Pursuant to Ljubljana Stock Exchange Rules, the Sava Reinsurance company (Pozavarovalnica Sava, d.d.) hereby publishes the following notice:

An article entitled Accomplices in irresponsibility: Sava Re Supervisory Board allows a new potential elitist deal! (Pajdaši v neodgovornosti: NS Save Re dovoljuje nov potencialni klientelni posel!) by Simona Toplak was published in both the web and printed versions of the Finance newspaper on 2 August and 3 August 2016. Since the information in the article was incorrect, a request to publish the correction in line with the Media Act was sent to the newspaper house providing additional explanations by the Chairman of the Management Board with the aim to ensure objective information to the public.

Since increased interest has been expressed by other media and opinion shapers, we would like to inform the public in line with the rules on equal informing by presenting the text which was sent to the Finance newspaper by the Chairman of the Management Board of Sava Re Company Zvonko Ivanušič:

'An article entitled 'Accomplices in irresponsibility: Sava Re Supervisory Board allows a new potential elitist deal!' by Simona Toplak was published on 2 August 2016 on the web page of the Finance newspaper (http://www.finance.si/8847768/Pajdasi-v-neodgovornosti-NS-Save-Re-dovoljuje-nov-potencialni-klientelni-posel).Since the information in the article was incorrect and with the aim to ensure objective information to the public, I am sending the correction containing additional explanation which you should publish pursuant to Articles 26 and 27 of the Media Act.

Despite our previous warnings regarding the incorrect and misleading way the Finance newspaper has presented the purchase of ACH property by the Sava Re Company, the newspaper obviously continues this practice. In her article 'Accomplices in irresponsibility: Sava Re Supervisory Board allows a new potential elitist deal!' stated a series of inaccurate, misleading and insulting comments. The main issues arising from the title of the article are explained below, while the rest will be presented in the Management Board's response report in line with the recommendations for information and best corporate governance practice.

Firstly, it is not true that the Chairman of the Management Board of Sava Re Company Zvonko Ivanušič had promised the Supervisory Board that he would sell ACH property in about ten days. Sava Re purchased the property for its own needs, therefore the building is not for sale.

As evidence regarding two certified appraisals setting the value of ACH property above EUR 5 million Mr. Ivanušič submitted to the Supervisory Board a letter of intent from the METROPOLA IN real estate agency whose offer for the property was EUR 5.0 - 5.5 million and not EUR 5.5 million as was stated by the Finance newspaper, and a binding offer for EUR 5.5 million given by the same real estate agency to Metalka Commerce in December 2015. Since at that moment the transaction between Sava Re and Metalka Commerce was in the final phase, the vendor did not accept Metropola's offer. According to reliable information the Finance newspaper has been aware for several months of the above stated binding offer but it still has not published it since it apparently would not suit its claims regarding alleged overpayment for the property at stake.

It is also not true that both external auditors (Deloitte and Schoenherr) performed new appraisals in which they valued the property at about EUR 4 million. Based on sound evidence - since the report was presented to the Management Board for inspection - I am aware that Deloitte did not perform or order any appraisal. At the same time I assume that the Schoenherr law firm did not perform or order any appraisal either, since no appraisal of property was mentioned at the Supervisory Board's last meeting. The Management Board does not have access to Schoenherr's report since the Supervisory Board did not submit the report to it. It is undoubtedly true that there are three appraisals made by three different certified appraisers that valued the property between EUR 4.7 and 5.3 million. The Sava Re Company ordered one appraisal before concluding the purchase contract in 2015 and another one recently, while one appraisal was ordered by the ACH company in 2014 before selling the property. There were therefore three certified appraisers and two parties who ordered the appraisals. Moreover, the fact that a former member of ACH Management Board stated that in 2014 she received an offer from a known potential buyer for the purchase of that property at the price of EUR 4.8 million which ACH rejected then as being too low, should present a clear picture to any objective observer.

Simona Toplak was either malevolent or ignorant when she commented that it was 'beyond reasonable doubt that 5.5 million is economically justified price'. In 2014 the average price of comparable office premises in Ljubljana was EUR 1,400-00/m2. An analysis of other opportunities for purchasing property with the sales prices for 13 comparable locations was made before taking the decision on the purchase. The Sava Re Company paid EUR 1,100.00/m2 for the property at stake.

Simona Toplak was wandering what could be the reason for dismissing Mr. Ivanušič, since Supervisory Board members did not regard potential negligence which was stated in Deloitte's report as the ground for his dismissal. My answer is that reasonable ground for dismissal would be established negligence and causing damage to the company. None of the two grounds were established in the present case. Deloitte's report mentions potential and not factual negligence. Since Deloitte did not perform or order its appraisal of ACH property and since its report does not refer to the appraisal ordered by ACH in 2014 although it had obtained that information during review, it did not and could not make any such conclusion. On the basis of above mentioned appraisals and the binding offer it is clear that the price paid for the property was not excessively high and that no negligence was committed.

I do not wish to waste any words on the sarcasms as the author calls them, jokes, unofficial information and assumptions that Simona Toplak used in her article. I will let the readers create their own opinion on them on the basis of factual explanations presented in this reply as well as information they will receive when the Management Board publishes its response report.'

This notice will be published at the company's web page at www.sava-re.si as from 4 August 2016 for the period of at least 5 years.

Pozavarovalnica Sava d.d. published this content on 04 August 2016 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 04 August 2016 11:05:11 UTC.

Original documenthttp://www.sava-re.si/en/media-centre/news/1434/response-to-the-article-published-in-the-finance-newspaper/

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