2007 annual report SLOVENIA CONTROL, SLOVENIAN AIR NAVIGATION SERVICES LIMITED

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2 CONTENTS

3 INTRODUCTION 7 COMPANY VISION 8 MISSION 8 COMPETITIVE ORIENTATION 8 DEVELOPMENT POLICIES 8 PUBLIC COMPANY CONTACT INFORMATION 9 ORGANIZATIONAL SCHEME OF PUBLIC COMPANY 10 STATUS AND ACTIVITY 11 PUBLIC COMPANY ORGANIZATION annual report A. BUSINESS REPORT SIGNIFICANT EVENTS AND IMPACTS ON 2007 BUSINESS OPERATIONS SIGNIFICANT BUSINESS DATA FOR SIGNIFICANT EVENTS AT THE END OF THE BUSINESS YEAR DIRECTOR'S REPORT SUPERVISORY BOARD REPORT PROGRESS REPORT Activities in Air traffic control activities in Air traffic control sector Aeronautical telecommunication sector Aeronautical information sector Training and educating staff for air traffic control Activities in 2007 regarding general affairs Human resources and organisation Legal affairs Financial accounting Activities in 2007 regarding joint affairs Safety Quality Security International Co-operation Public tenders Project management Business informatics Activities relating to the acquisition of funds from structural funds Inspections by the aviation inspectorate Activities, related to the acquisition of operating permits Statistics Key performance indicators Analysis of regulations and delays in REPORT ON REALISATION OF OBJECTIVES Safety Capacity; Keeping the certificate of qualification for performing air navigation services and acquiring the ISO9001:2000 certificate of quality Employee development Air traffic control centre - ATCC project Active international co-operation Solving open ended questions with government authorities, which have an impact on company business operations 62 8 REPORT ON REALISATION OF OBJECTIVES Monitoring systems Automated systems Communication system 65 3

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5 9 RISK MANAGEMENT Strategic risks Financial risks Operating risk Information risks ANALYSIS OF AIR TRAFFIC IN EXPECTATIONS ACCORDING TO THE DEVELOPMENT OF THE PUBLIC COMPANY KEY PLANS FOR Public company plans for Forecast on the extent of air traffic in annual report B. ACCOUNTING REPORT 81 1 INDEPENDENT AUDITOR REPORT 82 2 ACCOUNTING STATEMENTS Balance Sheet as at 31 December Profit and loss statement from 1.1. to Distributable profit Cash flow statement for Statement of capital flow for Statement of capital flow for NOTES TO ACCOUNTING STATEMENTS Summary of accounting policies Notes to the accounting statements Intangible assets, long-term deferred costs and accrued income Fixed tangible assets Receivables for deferred taxes Inventories Short-term financial investments Current account receivables Cash at hand Short-term deferrals and accruals Capital Long-term financial liabilities Lon-term operating liabilities Short-term financial liabilities Short-term operating liabilities Net sales revenues Other operating revenues Financial revenues Other revenue Material costs Services costs Labour costs Write offs Other operating expenses and provisions Financial expenditures from financial liabilities Other expenditures Division of costs according to functional groups Tax assessment - corporate tax Revaluating profit loss statement based on preserving the purchasing power of capital Events after the balance sheet date Potential liabilities Auditing costs Other disclosures Proposal for the distribution of profits 108 5

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7 INTRODUCTION

8 2007 annual report Air traffic control is a service, which monitors, manages, controls and coordinates air traffic with an invisible hand, every single day in any type of weather and all over the world. Through our highly skilled and appropriately rewarded professionals, we constantly strive for excellence in providing safe, cost efficient and high quality air navigation services in the Slovenian airspace and beyond as needed, to the satisfaction of our costumers. We work together with our business and institutional partners in the region to establish the Single European Sky. Introduction Company vision To be a Single European Sky certified service provider, designated to provide safe, high quality and cost-efficient air navigation services in the Slovenian airspace and beyond as needed. To be prepared for the provision of air navigation services as an active partner within the future functional block of airspace in our region. The mission will be accomplished by our highly skilled, motivated and appropriately rewarded staff. Mission In this public company, which executes public services for the economy, we offer services of public interest and we are the only ones of this type in the Republic of Slovenia. Contrary to those employed in other companies, employees of this company must have special knowledge and skills to perform air navigation services, which cannot be compared with any other occupation in the Republic of Slovenia. Competitive orientation In this public company and in accordance with the requirements of the Act on the Provision of Air Navigation Services we have adopted a 5 years strategic business plan, in which the entire program for performing the company's services is presented. The development policies for the following years include the construction of a new centre for air navigation services with office space at the Jože Pučnik airport in Ljubljana and the upgrading, replacement and expansion of individual subsystems of the automated system for the management and control of air traffic and at the same time the modernization of radar, radio-navigational and communication infrastructure, and with this consequently flight procedures. The realization of development objectives also means maintaining the qualification certificate for performing air navigation services in the Republic of Slovenia. At the same time, we would like to preserve the European level of security, offer a high quality performance of service, further train and educate our employees and achieve the goals laid down in the local program of harmonisation and convergence of air traffic management. Measures tied to the development of employees can also be included under development policies. Development policies 8

9 Public Company: Head Office: Registration Number: SLOVENIA CONTROL, Slovenian Air Navigation Services, Limited Kotnikova 19a, SI Ljubljana Identification Number: ID SI annual report Current Account: Registration in the business register: , NLB, d.d , Banka Koper d.d. Limited Liability Company Public company contact information Classification of basic activities: Ownership: Slovenia Share Capital: EUR 1,001, Accompanying activities in air navigation 100% ownership by the Republic of Number of Employees: 198 (on 12 December 2007) Contacts: Telephone Number: Fax Number: Electronic Mail: info@sloveniacontrol.si Supervisory Board: Representatives of Owner: Worker Representatives: Marija Kozinc: President Dejan Klemenčič: Member Igor Nered: Member Monika Pintar Mesarič: Member Žiga Ogrizek: Member Zoran Pajič: Member 9

10 2007 annual report Organizational scheme of public company 10

11 The public company was established based on the Act on the Provision of Air Navigation Services, in accordance with the Companies Act, the Public Utilities Act, and in connection with the Aviation Act. The legal organization of the public company is in accordance with the Companies Act, a limited liability company, which is owned and was founded by the Republic of Slovenia. The public company has three management bodies: the Founder, the Supervisory Board and the Director. Founder rights are executed by the Republic of Slovenia annual report Status and activity By establishing a public company the Government of the Republic of Slovenia eliminated the area of navigation services from the Civil Aviation Administration of the Republic of Slovenia, the constituent body within the Ministry of Transport and thereby followed the policies of international legislation and European directives for forming a Single European Sky (SES) and the flexible use of airspace between civil and military organizations in Europe. This concept of reorganization has already been implemented in the majority of European Union member states and in other regions around the world, and thereby has enabled air navigation services greater autonomy when carrying out their activities and greater flexibility, and adaptation to market conditions. The main activity of the public company is Accompanying activities in air navigation, which includes the management and control of air traffic, which is performed in the following air navigation departments: air traffic services, aeronautical telecommunication and aeronautical information. The public company performs this activity within the framework of its mission, for which it was established. With its experts, this public company is the only company in the Republic of Slovenia, which performs the air traffic management and control. Its activity cannot be compared with any other activity in the Republic of Slovenia and that is why the position of company employees can only be compared to companies that perform the same activity abroad. Due to their specific knowledge, the employees in the public company are incorporated into numerous activities, which have an impact on the development of the profession, amendments to regulations and development in this area. The internal organization and systemization of jobs in the public company are defined by the Rules on Internal Organization and Job Systematization. The organization of the public company is subordinated in performing the primary activity and is based on air navigation services, which originates from the Aviation Act and the Act on the Provision of Air Navigation Services. Public company organization The fields of work for this public company include: - air traffic control, in which the air traffic services sector, aeronautical telecommunication sector, aeronautical information sector and the department for training operational staff - Flight School - are organised; - common matters, which includes the department of safety for air traffic, the strategic planning and international affairs department, and the department for public tenders and managing projects. - general affairs, which includes the human resources and organizational affairs department, department of financial accounting and the legal services department. Services are performed at the headquarters on Kotnikova 19/a in Ljubljana and at the Ljubljana, Maribor, Portorož and Cerklje ob Krki airports. 11

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13 A. BUSINESS REPORT

14 1. Significant events and impacts on 2007 business operations

15 January 2007 Implementation start for "Examination of conformity according to the requirements of Commission Regulation (EC) 2096/05 dated 20 December 2005 on the common requirements for implementing air navigation services for 2007 and 2008." The corporate collective agreement and the new Rules on Internal Organization and Job Systematization were adopted. An application for the issuance of a building permit for the construction of the new Air Traffic Control Centre Ljubljana was submitted to the Ministry of the Environment and Spatial Planning annual report March 2007 Operating permit was issued for secondary radar MSSR at Oljska gora. Pursuant to the Contract on the Arrangement of Mutual Relations Regarding Specific Infrastructure for Air Navigation Services between the Republic of Slovenia and the public company, a handover of the ANS infrastructure was completed. Co-operation begins on the initiative of Adriatic Cooperation with air navigation services from Italy and Croatia. April 2007 The public company was awarded the ISO 9001:2000 certificate of quality by Bureau Veritas. The start of co-operation in the Functional Airspace Block Central Europe Feasibility Study - FAB CE FS in accordance with the Single European Sky - SES regulation. May 2007 The public company received the basic certificate called the Family Friendly Company certificate. July 2007 An agreement was signed with Aerodrome Ljubljana d.d. for implementing ground movement control (GMC) at the Jože Pučnik Airport Ljubljana. September 2007 An upgrade of the simulator was carried out with the intention of completely replicating the working positions of the area control centre and setting up a module for the simulation of the air traffic control tower, which also includes the possibility of simulating ground movement control. 15

16 2007 annual report A contract on the arrangement of mutual relations regarding the performance of air navigation services at the Cerklje ob Krki was signed with the Ministry of Defence. The Ministry of Transportation extended the Flight School permit for training staff regarding air navigation services. October 2007 The Government of the Republic of Slovenia adopted an Act of Modifications and Supplements for the Act on Establishing the Public Company, Slovenia Control, Slovenian Air Navigation Services, Limited. The new FDPS Flight Data Processing System has started to be used operationally. The theoretical part for training a new group of air traffic controllers has begun. November 2007 The public company has obtained a building permit for the new Air Traffic Control Centre Ljubljana. An agreement was entered with Agency of the Republic of Slovenia for the Environment for performing aeronautical meteorological services. The Ministry of Transportation extended the pubic company's air navigation services certificate until the end of December

17 2. Significant business data for 2007

18 2007 annual report The public company's revenues are related to the en-route charges and terminal charges, which are being paid by the users. Calculation, billing and charging of the costs of the completed services is done by Eurocontrol, which collects the payments of the users and then distribute the revenues to the public company for the performed services. In 2007, revenues amounted to EUR 22,124 thousand with EUR 18,636 thousand from en-route charges, EUR 3,085 thousand from terminal charges and EUR 403,000 thousand from other sources. Other sales revenues amounted to EUR 279,000 thousand. In 2007, the public company achieved the following business results: Operating revenues Financial revenues Operating expenses Financial expenses Net profit Capital Provisions Non-current payables Current liabilities Total equity and liabilities Fixed assets Current receivables Cash at bank Total assets EUR 22,404 thousand EUR 34 thousand EUR 21,903 thousand EUR 127 thousand EUR 245 thousand EUR 2,308 thousand EUR 1,239 thousand EUR 9,950 thousand EUR 4,088 thousand EUR 17,585 thousand EUR 12,430 thousand EUR 2,194 thousand EUR 2,212 thousand EUR 17, 585 thousand 18

19 3. Significant events at the end of the business year

20 2007 annual report Audit by the Court of Audit of the Republic of Slovenia Pursuant to the audit report given by the Court of Audit of the Republic of Slovenia, the public company has prepared a responsive report, in which it has listed the measures for correcting irregularities. In May 2008, The Government of the Republic of Slovenia adopted a decision on which the necessary legal bases for the correction of these irregularities shall be adopted. Based on this, the Court of Audit of the Republic of Slovenia issued an audit report, in which they evaluated the response report as being authentic. ATCC Project In February 2008, the ATCC project was redirected at the request of the Ministry of Transport because of the so called "Clean Shovel" affair. The consequences of this are: - a decision made to close the Call for tender without selecting any of the contractors for the construction of the Air Traffic Control Centre, which at that time still included the control tower - continuation of activities regarding the Air Traffic Control Centre with the office space and garage at the selected location, while the control tower shall be separated from the ATCC Project and new location at the Jože Pučnik Airport Ljubljana found. Modifications and supplements of technical documentation to be performed due to the exclusion of the control tower and additional demands by the client, - modification to the construction time schedule. Exchange of Directors At its session on 20 March 2008 the Government of the Republic of Slovenia discharged Srečko Janša as the Director of the public company, after he had been in this position from the beginning of 2004, and at the same time appointed Franc Željko Županič as the new Director. Structural Funds The sub-contractor for consulting in the area of acquiring and drawing EU financial funds from structural funds has given an evaluation that with regards to the income and methods of financing, the public company would not be entitled to any co-financing of projects from structural funds. Collective Agreement on Air Traffic Control and Management In January 2008, negotiations for the modifications and supplements of the collective agreement on air traffic control and management began. Technical Control In May 2008, a directive on the safety of the technical control centre and performing control (DoV no. 1 (TCNiON)) was adopted, which relates to the technical centres in the area control centre of Ljubljana, control tower at the Jože Pučnik Airport in Ljubljana and control tower at the Maribor Airport, which are ensured by the public company. 20

