Report of the Supervisory Board

  • Report of the Supervisory Board of Zavarovalnica Triglav d.d. on the Verification of the Annual Report of Zavarovalnica Triglav d.d. and the Triglav Group for 2013
  • and
  • Opinion of the Supervisory Board of Zavarovalnica Triglav d.d. on the Annual Internal Audit Report of the Internal Audit Department for 2013

The Supervisory Board in 2013 actively monitored the operations of the Company and supervised its management with due responsibility. It examined reports on various aspects of the Company’s business, adopted appropriate resolutions and followed their implementation. Individual issues were discussed within the framework of the Supervisory Board’s committees and on the basis of their findings the Supervisory Board passed resolutions and gave recommendations.

The Supervisory Board carried out its work in the scope of its powers and competences set out by law, the Memorandum and Articles of Association and its own Rules of Procedure.

1. Introduction

Pursuant to Article 282 of the Companies Act (the ZGD-1; Official Gazette of the Republic of Slovenia, No. 42/06 et seq.) and the fourth paragraph of Article 165 of the Insurance Act (the ZZavar; Official Gazette of the Republic of Slovenia, No. 13/00 et seq.), the Supervisory Board hereby presents its Report on the Verification of the Annual Report of Zavarovalnica Triglav d.d. and the Triglav Group for 2013 (hereinafter: the Report) and its opinion on the Annual Internal Audit Report for 2013.

The findings are based on supervision of the operations of Zavarovalnica Triglav d.d. (hereinafter: the Company) in 2013 and on an examination of the Audited Annual Report of Zavarovalnica Triglav d.d. for 2013, which includes the reports and opinions of chartered actuaries for non-life and life insurance as integral parts in accordance with Article 76 and pertaining to Article 159 of the Insurance Act, and on an examination of the Audited Annual Report of the Triglav Group for 2013.

The opinion of the Supervisory Board on the work of the Internal Audit Department in 2013 is also an integral part of the Report.

2. General information

Supervisory Board in 2013

In 2013 the Supervisory Board was made up of the following members:

  • shareholder representatives:
    • between 1 January and 7 April: Igor Mihajlović (Chairman), Gregor Kastelic (Deputy Chairman), Aljoša Valentinčič, Vladimir Uršič, Adolf Zupan and Jovan Lukovac;
    • between 8 April and 11 June: Mihael Perman (Chairman from 16 April to 11 June), Jovan Lukovac (Deputy Chairman from 16 April to 11 June), Žiga Andoljšek, Aleš Živkovič, Rok Strašek and Blaž Šlemic;
    • as of 12 June: Matej Runjak (Chairman as of 1 July) Gregor Kastelic (Deputy Chairman as of 1 July), Mario Gobbo, Dubravko Štimac, Rajko Stanković and Matija Blažič;
  • representatives of employees:
    • Branko Gorjan, Peter Celar and Miran Krštinc.

The Supervisory Board held 13 sessions.

The Supervisory Board had four committees in the reporting year: the Audit Committee, the Appointments and Remuneration Committee, the Strategy Committee and the Nominations Committee.

Audit Committee

The members of the Audit Committee were as follows in 2013:

  • between 1 January and 7 April: Jovan Lukovac (Chairman), Aljoša Valentinčič, Branko Gorjan, Vladimir Uršič and Barbara Nose; [1]
  • between 16 April and 11 June: Jovan Lukovac (Chairman), Žiga Andoljšek, Aleš Živkovič, Branko Gorjan and Barbara Nose (independent expert and member from 26 April to 11 June);
  • as of 1 July: Mario Gobbo (Chairman), Rajko Stanković, Branko Gorjan and Barbara Nose (independent expert and member as of 22 August).

The committee held 13 meetings in 2013.

