Current reports

Conclusion of substantial agreement.

Current report number: 4/2011

Data: 16 March 2011

Komisja Nadzoru Finansowego
Pl. Powstańców Warszawy 1
00-950 Warszawa

Acting pursuant to S. 56(1)(1) of the Act of 29 July 2005 on Public Offer and the Terms of Introduction of Financial Instruments into an Organised Trading System and on Public Companies (consolidated text in the Official Journal of the Republic of Poland of 2009 No. 185, pos. 1439, as amended), the Management Board of Tell S.A. hereby makes it known that, on 15 March 2011, the issuer concluded an investment agreement for:

– taking, for the sum of PLN 1,287,000, shares constituting 30% of the increased share capital of Sp. z o.o., whose registered office is in Gdansk, giving the right to 30% of the votes at the general meeting of that company – on the date of conclusion of the investment agreement,

– purchasing from the existing shareholders further shares for the total of PLN 900,000, constituting, together with the previously taken shares, 51% of the increased share capital and giving the right to 51% of the votes at the general meeting of Sp. z o.o., whose registered office is in Gdansk – by 31 January 2012.

The company is a leader in the gifts and gadget market and operates under the Toys4Boys brand a chain of 8 stores located at shopping centres and an Internet store. As an addition, is engaged in wholesale and B2B sale activities with regard to gifts and gadgets. In 2010, the Company’s revenues exceeded PLN 7m and its operating profit PLN 0.3m.

The issuer assumes that, by using the effects of synergy and many years of experience in operating and developing a store chain, within a year and a half, Toys4Boys will increase its chain to 25 stores, while remaining a leader in Internet sales.

The issuer assumes that, in 2013, Sp. z o.o. will record a profit equal to 20% of the operating profit of the issuer’s group.

The transaction concluded is a manifestation of extending the strategy of diversifying sources of the issuer’s revenues, on the assumption that investment will be made into business models similar to the basic business of the Tell Group, i.e. operation of specialised chains of low-area stores, located mainly at shopping centres. At the same time, the issuer plans to continue to strengthen its position in the area of telecommunication services distribution, including mobile telephony services.

Legal basis: Art. 56 sec. 1 clause 1 of the Public Offering Act – confidential information

Signed: Rafał Stempniewicz – President of the Management Board