Restructuration of the Group and establishment of subsidiaries - Seite 2

In order to separate the operations of OÜ TKM Beauty Eesti, which is involved in the retail trade of cosmetics, from the cosmetics wholesale function, a division will be undertaken. In the course of the division of OÜ TKM Beauty (company being divided), OÜ TKM Beauty Holding, a company with a share capital of 2,500 euros and 100% ownership by Tallinna Kaubamaja Grupp AS, will be established. OÜ TKM Beauty will transfer the share of OÜ TKM Beauty Eesti to OÜ TKM Beauty Holding (recipient company). Anne-Liis Ostov, who currently manages the operations of I.L.U., will become a member of the management board of OÜ TKM Beauty Holding. The further plan is to merge OÜ TKM Beauty Holding and OÜ TKM Beauty Eesti so that OÜ TKM Beauty Eesti will directly become a 100% subsidiary of Tallinna Kaubamaja Grupp AS. Anne-Liis Ostov does not hold any shares of Tallinna Kaubamaja Grupp AS.

Separating footwear retail sale and wholesale

Another division of subsidiaries will take place in the Group with the aim of separating retail sale and wholesale functions of footwear, wherein TKM King AS (company being divided) will transfer part of its assets to TKM Hulgikaubandus OÜ (recipient company), a company to be established in the course of the division. The objective of the activity of TKM Hulgikaubandus OÜ is the import of footwear and other industrial goods for the retail companies of Tallinna Kaubamaja Grupp. Tallinna Kaubamaja Grupp AS will be the sole shareholder of TKM Hulgikaubandus OÜ and the share capital of the new company is 2,500 euros. Kristi Lomp, who will continue as a member of the management board of Selver AS as well, will be a member of the management board of TKM Hulgikaubandus OÜ and she does not hold any shares of Tallinna Kaubamaja Grupp AS.

Establishment of subsidiary TKM Finants AS

We aim to provide our customers more convenient purchases and have therefore decided to develop financial services that support our retail business. Tallinna Kaubamaja Grupp AS is applying for an authorisation of a creditor to develop the financial service line of business and is establishing TKM Finants AS, a subsidiary with a share capital of 50,000 euros belonging completely to the Group. According to the developed plan, after the Financial Supervision Authority has issued the relevant authorisation, TKM Finants AS will commence with granting credit to private persons, the postponement of a due date for a charge, including the entry into credit agreements and performance of acts needed for this purpose in its own name and on its own account. Member of the management board of TKM Finants AS will be Marit Vooremäe, who has been working as the financial director of Tallinna Kaubamaja Grupp AS since 2008 and who will continue in this position after the establishment of TKM Finants AS. Marit Vooremäe does not hold any shares of Tallinna Kaubamaja Grupp AS.

The establishment of subsidiaries and reorganisation of the Group’s structure will have no effect on the consolidated financial results of the Group. Establishment of subsidiaries is not deemed to be qualifying acquisition of a holding for the purposes of the part ‘Requirements for issuers’ of the Rules and Regulations of the NASDAQ OMX Tallinn Stock Exchange and it will not significantly impact the activity of the Tallinna Kaubamaja Grupp AS. The members of the management board and the supervisory board of Tallinna Kaubamaja Grupp AS have no other personal interests in these transactions.

Raul Puusepp 
Chairman of the Management Board
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