The duties and competences of the Audit Committee are set out in the Companies Act, the Rules of Procedure of the Supervisory Board, the Rules of Procedure of the Audit Committee and resolutions of the Supervisory Board. The Audit Committee:

  • monitored and discussed financial reporting procedures, the functioning of internal controls, the Internal Audit Department’s reports and recommendations, risk management systems and external audits of non-consolidated and consolidated financial statements;
  • discussed the implementation of the external auditor’s recommendations;
  • discussed reports by the Fraud Prevention, Detection and Investigation Department;
  • discussed the Compliance Policy;
  • proposed to the Supervisory Board the appointment of an auditor of the Company’s Annual Report for 2013, proposed to appoint certified auditors in the group of the proposed auditor as auditors of the subsidiary insurance companies and discussed the audit agreement with the certified auditor for 2013;
  • assessed the compilation of the non-consolidated and consolidated annual reports for 2012;
  • monitored the type and scope of non-auditing services provided by audit firms;
  • performed special duties in accordance with the guidance and requirements of the Supervisory Board; and
  • regularly reported on its work to the Supervisory Board at its sessions.

The Audit Committee conducted a performance self assessment with the aim of ensuring quality and continued improvement.

Appointments and Remuneration Committee

The members of the Appointments and Remuneration Committee were as follows in 2013:

  • between 1 January and 7 April: Igor Mihajlović (Chairman), Adolf Zupan, Miran Krštinc and Srečo Jadek;[2]
  • between 16 April and 11 June: Blaž Šlemic (Chairman), Mihael Perman, Miran Krštinc and Anton Marolt (independent expert and member between 21 May and 11 June);
  • as of 1 July: Matej Runjak (Chairman), Dubravko Štimac and Miran Krštinc.

The committee held five meetings in 2013.

The duties and competences of the Appointments and Remuneration Committee are set out in the Rules of Procedure of the Supervisory Board and Supervisory Board’s resolutions. The Appointments and Remuneration Committee:

  • discussed the remuneration of employees in managerial positions;
  • discussed the drafting of specific task contracts and executive contracts;
  • discussed the calculation of the Triglav Group’s performance factor for 2012, on which the performance-related remuneration of the Management Board depends; and
  • regularly reported on its work to the Supervisory Board at its sessions.

Strategy Committee

The members of the Strategy Committee were as follows in 2013:

  • between 1 January and 7 April: Gregor Kastelic (Chairman), Igor Mihajlović and Peter Celar;
  • between 16 April and 11 June: Rok Strašek (Chairman), Jovan Lukovac and Peter Celar;
  • as of 1 July: Gregor Kastelic (Chairman), Mario Gobbo and Peter Celar.

The duties and competences of the Strategy Committee are set out in the Rules of Procedure of the Supervisory Board and Supervisory Board’s resolutions. Its tasks include monitoring of the implementation of the Triglav Group Strategy, giving relevant opinions, drafting resolutions for the Supervisory Board and ensuring their implementation. The Strategy Committee:

  • discussed the Triglav Group Strategy for the 2013-2017 period and proposed its adoption to the Supervisory Board;
  • discussed the Company’s participation in the process of the privatisation of Croatia Osiguranje d.d.; and
  • reported on its work to the Supervisory Board at its sessions.
Nominations Committee

Given the fact that the terms of office of the shareholder representatives on the Supervisory Board expired on 7 April 2013, and with an aim to carry out the process of proposing candidates for shareholder representatives on the Supervisory Board and forwarding a proposal for their appointment to the Supervisory Board, the Nominations Committee was set up as a Supervisory Board committee on 12 December 2012. The committee consisted of Igor Mihajlović (Chairman), Branko Gorjan, Matjaž Jauk (external member) and Peter Ješovnik (external member). As a result of the requirement to convene the General Meeting of Shareholders in accordance with Article 295 of the Companies Act and the appointment of new shareholder representatives to the Supervisory Board, the Nominations Committee failed to complete the nomination procedure at the General Meeting of Shareholders on 14 February 2013. Upon the appointment of the new shareholder representatives to the Supervisory Board, the Nominations Committee was dissolved.