21 Radar System at the Jože Pučnik Airport in Ljubljana In March 2008 the new radar station at the Jože Pučnik Airport in Ljubljana was installed. It is the most technologically advanced radar system, composed of a primary and secondary radar, which will considerably increase the reliability and the availability of radar data for the region of central Slovenia. The new secondary radar also supports MODE-S technology annual report International Co-operation In March 2008 the Functional Airspace Block Central Europe Feasibility Study - FAB CE FS was completed and decisions to begin procedures in terminating the CEATS Agreement and continuing activities relating to FAB CE were taken. In May 2008 a Memorandum of Co-operation was signed with a Czech air navigation service provider (ANS CR) in the area of developing a flight data processing system (FDPS). Quality At the end of February 2008, the first control judgement of the third client in procedure, was executed by Bureau Veritas, which also extended the certificate of quality ISO 9001:2000 no Security In February 2008 an evacuation plan was completed for the business building on Kotnikova 19a. User Day Prior to the start of the summer season for sport flying, a so-called "user day" was organized in April 2008, which was intended for all VFR users of Slovenian airspace. The organization of the airspace, safety measures and aviation information were presented. Traffic in the First Three Months of 2008 From January to March 2008 there were a total of 58,909 flights that crossed the Republic of Slovenia according the instrument flight rules. On average there were 497 operations completed each day. The most traffic occurred on March with 600 operations completed. The least amount of traffic occurred on January with 377 operations completed. The most traffic within one hour occurred on January between and UTC with 63 operations completed. The traffic was greater by 17% compared to the traffic during the same period in

22 4. Director's report

23 2007 was extremely active and dynamic regarding the company's operations just as the previous three years and the beginning of KZPS, d.o.o.'s operations. Managing this company, which has the role to ensure public goods upon unifying the elements of the market economy and at the same time performing specific activities in Slovenia, has also prospered in Not only this, we achieved the goals we set for the business plan in 2007, which included: - Safety; - Capacity; - Keeping the certificate of qualification for performing air navigation services and acquiring the ISO9001:2000 certificate of quality. - Air traffic control centre - ATCC project - Active international co-operation and - Solving open ended questions with government authorities, which have an impact on company business operations 2007 annual report Our projects and the tasks we set exceeded the planned frameworks. Srečko Janša Slovenia Control CEO Until now, we have focused great attention on each goal and task we set and despite this; I can say that I am especially proud of some of our achievements. They include: - Signing the corporate collective agreement, which rounded up the settlement of all the legal labour problems that piled up at the end of the nineties and the first years of 2000; - Acquiring the ISO 9001:2000 certificate of quality, which is also of exceptional significance for maintaining the qualification certificate for performing air navigation services. The external assessment of the ISO 9001:2000 quality system, which ended in February 2008 established that evident progress in the quality system was made since the beginning of 2007; - The continuation of an exceptionally demanding investment cycle, which has already partially come full circle with the successful implementation of the flight data processing system FDPS and acquiring a building permit for the construction of the air traffic control centre. - Redefining the CEATS project, where we played an exceptionally active role and succeeded to redirect it into the so-called FAB CE project, which consequently also implemented a basis for the termination of the CEATS agreement. - Organizing relations with the Ministry of Defence for performing air traffic control services at the airport Cerklje ob Krki, which represents very good foundations for further co-operation and even its modernization. - Implementing the first phase of ground movement control GMC at the Jože Pučnik Airport in Ljubljana. - The beginning of implementing performance indicators monitoring which is very significant with the events taking place in the European and the global airspace in relation to the legislation regarding the Single European Sky (SES). The fulfilled tasks, which we set and successfully carried out, represent a big step in the development of air traffic management activities. Air traffic in Europe as well as in the Republic of Slovenia is sharply increasing. Demand for additional capacities is bigger day in and day out. Adapting to these changes and ensuring enough services and quality is already a tough task all on its own. Alongside all of this, worrying about the development in other areas of the company's business operations represents a great challenge for management but also satisfaction when goals are achieved. 23

24 2007 annual report We successfully continued the investment cycle in which a great number of employees were included who played a key role for its realisation. Investments were oriented towards the development of air traffic control radar systems, data processing systems, radio navigation and communication systems. Activities for the modernisation of the system of safety, the system of quality and the implementation of the security system ran parallel with this. I should especially emphasise the replacement of the flight data processing system and the modernisation of the radar data processing system, which were successfully implemented in December 2007 without a negative impact on safety in air traffic and on the capacity of airspace. Allot of attention, activity and effort in 2007 was also oriented towards the construction project for the air traffic control centre (ATCC construction project), as we have successfully come close to completing the first phase of the ATCC project. KZPS, d.o.o. acquired a building permit in December The completion of the selection process for a building contractor and the immediate start of construction were anticipated for the beginning of Prior to this, KZPS, d.o.o. settled all relations with external subjects regarding the attainment of all adequate rights and especially the building and servitude rights for the construction of the building at the selected location in the Republic of Slovenia, all necessary negotiations were completed with Aerodrome Ljubljana, d.d. for the purchase of all the real estate property still necessary and settle the mutual relations with the Municipality of Cerklje na Gorenjskem regarding the payment for all municipal documentation and furnishing the space. Immediately upon receiving the building permit we began implementing the municipal regulations for the region, where we closely and successfully co-operated with the Ministry of Internal Affairs or the General Police Administration. I am convinced that the selection of a qualified contractor for construction for a suitable price would be successful regardless of the complications that had come up in relation to the investigations pertaining to the construction lobby for which the selection procedure was completed with no selection. Co-operation with other air navigation service providers in Europe was also successful in many areas. In following the need to increase airspace capacities we continued and strengthened co-operation with other air navigation services providers and began with the redesign of the enroute network and the borders for airspace under the responsibility of our company and strengthen the cooperation for the initiatives on the development of air traffic control systems in the future. Besides this, KZPS, d.o.o. as the host of one of the biggest European forums for the development of air traffic management systems and the joint adaptation to the rapidly increasing traffic (SESAR), succeeded in Slovenia to join together all the European experts on air traffic management. As a result, it earned allot of praise and recognition for Slovenia and Slovenian air traffic control amongst the expert public, especially even the importance of small air traffic control providers in such a big region such as Europe. At KZPS, d.o.o. we continued with active co-operation in initiating the design of the functional airspace block in Central Europe, in which together with the providers from Austria, Bosnia and Herzegovina, the Czech Republic, Croatia, Hungary and the Slovak Republic we successfully completed the Functional Airspace Block Central Europe Feasibility Study in accordance with the Single European Sky - SES regulation. In March 2008 a decision 24

25 was adopted to continue the activities with the intention of designing FAB in the region by the beginning of In 2007, besides the basic activities we also continued to perform consulting services and completed various studies. Of course it is necessary to also mention the TransSLO project, which is completely financed by European funds and treats the area of research in transport. The goal of TransSLO is to permanently preserve the implemented cooperation and the designed relations amongst the research environment, the economy and the entire expert public in the area of transport in the local economy or industry or social environment, with special emphasis on the relations with possible users of research results. The purpose of the project is to take advantage of the scientific and research potential of research groups connected in a network in order to connect the academic or research environment and the real world or the economy and at the same time establish and realize a vision for a transport policy in Slovenia for the future annual report The Court of Audit of the Republic of Slovenia also confirmed that the management and the business operations of the company were performed correctly and successfully in The 2006 audit report was issued in October The deficiencies, which were announced in the audit report, are not related to the obligation of arrangement by KZPS, d.o.o. but on the implementation of the necessary activities by the founder and the sole partner of KZPS, d.o.o., which is the Government of the Republic of Slovenia. After almost four years of managing the public company, I followed common thread of managing the company which was: safety, quality, flexibility and efficiency for all users of Slovenian airspace. I personally assess the 2007 business year, just as all three previous years, as an additional successful year, which is also supported by all the statements in this report. When I look back at all four business years after finishing my business career at KZPS, d.o.o., I can say that the reorganization of the activities from government administration into a contemporary company, taking into consideration the specifics of a public company, the ownership of the state and the incomparability of this type of work with any other company in Slovenia, it took great effort, adapting to unexpected events, solving problems which the company transferred over from the previous organisational form and ploughing up the terrain, which was necessary from all the subjects involved because of the nature of the company's work. Having witnessed all of this, I can say with pride that today KZPS, d.o.o. is a company, which has good foundations and implemented business processes for successful business operations, is recognised at home as well as abroad and that regardless of its size or smallness it managed to fulfil all the conditions, which must be met if the basic activity is to be performed. This means not only with the effort and work of the director but also of all the employees. Srečko Janša Slovenia Control CEO 25

26 5. Supervisory board report

27 Pursuant to the Act of Incorporation, the public company's supervisory board has 6 members. 4 members who carry out the rights of the founder are appointed by the Government of the Republic of Slovenia and 2 members are elected by the public company's worker's council. In 2007, there was a change in the composition of the members of the supervisory board who carry out the rights of the founder and are appointed by the Government of the Republic of Slovenia. On 25th October 2007 the Government of the Republic of Slovenia discharged the member of the supervisory board Gordana Grahek and appointed Dejan Klemenčič and on 6th December 2007 it discharged the member of the supervisory board Tomaž Oplotnik and appointed Monika Pintar Mesarič. After these changes the members of the supervisory board elected Monica Pintar Mesarič as deputy president of the supervisory board annual report In 2007, the supervisory board operated as two different groups: - Before the changes: Marija Kozinc - president, Tomaž Oplotnik deputy president, Gordana Grahek - member, Igor Nered - member and Žiga Ogrizek and Zoran Pajić - representatives of worker's council. - After the changes: Marija Kozinc - president, Monika Pintar Mesarič - deputy president, Dejan Klemenčič - member, Igor Nered - member and Žiga Ogrizek and Zoran Pajić - representatives of worker's council. Marija Kozinc, PRESIDENT OF SUPERVISORY BOARD In 2007, the supervisory board, within its jurisdiction actively kept track of and monitored the business operations of the public company in accordance with the legislation, especially in accordance with the provisions of the companies act and the act of incorporation. In 2007, the supervisory board had a total of 13 meetings, whereby 10 were regular sessions and 3 were correspondence sessions. A total of 97 decisions were adopted at these meetings. The vast majority of the adopted decisions have been realized and the unrealized decisions pertain to the five years strategic business plan for the Slovenia Control, Slovenian Air Navigation Services, Limited and the business plan for the public company Slovenia Control, Slovenian Air Navigation Services, Limited for Both business plans of the public companies were prepared and treated by the supervisory board on a timely basis and also submitted to the Government of the Republic of Slovenia to be debated, however because of the changes pertaining to the control tower, both business plans had to be appropriately adapted and therefore they shall be resubmitted to the Government of the Republic of Slovenia. The business plan for the public company Slovenia Control, Slovenian Air Navigation Services, Limited for 2008 has already been appropriately modified and the five years strategic business plan for the public company Slovenia Control, Slovenian Air Navigation Services, Limited will be prepared for the period The remaining unrealized decisions of the supervisory board are in the realization phase Annual Report At its 39th regular session on 11 June 2008 the supervisory board verified the composed and revised annual report of the public company for the 2007 business year, took a positive stand on the audit report by Ernst & Young, d.o.o., prepared a report on its verification and made a recommendation to the Government of the Republic of Slovenia as the founder of the public company to accept the 2007 annual report. 27

28 2007 annual report The supervisory board also verified the proposal for the use of the distributable profit and consented. The supervisory board adopted decisions, whereby it proposes to the Government of the Republic of Slovenia as the founder of the public company that the distributable profit of EUR 1,206, remain undistributed and is not intended for distribution. The supervisory board assessed the business operations of the public company as successful in Monitoring business operations in 2007 During the 2007 business year, the supervisory board regularly verified the business operations of the public company in different areas, especially in the area of financial operations and the achieved business results and verifying the legality of business operations. It also verified the realisation of the planned investments and the realisation of the founder's supervisory board's decisions. At the meetings, the supervisory board was regularly informed about the realisation of the planned investments, especially with the activities relating to the construction of the air traffic control centre. Amongst the most significant events it is important to highlight the acquisition of the operating permit for a secondary radar MSSR on Oljska gora, an upgrade of the simulator with the intention of completely replicating the working positions in the area control centre and setting up a module for the simulation of control tower work performance, which also includes the possibility of simulating ground movement control and the new flight data processing system is being used. In 2007 the public company obtained a building permit for the construction of the Ljubljana Air Traffic Control Centre. In 2007 there were some achievements in other areas of the company's business operations in co-operation with the supervisory board and the founder. The corporate collective agreement and the new Rules on Internal Organization and Job Systematization were adopted. The public company was awarded the ISO 9001:2000 certificate of quality by Bureau Veritas and it also received the basic certificate called the Family Friendly Company certificate. A contract on the arrangement of mutual relations regarding the performance of air navigation services at the Cerklje ob Krki airport was signed by the Ministry of Defence and an agreement was entered with the Agency of the Republic of Slovenia for the Environment for performing aeronautical meteorological services. In 2007 two out of three open ended questions were finally solved, which the supervisory board warned about. In principle, the question about reimbursing costs for the payment of exempted flights was also solved in 2007; however agreements have not been signed yet. For entering agreements and by doing so, finalizing these issues, the public company is making an intense effort and its regulation is also stated in article 9 of the Commission Regulation (ES) no. 1794/2006 dated 6 December 2006 on the establishment of a common regulation for air navigation charges. 28

