GENERAL DESCRIPTION OF THE S.BON MODEL AND SLOVENIAN CREDIT RATING SCORES (SB)

S.BON AJPES credit rating model is based on a statistical analysis of the financial statements and occurrence of payment default events for the entire population of Slovenian business entities over a longer period of time. Credit rating assessment complies with Basel banking regulation. For each business entity is a measure of the overall probability payment default over a period of 12 months after the date of the financial statements of the entity. Payment default event is defined as the occurrence of initiation of personal bankruptcy or compulsory composition. Current business data and data from the audited annual reports are taken into account when updating credit rating during the year. S.BON AJPES credit rating scale classifies Slovenian business entities in 10 grades with ratings from SB1 to SB10, with SB1 as the highest score on the credit rating scale. Special credit rating SB10d is assigned to business entities to which payment default event has actually occurred.

ESTIMATED MAXIMUM SUSTAINABLE INDEBTEDNESS

The estimated maximum sustainable indebtedness complements the information on the credit rating. It is calculated on the basis of publicly available financial statements of a business entity and it may vary during the year, taking into account the risk of payment default, estimated with S.BON AJPES credit rating model, as well as between the years due to changes in business results or balance sheet structure. Methodology considers several factors including the ability of repayment of financial liabilities based on the generated cash flow from operations, capitalization and assets of a business entity. Known financial liabilities are taken into account, without any off-balance sheet records (guarantees, etc.). Financial liabilities to owners or other related parties are treated as any other financial liabilities. The maximum sustainable indebtedness of business entity is 0 in the case of negative sole proprietor's eqiuty as it depends on the creditworthiness of a natural person.