A N N U A L R E P O R T

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A N N U A L

R E P O R T

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Multi-brand strategy in Internet enabled us to reach new groups of users and resulted in considerable growth in audience reach that brought us closer to business leaders. Total revenues growth outperformed the market and our advertising offer expanded considerably. We were working on development of varied audiovisual products, both using online services and our own multimedia studio. We were successful in syndicating our content via mobile platforms (currently, we cooperate with all Polish mobile telephone operators). We expanded our news, business and sport services. As Internet becomes an important player in the advertising market, its signiﬁ cance grows in the Agora Group media portfolio.

In 2008 revenues of Metro, our free newspaper,

achieved a rapid growth which translated into an increased ad market share. Apart from the continuous

development of print supplements and online services, Metro introduced its new layout and changed editorial formula. These changes resulted in positive reactions from readers. We believe that the aforementioned

changes will help us to leverage Metro’s advertising

potential.

The collections business is still a significant area of our activity, though in 2008 revenues and margins deteriorated. Severe competition and market saturation were the main reasons of the decline. The

formula of this business has evolved within the last few years. In 2004 we were selling only books while at present we are a multimedia publishing house offering books, music, movies on DVD. In addition, we distribute and license content (soundtracks for TV series and music for mobile phones) and publish music CDs under the label of our radio stations. We assume that we cannot count on the historical levels of revenues from this line of business, however, we believe that with a new business model, currently under development, we will be able to further leverage, to our advantage, the unique multimedia character of the Agora Group.

In 2008, AMS executed an investment program aiming at two core objectives: to maintain the leadership position and high quality of our panel system and to enter new market segments, including those becoming the market standard nowadays. We were further developing our mobile outdoor advertising offer, both traditional and based on the cutting-edge technologies. The LCD faces—CityINFOtv on the Warsaw subway trains are a perfect example of leveraging multimedia resources of Agora.

L E T T E R T O

S H A R E H O L D E R S

„

Strong market position of our media brands combined with the Group’s ﬁ nancial strength are our key assets allowing us, not only to defend but also to strengthen our market position at the time of the most diﬀ icult economic downturn.

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5

Letter to Shareholders

Magazines, published by Agora, maintained strong business position. Our key titles remained very popular with readers and advertisers whereas most recent launches reached extremely high copy sales. We also continued an intense development of our key titles in Internet.

Agora’s radio stations held to their market positions. Super-regional, opinion making radio station TOK FM reached proﬁ tability and increased ad revenues. We started to use effectively new distribution platforms to expand the range of our radio brands and to create new revenue streams. Our internet radio platform Tuba. fm and internet video channel—Kiss TV are perfect examples of such undertakings.

Solid foundation of our media, their competitive position as well as proper cost discipline are of extreme importance in the face of ﬁ nancial market turmoil and unpredictable macroeconomic conditions. We are convinced that the deteriorating economic situation will not spare the advertising market. How seriously will ad spend diminish? How long will the situation last? We do not know the answers to these questions as they are highly dependent on GDP growth, which is currently unpredictable. Anticipating deterioration of the market conditions, at the end of 2008 we started implementing operating efﬁ ciency improvement plan. In the face of divergent opinions about the further development of the macroeconomic conditions,

using our experience from the previous crisis, we are preparing the Agora Group for various scenarios, including further deterioration of the advertising market.

The market context is changing and these changes may have profound and long-lasting effect. Therefore we are not only focusing on the cost effi ciencies but also working intensely on tailoring our projects to fi t the new market conditions. In order to achieve this we make use of Agora Group multimedia character and combine the potential of our projects with emerging new revenue streams. Strong market position of our media brands combined with the Group’s fi nancial strength are our key assets allowing us, not only to defend but also to strengthen our market position at the time of the most diffi cult economic downturn. We hope that similarly to the previous economic slowdown, we will manage to leverage the situation to our advantage.

We would like to thank all our shareholders for their interest and support.