3. Operations of the Supervisory Board in 2013 and the scope of supervision over the Company’s Governance

The description of the Supervisory Board’s operations and the scope of it supervision over the Company’s governance in 2013 are based on the supervision of the Company’s operations carried out by the Supervisory Board in 2013, acting within its powers.[3]

The Supervisory Board’s duty is to supervise how the Company conducts business and operations and to perform other tasks in accordance with the Companies Act (ZDG-1), the Insurance Act (ZZavar), the Memorandum and Articles of Association, the Rules of Procedure of the Supervisory Board and the Corporate Governance Code. The methods and organisation of its work are set out by the Rules of Procedure of the Supervisory Board, which are published on the Company’s website.

The Supervisory Board has the power to examine securities held in custody, the petty cash book, accounting records and documentation of the Company which contain facts that provide information about its business conduct. The Supervisory Board approves the Management Board’s drafts of the business policy, financial budget, internal control system organisation and framework annual work programme of the Internal Audit Department, and carries out other duties within its powers pursuant to applicable legislation and the aforementioned bylaws of the Company.

a) With regard to its core competences, in 2013 the Supervisory Board:

  • adopted the Triglav Group Strategy for the 2013-2107 period;
  • adopted the business policies and business plans of the Triglav Group for 2013 and 2014;
  • approved the Internal Audit Department’s Annual Work Programme for 2014;
  • adopted the Internal Audit Department’s Annual Internal Audit Report for 2012;
  • adopted the Audited Annual Report of Zavarovalnica Triglav d.d. for 2012 and the Audited Annual Report of the Triglav Group for 2012, adopted the Report by the Supervisory Board of Zavarovalnica Triglav d.d. on the Verification of the Annual Report of Zavarovalnica Triglav d.d. and the Triglav Group for 2012 and adopted the Opinion of the Supervisory Board of Zavarovalnica Triglav d.d. on the Internal Audit Department’s Annual Internal Audit Report for 2012;
  • dismissed Matjaž Rakovec from his office as President of the Management Board of Zavarovalnica Triglav d.d. on business grounds and appointed Andrej Slapar in his stead;
  • proposed to the General Meeting of Shareholders to approve the auditors for 2013 and give discharge to the Management Board for its work in 2012 and approved the General Meeting of Shareholders’ proposal for the distribution of the accumulated profits as at 31 December 2012;
  • adopted amendments to the Management Board Rules;
  • adopted amendments to the Rules of Procedure of the Supervisory Board;
  • adopted the Compliance Policy; and
  • was briefed on the findings and requirements of the Insurance Supervision Agency, the Securities Market Agency and other supervisory authorities regarding supervision procedures and on follow-up procedures related to their findings and requirements.

b) With regard to the supervision of the Company’s conduct of business in 2013 the Supervisory Board:

  • was briefed on and approved reports on the performance of Zavarovalnica Triglav and the Triglav Group;
  • was briefed on reports on the performance of the Company’s subsidiaries, on the Company’s activities and assessments regarding the subsidiaries and on the subsidiaries’ activities;
  • was periodically briefed on estimated performance indicators of the Company;
  • was briefed on reports on capital adequacy, the matching of assets and liabilities in the guarantee fund and mathematical provisions and assessments of the sensitivity of assets affecting capital adequacy;
  • was briefed on capital adequacy measurement results of the Company’s based on S&P models, Solvency II and applicable legislation;
  • was briefed on internal audit reports by the Internal Audit Department;
  • was briefed on the Letter to the Management following the 2012 audit of Zavarovalnica Triglav and the Triglav Group;
  • was briefed on material on monitoring the macroeconomic environment and systemic risks;
  • was briefed on a report on the Company’s readiness to meet the Solvency II requirements;
  • was briefed on the Subsidiary Governance Policy of the Triglav Group;
  • was briefed on the Guidelines on Performance Evaluation of Supervisory Boards, Management Boards and Boards of Directors of Triglav Group Subsidiaries;
  • was briefed on the management of the Company’s investment in Abanka Vipa d.d.;
  • was briefed on the report on the sale of shares issued by Petrol d.d. to Istrabenz d.d.;
  • was briefed on a report regarding the status of the project for the entry of IFC, a member of the World Bank Group, into the ownership structure of Triglav INT d.d.;
  • was briefed on the status of the privatisation process of Croatia Osiguranje d.d. and Zavarovalnica Triglav’s steps in this process;
  • was briefed on developments in a legal action regarding claims against the subsidiary Slovenijales d.d.;
  • was briefed on a report on the exposure of Zavarovalnica Triglav to hybrid and subordinated bonds;
  • was briefed on a report on protection of employees’ dignity of the Company, a report on the system of reporting and a report on conduct in the event of conflicts of interest;
  • was briefed on a report on the operations of the Marketing Department;
  • was briefed on a report on agreements on corporate legal advising and on public relations;
  • was briefed on a report on procedures carried out following the dismissal of Matjaž Rakovec as President of the Management Board;
  • was briefed on a report on pending labour disputes in Triglav Group subsidiaries and a report on non-insurance commercial disputes in the Triglav Group in which the case value exceeds EUR 50 thousand;
  • discussed reports by the Audit Committee, Strategy Committee, Appointments and Remuneration Committee and Nominations Committee; and
  • received other information regarding Zavarovalnica Triglav d.d., the Triglav Group and the subsidiaries.

