The governance of the company Poslovni sistem Mercator, d.d., is based on legal provisions, sound business practice, and the principles of the Corporate Governance Code. Corporate Governance Code (Official Journal of the Republic of Slovenia, No. 118/2005, dated 17 December 2005, amended on 5 February 2007, revised and adopted on 8 December 2009, hereinafter referred to as "the Code") is available on the Ljubljana Stock Exchange website at www.ljse.si, in Slovenian and English language. The company is using the Code and complying with it voluntarily.

Management and Supervisory Board of the company Poslovni sistem Mercator, d.d., headquartered at Dunajska cesta 107, Ljubljana, hereby submit this statement of compliance with the Code, which is also a constituent part of the 2011 Annual Report. It is available at company website at www.mercator.si.

Compliance with the provisions of the Code

Management Board and Supervisory Board of the company Poslovni sistem Mercator, d.d., have reviewed the corporate governance at the company Poslovni sistem Mercator, d.d., and the Mercator Group, and the compliance thereof with the Code, and prepared a new statement which reflects the actual situation of corporate governance at the company Poslovni sistem Mercator, d.d., and the Mercator Group.

It was found that corporate governance at the company Poslovni sistem Mercator, d.d., and the Mercator Group complies with the provisions of the Corporate Governance Code, with particular deviations explained below.

Relations with shareholders

Recommendation 4.2: Given the fact that major shareholders communicate their investment plans on their own initiative, the company did not invite them separately to publicly disclose their management policies with regard to their investment in publicly traded stock corporation.

Recommendation 5.2: The company publicly announced on its website all information about lodging proxies for voting at particular Shareholders Assemblies; in addition, each shareholder was informed individually in this regard. However, the company did not announce on its website the information on the cost of organized lodging of voting proxies at particular Shareholders assemblies, although it did make sure the most competitive provider of these services was hired.

Recommendation 5.6: Shareholder's Assembly did not vote on the Supervisory Board members individually.

Supervisory Board

Recommendation 7.1: Some Supervisory Board members have not produced documentation to prove their specialized professional or expert competencies for Supervisory Board membership. Nevertheless, they qualify for such engagement due to professional competencies or experience.

Recommendation 8: All Supervisory Board members have signed a special statement specifying their position on meeting each of the independence criteria. However, the company did not announce the signed statements on its website; the statements are deposited at the company headquarters.

The company Mercator, d.d., shall continue to observe the recommendations of the Code in the future, looking to implement as far as possible the non-binding recommendations of the Code and thus to improve its corporate governance system.

Žiga Debeljak
President of the Management Board

Robert Šega
President of the Supervisory Board