29 Pursuant to articles 19 and 27 of the act of incorporation the supervisory board treated and decided to give consent to number of contracts that have a value that exceeds EUR 62, and for five contracts, the supervisory board in accordance with the act of incorporation acquired the opinion of the founder. Plans for 2008 In 2008, the supervisory board is going to focus special attention on monitoring planned investments, especially the construction of the Air Traffic Control Centre Ljubljana. Significant activities of the public company will also include the modifications and supplements to the collective agreement on air traffic control and in 2008 there are plans to prepare regulations, which are going to reorganize the training of staff for aeronautical telecommunications as well as training staff for aeronautical information services. The supervisory board shall also still focus more attention on the partially open question about covering the costs of exempted flights annual report Marija Kozinc, PRESIDENT OF SUPERVISORY BOARD 29

30 6. Progress report

31 The public company possesses a certificate to perform air navigation services no /2006/79/slo dated 20 December 2006 and thus can perform the following activity: air traffic management and control, issuing the necessary flight information and implementing, upgrading and maintaining all existing systems for air traffic control. Based on the acquired work permit no /2007/3 dated 19 October 2007 for training air navigation services staff, it operates as a flight school, which provides that the air navigation services staff is professionally qualified annual report Besides ensuring its basic activity in 2007, the public company also performed activities, which are related to the goals of the five year strategic business plan and the 2007 business plan and the established projects Activities in 2007 Significant activities and events in 2007: - ATCC Project acquiring the building and servitude rights, acquiring the building permit, starting construction on the access road and municipal infrastructure, harmonising with engineers relating to projects for realization, reconciling with the Ministry of Internal Affairs regarding the purchase of buildings, reconciling with Aerodrome Ljubljana d.d. regarding the purchase of buildings, payment of compensation for connecting to their infrastructure and co-financing the construction of new infrastructure and access road, reconciling with the Municipality of Cerklje in Gorenjska regarding the payment of the municipal contribution. - Slovenian Presidency of the EU: preparation and implementation of flight data processing system, temporary implementation of radar system at the Jože Pučnik Airport in Ljubljana and the implementation of the additional radio navigation system Doppler VOR/DME close to the airport at MW in close proximity to the village Šenčur. - Audit for 2006 by the Court of Audit of the Republic of Slovenia. - Handover of the infrastructure building in accordance with the contract on the arrangement of mutual relations relating to specific infrastructure for air navigation services, which the public company signed with the Republic of Slovenia at the end of Accepting the corporate collective agreement, rules on internal organization and job systematization and the signing of new employment contracts. - Adopting the rules on protecting personal data. - After a successful external assessment the company acquired the ISO 9001:2000 certificate for quality management, which was presented to the company on 18th April Signing a contract for a long term loan in the amount of MEUR 14.6 for financing the construction of the ATCC Ljubljana. - Decision by the Ministry of Transport to finance the company projects from structural funds (Operative development program of transport and environmental infrastructure for the period ). A decision was adopted and confirmed by the Ministry of Transport for three projects, which were to be financed from structural funds and EUR 21,000, approved by the Ministry of Transport, but this decision was later cancelled. - Implementation of the secondary radar MSSR on Oljska gora and acquiring an operating permit. - After complying with certificate procedures the company acquired the basic certificate Family Friendly Company, which was awarded on 14th May Organisation of many workshops on ATM Safety and ATM Security of air navigation services in co-operation with Eurocontrol and regarding aeronautical information services (AIS). - Signing an agreement with Aerodrome Ljubljana d.d. for implementing ground movement control (GMC) at the Jože Pučnik Airport in Ljubljana. 31

32 2007 annual report - Implementing a direct link between ARO Portorož and ARO Brnik via a network printer and a telephone connection. - A contract on the arrangement of mutual relations regarding the performance of air navigation services at Cerklje ob Krki airport was signed with the Ministry of Defence. - Carrying out a tender for an air traffic controller initial training started on 19th November The qualification certificate to perform training of air traffic controllers and other staff was extended for the flight school. - An agreement was entered with the Agency of the Republic of Slovenia for the Environment for performing aeronautical meteorological service and the payment of these services, which was signed at the end of December Organisation and management of the TransSLO project in co-operation with the other partners on the project, which is entirely financed by the EU. - The beginning of activities for reducing noise at the Jože Pučnik Airport in Ljubljana Air traffic control sector Important activities and events, which were realized in 2007 within the framework of the air traffic control sector, in addition to the goals, which are listed under the heading report on realisation of goals: - safe execution of air traffic control, - increase in air traffic, - performing training at the workplace, - executing the agreement with Aerodrome Ljubljana d.d. for implementing ground movement control (GMC) at the Jože Pučnik Airport in Ljubljana. - preparing documents for a quality management system, other operative instructions and keeping them up to date, - preparations for the Slovenian Presidency of the EU, - co-operation in signing the technical agreement between NATO and MOD of the RS, which enables the co-ordination of all procedures between NATO, the chain of command and monitoring authorities and public companies, which control the airspace FIR/UIR Ljubljana, - co-operation in signing a contract on the arrangement of mutual relations regarding the performance of air navigation services at Cerklje ob Krki airport with the Ministry of Defence. - co-operation in international projects (FAB CE) Air traffic control activities in Aeronautical telecommunication sector In 2007, the aeronautical telecommunication sector fulfilled its tasks in accordance with the plan. The main tasks were: - regular maintenance and ensuring system and device operations for air traffic control, - co-operating in investments, the restoration and modernisation of systems and devices, and - technical monitoring of systems and devices. System monitoring and control at the air traffic control centre on Kotnikova ulica in Ljubljana (TNC Ljubljana) operates 24/7 everyday of the year. System monitoring and control at the Jože Pučnik Airport in Ljubljana took place from 7.00 to and from 7.00 to at the Maribor Airport, everyday of the year. At night TNC Ljubljana performed the system monitoring and control for all the airports with the aid of remote control. Covering the devices was also ensured by an organised on call schedule by 32

33 the technical staff at home and by intervention in the event of bigger deficiencies, which could not be remedied by TNC. Regular maintenance took place based on regulations, manufacturer instructions and regular monthly work plans. Care for the assurance of adequate inventory of spare parts took place all year round. The inventory of spare parts for radars especially increased, which ensures faster intervention in the event of a defect and greater independence during interventions annual report The remaining activities of the aeronautical telecommunication services for 2007: - implementation of new flight data processing system (FDPS) and upgrade of a radar processing system (RDPS), - implementation of an inter regional network between the airports and the centre, - implementation of the ARTAS system, - upgrading and modernisation of working positions of air traffic controllers at the Cerklje ob Krki and Portorož airports. - finalisation of implementing the secondary radar Oljska gora, - modernisation of the radio system and replacing the antennae on Krim, - upgrading the voice communication system in the simulator, - connection with the voice communication system NATO, - implementation of informative radar pictures at the Portorož and Maribor airports, - the beginning of implementation of the new radar system at the Jože Pučnik Airport in Ljubljana Aeronautical information sector In 2007, besides the regular everyday operative work the aeronautical information sector underwent a reorganisation (merger) of the COM and NOTAM departments into one organisational unit, called the informationcommunication centre, which enables a more flexible scheduling of work in the unit and there is no need to hire new staff. As result, the rationalisation and the good use of internal reserves for the operation of the aeronautical information sector was accomplished. In order to have been able to carry out the above mentioned reorganisation, it was necessary to train four employees who only had NOTAM ratings, for COM rating. As a result of the organisation of work itself, which was not allowed to be obstructed at that time, the process was prolonged until October 2007, when all the candidates for acquiring a COM rating passed an examination and acquired the necessary permit. This is how work at IKC began on 1st December Furthermore, the employees at ARO Ljubljana were also trained to acquire NOTAM rating. As a result, an additional possibility was also acquired for the further optimisation of work processes in the aeronautical information sector. In 2007, publication of the NOTAM series "C" began, which is the Slovenian translation of NOTAM series "A" and "B", which enables better informing and for some easier comprehension ( especially for sports pilots, glider pilots, hot air balloon pilots, ultra light aircraft pilots, skydivers...) of restrictions or notifications, which are issued by NOTAM. As a result, the awareness of the users of Slovenian airspace has increased and consequently safety in Slovenian airspace as well. 33

34 2007 annual report EAD (European AIS Database) software version AIXM 3.3. was updated (Aeronautical Information Exchange Model 3.3.). In 2007, the 1025 NOTAM series A, the 232 NOTAM series B and the 136 NOTAM series C were published. 908 requests from foreign state and military aircraft for the use of Slovenian airspace (each request contains multiple flights) for the needs of the Ministry of Foreign Affairs. Equipment was installed at ARO Portorož intended for "remote services for ensuring aeronautical information" (network printer and telephone with a direct connection to ARO Ljubljana), which means that in ARO Portorož this type of service can also be performed when there is no employee present who could ensure aeronautical information. As a result, the work process has been rationalised and optimised. Information about 20,337 departing IFR flights from Slovenian airports was submitted to Eurocontrol for the need to calculate the terminal charges. The aeronautical information publications department (AIP) issued 11 publications (3 AIRAC amendments, 4 regular amendments, 2 AIC and 2 AIP SUP). It began with the domestic production of aeronautical maps (this had been performed by a subcontractor until now). An independent audit for aeronautical maps was performed for an external client (NAV Canada). 30,343 flight plans were submitted to and processed by the aeronautical reporting office (ARO) Training and educating staff for air traffic control Due to the special requirements regarding the qualifications of staff, who work in air traffic control, the public company puts a considerable amount of importance on training and educating staff. In the context of air traffic control a flight school is in operation for the training of staff, which performs all the necessary activities for training employees, who work in air traffic control and who need a license or work permit. In addition, educational documentation is upgraded and supplemented in the context of the flight school. The remaining types of training take place through the human resources and organisational affairs department. The following is a list of information on the completed training sessions for One candidate renewed their air traffic controller licence, rated as instrument air traffic controller with endorsement for tower controller (ADI/TWR) for Ljubljana (LJU); - One candidate renewed their air traffic controller licence, rated as instrument air traffic controller with endorsement for tower controller (ADI/TWR) for Maribor (MBX) and later also acquired endorsement for Cerklje (CEK); - 3 candidates acquired their air traffic controller licence, rated as visual tower controller (ADV) for Cerklje (CEK); - 3 air traffic controllers began training as procedural approach controllers (APP) for Ljubljana (LJA); - one air traffic controllers began training as procedural approach controller (APP) for Portorož (POW); - 2 air traffic controllers began training as procedural approach controllers (APP) for Maribor (MBX); 34

35 - 4 students completed the theoretical and practical training on the simulator, rated as area traffic controller with radar endorsement (ACS/RAD) for Ljubljana (LJA) and began training at the workplace. - two candidates completed practical training at the workplace for on-thejob instructor endorsement (OJT); - 4 employees of MORS completed training for ARO operator for Cerklje (CEK); - 4 aeronautical information sector employees completed training for COM operator; - 8 aeronautical information sector employees completed training for NOTAM operator; - In October, the training of 12 new air traffic controllers began, which is organized and performed in the context of the flight school. The course lasts 426 hours; the course was also attended by two university students from the Directorate of Aviation. - 7 technicians from MORS completed the pedagogical-andragogical training for instructors of technical staff employees of air traffic control sector and 9 aeronautical telecommunication sector employees completed training regarding the implementation of the new flight data processing system- FDPS R1; employees employees completed training regarding the implementation of the new flight data processing system - FDPS R1+; - 19 employees of tower control completed training regarding the implementation of ground movement control (GMC) at the Jože Pučnik Airport in Ljubljana; 2007 annual report Training staff at the institute of European organization for the safety of air traffic (hereinafter as EUROCONTROL) A special form of training staff is ensured by the training institute IANS, which operates out of EUROCONTROL. Training fees are included in the membership, which the public company pays for membership in this organisation. In 2007, 45 of our employees attended 25 courses, which on average lasted for one week at a time. Employees became informed about new technologies, procedures and strategies in air traffic control at these courses. Other training for staff In addition to the above mentioned, the flight school co-ordinated the following training abroad for acquiring tye ratings for 17 staff members at the following courses: DME-FSD 40/45, VOR 431, ILS 4000, STAR 2000, RSM 970S, FDPS (KAMI, JETI). Refresher courses Refresher courses were organized in the context of the air traffic services sector. One part of the course is intended for training as a result of the increase in traffic, the actual situation during live traffic and maintaining the condition of air traffic controllers and the second part was intended for training regarding emergency situations, emergency procedures and extraordinary events. The refresher courses were organised over a period of 2 days in spring and 3 days in autumn and a total of 90 employees attended. 35