Piotr Niemczycki

Tomasz Józefacki member of the management board

Piotr Niemczycki president of the management board

Zbigniew Bąk vicepresident of the management board

Grzegorz Kossakowski member of the management board, CFO

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6

Agora SA is one of the largest media groups in Poland and has been listed since 1999 on the Warsaw and London stock exchanges. It was set up in 1989 as the

publisher of Gazeta Wyborcza, and in the space of two

decades has built a strong position across the majority of media market segments: in the daily newspaper and magazines segment, in outdoor advertising, radio and the Internet.

Gazeta Wyborcza is the largest corporate undertaking and the largest opinion-forming newspaper in Poland. With its unique national-local formula and rich

thematic offer, Gazeta Wyborcza is the most popular

daily title with advertisers.

Agora also publishes the largest nationwide free

daily, Metro, which is the third most read newspaper in

Poland, and 14 colour magazines on various subjects: from interior design and auto-moto to shopping to parenting.

Outdoor advertising is Agora’s second largest source of income, and its outdoor company AMS is the segment leader in Poland.

The Internet operations are the most dynamically growing area of the company’s activity. Agora owns over 90 Internet brands and most of them are leaders in their ﬁ eld.

The company’s radio station group includes two local radio station networks, Złote Przeboje (Golden

Oldies) and Roxy FM, and the superregional Radio TOK FM—the ﬁ rst news&talk radio station. The programmes aired on these stations are also available on the TUBA. FM Internet platform, which offers over 20 thematic music channels, including a video channel.

Agora is also a publisher of collections of literature, music and ﬁ lm books series with CDs and DVDs. The company is active as a music producer, offering books with premiere music albums of Polish artists, and participates in ﬁ lm production and organisation of important cultural events.

Conducting such a wide range of activities requires a strong back-up made up of, inter alia, three modern printing houses, photo department and photo agency Agencja Gazeta which supplies photographic materials to Agora’s various media outlets and external clients and a modern TV studio which produces professional audiovisual content for Internet brands, to name a few. Building up the company’s command of the production and distribution of audiovisual content, Agora, together with its partner ATM Grupa, developed an Internet TV platform—TiVi.pl.

A M U LT I M E D I A P U B L I S H E R

A G O R A

R E V E N U E S T R U C T U R E I N 2 0 0 8 Metro 3% Outdoor 14% Radio 7% Print 5% Internet 6% Magazines 9% Collections 5% Gazeta Wyborcza 51%

source: readership of Metro: PBC, MillwardBrown SMG/KRC, CPW (daily readership), n = 47 749, 2008.

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Agora

K E Y F I G U R E S I N 2 0 0 8 ( C O N S O L I D AT E D R E S U LT S )

Revenues

_{1 277.7}

PLN million Operating EBITDA margin

_14.3%

Advertising

_916.1

PLN million Net proﬁ t

_23.4

PLN million

Copy sales

_200.2

PLN million Operating cashﬂ ow

_189.6

PLN million

Collections

_63.2

PLN million Free cashﬂ ow

_73.6

PLN million

Operating cost

_{1 205.9}

PLN million Employment at the end of the year

3.7

thou.

employees

Operating EBITDA

_182.2

PLN million

notes:

Operating cost: excluding an impairment loss on investment in Trader.com (Polska).

Operating EBITDA = EBITDA + non-cash expenses relating to share-based payments. Operating EBITDA excluding impairment loss on Trader.com (Polska) = EBITDA + non-cash expenses relating to share-based payments + impairment loss on Trader.com (Polska)

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8 Most important awards in 2008

Agora’s quarterly report for 4Q2008 included among the best quarterly reports of WIG20 listed

companies in the ranking by Gazeta Giełdy Parkiet.

11 nominations to Fryderyki 2008 music awards for projects by Agora.

Empik’s Aces awards for Gazeta Wyborcza and

the book Świadectwo (The Testimony) in the

Newspapers and Special Projects categories. Awards for Agora for supporting integration: AMS honoured with Przyjaciel Integracji (A Friend of Integration) medal by

Stowarzyszenie Przyjaciół Integracji (Association of Friends of Integration) and journalists of Gazeta Wyborcza and Poradnik Domowy

(Housekeeping) awarded in the Oczy otwarte

(Eyes Wide Open) competition.