c) With regard to the Supervisory Board’s power to approve Management Board decisions on the basis of the Rules of Procedure of the Supervisory Board, [4] in 2013 the Supervisory Board approved the participation of Triglav INT in a share capital increase of Triglav osiguranje a.d.o., Belgrade, and the sale of Zavarovalnica Triglav’s interest in Helios Domžale d.d.

d) Other major actions of the Supervisory Board in 2013:

  • according to the employment contracts with Management Board members it discussed their entitlement to performance-related remuneration and determined the board members’ annual performance-related bonus for 2012.

e) Supervisory Board’s requirements, recommendations and warnings in 2013:

  • a requirement to analyse various scenarios and alternative strategic solutions regarding Triglav osiguranje a.d.o., Belgrade, and to regularly report on the performance of that subsidiary to the Supervisory Board;
  • a requirement to define a further strategy regarding the investment in Abanka Vipa d.d., based on the information obtained, and duly report on that to the Supervisory Board;
  • a call on the Management Board to exercise greater caution and diligence in handling sensitive information when communicating business-related information to the public;
  • a requirement to the Management Board to take a position as to whether relevant changes of circumstances have occurred in respect to the agreement with IFC that should be communicated - if so to inform the public and to report on the matter to the Supervisory Board;
  • a finding of inconsistency in the explanations given to the Supervisory Board with regard to the agreement concluded with IFC, its communication to the public and the actual situation;
  • a requirement that the comments presented by the Audit Committee be taken into account in the Compliance Policy;
  • a requirement to the Management Board to issue a report on legal actions other than insurance disputes in excess of EUR 50 thousand per case;
  • a requirement that when results are presented to the Supervisory Board all cases of underpeformance be explained, together with follow-up actions, persons responsible and timetables;
  • a requirement for making presentations on insurance sales, loss adjustment and product development;
  • a requirement to the Management Board to present the situation by making comparisons with companies and groups that are competitors; and
  • other requirements related to supervision.

The costs of the functioning of the Supervisory Board not disclosed in the Annual Report for 2013 were primarily costs of translations of material for sessions of the Supervisory Board and its committees, interpreting at sessions, and the rental of technical equipment for interpreting. In 2013 these costs amounted to EUR 120 thousand.

4. Performance self assessment [5]

The Supervisory Board had four committees in 2013: the Audit Committee, the Appointments and Remuneration Committee, the Strategy Committee and the Nominations Committee. The committee Chairmen regularly reported on their work at sessions of the Supervisory Board, which discussed the adopted decisions, recommendations and opinions and passed appropriate resolutions after due consideration.