36 2007 annual report Briefings The topics at briefings include current problems, processing incidents, safety recommendation and preparations for the season by being informed about the novelties and changes. Briefings are organised during the autumn/winter and last for one day for each group. A total of 109 employees attended them. All the training for employees, who need a licence or permit to perform their duties was carried out in accordance with the requirements by the ICAO EU and EUROCONTROL and with their own staff. The exception was training of the students for instrumental air traffic controller rating, which was carried out abroad due to the lack of equipment. Other Under the flight school, the educational documentation is also upgraded and supplemented, whereby it is worth mentioning the creation of the Training Program for Controllers LKZP Brnik, regarding the implementation of ground movement control (GMC), The Training Plans for Controllers LKZP Brnik, regarding the implementation of ground movement control (GMC), Training Program for KZPS, d.o.o. Staff, regarding the implementation of the new Flight Data Processing System, the Training Plans for KZPS d.o.o. Staff, regarding the implementation of the new Flight Data Processing System, Supplement to the Training Program for KZPS, d.o.o. Staff, regarding the implementation of the new Flight Data Processing System, Supplement to the Training Plans for KZPS d.o.o. Staff, regarding the implementation of the new Flight Data Processing System, which define the organisation and course of training, methods of evaluation and the finer details regarding training. These plans and programs were reviewed and endorsed by the Directorate of Civil Aviation for the period from January to December. A project for the centralisation of documentation at the flight school's archives also took place in 2007 and shall be completed in Activities regarding the co-ordination in extending the validity of licences or permits for operational personnel were carried out during the entire period Human resources and organisation The human resources department ensures the execution of human resource policies and the human resources function in the company, organisational processes and material and non-material conditions for employees at the workplace. The goals of the department are oriented towards realising company goals. With its professional, effective and up to date operations, the department contributes to the realisation of all the goals set in the strategic plan for business operations as well as in the annual business plan. In particularly, it is directly responsible for executing the strategic goal of employee development Activities in 2007 regarding general affairs 36

37 Structure of human resources in 2007 Structure of human resources in 2007 regarding education As at No. of employees Level of education IV 4 3 V VI VII/ VII/ VIII annual report Structure of human resources in 2007 regarding sex As at No. of employees Sex Male Female The average age of employees in the public company is 38.3 years. Employment in 2007 The number of employees in the public company has been increasing year in and year out. When the public company was founded on 1st May 2004 there were 121 employees. The employment trends by year can be seen in the graph below. The reasons for the constant increase in the number of employees are: - restriction in hiring public servants and thus a lack of operative personnel prior separation from the CAA - only operative staff transferred to the public company (staff for air navigation services) - performing air navigation services 24/7 365 days a year. - constant increase in air traffic and the need to ensure capacities, - the decision to build a new air traffic control centre, - no investments in the infrastructure of air navigation services in the past, which as a consequences there is high intensity in the area of modernisation, the replacement and upgrading of systems and devices for air traffic control, - the establishment of a large number of projects, 37

38 2007 annual report - the obligation to carry out public tenders for construction, goods and services, - particularities in financing, - the need for greater organisational flexibility and at the same time ensuring organisational structures for the needs of controlling work processes and company management, - the need to organise business operations (system of quality, being in command of and managing documentation), - obligations regarding security activities, - strong role of unions and the need to ensure employee satisfaction when taking into consideration the special responsibility of air traffic safety and the incomparability of the activities with other activities in the country. In 2007, 24 new employees were hired, which included: - 20 employees for operational work as follows: 14 employees for the air traffic services sector (1 head of air traffic services, 2 air traffic controllers, 10 air traffic controllers - beginners, 1 higher technologist), 5 employees for the aeronautical telecommunication sector (1 aviation telecommunication head, 2 technologists, and 2 consultants) and 1 employee for the aeronautical information sector (specialist for aeronautical information - instructor) - 4 employees for the needs of non-operative tasks (head of public tender and project management department, financial consultant, trainee for office work and a clerical officer). In 2007, the employment relationship of two employees was terminated and one employee went into retirement. The selection of air traffic controllers - beginners was carried out for the third time with the aid of the First European Air Traffic Controller Selection Test - FEAST. Payment system According to the corporate collective agreement and the rules on internal organisation and job systematisation in January 2007, the payment system has radically changed in the public system and in the area of job systematisation. In accordance with the rules on internal organisation and job systematisation, jobs have been systematised according to individual groups of jobs. In addition to the two mentioned acts, employee salaries in 2007 were also paid out based on the collective agreement regarding the management and air traffic control and the rules on work performance. Due to the new payment system, the salaries in the public company increased by an average of 30%. The payment system is motivationally set up, with a goal to attain employee satisfaction and loyalty to the employer. The development of heads In 2007, the project called the "development of heads" continued. 3 workshops were organized for this purpose, which dealt with topics regarding the method and significance of communication, the defining of competencies, analysis of the organisational climate, etc. Individual heads of organisational units also completed discussions with the contractual 38

39 partner, who also organised all these workshops. The heads of the organisational units started to carry out annual interviews with employees in Family friendly company The project "Family Friendly Company" commenced in In 2007, the public company received a basic certificate, which is issued for a three year period. In the context of the project, measures for harmonising the professionals and family lives of employees were selected and had already begun to be implemented in 2007 (social gatherings of employees, the approval of work at home, organisation of holiday activities for the children of employees, annual interviews for employees, training of heads, etc.) annual report Health and safety at work In 2007, vaccination shots for the flu were organised, which took place at the public company's premises. 36 employees decided to receive a vaccination shot. All the locations had first aid kits and basic medications. The public company ensured personal security equipment to all those employed in the aviation telecommunication sector. In addition to this, the public company ensured that all the employees were given a medical examination in accordance with the health and safety at work act and the aviation act. All the employees were allowed to take their regular holiday leave, air traffic controllers were also allowed to take a medically programmed 7 day recreation holiday and the remaining 8 days for their recreational holiday. In co-operation with the contractual partner new fire safety standards were adopted in Legal affairs The legal department actively co-operated in all areas of the public company's business operations in the area of general and joint affairs as well as in the area of air traffic control. In the area of general and joint affairs, it co-operated in the preparation of documentation for supervisory board meetings and co-operated in its implementation and the preparation of proposals for discussion by the Government of the Republic of Slovenia. 9 regular and 2 correspondence meetings were carried out by the supervisory board in documentation proposals were submitted to the founder for treatment from the regular ones presented each year such as the business plan, the annual report, proposals for the consent of entering contracts, which the founder submits, selecting an auditor, including special ones such as amendments to the act of incorporation and the proposal of the response report regarding the audit of business operations, which was performed by the Court of Audit of the Republic of Slovenia in The legal department actively operated or co-operated in the preparation of internal regulations, implementing the system of electronic business with documented material, arranging the insurance of actions in tort on behalf of the public company and implementing audits. Independent activities were also performed in the air of daily harmonisation with the documentation 39

40 2007 annual report content, memorandums, contracts, reports etc., and the independent formation of opinions and document proposals. The legal department actively co-operated with external contractors in executing specific activities, which fall under the public company's business operations (e.g. legal representation, notary, translating, formation, clipping, informing the public, etc.) In the area of joint affairs, the legal department co-operated in examining the completed public tender procedures and verifying contracts. Co-operation in the area of air traffic control took place above all in the area of preparing regulations, which were submitted to parliament for further discussion and adopted by the Ministry of Transport. Active co-operation within a group of lawyers was also important in the preparation of starting points for forming the FAB CE (Functional Airspace Block - Central Europe). The goal and the fundamental task of the legal department are to provide for legality in the business operations of the public company. With this goal and orientation, the legal department will also perform legal tasks regarding the public company's business operations in the area of assistance, consultation and up to date operations of the departments within the company as well as company relations with other organisations and institutions Financial accounting The financial accounting department organises and manages the company's financial accounting. Accounting services are performed by an external contractual partner. In order to ensure uninterrupted and effective business operation, it cooperated with state representatives and contractual partners as well as with management and other organisational units within the company. It draws up, controls, liquidates and keeps track of accounting documents such as bills, account statements, travel logs and other. It prepares and draws up reports for informing state institutions, analyses for external and internal users, in which future company business operations are based on. The priorities for the financial accounting department are to ensure liquidity and ensure funds for planned investments. The company settled all its obligations by the deadline in 2007 and thus ensured funds for the realization of investments in accordance with the plan for 2007, with regards to time and procedural possibilities. Method of financing the public company With the amendment to the act on the provision of air navigation services in December 2005, the method of financing the public company was also amended. The company receives funds for performing air traffic control services via the European organisation for the safety of air navigation (Eurocontrol) from the users of these services, therefore receiving revenues from en-route and terminal charges into their current account. The bills for route and terminal charges are issued by Eurocontrol on behalf of the public company, which also manages the exact payment of debts and statement of late interest charges in the event payment is not made or payment is delayed. The company issues a bill for other revenues and also receives payment into their current account. 40

41 The company has two current accounts open: at the Nova LB d.d. and the Banka Koper d.d. Deposits of flight and terminal taxes. More than 90% of the deposits are received at the Banka Koper, d.d. and the rest of the deposits (from other revenues, VAT reimbursement, ) are received at their Nova LB d.d. bank account. Activities in 2007 In 2007, the Court of Audit of the Republic of Slovenia audited the company's business operations in They audited salaries, public tenders and management funds (management of infrastructure for implementing air navigation services). The Court of Audit of the Republic of Slovenia did not find any irregularities in the area of salaries and public tenders. The Court of Audit of the Republic of Slovenia had remarks regarding the management of funds; however no irregularities were found and the public company cannot be at fault, as the problem needs to be solved at the level of the Government of the Republic of Slovenia with an amendment to certain legislation. The public company submitted a response report in 2008, which the Court of Audit of the Republic of Slovenia assessed it as being authentic. The department actively co-operated in the 2006 company audit annual report In 2007, the department actively co-operated in the handover of infrastructure to the public company based on the contract on the arrangement of mutual relations regarding specific infrastructure for air navigation services, which was signed 1st December The handover of infrastructure was completed in March 2007 and the funds were transferred into the books on 1st January In January, the Ministry of Transportation and the Ministry of Finance agreed on the method and amount of transferred infrastructure funds, and on the method and amount of depreciation, and reporting the balance of these funds. In co-operation with the Directorate for Civil Aviation and agreement was entered with the Agency of the Republic of Slovenia for the Environment on depositing funds to ensure aviation meteorology. The company deposited the funds to the Agency of the Republic of Slovenia for the Environment in December Many activities were devoted to preparing the agreements, which will assure the reimbursement of costs, which the company has with flights that are excluded from paying taxes. Agreements were prepared on the reimbursement of costs for performing air navigation services for flights that are exempt from taxes, which is supposed to be signed by the following ministries:. Ministry of Defence, Ministry of Foreign Affairs, Ministry of Internal Affairs and the Ministry of Transportation. Each ministry is supposed to cover the costs of those flights, for which it had exempt the payment of taxes. The signed agreement was only adopted by the Ministry of Internal Affairs. The department actively co-operated in the agreements with the Ministry of Defence regarding covering the costs of air navigation services at the Cerklje ob Krki Airport. EUR 284, in revenues were generated from this in The department actively co-operated in the implementation of electronic writing and calculating travel logs. The department actively co-operated in the TransSLO project especially in the financial part and the project is being continued in

42 2007 annual report The department managed procedures for the selection of partners in the area of financing and auditing. The most significant event is the finalised procedure and agreement with the selected bank Banka Koper d.d. for a long term loan of EUR 14.5 million, with which the funds are ensured for the construction of the air traffic control centre ATCC: The contract was signed on 3rd April In 2007, the company drew EUR 2.9 million of the long term loans and the drawing of the remainder of the principle is intended to settle obligations to the sub-contractors of the ATCC project. In 2007, the auditing firm Ernst&Young were selected as the auditors for auditing the public company's 2007, 2008 and 2009 business years. In May 2007, a contract was signed for a short term revolving loan with Unicredit banka, d.d. for EUR 3 million for a period of one year. This loan assured additional funds for ensuring liquidity during the period when inflows are lower than outflows. There was a public tender for the selection of the most favourable bidder - insurance companies for insuring property. The department co-operated in the selection of the most favourable bidder - insurance companies for the insurance of actions in tort. The department actively co-operated in tenders for the selection of suppliers of new systems and devices for ensuring the uninterrupted implementation of air traffic control, especially in defining payment conditions and from the standpoint of ensuring funds for the realisation of individual projects. In 2007, the implementation of the secondary radar on Oljska gora was realised and in December 2007 the new FDPS started operating. In 2007, the procedure for the purchase of the new control system PSR/MODE-S was carried out and the new navigation system Terminal VOR-DVOR. In addition, the department actively co-operated in selecting a contractor to implement services for acquiring and drawing funds from structural funds for the period from For the entire period it also co-operated with the Ministry of Transportation as well as with the Department of Selfgovernment and Local Policy under the Government of the Republic of Slovenia in including the public company's projects in the operative program for the development of environmental and transportation infrastructure for the program period with the intention of acquiring grants from structural funds. Together with the expert departments, companies were prepared for the public company's offer for the sale of services such as aviation expertise and other. Amongst other things, the procedure "Missed Approach" was formulated for the Maribor Airport (value of project EUR 1,617), a security analysis for the construction of a new block at the thermo-hydro plant in Šoštanj (valued at EUR 20,000) was completed, a study was carried out to see the impact of power lines at the future airport in Trebnje (valued at EUR 5,850.00), an expert's detailed report was drawn up for the construction of a heliport in Brezovica (valued at EUR 2,232) In July 2007, a contract was signed with Aerodrome Ljubljana to implement the ground movement control GMC at the Jože Pučnik Airport in Ljubljana, in which the contractor charges the client EUR 6, without VAT each month for their services. 42