The Mediatory 2008 student awards for Gazeta’s

journalist Wojciech Jagielski and for the social

campaign Umierać po ludzku (Humane Death).

Gazeta Wyborcza’s and Metro’s advertising departments ranked the best among all dailies’ sales teams and the Agora Radio Group’s sales team recognized the best radio station sales

team in the ranking by Media&Marketing Polska.

Gazeta Wyborcza and Sport.pl distinguished by INMA (International Newsmedia Marketing Association) in the Football Media Competition for the best projects connected with the Euro 2008 football championships.

Social activities For many years Agora have been

engaged in activities pro publico bono. The company’s media initiate and support national social campaigns, cultural events and initiatives promoting civic and pro-ecological attitudes. Our media implement this mission

in the national campaigns by Gazeta Wyborcza: Umierać

po ludzku (Humane Death), Dzieciaki do domu (Kids

Get Home), Przejrzysta Polska (Transparent Poland),

Ratujmy Rospudę (Let’s Save the Rospuda Valley) and Rodzić po ludzku (Humane Birth), activities of our outdoor company AMS aimed at supporting activation of the handicapped, providing media patronage of our radio stations over the most important cultural events

and organizing pro-ecological campaigns by Metro.

Our social activities are also aimed at helping people in

need outside Poland, like in Wolność słowa na Białorusi

(Freedom of Speech in Bielarus), Solidarni z Donieckiem

(Solidarity with Donieck), Ratujmy Darfur (Let’s Save

Darfur) and Vlepka – protest dla Tybetu (Sticker—the

Protest Supporting Tibet) campaigns.

The broadening pro publico bono activity of Agora’s media and of Agora-Holding is brought together and supported by Agora Foundation established in 2004.

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Przyjaciel Integracji (A Friend of Integration) medal from Stowarzyszenie Przyjaciół Integracji (Association of the Friends of Integration)—another award for AMS for supporting the handicapped.

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Services by Agora awarded third year in a row during the

Webstar Festival—the national interactive contest, which promotes the best websites in the Polish Internet.

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Agora

L I N K S

K E Y E V E N T S I N 2 0 0 8

Gazeta Wyborcza chosen the Newspaper of the Year for Young Readers by the World Association of Newspapers (WAN).

Gazeta Wyborcza awarded in the INMA Awards 2008 international competition for the newspaper’s pre-election edition’s cover, for Ratujmy Rospudę (Let’s Save the Rospuda Valley) campaign and for its dual-media advertising offer.

The Polish European Award for Gazeta Wyborcza

for merits in supporting European integration. A Gold Medal of Izba Wydawców Prasy (Chamber

of Press Publishers) for Gazeta Wyborcza’s

pre-election edition cover in GrandFront 2007 competition.

Grand Prix Media Trendy 2008 for Gazeta

z Iskierką (Gazeta with a Spark) in the Social Marketing category.

Gazeta Wyborcza and Metro won the quality prizes in the competition by IFRA, NAA and PANPA.

Gazeta Wyborcza awarded in the Best of Newspaper Design international contest by the global association Society for News Design.

Metro recognized as a High Reputation Brand according to the Premium Brand Independent Ranking of Brand Reputations in Poland. Radio TOK FM chosen the Radio Station of

the Year by Media&Marketing Polska.

Gazeta Wyborcza photoreporters honoured with the BZ WBK Press Foto 2008 awards.

11 journalists of Gazeta Wyborcza

recognized in the best regional

journalists ranking by Press monthly.

Gazeta Wyborcza reporters awarded by Amnesty International

with Pióro Nadziei (Pen of Hope)

awards.

www.agora.pl www.agora.ua www.fundacjaagory.pl

june

purchasing the shares of Trader.com (Polska).

november

changes in the company’s management: Piotr Niemczycki becomes the company’s CEO, Tomasz Józefacki becomes a member of the board and Grzegorz Kossakowski becomes the company’s CFO.

