Pursuant to the Rules and Regulations of the Ljubljana Stock Exchange, d.d, and the relevant legislation, the company Poslovni sistem Mercator, d.d., Ljubljana, hereby announces the following:

The second report by Mercator's extraordinary Management Board member Gregor Planteu, pertaining to the period from August 9, 2017, to October 31, 2017, again finds that all transactions effected with the majority shareholder Agrokor and the companies affiliated to it, detailed in the report, complied with the principles of diligence, good management and credibility, and that the company Poslovni sistem Mercator d.d. did not sustain any loss or damage with regard to these transactions.

In compliance with his powers and authorizations, Mercator's extraordinary Management Board member Gregor Planteu reviewed all transactions with the majority shareholder and the companies affiliated to it, and he was informed about all details required for evaluation of compliance of company operations with the ZIČUDSP. The report pertains to purchase and sale of trade goods/merchandise, financing, real estate, marketing services, IT services, services related to the Pika card, and the balance of receivables and payables.

The extraordinary member of Mercator's Management Board also very actively monitored reporting and compliance of procedures for all managers and executives, in accordance with the organizational rules and other acts related indirectly or directly to the provisions of the ZIČUDSP. In the report, he again notes that the entire Management Board is devoting particular attention on the management of risk pertaining to the balance of receivables from the Agrokor Group companies.

In the period to which the report pertains, Mercator also complied with the commitments already laid down in the Agreement on Mercator's Financial Restructuring and the Agreement on Sale and Purchase of Shares of the company Poslovni sistem Mercator, d.d. Moreover, Mercator consistently observed in its operations the internal acts and commitments put into place already before the adoption of the Act on Conditions for Appointment of Extraordinary Management Board Member in Companies of Systemic Importance to the Republic of Slovenia (ZIČUDSP). Based on the provisions of this Act, the report also finds that the company did not extend or grant in the reporting period at hand any guarantees, loans, sureties or similar commitments to its majority shareholder (partner) or to any company affiliated to it.

The report pertains to Poslovni sistem Mercator, d.d., as a company of systemic importance to the Republic of Slovenia.

The company Poslovni sistem Mercator, d.d., published today on December 1, 2017 Report on all transactions effected with the majority shareholder the company Agrokor, d.d., and the companies affiliated to it for the period from August 9, 2017 to October 31, 2017, on company’s website: https://www.mercatorgroup.si/assets/Report-on-all-transactions-effected-with-Agrokor-d.d.-and-the-companies-affiliated-to-it.pdf.

The report of extraordinary member of Management Board will be by the Act on Conditions for Appointment of Extraordinary Management Board Member in Companies of Systemic Importance to the Republic of Slovenia as of December 1, 2017, announced on the company website at www.mercatorgroup.si where it shall remain available for a period of no less than 5 years.