43 Some statistics for in 2007, the public company received 2,357 incoming accounts (accounts from domestic and foreign suppliers), invoices were issued, travel orders were issued, - contractual natural persons included: 52 payments of sub-lease contracts, 38 payments of lease contracts and 25 payments according to "author contracts". - payment went out to 49 members of the worker's council and 55 members of the supervisory board 2007 annual report Safety ECAC ATM Safety Framework Maturity Study achieved an average planned level for Activities in 2007 regarding joint affairs The safety department for air traffic control - safety endeavours to achieve the highest possible level of safety culture for all employees when implementing their work and tasks, which ensures: - a clear and preventative approach to the systematic management of safety in performing air navigation services with the intention of constant improvement - implementing acceptable levels of safety first when judging commercial, operative, environmental, social or societal impacts in performing air navigation services - being aware of the significance of safety and personal responsibility of all employees when performing air navigational services - responsibility for safety at all levels of management, for achieving satisfactory efficiency of air navigation services with the obligation and co-operation of all those employed in the company. - the culture of justice when reporting about or investigating events linked with safety and the corrective measures linked with them - reducing the risk of a plane crash, incident or an event linked to safety, which can occur if air navigation services are performed at the lowest comprehensible level and in the real world a realisable level The constant activities of the safety department regarding air traffic control - safety was treated during the whole time in the form of co-operating with - the rest of the services and departments of the public company in relation to executing the processes and activities of the safety management system. - The Ministry of Transport of the Republic of Slovenia - Directorate for Civil Aviation - The Ministry of Transport of the Republic of Slovenia - Sector for the investigation of aircraft crashes and incidents - The European organization for the safety of air navigation - EUROCONTROL (the IANS institute, LCIP - local plan for harmonisation, ECIP - EUROCONTROL plan of harmonisation, ESP program - European Safety Programme and SASI - Support to Air Navigation Service Providers for Safety Management System Implementation - airlines in Slovenian airspace (ADRIA) - the organisation of APAC in the area of managing safety and assessing safety for the ATCC Ljubljana project - neighbouring departments for the safety of air traffic - Ministry of Defence of the Republic of Slovenia 43

44 2007 annual report In 2007, a local safety group was formed with the purpose of expanding and increasing the efficiency of the safety management system in the public company. In co-operation with the educational institution IANS and the agency Eurocontrol, the public company in accordance with the SASI 2007 program carried out training of SAF-AOI - ATM Occurrence Investigation) with international participation from Malta, Croatia and Slovenia. The process of informing about events regarding safety In 2007, there was a total of 220 reports filled out regarding safety in the public company, with 200 of them being from all air traffic control units, 15 from all aeronautical telecommunication units and 5 from all aeronautical information units. Number of safety incidents in 2007 according to the sectors and departments AIR TRAFFIC SERVICES SECTOR 200 Area Control Centre Ljubljana 66 Tower Brnik 81 Tower Maribor 26 Tower Portorož 26 Tower Cerklje ob Krki 1 AERONAUTICAL TELECOMMUNICATION SECTOR 15 AERONAUTICAL INFORMATION SECTOR 5 TOTAL 220 Comparison of the number of safety incident reports for 2005, 2006 and 2007 according to sectors and departments Year AIR TRAFFIC SERVICES SECTOR Area Control Centre Ljubljana Tower Brnik Tower Maribor Tower Portorož Tower Cerklje ob Krki AERONAUTICAL TELECOMMUNICATION SECTOR AERONAUTICAL INFORMATION SECTOR TOTAL The process of investigating safety incidents and formulating corrective measures In 2007, 4 safety incidents were investigated within the context of the investigation commission of the public company. The air traffic safety department proposed 4 corrective measures for air traffic controllers, 7 safety recommendations and 2 safety demands at the level of the public company. Reporting about safety was organised in all air traffic control towers. Due to the project of implementing the new FDPS in December 2007, the reporting on safety for the area control centre Ljubljana was organised at the beginning of

45 The process for performing safety analyses In 2007, 8 safety incidents were analysed to different extents and different complexities. Activities in relation to performing safety analyses took place in close co-operation and the necessary degree amongst the air traffic safety department and all other operational units. - VP-02 FDPS-KAMI - VP-03 STCA - VP-07 MSSR Oljska gora - VP -08 Las Cerklje - VP-09 Stop Bar - VP-10 New tower- location - VP-11 OKZP simulator - VP-12 OKZP weather forecast 2007 annual report Quality In February 2007, the public company successfully obtained the ISO 9001:2000 certificate of quality from Bureau Veritas, whereby all the conditions under regulation 2096/2005 for quality (item 3.2) were fulfilled. In May 2007, the first internal assessment at all five locations of the public company was completed and the disharmonies were remedied. The second internal assessment was completed in December 2007 and January With regard to the forecasted external assessment, the process regulations and quality regulations were corrected or supplemented. On behalf of the Ministry of Transport, the public company acquired a quality manual in accordance with article 9 of the aviation act. Through introductory meetings before internal assessments, informative training of employees on the quality management system and the process approach in the public company took place and as a result awareness about the quality system in the public company had increased. In addition, there was training for employees who are internal assessors in December 2007, whereby knowledge about quality and becoming familiar with the 9001:2000 ISO standards was achieved and expanded. As a result, the constant improvement of the quality management system was achieved, which is also a condition for the preservation of the certificate as well as achieving TQM Security In November 2007, in the area of safety the public company acquired approval from the Ministry of Transport for a safety program, whereby the requirements in the aviation act (article 129) and regulations 2096/2005 in the area of safety (item 4) were satisfactory. An assessment was made by the Ministry of Transport regarding the fulfilment of regulation 2096/2005 in the area of safety - security. Two new documents were prepared, which included the rules on the form, content and wearing procedure for ID badges and a safety manual. A fourth document - rules / procedure for entering air navigation services buildings is being reviewed. 45

46 2007 annual report In the area of fire safety, an examination of the active fire protection system was performed and any defects were remedied, which included the partial replacement of detectors and the transfer system of alarm signals to the Ljubljana fire hall via the Intranet system (TUS was completely terminated) was implemented. Contracts for performing physical security and maintaining the technical security system on Kotnikova 19a were signed. The public company co-operated in workshops on securing critical infrastructure at the Ministry of Transportation and within SET (Eurocontrol ATM Security Team). In June 2007, the public company organised a workshop on ATM Security (Implementation &Improvement) in Ljubljana International Co-operation CEATS/FAB CE Project Through its representatives, the public company together with the representatives from the Ministry of Transport represent the Republic of Slovenia at the highest possible level regarding the CEATS, CEATS Coordination Group: (hereinafter CCG), where we continued to work actively and successfully in the project in In accordance with the conclusion of the Ad Hoc CCG meeting, which took place in November 2006, activities regarding the new concept of the CEATS project continued to take place, which was renamed Functional Airspace Block Central Europe - FAB CE). At the 18th CCG meeting on 22 March 2007 in Brussels, the FAB CE Feasibility Study Project Charter was adopted alongside Slovenia's active role, which defined the content and time frame of the Functional Airspace Block Central Europe. All the CEATS countries except for Italy participated in the study, which would prove the logicality and feasibility of the FAB organisation in the region, in accordance with the Single European Sky legislation. The study had to be based on the new concept of the project, which differentiates from the one forecasted in the original CEATS agreement and anticipates: - service provision will be based on a dynamic (virtual) connection of existing and planned centres and not on the consolidated solution through upper area control centre in Vienna, - the service provider will be individual national air navigation service providers and not Eurocontrol, - Eurocontrol will act as the project manager and facilitator for the project, - The project will cover the upper and lower airspace, which will form a functional airspace block in line with the Single European Sky Legislation. The organisation and the implementation of the study was trusted with the FAB CE Steering Group, which steered the project work of the FAB CE project management office and six working groups, which were formed according to areas (operational, technical, financial, safety, legal, human resources). The public company, with all its representatives actively co-operated in all the listed groups and in co-ordination with the representatives of the Ministry of Transport represented the interest of Slovenia and the public company with the purpose of implementing the provisions of the Single European Sky legislation and improving the co-operation of all types for ensuring the appropriate execution of air navigation services in the future. The final documents of the study, which include the FAB CE Master Plan, FAB CE Cost Benefit Analysis) and the FAB CE Safety Plan, were discussed in 46

47 March 2008 at a CCG meeting, which adopted the decision to continue with the project and identify the necessary changes to the legal basis for continuing regional connection and co-operation within the region. Adriatic Cooperation In 2007, the public company together with the Italian (ENAV) and the Croatian (Croatia Control) air navigation service providers formed a group called the Adriatic Cooperation with the intention of improving the operational and technical co-operation amongst partners in ensuring air navigation services in the region of the Adriatic Sea. Many meetings at the level of directors were organised as well as at the operational level, and important steps were already made in the first year in improving cooperation on the account of good partners and the users of our service. An agreement was signed between the public company and ENAV on the use of two Italian radars on behalf of the public company, which will improve the radar coverage of the airspace in Slovenia. There were some changes proposed and adopted at the operational level regarding the route network in all three countries, and the technical area identified the possibility of cooperation in the development of a flight data processing system - so-called CoFlight Project, which forecasts the development of a new generation system in accordance with the European development project SESAR. The decision for the public company to co-operate as an observer in the CoFlight User Group should be adopted in the first half of annual report Co-operation for harmonised organisation of airspace with Austria and Croatia In 2007, the public company was an initiator for the harmonised approach in modifying the organisation of the airspace amongst Austria, Croatia and Slovenia. The three-sided harmonisation of shaping the airspace and network of airspace routes was oriented in the optimization of airspace routes and operative agreements, which include the airspace of three countries. Eight months of negotiation at different levels for the preparation of the biggest simultaneous changes in the network of airspace routes in Slovenian airspace have manifested over the past ten years into an agreement, whereby the type of airspace routes and operational agreements are changed in April 2008, which will enable for the rationalisation of operational work and increase the flow of air traffic. Other co-operation The public company continued co-operation in preparing an important development document called LCIP in the preparation of important Eurocontrol reports such as ATM Cost Effectiveness Report - ACE Report and monitored the development of the project SESAR and the operations of the CANSO and ATCA associations. TransSLO The public company together with its partners is concluding the activities in the project Specific Support Action on Support for Sustainable Transport Research in Slovenia (TransSLO) in The following results were achieved: - The first Ph.D. Research Day on air traffic was organised for Slovenian researchers, which was intended to encourage the young researchers of Slovenia to co-operate internationally and enable the promotion of their own work. 47

48 2007 annual report - A database of Slovenian and foreign researchers in the area of air traffic has been implemented and research organisations. The database allows all those who are interested central access to contact information of the professional public in the area of air traffic in one place. The purpose of the database is to allow the academic and research environment and the economic potential an interconnected network group for achieving the development of air traffic in Slovenia and abroad. - The TransSLO workshop was organised, which allowed all the experts, researchers and business institutions, which operate in the area of transportation in Slovenia and the EU a more in-depth professional gathering and a pre-preparation for the next European Commission tender for obtaining funds. Developmental research priorities in the area of transportation in Slovenia were also formed within the context of the workshop. - The results of the endeavours were presented at the TRA international conference in April 2008 in Ljubljana and in 2008 a document will also be prepared, which will show the strategic directives for Slovenia in the area of transportation in the upcoming years. Preparation of the document is also supported by the Ministry of Transportation. The project activities have initiated the realisation of the transportation policy in Slovenia with an emphasis on safety, the environment and intermodality. The priority areas for transportation research in Slovenia were defined, which are worth treating because of the improvement of social and economic conditions, which are in the interests of the European Union as a whole. We enabled an increase in Slovenia's participation in Europe in the research and development of transportation and initiated national and international strategic orientations of Slovenia in the area of development, global changes and the environment. We stimulated connections in the context of a "knowledge triangle" (amongst education, development and innovation). We have enabled Slovenia to connect to the so-called European Research Area (ERA). TransNEW The TransNEW Project - Support for realising New Member States and Associated States in Transport Research, is a continuation or upgrade of the TransSLO project. Activities for preparing the project will begin at the beginning of The project will officially start after confirmation by the European Commission to finance the project, which will probably be at the end of December 2008 and will last 24 months. The public company will participate in the TransNEW project as one of the 15 partners. The main co-ordinator will be NewRail, Centre for Railway Research at Newcastle University from Great Britain, and in addition to the public company the following are going to participate: Technical University from Lithuania, Technical University from Latvia, CDV Transportation Research centre from the Czech Republic, Pomorski Research Centre from Poland, The University of Belgrade - Serbia, The Technical Research Institute from Turkey, Consulting Company for Research from Romania, The Company EU Travyz from Holland, College of Transportation in Bulgaria, The Technical University of Moldavia, the company Euromobilita from the Czech Republic, Autokut a company from Hungary and the National Institute of Research and Development in Informatics from Romania. The main purpose of the project is to stimulate research and development in the area of transportation in all the new EU member states and the associated members. This means recording the research opportunities and 48

49 implementing a database of research organisations and researchers not only in Slovenia, but in all of the 26 new EU member states and associated members, who will be dispersed in the region in the context of the project. Within its activities, the public company will include the Western Balkan States: Croatia, Bosnia and Herzegovina, Serbia, Kosovo, Macedonia, Albania and Montenegro. The main task of the public company will be to implement and acquire a database of research organisations and researchers from the stated regions, organise a Ph.D. Day, organise a workshop, which will enable all the experts, researchers and business institutions, which operate in the area of transportation a more in-depth professional gathering annual report In addition to the activities at the regional level, intermodal activities or activities which will allow for an analysis of the researched area in the area of transportation at all levels - maritime affairs, roads, railways and aviation will also be addressed. The public company shall take on activities, which are tied to the analysis of research possibilities and development in all 26 states in the area of aviation Public tenders In 2007, 295 public tender procedures were carried out, which included: procedures with an order form totalling EUR 562, EUR, - 1 procedure according to the B list in the amount of EUR 56,779,33, - 37 procedures by collecting offers totalling EUR 1,152,153.32, - 8 open procedures totalling EUR 5,341, Project management In 2007 the public company actively performed project management. In accordance with the rules on project management in the public company Slovenia Control, Slovenian Air Navigation Services, Limited there were 62 projects at the end of 2007 in the company in the area of Air Information Services, Air Traffic Control Centre, Single European Sky - FAB CE, SESAR, automated systems, communication systems, monitoring systems, navigational systems, navigation services, projects 6 and 7 of the rough draft program, cohesion and structural funds and general affairs projects. On 31 December 2007, from 62 projects there were 30 projects being established and 24 in the realisation phase. There were 5 projects that were temporarily and permanently stopped and only three were concluded. In comparison to 2006, the public company made considerable progress in the area of project management. The number of projects increased from 20 to 62. Number of projects 49