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G A Z E TA

W Y B O R C Z A

Gazeta Wyborcza is the largest opinion-forming

newspaper in Poland with monthly paid circulation of 411 thousand copies. It combines the power of an inﬂ uential and strongly rooted title with the attractive and reach—building content for readers and advertisers, and with the effective promotional platform for other Agora brands. With its national

issue and 20 regional editions, Gazeta reaches over

5 million readers nationwide. Readers value thematic

magazines of Gazeta, such as Wysokie Obcasy (High

Heels), Duży Format (Large Format), Gazeta Co Jest

Grane (What’s Up?) and Gazeta Telewizyjna (TV Guide) while 4 thematic ad supplements are popular with advertisers.

The success of Gazeta Wyborcza on the difﬁ cult and

increasingly competitive market in 2008 was based on its reputation and strong brand, as well as wide thematic offer, the highest quality of journalism and its promotional and advertising innovativeness.

Readers reached for Gazeta in order to follow the

key up-to-date social and political issues covered,

inter alia, in editorial series, such as Siedem wyborów

Wałęsy (Wałęsa’s 7 Dilemas) and To nie jest kraj dla starych ludzi (This is not a Country for Old Men). They

actively embraced Gazeta’s special events, like the

miniEuro tournament for children organised alongside

the European Championships, awarded by the INMA (International Newsmedia Marketing Association).

Readers also appreciated additions to Gazeta sold

in a dual-media offer, like popular Polish TV series on

DVD: Czterdziestolatek (Fourty-Year-Old) and Stawka

większa niż życie (More than Life at Stake) or music discs with the hits of Carlos Santana and Christmas carols performed by Edyta Górniak.

The diverse and good quality thematic offer which includes dual-media campaigns and non-standard ad

forms, appealed to advertisers, making Gazeta the most

popular quality daily with advertisers and helping the title to maintain its share in ad spending in dailies at the level of 41%.

In mid-year Wyborcza.pl portal, the Internet edition of Gazeta Wyborcza, was remodelled. It combines the information and opinion-forming impact of the newspaper with the speed and immediacy of the

Internet. Wyborcza.pl broadens Gazeta’s offer with

up-to-date online comments and multimedia content produced, inter alia, in Agora’s modern TV studio. Thanks to its interactive character Wyborcza.pl enables even closer, more intense contact between Gazeta and its readers, providing ongoing dialoguea and an exchange of opinions and thoughts on forums

and blogs. Gazeta’s website is the most popular site

of a press title in the Polish Internet.

A M O D E R N N E W S P A P E R

W I T H L O N G T R A D I T I O N

K E Y F I G U R E S I N 2 0 0 8

Ad revenues

₄₈₆

PLN million

Copy sales revenues

₁₅₂

PLN million

source:

copy sales: ZKDP, paid circulation, 2008,

readership: PBC, MillwardBrown SMG/KRC, 2008, CCS (weekly readership), a nationwide representative sample of people aged 15+, N = 47 749,

the Internet reach: Megapanel PBI, Gemius, Real Users, December 2008.

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Gazeta Wyborcza A D V E R T I S I N G S P E N D I N G I N N E W S P A P E R S I N 2 0 0 8 Mecom (local) 7% Gazeta Wyborcza 41% Polskapresse 15% Rzeczpospolita 8% Dziennik 7% Fakt 6% Metro 3% Super Express 3%

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Opinion-forming, modern and innovative, close to readers—

Gazeta Wyborcza is the most popular quality daily with readers and advertisers in Poland.

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Agora SA Annual report 2008 C O P Y S A L E S O F N E W S P A P E R S ( I N T H O U S A N D C O P I E S ) Fakt 495 Gazeta Wyborcza 411 Super Express 204,5 Rzeczpospolita 157 Dziennik 155 W E E K LY R E A D E R S H I P ( C C S ) ( M I L L I O N R E A D E R S ) Gazeta Wyborcza 5 Fakt 4.8 Super Express 2.3 Metro 2.2 Dziennik 1.6 Rzeczpospolita 1.4

↗

Wyborcza.pl — online face of Gazeta Wyborcza, the most popular website of the press title in the Polish Internet.