All members were involved in the Supervisory Board’s work. With their presence at sessions and active participation in discussions and decision-making they contributed to the effective discharge of the Supervisory Board’s duties. The Rules of Procedure of the Supervisory Board regulate potential conflicts of interest. The members of the Supervisory Board signed and submitted statements of independence and loyalty in accordance with the Corporate Governance Code, which the Company published on its website. To avoid conflicts of interest, already in 2009 the Supervisory Board adopted the recommendation that its members not sit on the supervisory boards, management boards and boards of directors of other companies in the Triglav Group.

The Supervisory Board is of the opinion that its cooperation with the Management Board was adequate, in accordance with the applicable legislation and good practice. To its best knowledge the Supervisory Board was informed of all events of material significance to the assessment of the situation and its consequences, and to the supervision of the Company’s operations. The Supervisory Board regularly followed the implementation of its resolutions. The Management Policy of Zavarovalnica Triglav sets outs the main guidelines on corporate governance, taking account of the long-term objectives, and includes the definition of the role and functioning of the Supervisory Board and its committees.

The Supervisory Board conducted a performance self assessment.

The Supervisory Board is of the opinion that its composition is appropriate, in terms of the Company’s size, business activities and objectives, and in terms of the independence of its members in the sense of the Corporate Governance Code. The members of the Supervisory Board have sufficient professional expertise, experience and skills for holding office on the board, which allows the Supervisory Board to make decisions of requisite quality.

In view of the above, the Supervisory Board is of the opinion that its work and the work of its committees were successful.

5. Opinion of the Annual Internal Audit Report for 2013

In accordance with the third paragraph of Article 165 of the Insurance Act (ZZavar), the Internal Audit Department’s Annual Internal Audit Report for 2013 was submitted to the Supervisory Board, containing a report on the implementation of the Internal Audit Department’s Annual Work Programme, a summary of material audit findings and an assessment of the adequacy of the Internal Audit Department’s funding.

On the basis of the Internal Audit Department’s Annual Internal Audit Report for 2013, adopted at its session on 8 April 2013, the Supervisory Board finds that the Internal Audit Department carried out its duties in accordance with the Annual Work Programme for 2013, adopted by the Management Board and approved by the Supervisory Board, and in accordance with decisions on extraordinary internal audits. In 2013, as planned, the Internal Audit Department carried out regular internal audits in areas of the operations of the Company and subsidiaries of the Triglav Group, extraordinary internal audits as well as performed other internal audit activities (informal consultations, follow-up of the implementation of recommendations given by internal and external auditors, reporting to the Management Board, the Supervisory Board and the Audit Committee, quality assurance and improvements in the department, etc.). The Internal Audit Department presented its audit findings to the relevant persons in charge and gave recommendations for improving the system of internal controls and risk management. The Internal Audit Department reported on the implementation of its work programme, material audit findings and the implementation of recommendations on a quarterly basis to the Audit Committee and on a semi-annual basis to the Supervisory Board.

In 2013 the Internal Audit Department continued with quality assurance and improvement activities related to its own functioning and that of the internal audit departments of the Triglav Group’s subsidiaries. Within this framework the Internal Audit Department provided professional training for its own employees, started recasting its internal documents and rules of procedure with the aim of defining more systematic and integrated rules of internal auditing in the Company. It formulated process schemes for operational processes of internal audit, began developing a system of performance and efficiency indicators for its own functioning, redefined the procedures for issuing internal audit reports and provided assistance to internal audit departments of the Triglav Group subsidiaries in preparing and implementing measures to carry out the recommendations following the quality assessment of their performance in 2012 and in the planning of their work for 2014. The Supervisory Board expects the Internal Audit Department to continue such activities in the future, with the aim of continually improving the quality of its work.

On the basis of the above, the Supervisory Board is of the opinion that the Internal Audit Department operated in line with its Annual Work Programme for 2013 and that its work made an important contribution to the better functioning of the system of internal controls and improved risk management at the Company level and at the Group level.

