Notice of a meeting of the Supervisory Board of KD Holding d.d.

Pursuant to the provisions of the Rules of the Ljubljana Stock Exchange d.d. and the ZTVP-1 (Official Gazette of the Republic of Slovenia, No. 56/99), KD Group, d.d., Ljubljana, hereby issues the following announcement:

The Supervisory Board of KD Holding held its 17th ordinary meeting on 30 June 2004.
At the meeting, it considered and approved the annual reports of KD Holding d.d. and the KD Holding Group for the financial year 2003, and adopted the written Report of the Supervisory Board on the review of the annual reports, which states, amongst other things, that the Supervisory Board
: - regularly monitored the company’s operations in 2003 at Supervisory Board meetings, at which it discussed day-to-day operations, the company’s investment activities and the work of the Management Board,
- reviewed and took note of the auditor’s reports on the annual reports of KD Holding d.d. and the KD Holding Group, as well as the auditor’s unqualified opinion, and had no comments thereon,
- considered and amended the Management Board’s proposal for the appropriation of retained earnings;
- on the basis of a final review of both annual reports, the Management Board’s proposal for the appropriation of retained earnings and the audit reports, concluded that it had no comments to make and that it fully approved the annual reports of KD Holding d.d. and the KD Holding Group for 2003.

The Supervisory Board discussed and adopted resolutions regarding the implementation of the procedure for the merger of KD Naložbe d.d. into KD Holding d.d. In accordance with Article 514.a of the Companies Act, the Supervisory Board, on the basis of the management’s report on the merger and the audit report on the merger prepared by the authorised auditor PricewaterhouseCoopers d.o.o., reviewed the proposed merger and prepared and adopted a written report on the matter. In this report, the Supervisory Board expressed a positive view on the implementation of the merger and gave its consent to the content of the merger agreement and to the Management Board’s report on the merger.

Later in the meeting, the Supervisory Board discussed and approved the proposed amendments and additions to the company’s Articles of Association. It took note of the letter of resignation from Supervisory Board member Mr Martin Noset and proposed that the General Meeting appoint Mr Alojz Penko as a new member of the Supervisory Board.
The Supervisory Board considered the draft agenda for the 5th General Meeting of Shareholders, which will, amongst other things, decide on the merger of KD Naložbe d.d. into KD Holding d.d., and, in this context, considered and adopted the draft resolutions for which it is the proposer or co-proposer, and authorised the Management Board to convene the General Meeting.

The General Meeting of KD Holding d.d. will be held on 20 August 2004; the notice convening the meeting, together with the proposed resolutions, will be published in the newspaper Dnevnik and on the SEOnet website.



KD Holding d.d.
Management Board