50 2007 annual report In 2006, the public company started to implement project management in practice and that is why the majority of the projects were in the preparation phase. The setting up and execution of concluded projects has not occurred yet. In 2007, there was a considerable increase in the number of projects being set up, which shows the need for new projects and new development and company progress in the area of performing project management. Comparison of project statuses in 2006 and 2007 Some more important projects are listed as follows: - the project for the construction and set up of the new Air Traffic Control Centre at the Jože Pučnik Airport in Ljubljana, which corresponds to the construction of the building itself, on the implementation of all the systems for ensuring and performing air traffic control services and an operating drive at the new location, where training and instructions for performing services and other activities are included for the successful drive of company operations. - the Slovenian Presidency of the EU project and ensuring air navigation services, which is currently completed up to the first phase. As the second phase the project "The creation of a plan of measures for unexpected events", will be completed in the project for preparing applications for drawing EU funds from structural funds, which originates from the permanently stopped project of drawing funds from cohesion funds. - the project system of informing of pilots a half a year in advance - Self&Home Briefing, which will ensure that pilots are informed half a year in advance about Slovenian international airports and informing pilots half a year in advance using the internet. - EAD Briefing facility application project, in which the modernization of EAD work station will be carried out with the introduction of the EAD BF application in the context of the INO DU program module at EAD working stations(ecit). In this way there will be a joining of multiple processes and work tasks in a way that they are carried out in a unified system and the maximum usage of work tools, which are available, will be ensured. Quality procedures in case of an emergency will be defined and introduced. - the project for setting up a new terminal radar at the Jože Pučnik Airport in Ljubljana and its implementation for operation. - Terminal DVOR project, with an objective to ensure data for air traffic control and at the same time ensuring the highest level of safety and permeability for air traffic in the airspace of the Republic of Slovenia as well as in the area of airports. - project Establishment of Ground Movement Control in Ljubljana Airport (GMC Brnik), whereby the public company co-operates with Aerodrome Ljubljana d.d. and Integra. 50

51 - the project Specific Support Action on Support for Sustainable Transport Research in Slovenia (TransSLO), which has the objective to strengthen the ties amongst different economic subjects in the area of transportation. - the project in obtaining and implementing the ISO 9001:2000 system of quality - the project for the control system HP-OV NNM. - the project for setting up MSSR on Oljska gora. In 2007, the public company also acted as contractor of services in the context of projects. An analysis of the Trebnje airport and Review of the navigation studies for the Cerklje ob Krki airport were carried out for external clients annual report Business informatics In 2007, the public company carried out many activities in business informatics. The main one included the implementation of the documentation system Business Connect. An upgrade of the PR1 application (internal approval of employee proposals and demands) was carried out, in the sense of recording the overburdening of individual types of costs. An additional module was also developed for the application Projektna pisarna 3.0, which enables automated (manual defining) processing of reports about completed tasks within the programs or projects Activities relating to the acquisition of funds from structural funds. In 2007, a project group began work on the preparation of applications for drawing funds from structural funds. The project group performed all the activities and needs for preparing a public tender for the acquisition of a contractor for the preparation and submission of an application for the acquisition of funds from structural funds for the period. A public tender was carried out in co-operation with an external contractor. In 2007, the public company maintained an active dialogue with the intermediary body, which is the Directorate for Civil Aviation in the case of the public company. All the documents for the completed public tenders were sent to the intermediary body, which will be co-financed from the structural funds and in addition to this all the newly created documents would also have been sent on a regular basis for confirmation. Weekly progress reports on the projects, which will be co-financed by structural funds were regularly sent to the intermediary body and in addition to this monthly reports were also drawn up, which reflected the monthly summary of all activities related to the projects, which will be co-financed by structural funds Inspections by the aviation inspectorate The aviation inspectorate performed regular inspection in the public company at all locations. All the established irregularities were remedied by the subscribed deadline and the work by the inspectors took place uninterrupted and without any particularities. 51

52 2007 annual report Activities, related to the acquisition of operating permits The Ministry of Transportation, the Directorate for Civil Aviation had already informed the public company in 2006 about all the documents that are necessary for the issuance of an operating permit. In 2007 the demands for the issuance of operating permits were submitted based on the stated notification. There were no difficulties in acquiring permits. In 2007, a list of operating permits and the accompanying documents was established on a local computer and at the same time activities regarding the preparation of operating permit databases in the application Business Connect began. The preparation of operating permit databases is in the final phase. 18 operating permits with the accompanying documentation were entered into the current database on the local computer, of which there were 11 newly issued or upgraded in Key performance indicators The average number of flights within a sector hour within the area control centre Ljubljana The number of flights, which the area control centre Ljubljana can control is limited to the number of open sectors. In comparison with the number of flights and the total number of sector hours, which were available to the user, we get the average number of flights in a sector hour, annually. The average number of flights in a sector hour in the last years has been persistently increasing because of the improved anticipated flow of air traffic and the consequential adaptation of planning work to the flow of air traffic. Changes in the flow of air traffic also have an impact on the increase in the number of flights in a sector hour, which are reflected in the increase in the amount of air traffic during evening hours Statistics The chart below shows the average number of flights in a sector hour according to each year. Average number of flights in a sector hour 52

53 Air traffic controller hour productivity The ATCO hour productivity is an indicator, which shows the number of hours of flying for each paid hour of the air traffic controller. The total amount of time for all the flights across the airspace is taken into consideration as the number of flight hours. In addition to the total flight time, the number of working hours on an annual basis, the average duration of a shift and the number of air traffic controllers for the air traffic control region of Ljubljana also have an impact on the value of the indicator annual report The chart below shows air traffic controller productivity according to each year. Air traffic controller productivity The ratio between the number of staff and the number of air traffic controllers The support staff ratio or the ratio between the number of staff and the number of air traffic controllers in the public company, indicates how many are employed in jobs, which offer support to operative jobs in air traffic control in relation to one air traffic controller. In 2007, the ratio between the number of staff and the number of air traffic controllers was 2.46 in the public company, which means that there were an additional 1.64 co-workers employed in the other departments for every air traffic controller employed. In 2006 an average of additional 2.4 co-workers were employed in all the other jobs for every air traffic controller employees in the member states of Eurocontrol. After a persistent increase in the coefficient over the past years, 2007 recorded a drop in the coefficient value, which indicates in increase in efficiency. Upon an increase in the amount of air traffic and the effective planning for staff, a further decrease in the coefficient value can be expected. 53

54 2007 annual report The support staff ratio can be seen in the chart below on an annual basis. The ratio between the number of staff and the number of air traffic controllers A similar insight into the correlation amongst staff in the public company is also offered by the indication of the number of annual flights per staff member in the public company and the number of annual flights per air traffic controller in the air traffic control region of Ljubljana. As indicated by the chart below, the number of flights per staff members increased by 4% in the past year and the number of flights per air traffic controller for the air traffic control region of Ljubljana increased by 2%, which shows favourable movement in the staff structure. Number of flights per staff members Analysis of regulations and delays in 2007 In the Network Operations Plan for 2007, Eurocontrol forecasted air traffic growth by 7.8% and the actual air traffic growth for the Dolsko sector was 15.71%. The forecast for anticipated delays was 0.2, and the actual delays for 2007 were The majority of the calculated delays were due to the implementation of the new FDPS system in November and December, which is 46% of all delays. The delays and regulations during the implementation for the FDPS R1 system regarding each phase: PHASE 1: 1758 delay minutes (regulation 19., 21., ) PHASE 2: delay minutes (daily regulations) PHASE 3: 1148 delay minutes (regulation 7., 9., ) TOTAL delay minutes and 20 regulations 54

55 The diagram below shows the total delays in the last three years. Total delays in the last three years 2007 annual report The diagram below shows the delay (calculated for each year as a unit) in the last three years. Delay calculated for each year as a unit The diagram below shows delay distribution according to reasons Delay distribution according to reasons Legend - RDR - delay because of radar - CAP - delay because of capacities - STAFF - delays because of staff - OTHER - other reasons for delay 55

56 7. Report on realisation of objectives

57 In its business plan for 2007, the public company defined the following objectives: - Safety, - Capacity; - Keeping the certificate of qualification for performing air navigation services and acquiring the ISO9001:2000 certificate of quality. - Employee development, - Air traffic control centre - ATCC project - Active international co-operation and - Solving open ended questions with government authorities, which have an impact on company business operations 2007 annual report 7.1. Safety In the context of air traffic safety, two operational objectives were defined and thus: - no extraordinary flight safety event type A, which according to ICAO classification means that an aircraft crash is possible and would be caused by public company staff members - minimum number of extraordinary flight safety events type B, which according to ICAO classification means reducing the current minimal separation and would be caused by public company staff members One (1) extraordinary flight safety event type A was recorded in the air traffic control sector, whereby it is necessary to emphasise that the incident happened without any direct contribution from the public company staff. One (1) extraordinary flight safety event type B was recorded and the incident happened without any direct contribution from public company staff. The stated objective of possibly increasing the number of aircraft movements in Slovenian airspace in all flight phases by at least 10% was surpassed. Compared to 2006 air traffic increased by 15.7%. The objective to ensure the optimal average delay per flight, which will be less than 0.2 min per flight could not be achieved do to the events that occurred in September - the breakdown of technical systems (RDPS and radars). The average delay per flight was min. This is still very good regarding the goals set by Eurocontrol's PC, which placed the limit at 1 minute per flight, which we completed Capacity; Via the implementation of flexible shifts and the activation of achievement outside of the workplace (W-waiting), the appropriate availability of staff was ensured, followed by movement of traffic. Activities for the implementation of special support tools for creating a monthly work plan have already started, which will additionally enable a more optimal usage of capacities. In addition, the flexible openness of air traffic control in Portorož and air traffic control in Maribor were ensured due to the traffic needs at international airports and as a result this enables an extraordinary openness in the event of demand. Activities for the reorganisation of airspace and associated procedures took place throughout the entire year, especially in the following areas: - The optimisation of the network of airspace routes and the organisation of airspace. The objective was partially realised, changes 57

58 2007 annual report in airspace for air traffic control in Maribor are prepared, but not yet implemented. - The renewal of international letters of agreement in a way, which will enable greater capacity of our airspace. A change in a letter of agreement between Ljubljana and Vienna has been realised. Negotiations have begun with neighbouring Croatia regarding the dualisation of routes, which will continue in The implementation of ground movement control (GMC) at the Jože Pučnik Airport in Ljubljana. Phase 1 was completed on 30th July 2007 and the continuation of Phase 2 and 3 follow in In the area of equipment availability, regarding the capacity of airspace, the following investments were made: - The ARTAS system has an operating permit, successful integration of the Safety Net system. - The implementation of the management system and the technical monitoring of devices, which is based on the Open View system has continued. - Self serve terminals at the Maribor and Portorož Airports have not been implemented yet. - The old communication stations from Krim were transferred to Jože Pučnik Airport, Ljubljana because of new installations. - Frequency coupling was not carried out because it was assessed that the current equipment installation is not possible. - Remote control monitoring system with remote control broadcasting stations has been implemented. - A secure intercity data network was built, which is currently in the testing phase. - The set up procedure for DVOR is taking place in accordance with the plan. It will probably be operational in the second quarter of The replacement procedure for the existing VOR on Kresniški vrh has not yet begun - The purchase procedure for radar system spare parts is in accordance with the plans. The new radar system at Brnik is currently in the test phase and test operations. - The successful implementation of the new FDPS system and operational use. Maintenance of the equipments and systems is planned in accordance with the plan during the time when there is less traffic. Regular monthly maintenance was performed on the aging radar station at Brnik, which takes place every second Monday in the month. Informing operational departments on the maintaining of parts is taking place in accordance with the agreement. The purchase procedure for spare parts for the most important systems is in accordance with the plans. The public company received a certificate - performing air navigation services on 20th December 2006 with a decision from the Ministry of Transportation under no /2006/82. The certificate was issued for a period of two years. In September, the Directorate for Civil Aviation performed an examination of fulfilled conditions for the validity of the certificate. They verified all the requirements, which are defined by conditions for the validity of the 7.3. Keeping the certificate of qualification for performing air navigation services and acquiring the ISO9001:2000 certificate of quality. 58