→

The promotional campaign of Wysokie Obcasy (High Heels), the magazine supplement to Gazeta Wyborcza on Saturday.

source: PBC, MillwardBrown SMG/KRC, 2008, CCS (weekly readership), a nationwide representative sample of people aged 15+, N = 47 749.

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Gazeta Wyborcza

L I N K S

K E Y E V E N T S www.wyborcza.pl

Social activities

Gazeta’s social activity combines

the nationwide campaigns like Dzieciaki do domu

(Kids Get Home) campaign with the activity of local

scope. Gazeta Katowice’s editorial ofﬁ ce organized

a campaign to encourage the involvement of local society in revitalising the city’s Nikiszowiec district, which was listed as UNESCO cultural heritage site.

In Łódź, throughout the summer holidays, Gazeta ran

the campaign Ratujmy fabryczną Łódź (Let’s save the

Łódź of the Factories). The editorial ofﬁ ce in Białystok

set up a Tent of Tolerance in the main city square and promoted the Esperanto language as a part of the campaign to promote the idea of tolerance. In

Katowice, Gazeta z Iskierką (Gazeta with a Spark)

—a special issue of Gazeta prepared by children with

cancer looked after by Fundacja Iskierka (The Spark

Foundation) was created. The initiative was recognised by the jury of the Media Trendy competition, which awarded it Grand Prix and the ﬁ rst prize in the Social Marketing category.

↑

Piotr Stasiński, deputy editor-in-chief of Gazeta Wyborcza, received the award for Gazeta in the international contest INMA Awards 2008.

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Gazeta in Katowice supported inhabitants of Nikiszowiec district and organised the Easter fair of products of the local cuisine. Collected funds were earmaked for ﬁ nancing the monitoring system for the district.

march

The Daily Telegraph’s Jobs & Careers

supplement in Gazeta Wyborcza.

june launching the editorial series

Siedem wyborów Wałęsy (Wałęsa’s 7 Dilemas).

may Andrzej Wajda chosen

Gazeta Wyborcza’s Man of the Year.

august launching the remodelled Wyborcza.pl

portal and a dual-media ad offer of Gazeta Wyborcza

and Wyborcza.pl.

september

the end of Szkoła Mistrzów Fotograﬁ i (School for Masters of Photography) competition

organized by Gazeta Wyborcza and Wyborcza.pl.

october

launching the attractive e-subscription

offer of Gazeta Wyborcza.

november

Gazeta Wyborcza’s ad department

(along with the Metro’s team) ranked the best

among dailies sales teams in the ranking by Media&Marketing Polska.

november

start of To nie jest kraj dla starych ludzi (This is not a Country for Old Men) editorial series covering issues related to the situation of old people in Poland.

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I N T E R N E T

Agora is one of the top players on the Polish Internet market. The company’s offer includes Gazeta.pl, one of the leading Internet portals in Poland, thematic websites enhanced with audiovisual content and vertical and community services.

In 2008, the company doubled the number of its Internet brands to almost 100, adding to its portfolio 46 new services. After taking over Trader.com (Polska), Agora extended its classiﬁ ed online offer by 5 services in popular thematic categories: real-estate and auto--moto. Providing new services and enhancing the existing ones with video content, both produced in-house and supplied by partners (like Dailymotion, VideoJug and Ekstraklasa S.A.), was another important direction of development of company’s online offer.

Agora also developed its know-how in the realm of audiovisual content production and distribution by running the online TV platform TiVi.pl—a project by A2 Multimedia, a joint venture between Agora and ATM Grupa. Agora’s rich and diversiﬁ ed content offered online is also available via mobile technology, i.e. on Gazeta.mobi and on mobile phones, as a result of our cooperation with mobile phone operators.

The reach of Agora’s Internet offer at the end of December 2008 was 44.62%. The strategy of developing online thematic services has resulted in a dynamic growth of the company’s Internet ad revenues—the Internet ad sales revenues of Agora in 2008 grew twice as fast as the market.

