NLB Group
Report of the Supervisory Board of NLB
Report of the Supervisory Board of NLB
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The Supervisory Board of NLB was appointed at the General Meeting of
Shareholders on June 30, 2009 for the period of time until the conclusion of the
General Meeting of the Bank, which takes decisions regarding the annual report
for the fourth financial year after members are elected. Andrej Baričič, Riet Docx,
Gregor Dolenc, John Hollows, Igor Masten, Rasto Ovin (Deputy Chairman), Stojan
Petrič, Marko Simoneti, Boris Škapin, Jan Vanhevel, and Stanislava Zadravec
Caprirolo were appointed members of the Supervisory Board. Following the
resignation of Stanislava Zadravec Caprirolo, Marko Simoneti was elected
Chairman of the Supervisory Board in November 2009.
In 2010, Gregor Dolenc tendered his resignation as member of the Supervisory Board. At the 15th General Meeting of Shareholders on June 30, 2010, Jurij Detiček was elected to replace Stanislava Zadravec Capriolo as member. At the 16th General Meeting of Shareholders of NLB on November 25, 2010, Anton Macuh was elected to replace Gregor Dolenc as member. Professional support to the Supervisory Board in its work was provided by four commissions in 2010: the Risk Commission, the Audit Commission, the Remuneration and Appointment Commission and the Strategy and Development Commission. |
Work of the Supervisory Board
In 2010, the Supervisory Board met at nine regular and four correspondence sessions, at which it discussed regular reports on NLB's and the NLB Group's operations, as well as other current matters and important issues.
- discussed and approved the Annual Report 2009 and the proposal on the use of distributable profit;
- approved the proposals to adopt resolutions at the General Meeting of Shareholders, including the proposed changes to the articles of association and the proposal to appoint new members to the Supervisory Board;
- approved the NLB Group's strategy for the period 2010–2015, which includes short-term and long-term guidelines for the restructuring of the Bank and for improving its operations;
- regularly monitored the implementation of the program of short-term activities related to improving NLB's operations as regards the divestment of non-strategic investments, reducing risk-adjusted assets, cost reduction and maintaining an appropriate level of capital adequacy;
- regularly monitored measures for the customers in intensive care, and was briefed on large transactions and approved the Bank's large exposures to individual corporate customers;
- approved NLB's plan for the period 2011-2013;
- was briefed on the Bank’s and the Group’s capital projection for 2010 and 2011 and for future years, and approved the Bank’s capital increase proposal;
- approved NLB's borrowing on foreign markets in the form of syndicated loans;
- consistently monitored the realization of the LHB Internationale Handelsbank restructuring program on the basis of the approved operational strategy for the period 2010-2012;
- regularly discussed the internal audit reports, was briefed on letters from the Bank of Slovenia and external regulators, and monitored the implementation of their recommendations;
- was regularly briefed on reports regarding the Bank’s participation in the Republic of Slovenia’s guarantee schemes and regarding trends in the Bank’s lending activities;
- adopted a revised remuneration system for the Management Board and set remuneration criteria for 2010.
Verification and approval of the Annual Report 2010
On April 7, 2011, NLB's Management Board submitted the Annual Report 2010, with the audited financial statements of
NLB and the consolidated financial statements of the NLB Group, including the auditor’s opinions, to the Supervisory
Board. According to the auditor, the financial statements and the accompanying notes present a true and credible picture
of the Bank’s and the NLB Group’s financial position as at December 31, 2010, and are in line with the International
Financial Reporting Standards. Based on its review of the business report, the auditor finds that the information provided
in the business section of the annual report is in line with the Bank’s and the NLB Group’s financial statements.
The Supervisory Board had no comments on the report provided by the auditors of PricewaterhouseCoopers d.o.o.,
Ljubljana. After carefully verifying the audited annual report for the 2010 financial year, the Supervisory Board
adopted it unanimously.
Evaluating the Supervisory Board’s work
The Supervisory Board monitored the efficiency of its work during the course of the year and discussed various
suggestions by members for improving its work. The first discussions were held regarding the advantages and
weaknesses of introducing a single-tier system of corporate governance, given the fact that the Bank is controlled by
two shareholders through a shareholder agreement. Modifications to the structure and organization of the meetings
of Supervisory Board Commissions were introduced. Two new members were successfully introduced to the work of
the Supervisory Board. Certain rules of procedure were also amended. With these changes, the effectiveness of the
work of the Supervisory Board and its commissions was improved in the monitoring of the implementation of the
strategy in individual areas, and in risk management and audit reports.
While discussing the annual report, the Supervisory Board also formally evaluated its own work. Through discussions, it
was determined that the work of the Supervisory Board in the preceding period was made very difficult by the Bank's
significant problems with bad investments. Its work was also made more difficult by the long search for consensus
amongst the largest shareholders regarding the appropriateness of proposed strategic measures for an exit from the
recession. These measures did not receive the full support of all significant stakeholders until the end of 2010.
The members of the Supervisory Board received additional training in the form of seminars organized by the Slovenian
Directors’ Association and the Bank Association of Slovenia. The Supervisory Board discussed and adopted a report on
the costs of its work during 2010. The costs are in large measure conditional on the international composition of the
Supervisory Board and on the fact that the Supervisory Board and its Commissions work in both the Slovene and English
languages.
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During discussions, it was established that Supervisory Board members were
exceptionally active in matters last year, which is understandable given the
difficult operating conditions and changes to the Bank’s strategic policy. In
2010, there were nine regular and four correspondence sessions of the
Supervisory Board, nine sessions of the Audit Commission, eight sessions of the
Risk Commission, five sessions of the Strategy and Development Commission
and three sessions of the Remuneration and Appointment Commission.
Members of the Supervisory Board were also active at two General Meetings of
Shareholders and at various meetings with banking supervisors, auditors,
shareholder representatives and with potential new shareholders of the Bank. Opportunities for improvement that were discussed included improving communications between the Supervisory Board and shareholders, improving the coordination between the work of the specialized committees of the Supervisory Board and the increased transparency of reports that are discussed regularly at Supervisory Board sessions. |
Conclusion
The Supervisory Board would like to thank the Management Board and all employees for their contributions and efforts in 2010. Unfortunately, due to significant burdens from the past, this was not reflected in the Bank's operating results in 2010. Great challenges also await the Bank in the future. All of the Bank's significant stakeholders bear their own share of responsibility in this regard. The Supervisory Board believes that we will successfully meet these challenges and achieve the planned turn around in the Bank's operations on the basis of its new strategic guidelines and the combined and responsible work of all stakeholders.
Supervisory Board of NLB
Marko Simoneti
Chairman of the Supervisory Board
Annual Report 2010