59 certificate. The public company, met the majority of conditions from the stated decision. Some matters have remained unsolved. They include: - The plan of procedures for unexpected situations - The distribution of income from performing air navigation services in the part which talks about covering the costs of the national supervisory body. On 18th December 2007 The Ministry of Transport issued resolution no /2007/31, in which the deadline for meeting the conditions for both unsolved conditions is extended to 20th December annual report In accordance with the Commission Regulation (EC) 2096/05, the public company also executed a consultation in the form of a one day workshop titled "Co-operation between Slovenia Control, Slovenian Air Navigation Services, Limited and the users of these services". The goal of the workshop was to present the work and the future development of the public company and co-operation with the end users. Representatives of transportation service, air navigation service providers, The Ministry of Transportation and the Ministry of Defence were invited to the workshop. In the context of internal assessments in accordance with the Commission Regulation (EC) 2096/05 five completed assessments were in accordance with the plan of internal assessments. Assessments took place at all locations. All of the regulation requirements were assessed and there were a total of 35 disharmonies. The number does not reflect the true state of affairs, because some of the disharmonies are repeated in the same sector; however in different units. The disharmonies have already been remedied or are being remedied. The condition in the area of remedying disharmonies will also be the subject of internal assessments in In 2007, the public company was awarded the ISO 9001:2000 certificate of quality from Bureau Veritas. Activities for remedying disharmonies took place throughout the whole year, which were established during the internal assessment and as a result the preservation of the certificate. The external assessment, which was completed in February 2008, was successfully carried out without any major disharmonies. It is important that the external assessors emphasised that there was considerable progress made until the beginning of 2007 also in the area of ISO 9001:2000 quality system. For performing the management and control of air traffic, which is the primary activity of the public company, the staff is one of the resources, which has the greatest impact on the success in executing the activity. This is why employee development is one of the strategic objectives Employee development The realisation of the forecasted measures, which were defined in the business plan for achieving this objective in 2007 can be seen in the following: - The corporate collective agreement and the new Rules on Internal Organization and Job Systematization were adopted. - The development of managers project continued - Annual interviews with employees started, which continue in Regular meetings held by the Director and besides the heads some of the other employees, responsible for individual wider or narrower areas, participated in some of them - The head of the company regularly attended worker's council meetings and responded to all the initiatives and questions from the employees. 59

60 2007 annual report - All types of training were carried out, related to air traffic safety. - All the courses related to the procedures for emergency situations were carried out along with a refresher courses for air traffic controllers and consultations on safety. In accordance with international standards, the training needs to be carried out for all operational staff two times a year and are a condition for extending the license and work permit. - Refresher courses were organised, which were intended mostly for training in the operational part in the technical monitoring centre in Ljubljana. A refresher course for FDPS was completed and a basic course for radio communication. - In addition, simulation exercises for air traffic control were carried out, with an emphasis on emergency situations. - Team Resource Management is starting to be implemented, which will have a positive impact on mutual relation and shall indirectly increase safety. Two facilitators were trained and the training of additional facilitators is anticipated for Employees were allowed to attend different general seminars and workshops for learning about novelties in the area of work and acquiring additional knowledge. - Regularly informing employees continued through the internal monthly bulletin Radial, which allows employees to publish their own ideas. - A presentation about the public company was organised for new employees. - Informal gatherings for employees were organised. - Certain measures in the context of the Family Friendly Company project implemented. - Successful work was awarded regarding work performance and a salary was paid regarding business performance. - The public company participated in getting gifts for kids with financial contributions, which were organised by unions. The goal of the ATCC project is defined as the building of a new air traffic control centre and office space at the Jože Pučnik Airport in Ljubljana, with the accompanying equipment and technical systems for performing air traffic control services. With the intention of rationalising the business operations of the public company and achieving financial efficiency a business building part will also be included for the public company's headquarters. The ATCC project does not only include the physical construction of the new complex but it is composed of all the activities, which are necessary for the undisturbed performance of air traffic control services at the new location. The project is divided into three sections: 1) ATCC project - the building included activities, connected to the physical construction of the building, in which the new air traffic control centre will be located. 2) ATCC project - technical migration is composed of upgrading activities or modernisation, the exchange and removal of all systems and devices for air traffic control, whereby the activities are tied to the old as well as the new location. 3) ATTC Impulsion project includes the activities, which are needed at the beginning of performing air traffic control on new systems and devices, whereby the activities are tied to the old as well as the new location 7.5. Air traffic control centre - ATCC project 60

61 ATTC Building Project The following activities were carried out in 2007: - Preparation of application for the issuance of building permits and acquiring the necessary consensus. The application for the issuance of a building permit was submitted to the Ministry of the Environment and Spatial Planning in January Procedures for application supplements took place during the whole year, as the completion of the application depended on the activities, which had to be carried out beforehand by some state authorities. After the arrangement of all the questions, a building permit was issued on 12th December 2007 and became final on 12th January Reconciliation of documentation for acquiring building rights for the lot, where the building will be located and servitude rights for the lots where the municipal infrastructure and road will be located. building right was granted by the Government of the Republic of Slovenia at its session on 6th September 2007 easement right was granted by the Government of the Republic of Slovenia at its session on 16th October annual report - Preparation of tender documentation for the issuance of a public tender for the selection of a building contractor for the air traffic control centre. The public tender was issued in March 2007, many supplements to the tender documentation were prepared, and the public opening was carried out in June An assessment of the offers was performed, the supplementation of formal deficiencies by the bidders and a reassessment of the supplemented offers. A decision not to select any bidder was adopted, because no offer was suitable (technical viewpoint). Selection of the building contractor continued with a negotiation procedure without any preliminary publications, which was based on the previous open procedure. An invitation to hand in an offer during the negotiation procedure without prior publication was forwarded to all the bidders, who participated in the open procedure. The procedure was completed in February 2008 with a decision not to select a bidder. - Preparation of tender documentation for the issuance of a public tender for the selection of a building contractor for the access road and municipal infrastructure for the needs of the air traffic control centre. A tripartite contract was signed amongst the public company, Slovenia Control, Slovenian Air Navigations Services, Limited, the Ministry of Internal Affairs and the contractor J.V. SCTd.d. Ljubljana + Cestno Podjetje Kranj d.d. Construction began immediately after acquiring a building permit and is in the phase of implementation or completion. - A list of remarks regarding the project for the realisation and harmonising the remarks with the project managers. The creation of technical documentation (PZI) is in the final phase. - Reconciliation with the Municipality of Cerklje na Gorenjskem regarding the payment of the municipal contribution. The municipal contribution, which was assessed by the Municipality of Cerklje na Gorenjskem shall be paid in part based on the decision on the assessment of the municipal contribution into the municipality's budget, and partially by entering a contract on equipping with a contribution into the municipal infrastructure. - Reconciling with the Ministry of Internal Affairs regarding the purchase of buildings. The Ministry of Internal Affairs building, which needs to be demolished, was purchased. 61

62 2007 annual report - Reconciling with Aerodrome Ljubljana, d.d. regarding the purchase of buildings, payment of compensation for connection of their infrastructure and co-financing the construction of new infrastructure and the access road. Reconciliation is completed, only a signature on the appropriate documents is needed. The ATCC project technical migration and the ATCC project impulsion In 2007, the main activities of both projects were connected to the upgrading of the main technical system for air traffic control at the current location and incorporating the new flight data processing system and upgrading the radar system for air traffic control for complete operations. After two successful testing phases of the new system of control the system was in full operation and hooked up on 7th December This is the first bigger reliable system of operation and the possibility of incorporating new functionalities for the needs of air traffic control, which are occurring with the development of new technologies and secondly moving the system to another location will be easier. For the complete assurance of air traffic control safety, the old and new systems operated simultaneously for a certain period of time, which demanded a restriction on air traffic during the test phase, alongside the need to duplicate staff to cover the operations of both systems and confirmation for the acceptability of the system. This means decreasing the highest hour capacities of air traffic by approximately 30%, which were terminated in their entirety until 20th December Activities, which were carried out for the successful incorporation of the system into full operation: - Validation and verification of system and procedures, - Testing of the system and procedures - Training the operational staff - Safety analyses - The preparation of operational instructions and procedures, - Preparation of instructions for use, - Preparation of documentation for acquiring an operating permit, - Planning operational staff for the implementation of parallel system operations, - Operation airspace and limitation in airspace during restrictions, - Preparing a limitation plan in airspace and the simulation of anticipated delays, - Starting communication with users, - Contingency procedures. In addition to co-operating with international organisations (ICAO, EUROCONTROL, CANSO, ATCA...) participating in international conferences and bilateral co-operation with neighbouring societies, the public company has actively participated in the FAB CE (CEATS) project and other international projects. The VTC project is in the form when it was established, temporarily frozen, until the FAB CE does not form to such an extent that it would be logically possible to also define these types of connections in the area of training. The principle itself remains a perspective and it will be necessary to reasonably redesign or optimise together with the development of the FAB CE project Active international co-operation 62

63 7.7. Solving open ended questions with government authorities, which have an impact on company business operations In 2007, a contract was signed with the Ministry of Defence on performing services at the Cerklje ob Krki airport. A draft agreement on the issuance of a permit for the use of airspace was prepared, with the intention to obtain a possibility on impacting the content. In co-operation with the Directorate for Civil Aviation an agreement was entered with the Agency of the Republic of Slovenia for the Environment on depositing funds to ensure aviation meteorology. Agreements were prepared on the reimbursement of costs for performing air navigation services for flights that are exempt from charges. A contract was signed with the selected insurance company for insuring the professional liability of employees in the public company annual report A contract was signed with the selected insurance company to insure property. 63

64 8. Report on realisation of objectives

65 8.1. Monitoring systems MSSR Oljska gora (radar on Oljska gora). The beginning of investments goes back to the end of The total value of the investment amounts to EUR ,25 and from this EUR 10, in The investment was finalised in March 2007, all financial obligations have been settled. WAN (interregional secure network). The investment was completely realised in 2007 and the value of the investment is EUR 83,284,23. The investment is financially completed; technically it is in the phase of gradual incorporation annual report 8.2. Automated systems Safety net. The investment began in The total amount of the investment is EUR 428, and from this EUR 171, in The investment is financially completed and is in the phase of gradual incorporation. Simulator. The investment began in The total amount of the investment is EUR 364, and from this EUR 183, The investment is completed and the financial obligations settled. The FDPS investment started in 2006, autumn 2007 was a test period. The total value of investments, which were activated on 1 December 2007 is EUR 1,469, Communication system ATIS. The investment was started in 2006 and all financial obligations were settled in The value of the investment amounts to EUR 97, The system has been active since May VHF Krim. The investment was started in 2006 and all financial obligations were settled in The value of the investment amounts to EUR 657, The start of actual operations is March ARTAS, this investment had also started before 2007 and the total value of the investment is EUR 187,200 and the system was activated as a fixed asset 1 September VCS Maribor, the investment was entirely realised in 2006 and the value of the investment is EUR 145, The system has been active since January VCS Portorož, the investment was entirely realised in 2006 and the value of the investment is EUR 138, The system has been active since January

66 9. Risk management

67 Risk management is becoming more and more important in societies and also becoming more and more demanding. This is why we also decided to start actively being in command of these areas in our company. Our leading employees have started to obtain professional knowledge on risk management and we will continue to invest in expert training an also strengthen our human resources. The air traffic control activity is specific and demanding, and is exposed to numerous general and specific risks, which must be appropriately accompanying, managed and lead. In 2007, we defined for risk areas for the public company defined in the following: 2007 annual report Strategic risks are especially tied to co-operation with the state, international co-operation, strategic planning, acquisitions and ownership of assets, the market and the structure of the market: 9.1. Strategic risks In the public company we were in command of strategic risks: - by actively co-operating with the state, especially on open ended questions, which have an impact on the public company's business operations; - with active co-operation in the international market; especially with other performers of air traffic control services, - with strategic planning of investments in accordance with the five year business plan and annual business plan. The financial risks in 2007 included: - liquidity risk; - price risk; - credit risk and - asset management risk Financial risks In the public company we were in command of financial risks: - by planning expenses and revenues, - by forming prices for completed services based on the anticipated costs and revenues, - by planning cash flows, - by planning the necessary additional funds with a loan There is no currency risk as the company has all the inflows and the majority of outflows in EUR: The most important operating risks are the developments and maintenance of equipment, professional staff and legislation Operating risk In the public company we were in command of operating risks: - with the strategic planning of investments, development and maintenance of equipment, - with the planning of training for professional staff, - with active participation in legislation amendments Important information risks are linked with the quality of equipment and the network, control and intellectual property Information risks In the public company we were in command of information risks: - by having quality equipment and a network, - with control, - with intellectual property and by ensuring that important information arrived on time to key users without any abuse. 67

68 10. Analysis of air traffic in 2007

69 In 2007, there was a total of 332,383 flights over the Republic of Slovenia as follows: VFR (visual flight rules) 27,801, which represents 8.36 % IFR (instrumental flight rules) 304,582, which represents % IFR (directly by public company) 225,448, which represents 67,83 % IFR(MURA, TIBRO, DIMLO) 79,134, which represents 23,81 % IFR TRAFFIC FROM AND TO AIRPORTS IN THE REPUBLIC OF SLOVENIA IFR FLIGHTS OVER DOLSKO SECTOR 184, annual report IFR traffic under the control of the public company All further data only include IFR traffic, for which the public company was responsible. An average day had The most traffic occurred on 25th August The least amount of traffic occurred on January 1st The most traffic within one hour occurred on 8th September 2007 between and UTC 618 operations. with 946 operations. with 259 operations. with 73 operations. Traffic A comparison is made with Anticipated and real traffic in 2007 A growth in traffic was quite unexpected; it especially stands out in June and December Traffic 2005 and 2006, forecast and actual 2007 With good organisation of work and efforts of all the operational personnel, the public company actually exceeded its own expectations. 69

70 2007 annual report Traffic according to years and months Due to the tendency of traffic a comparison of traffic with previous years is also important /06 % JAN ,80 % FEB ,34 % MAR ,38 % APR ,14 % MAY ,05 % JUN ,30 % JUL ,27 % AUG ,67 % SEP ,91 % OCT ,64 % NOV ,89 % DEC ,97 % ,71 % Traffic compared to the same periods in 2005 and 2006 can be seen in the graph below. Traffic monthly 2005, 2006 and

