kaubamaja
Report of the supervisory board of Tallinna Kaubamaja AS regarding the annual report of 2009 23.04.2010
ln 2OO9, Tallįnna Kaubamaja Group was forced to operate in economic conditions that had gone through a dramatic change compared to the previous financial year. The peak year of the flnancial recession affected the
revenue as well as the profit of the group and made it seek solutions for sustainable development. By cutting fixed costs and closing down loss-bearing units, the group managed to consolidate the company and maintain a
good market position. The investments made over the recent years have laid a solid foundation for further development. ln 2010, the priority of Tallinna Kaubamaja Group is to make a better use of its inter-segmental synergy.
ln 2009, Selver focused on improving the assortment of goods and reinforcing the competitiveness of Selver stores. ln 2009, two new Selver stores were opened in Estonia and four in Latvįa' however, in the fourth quarter it was decided to stop the activiŲ of the Selver stores in Latvia due to Latvia's economic situation that had
experienced an abrupt declįne. |n 2010, it
is planned to keep the Selver chain
developing, to raise its
effectiveness and the proportion of Selver's private labels as well as to make the most of the competitive advantage of Selveri Köök (Selver's Kitchen).
The aims of the business segment of department stores for 2009 were centred on the successful relaunch of the renovated commercial spaces and cutting down on operation costs. ln the new financial year, the activiŅ of
Kaubamaja is targeted to cutting operational costs and negotiating for more favourable logistic and supply conditįons that would allow providing customers with high-qualiŲ goods at more competitive prices. ln 2008, the chain of beauŲ stores launched under the trademark of l.L.U' devised in 2oo7 was provided with a '
concept and the preparative work for opening several stores was performed. The first store of the l.L.U. chain was opened in March 2009 in Pärnu Centre, followed in November by stores at Rocca al Mare Trade Centre in Tallinn and Lõunakeskus įn Īartu. The plans for 2010 involve activities for consolidating the market position of the l.L.U. chain and opening the fourth store of the chain in autumn at Kristiine Centre in Tallinn. ln the segment of car trade, the aim of the financial year was to cope with the low point of the market. ln 2010, it
is planned to adapt the segment of car trade even more closely to the low sales volumes and to promote the quality and sales of follow-up services. ln para|lel, it is planned to conįinue negotiations for incorporating new additionaļ promising car marks to the sales portfolio.
Tallinna Kaubamaja As Gonsiori 2, Īallinn, Estonįa +372667 3300 Tet Fax +372 667 33Ol kaubamaja@kaubamaia,ee www. kaubamaja.ee
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o GDS
kaubamaļa
The tasks of the footwear retail segment for 2009 entailed the closedown of loss-bearing units and cutting down
on operating costs, integrating the concepts of two footwear chains and presenting the new SHU concept.
ln
2010, the segment will work on uniting, consolidating and achieving the profitabiliŲ of the footwear stores.
The key actįvities lįsted above have been carried out in close partnership with the supervisory board of Tallinna Kaubamaja' The members of the supervisory board have been involved in planning the activiŲ of the company'
in organising the management activities and in exercising supervision over the activity of the management board. The supervisory board has held 11 scheduled meetings and
2 extraordinary meetings. During
the
planning process, the supervisory board has dįscussed and approved the budgets and investments prepared by
the management board, and defined targets and priorities for activiŲ. While exercising supervision over the activiŲ of the management board, the supervisory board has discussed the financial results of the public limited company by months and specified further activity plans at its monthly meetings.
The supervisory board of Tallinna Kaubamaja AS is of the opinion that the management board of the Kaubamaja Group has performed the obligations assigned to it. The supervisory board maintains that the key priorities of the management board are related to making a better use of the internal synergy of the group, raising the effectiveness, increasing the market share and consolidating the loyal customer base. ln near future,
the supervisory board will focus on monitoring the implementation of the optimisation plans for key areas
o{
activiŲ. company approves the annual report of 2009 prepared by the management board.
The supervisory
Jüri Käo Chairman Tallinna
supervisory board ia
AS