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LUKA KOPER, d.d., Koper

Supervisory Board Meeting

At its 14th May 2012 meeting, upon the proposal of the Supervisory Board employee representatives, the Supervisory Board addressed the issue of the company's Management Board.

The Supervisory Board acknowledges that the current Management Board has administered the company under extremely difficult conditions during a period of global financial and economic crisis which has witnessed falling cargo volumes. At the same time, the company has been in a very precarious financial situation due to a number of erroneous and disputable business decisions made by the previous management. Since its appointment, the Supervisory Board has actively monitored the situation and participated through initiatives and proposals aimed at resolving these problems.

The Supervisory Board acknowledges the achievements of the Management Board in its increasing the volume of operations as well as its financial consolidation of the company over the past three years. In compliance with the predetermined criteria, the Management Board has also received an annual bonus for its work in 2011. The Supervisory Board also establishes that there are large reserves within the company as to the work organisation and operational efficiency. This said, the Supervisory Board is of the opinion that the main obstacle to the efficiency of Management Board operations has been a lack of teamwork and internal disagreements between Management Board members, which apparently increases over time, and exerts a strong negative impact on relations, internally as well as between the company and the local community.

The Supervisory Board establishes that the company has important long-term challenges ahead in relation to investment, financing and expanding port facilities. In addition to competent Management, such complex projects particularly require teamwork, both within the Management Board as well as on relation to the broader management of the company.

The Supervisory Board, whose function is to monitor the work of Management Board and attend to the interests of shareholders, believes that in future the company would be better able to achieve optimal results with a (single) Managing Director as opposed to a management board. Further to this, the Supervisory Board shall recommend that the General Assembly adopts such a proposal and amend the Statute of Luka Koper d.d. to this effect.

The Management Board
Date: 15.05.2012