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Current report:

Acquisition by a Dependent Company of Assets with a Significant Value

Report number: 42/2005 day: 2005-10-18

The management of Barlinek S.A. hereby announces that as a result of changes to the company statute made on October 13th 2005 by the Town Council of Korosten in Zhitomir district in Ukraine (the relevant registration authority), the dependent company Barlinek Ukraina ltd has acquired from Cersanit S.A. a share in the initial capital of Cersanit Ukraina ltd, based in Korosten in Ukraine, constituting 99.99% of the initial capital and giving 99.99% of the voting rights at the meeting of partners of the company.

The purchase price of this share in the company’s initial capital was set by the parties at 354,443.89 USD (in full: three hundred and fifty four thousand four hundred and forty three 89/100 US dollars), equivalent to 1,154,175.64 PLN (in full: one million one hundred and fifty four thousand one hundred and seventy five 64/100) according to the NBP’s average rate on October 13th 2005 (1 USD = 3.2563 PLN).
The total value of Cersanit Ukraina ltd’s initial capital is 1,791,200 UAH (in full: one million seven hundred and ninety one thousand two hundred Ukrainian hryvna), equivalent to a sum of 1,164,638.24 PLN (in full: one million one hundred and sixty four thousand six hundred and thirty eight 24/100) according to the NBP’s average rate on October 13th 2005 (1 UAH = 0.6502 PLN). The following relations exist between the companies buying and selling:

• the dominant body with relation to Barlinek S.A. and thus indirectly to Barlinek Ukraina ltd is Mr Michał Sołowow, who is also a major shareholder in Cersanit S.A.,
• Mr Mariusz Gromek holds the function in Barlinek S.A. of Chairman of the Supervisory Board, while also serving as a Member of the Supervisory Board in Cersanit S.A.,
• Mr Krzysztof Kwapisz holds the function in Barlinek S.A. of Vice-chairman of the Supervisory Board, while also serving as a Member of the Supervisory Board in Cersanit S.A,
• Mr Mariusz Waniołka serves as a Member of the Supervisory Board in Barlinek S.A. and Cersanit S.A.,
• Mr Robert Oskard serves as a Member of the Supervisory Board in Barlinek S.A. and Cersanit S.A.,

The contract is considered significant owing to the fact the share acquired is greater than 20% of the initial capital of Cersanit Ukraina ltd.
The shares were purchased using the dependent company’s own capital and constitute a long-term capital investment.