71 Data on flight levels Information on flight levels are from the public company's database. All the changes up to the automatic handover notification of the flight to the neighbouring air traffic control are taken into consideration. Data on flight levels 2007 annual report All IFR operations that begun at domestic airports are included in DEP. Air traffic in the Republic of Slovenia's airspace is divided: Above FL % ( %) Below FL % ( %) Compared to 2006, the increase in traffic was more distinctive in the upper part of the airspace. Traffic according to airlines Traffic according to airlines In 2007, Swiss was knocked off the list. The number of operations increased sharply for the low-economy operator Hapag-Lloyd Express-a (HLX -Yellow Cab), as well as Germanwings-a (GWI). 71

72 2007 annual report Traffic according to types of aircraft In 2007, the structure according to the types of aircraft did not significantly change. The diagram below shows the representation of the types of aircraft, which had completed more than 3000 operations. The only new name is CARJ-900 ranked 13th and the Fokker -100 has disappeared. Traffic according to types of aircraft Daily structure of traffic According to the days of the week, traffic is arranged as shown in the graph below. The diagram shows the average daily traffic for all of 2007 and it is important to take into consideration that there are quite big differences between the winter and summer season. Daily structure of traffic According to the days in a week, the traffic during high season (July- August) is arranged as shown in the graph below. It is important to take into account that this is an average of 9 weeks (724 at the least and at the most 946). 72

73 Traffic per hour The graph below shows the traffic per hour in Please take into account that this is average and the sample differs amongst the days in the week. Traffic per hour 2007 annual report According to hours, the traffic in the high season (July-August) is arranged as shown in the graph. It is important to take into account that this is an average and that the sample differs from day to day in the week. According to hours, the traffic in the high season (July-August) 73

74 2007 annual report Flights according to air traffic control The chart below shows the basic data on the traffic at individual air traffic control airports. LKZP LKZP LKZP LKZP Brnik Maribor Portorož Cerklje ob Krki Number of IFR operations in Average daily number of IFR operations 108,9 11,0 3,8 The highest number of IFR operations The number of VFR operations in Average daily number of VFR operations 51,9 75,2 34,7 29,6 The highest daily number of VFR operations Overview of the traffic at air traffic control centres according to type of traffic A growth tendency for IFR traffic at the Jože Pučnik Airport Ljubljana is continuing and as a result it decreases VFR traffic. The weather conditions have somewhat of a more explicit impact at the rest of the airports, meaning that there is somewhat less VFR traffic during the "bad" months. The Maribor Airport has recorded further growth in traffic, IFR and VFR. 74

75 11. Expectations according to the development of the public company

76 2007 annual report With its capacities, the public company will also follow the need to always have a bigger extent of services as a consequence of increased air traffic and ensure a high level of safety in the air for the future. The public company will also provide strategic technological development in the future, which will ensure safety and the appropriate capacities. It will participate in the European development program SESAR, with a goal to develop technological solutions, which will allow the EU's objectives to be achieved after The primary objectives are increasing capacities three fold, increasing the level of safety tenfold and cutting costs by half. Technological development will especially be oriented towards supports tools, which will implement more automation in air traffic control. In the context of technological development, the company will also actively participate in research projects 7 of the EU program- Furthermore; the constant renewal and upgrading of communication, navigation and control equipment will be provided for. For the development of flight data, the public company shall follow these trends in the international arena, which appear with the development of new technologies (especially the transfer and processing of different data) and the needs of the end users. Within Slovenian borders and after the implementation of Schengen, a huge gap has formed in the area of ensuring flight data at Slovenian sports airports, which have become very interesting for foreigners because they do not have to go through the border formalities at one of the three Slovenian international airports. This type of procedure was tied to certain costs in the form of flight taxes, which airports charge for landing and taking off of the aircraft. This gap will be filled by the public company by developing a system of self serve informing of pilots before take-off and shall offer (most preferably as a long-term lease) it to the administration of registered public airports (sports airports). In the context of preserving the certificate for performing air navigation services, development steps will be taken, especially in the training and education for comprehending the demands of European regulations and in the area of ensuring congruency with the requirements. By acquiring knowledge there will be better comprehension and the fulfilment of requirements for Commission Regulation (EC) no. 2096/05 and the requirements of ESARR. With better knowledge it will be easier to maintain the certificate for performing air navigation services and increasing the level of safety when performing air navigation services. The developmental orientation in the area of safety includes the preservation or reduction of the absolute number of aircraft crashes or incidents with a direct impact on air navigation services in the future, regarding the anticipated growth of air traffic, in accordance with the ATM strategy of the Eurocontrol Agency. The new air traffic control complex and modern systems for air traffic control will be the basis for long term development and the existence of the public company. Everything listed will only be possible alongside the continual development of employees. 76

77 12. Key plans for 2008

78 2007 annual report The public company has the objectives for 2008: - Air traffic safety. - Permeability of airspace. - The ATCC Project. - Development of employees. - Arrangement of management. The key plans for 2008 are as follows: - The public company will continue to effectively perform its primary activity in the future, for which it was established: in a safe, quality, flexible and cost effective way. One of the primary objectives of the public company is air traffic safety. - Permeability of airspace is also an objective for the public company, which is why it is necessary to carry out the activity to such an extent demanded by the traffic with the least number of restrictions and delays. The public company shall follow the needs regarding the openness of all international airports in the Republic of Slovenia. - All activities for preserving the certificate for performing air navigation service and the ISO 9001:2000 certificate of quality shall be carried out. - Acceptance of the amendments and supplements to the collective agreement for air traffic control is important for the public company. - The preparation of proposals for implementing regulations are planned for 2008, which will regulate the training of workers in flight telecommunications, training workers for flight information and the work schedule for air traffic controllers. - Project documentation and the implementation of a tender for a building contractor for the construction of the air traffic control complex and control tower is planned for The creation of complete security engineering for the new air traffic control complex will begin in The EAD system will be updated and expanded to other locations in the area of flight data and NOTAM messages will be simplified in The public company's objective in 2008 is also the successful cooperation in the international arena, especially regional co-operation for the implementation of FAB - functional airspace block. - Open questions regarding the management of funds will be solved in Public company plans for

79 12.2. Forecast on the extent of air traffic in 2008 The forecast on the extent of air traffic in 2008 is shown in the graph below. Air traffic is expected to increase by 13% in Forecast on the extent of air traffic in annual report 79

80

81 B. ACCOUNTING REPORT

82 1. Independent auditor report

83

84 2. Accounting statements

85 2.1. Balance Sheet as at 31 December 2007 ASSETS expl. current year previous year A. Fixed Assets I. Intangible assets and long term deferrals and accruals Long term property rights Goodwill Advance payments for intangible fixed assets Long term deferred development costs Other intangible assets Long term deferrals and accruals II. Tangible Fixed Assets Land and buildings a) Land 0 0 b) Buildings Production devices and equipment Other devices and equipment Tangible fixed assets under construction/in the process of acguisition III. Investment properties 0 0 IV. Long-term financial investments 0 0 V. Long-term trade accounts receivable Long-term trade accounts receivable - group Long-term trade accounts receivable - clients Long-term trade accounts receivable - others 0 0 VI. Deferred tax asset B. Short-term assets I. Assets for sale II. Stcok Material Work in Progress Finished Goods Advance payments in respect of stock 0 0 III. Current financial investments Current financial investments except loans Current loans IV. Current accounts receivable Current trade accounts receivable - group Current trade accounts receivable - client Current trade accounts receivable - others V. Cash and cash equivalents C. Current deferrals and accruals TOTAL ASSETS annual report 85

86 2007 annual report EQUITY AND LIABILITIES expl. current year previous year A. Capital I. Share capital Share capital Uncalled capital (as a deductible) 0 0 II. Capital reserves 0 0 III. Profit reserves Statutory reserves IV. Revaluation reserve 0 0 V. Profit reserve carried forward VI. Loss reserve carried forward 0 0 VII. Net operating profit for the year VIII. Net operating loss for the year 0 0 B. Provisions and long-term deferrals and accruals Provisions for pension and similar obligations Other provisions Long-term deferrals and accruals 0 0 C. Long-term liabilities I. Long-term financial liabilities Long-term financial liabilities: sums due to companies in group Long-term financial liabilities: sums due to banks Long-term financial liabilities in relation to bonds Other long-term financial payables 0 0 II. Long-term commercial liabilities Long-term commercial liabilities: sums due to group companies Long-term commercial liabilities: trade creditors Long-term liabilities in relation to bills of exchange Long-term commercial liabilities based on advances Other long-term commercial liabilities III. Deferred tax liability 0 0 Č. Current liabilities I. Liabilities, included in disposal groups 0 0 II. Current financial liabilities Current financial liabilities to companies in group Current financial liabilities to banks Current financial liabilities in relation to bonds Other current financial liabilities III. Current commercial liabilities Current commercial liabilities to companies in group Current commercial liabilities to suppliers Current liabilities in relation to bill of exchange Current commercial liabilities based on prepayments Other current commercial liabilities D. Current deferrals and accruals TOTAL EQUITY AND LIABILITIES

87 2.2. Profit and loss statement from 1.1. to EUR items expl. current year previous year A NET SALES REVENUES Net sales revenues in domestic market Net sales revenues in EU market Net sales revenues outside of EU - developing countries B INCREASE IN VALUE OF STOCKS OF FINISHED PRODUCTS AND WORK IN PROGRESS C DECREASE IN VALUE OF STOCKS OF FINISHED PRODUCTS AND WORK IN PROGRESS Č REALISED VALUE OF OWN PRODUCTS AND SERVICES D OTHER TRADING ACTIVITY REVENUES (with revaluation operation activity revenues) E OPERATING EXPENSES Costs of goods, material and services a) Material costs b) Services costs Labour costs a) Salary costs b) Social security costs (special pension insurance costs) c) Other labour costs Write-offs a) Depreciation b) Fixed tangible and intangible asset revaluation charge c) Current asset revaluation charge Other operational expenses F FINANCIAL INCOME Financial income from shares 0 2. Financial income from loans Financial income from receivables G FINANCIAL EXPENSES Impairment expenses on investments Financial expenses from financial liabilities Financial charges from trade liabilities 5 0 H OTHER INCOME I OTHER EXPENSES J TOTAL PROFIT K TOTAL LOSS 0 0 L TAX ON INCOME M DEFERRED TAXES N NET OPERATING PROFIT FOR THE BUSINESS YEAR annual report 87

88 2007 annual report 2.3. Distributable profit 2007 items current year previous year A. Net profit for the period B. Net loss for the period 0,00 0,00 C. Transferred net profit Č. Transferred net loss 0,00 0,00 D. Reducing capital reserves 0,00 0,00 E. Reducing reserves from profit 0,00 0,00 1. Reducing legal reserves 0,00 0,00 2. Reducing reserves for own shares and own business shares 0,00 0,00 3. Reducing statutory reserves 0,00 0,00 4. Reducing other profit reserves 0,00 0,00 F. Increasing profit reserves 0,00 0,00 1. Increasing legal reserves 0,00 0,00 2. Increasing reserves for own shares and own business shares 0,00 0,00 3. Increasing statutory reserves 0,00 0,00 4. Increasing other profit reserves 0,00 0,00 G. BALANCE SHEET PROFIT H. BALANCE SHEET LOSS 0,00 0,00 88

89 2.4. Cash flow statement for 2007 EUR items Current year Previous year A. INFLOWS a)cash from Operations Operating income (except for revaluation) and financial income from receivables Expenses excluding depreciation (except for revaluation) and financial expenses from trade payables Taxes on profit and other taxes not included in expenses b)movement in balance sheet items (deferrals, provision and deferred tax receivables and payables) Movement in accounts receivable Movement in deferrals Movement in deferred tax Movement in inventories Movement in accounts payable Movement in accruals and deferrals and provisions Movement in tax liabilities c) Net cash flow from operations (a + b) B. INFLOWS FORM INVESTMENT ACTIVITY a)cash form investment activity Cash from interest of other profit, relating to investments b)cash used in investment activity Cash used to acquire intangible assets Cash used to acquire tangible assets Cash used to acquire short term financial investments c) Net cash flow from investment activity (a + b) C. CASH FLOW FROM FINANCING ACTIVITY a)cash from financing activity Inflows from increasing long-term financial liabilities Inflows from increasing current financial liabilities b)cash outflows from financing Outflows from interest charges relating to financing Outflows from the repayment of capital Outflows for the payment of long-term financial liabilities c) Net cash flow from financing (a + b) Č. CASH AND CASH EQUIVALENTS AT YEAR END a)net cash flow for the period (Ac +, Bc, +Cc) b)cash and cash equivalents at beginning of year annual report The cash flow statement has been composed according to the direct method or the so-called version I in SRS

90 2007 annual report 2.5. Statement of capital flow for 2007 EUR Net profit Share Legal Transferred of the capital reserves net profit business year Total a) Opening balance for period b) Adjusted long-term provisions A. Opening balance for period B. Movements in capital a) Input of net operating profit fro the business year C. Movement in capital a) Arrangement according to Court of Auditors decisions b) Payment of dividends Č. Movements from capital a) Payment of dividends D. Final balance for period Statement of capital flow for 2006 EUR Net profit Share Legal Transferred of the capital reserves net profit business year Total a) Opening balance as at Movements from capital according to SRS A. Opening balance for period B. Movements in capital a) Input of net operating profit fro the business year C. Movement in capital a) Arrangement according to Court of Auditors decisions b) Payment of dividends Č. Movements from capital a) Payment of dividends b) Other reduction in capital D. Final balance for period

91 3. Notes to accounting statements