6. Findings of the Supervisory Board regarding the operations of Zavarovalnica Triglav d.d. in 2013

On the basis of its monitoring and supervision of the Company’s performance in 2013, and its examination and verification of the Annual Report for 2013, the Supervisory Board hereby establishes that the Company performed well, despite the economic crisis and adverse macroeconomic situation.

The Triglav Group generated a net profit of EUR 69.9 million, down 5% on the preceding year, but 27% higher than planned. The parent company’s net profit decreased by 4% compared to 2012 and amounted to EUR 48.3 million. Despite the adverse situation, the Triglav Group recorded a high return on equity of 12.0%. The main factor in the good performance was the good results in the core insurance business, as indicated by the favourable combined ratios of 90.1% for the Triglav Group and 85.3% for the parent company.

Insurance companies of the Triglav Group generated insurance and co-insurance premium of EUR 900.9 million in 2013, of which EUR 605.8 million was earned by the parent company. The economic and financial crisis, the decline in economic activity and reduced purchasing power saw the Company fall short of its planned sales targets, as demand for certain insurance products declined. Fierce competition, a marketing and sales policy aimed at maintaining and nurturing the portfolio, and measures to improve the poor insurance technical results in individual insurance classes, all resulted in a further loss of premium.

The Triglav Group recorded gross claims of EUR 627.5 million in 2013, which was 2% more than in 2012. The increase in claims was primarily the result of payments of endowments, surrenders and advances from life insurance as well as an increase in the number of health insurance policyholders. Gross claims of the parent company increased by 1% and reached EUR 419.4 million.

The Triglav Group’s gross operating costs were up 2% in 2013 and totalled EUR 302.4 million, while the parent company’s operating costs amounted to EUR 161.3 million and remained approximately the same as in 2012.

Despite the adverse economic and financial situation in Slovenia and the wider region, the Triglav Group further strengthened its capital position in 2013. The Triglav Group’s total equity amounted to EUR 590.5 million as at the end of 2013 and was 3% higher than a year earlier.

The findings of the Supervisory Board are also based on the following:

  • a positive opinion from a chartered actuary for the non-life insurance category,
  • a positive opinion from a chartered actuary for the life insurance category,
  • the Internal Audit Department’s Annual Internal Audit Report for 2013.

The Supervisory Board has no objection to the aforementioned reports.

7. Annual report

The Management Board submitted the audited Annual Report of Zavarovalnica Triglav d.d. for 2013 and the audited Annual Report for the Triglav Group for 2013 to the Supervisory Board on 20 March 2014.

The Supervisory Board hereby ascertains that the annual reports were compiled within the legally prescribed period and submitted to the appointed auditor. The Annual Report of Zavarovalnica Triglav d.d. for 2013 was audited by the audit firm Ernst & Young, Revizija, poslovno svetovanje, d.o.o., Ljubljana, which on 18 March 2014 issued a positive opinion on the Annual Report of Zavarovalnica Triglav d.d. for 2013 and the Annual Report of the Triglav Group for 2013 and an opinion that the annual reports are in compliance with the audited financial statements.

The certified auditor who signed the annual reports attended the discussions of the Supervisory Board and the Audit Committee of the said annual reports and provided the required additional explanations. The Audit Committee discussed the Letter to the Management after the preliminary audit, and on the basis of the certified auditors’ report established that the Letter to the Management after the audit would not contain material disclosures that could affect the submitted audited financial statements for 2013.

The certified auditors find that in all material aspects the financial statements for 2013 and the data disclosed in the accounting report were compiled in accordance with the accounting standards and the legislation in force in the countries where the subsidiaries operate, and that appropriate adjustments were made to comply with the International Financial Reporting Standards. A major factor in the audit of the financial statements for 2013 was additional impairments of the investments in banks and subsidiaries. No mergers or acquisitions occurred in the Triglav Group.

On the basis of a detailed examination, the Supervisory Board found that the Annual Report of Zavarovalnica Triglav d.d. for 2013 and the Annual Report of the Triglav Group for 2013, drawn up by the Management Board and audited by the certified auditor, were compiled in a clear and transparent manner to give a true and fair view of the assets, liabilities, financial position and profit of Zavarovalnica Triglav d.d. and the Triglav Group.

