Pursuant to the provisions of the Rules and Regulations of the Ljubljana Stock Exchange and the effective legislation, the company Poslovni sistem Mercator d.d., Ljubljana, hereby releases its response to the questions raised by the shareholders at the 29th extraordinary general meeting of shareholders (Shareholders Assembly) and which was held on September 1, 2021, at the company headquarters in Ljubljana at Dunajska cesta 107.

Questions raised by Mr Kristjan Verbič, statutory representative of the VZMD, as a proxy for the shareholder ODVETNIŠKA DRUŽBA RONNIE CHRISTOPHER HORVAT o.p. d.o.o. (law firm) and proxy for shareholders based on organized collection of proxy authorizations:

Shareholders are mostly raising questions regarding the economic need for such capital increase, considering the insignificance of the amount of funds relative to the company's requirements. The shareholders also inquire whether analysis of credit potential has been conducted and they believe that the potential in this respect exceeds the value of the capital increase. They also wonder whether the only purpose is the change of the shareholder status and the resulting establishment of conditions for minority shareholder squeeze-out, as the 90 (ninety) percent threshold would be exceeded as a result of the process, and the prerequisite for the squeeze-out would be met.

Reply:

The Management Board of the company Poslovni sistem Mercator d.d. Ljubljana was not the proposing party for the convocation of the 29th extraordinary general meeting of shareholders (Shareholders Assembly) at which the increase of share capital by in-kind contribution was adopted; rather, the Management Board merely convened the Shareholders Assembly upon request by the shareholder Fortenova Grupa d.d. that is also the proposing party for the increase of share capital. The Management Board of the company Poslovni sistem Mercator d.d. therefore was not and could not have been actively involved in the voting on the proposed increase of share capital by in-kind contribution. Pursuant to Article 337, paragraph 4, of the Companies Act (ZGD-1), the role of the Management Board of the company Poslovni sistem Mercator d.d. is restricted to Report on justified cause for full omission of pre-emptive/priority right in the increase of share capital by new in-kind contributions, which the Management Board of the company Poslovni sistem Mercator d.d. presented in a timely manner to the Shareholders Assembly. In that report, the Management Board, consistently with the requirements laid down in the ZGD-1, justified the cause for full omission of the priority/pre-emptive right, and justified the proposed emission price of EUR 36 per share. The Management Board has therefore essentially already responded to the questions raised in the Report on justified cause for full omission of pre-emptive/priority right in the increase of share capital by new in-kind contributions; to avoid redundancy and repeating its points, the Management Board fully refers to the said report. The Report on justified cause for full omission of pre-emptive/priority right in the increase of share capital by new in-kind contributions is also attached with this announcement. The Management Board furthermore explains that the company debt would have course (logically) be reduced even more if the amount of the in-kind contribution by the shareholder Fortenova Grupa d.d. that requested the convocation of the 29th extraordinary shareholders had been larger; however, the company Management Board does not have any influence over the majority shareholder's decision as to the amount of the in-kind contribution (receivables from the company Mercator d.d.). The in-kind contribution, as noted in the Report on justified cause for full omission of pre-emptive/priority right in the increase of share capital by new in-kind contributions, certainly does materially decrease the company's debt.

As of September 29, 2021, this announcement shall also be published on the company website at www.mercatorgroup.si, for a period of no less than five years.