In accordance with the aforementioned findings, the Supervisory Board expresses no objection to the positive opinion of the certified audit firm Ernst & Young, Revizija, poslovno svetovanje, d.o.o., Ljubljana, which has found that the financial statements present fairly, in all material respects, the financial position of Zavarovalnica Triglav d.d. as at 31 December 2013, its profit and cash flows for the year then ended, in accordance with the International Financial Reporting Standards as approved by the EU and the requirements of the Companies Act relating to the compilation of financial statements.

The Supervisory Board expresses no objection to the positive opinion of the certified audit firm Ernst & Young, Revizija, poslovno svetovanje, d.o.o., Ljubljana, which has found that the financial statements present fairly, in all material respects, the financial position of the Triglav Group as at 31 December 2013, its profit or loss and cash flows for the year then ended, in accordance with the International Financial Reporting Standards as approved by the EU and the requirements of the Companies Act relating to the compilation of financial statements.

In view of the above, the Supervisory Board hereby approves the Audited Annual Report of Zavarovalnica Triglav d.d. for the Year Ended 31 December 2013 and the Audited Annual Report of the Triglav Group for the Year Ended 31 December 2013.

8. Proposal for the distribution of accumulated profits

The Supervisory Board also examined the Management Board’s proposal for the distribution of accumulated profits as at 31 December 2013, subject to a final decision by the General Meeting and approved the following draft resolution proposed by Management Board to the General Meeting:

“The Company’s accumulated profits, which amounted to EUR 77,826,169.51 as at 31 December 2013, shall be distributed as follows:

  • EUR 25,008,662.80 of the accumulated profits to dividend payments. The gross dividend per share of EUR 1.10 shall be paid to the shareholders entered in the Shareholders’ Register no later than two days after the day of the General Meeting of Shareholders, within 30 days of the day this resolution is passed;
  • the distribution of the remaining accumulated profits of EUR 52,817,506.71 shall be decided on in subsequent years.”

The Supervisory Board hereby proposes to the General Meeting of Shareholders to give discharge to the Management Board for its work in 2013.

Matej Runjak
Chairman of the Supervisory Board
Ljubljana, 7 April 2014



[1] Barbara Nose was appointed to the aforementioned committee as an independent expert who is not a member of the Supervisory Board.

[2] Srečo Jadek was appointed to the aforementioned committee as an independent expert who is not a member of the Supervisory Board.

[3] The description of the functioning of the Supervisory Board and the scope of its supervision of the Company’s governance are in part based on a examination of the minutes of the Supervisory Board’s sessions in 2013, as the compostion of the Supervisory Board was considerably different until 11 June 2013. As a result of the dismissal of six shareholder representatives from the Supervisory Board, the 38th General Meeting on 11 June 2013 appointed new shareholder representatives to the Supervisory Board whose four-year terms of office started on 12 June 2013.

[4] In accordance with the Rules of Procedure of the Supervisory Board, the Supervisory Board has the power to approve the Management Board’s decisions on the establishment of limited companies in Slovenia and abroad where the capital contribution exceeds EUR 2,500,000, the acquisition or disposal of interests in domestic or foreign companies where the value of the acquisition or disposal of shares or participating interests in an individual company exceeds EUR 2,500,000 within the period of one year, the issue of debt securities and long-term borrowing from domestic and foreign banks above EUR 2,500,000 within the period of one year, and the acquisition of, disposal or investment in real property where the sale price or investment value exceeds EUR 2,500,000 within the period of one year.

[5] The self-assessment of the functioning of the Supervisory Board has been given for the period from 12 June 2013, as the composition of the Supervisory Board was considerably different until 11 June 2013. As a result of the dismissal of six shareholder representatives from the Supervisory Board, the 38th General Meeting on 11 June 2013 appointed new shareholder representatives to the Supervisory Board whose four-year terms of office started on 12 June 2013.

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