A N I N C R E A S I N G LY W I D E

A N D D I V E R S E O F F E R

K E Y F I G U R E S I N 2 0 0 8

Revenues

_77.1

PLN million

Internet ads

_47.9

PLN million

ads in vortals

_18.6

PLN million

EBIT

_(8.3)

PLN million

Operating EBITDA

_(4.1)

PLN million

Operating EBITDA margin

_{(5.3) %}

I N T E R N E T A D V E R T I S I N G R E V E N U E G R O W T H I N 2 0 0 8 : A G O R A V S . M A R K E T

Internet ad market 31%

Agora (incl. ads in vortals) 58%

Agora (excl. ads in vortals) 74%

source: advertising spending: estimates by Starlink media house.

notes:

Operating EBITDA = EBITDA + non-cash expenses relating to share-based payments. Operating EBITDA of Internet is calculated based on cost directly attributable to the appropriate area of the business line of the Agora Group and excludes allocations of all Company’s overheads (such as: cost of Agora’s Management Board and cost of the supporting divisions), which are almost in full factored in the Newspapers and Internet line of business.

↗

New audiovisual formats on TiVi.pl platform and promotional campaign of real-estate classifi eds vortal Domiporta.pl. Expanding video content and enriching the classifi eds off er in the Internet were among main growth objectives of Agora’s online operations in 2008.

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Internet L I N K S K E Y E V E N T S Gazeta.pl Wyborcza.pl eMetro.pl GazetaDom.pl Domiporta.pl GazetaPraca.pl GazetaEdukacja.pl Zdajmy.pl Edulandia.pl Sport.pl Moto.pl eDziecko.pl Ugotuj.to Lula.pl Infomuzyka.pl GameCorner.pl Polygamia.pl Plotek.pl Kotek.pl TiVi.pl Alert24.pl Blox.pl Cafe.pl Znam.to Blox.ua ChikiDriki.ua Plitkar.com.ua StartJob.com.ua

Social activities Sport.pl in cooperation with the

Rotary Club prepared a series of charity auctions conducted during the Olympics in Beijing. The money collected by auctioning objects donated by famous athletes was earmarked for scholarships for disabled

sportsmen. Gazeta.pl took part in the Widzialni.eu –

strony internetowe bez barier (Widzialni.eu—Websites without Barriers) project devoted to the availability of the Internet services for the disabled users.

The portal also supported the activities of the SOS

Wioski Dziecięce (Villages for Children) Association, the service Zaginieni.pl of the ITAKA Foundation, the Centrum Poszukiwań Ludzi Zaginionych (Centre for Searching for Lost Persons) and the campaign Szlachetna Paczka (The Noble Parcel) by Stowarzyszenie Wiosna (Spring Association) focused on preparing Christmas presents for the poorest families across Poland.

january

launching the blog service Blox.ua.

february launching a new mailing system at

Gazeta.pl portal based on solution by Google.

march enabling the Wideo.Gazeta service for users

of Nokia mobile phones.

may

Agora becomes the exclusive distributor of ad

space in Microsoft’s services in Poland.

may

start of cooperation with VideoJug service,

which provides its video materials to Agora’s services.

august

launching the Ekstraklasa.tv service set up by Agora and Ekstraklasa S.A.

october Sport.pl and

Gazeta Wyborcza awarded in the INMA (International Newsmedia Marketing Association) competition for the best projects related to Euro 2008.

november

start of Glossy Media—the ﬁ rst Internet ad network for women in Poland.

december

cooperation of Agora and Dailymotion video service.

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Metro is the largest free daily newspaper in Poland. With the average circulation of 495 thousand copies the title reached 1.2 million readers in 19 largest cities in the country daily and was the third most read national

daily paper. In 2008, in line with our plans, Metro

reached EBITDA breakeven point.

Last year, Metro underwent some changes. A new

editor in chief and a new editorial line bore fruit in the form of a refreshed layout and a redirection towards younger readers. The title increased its

Internet activity by establishing a community service Cafeanimal.pl for animal lovers.

Metro actively reacted to current events by preparing special editions targeted at speciﬁ c groups of readers, like afternoon edition reporting the power failure in Szczecin, an edition for Euro 2008 for football fans distributed in areas where matches were watched and the special issue for Dzień Dziecka (Children’s Day) distributed in parks and kids’ play areas.

T H E D A I LY F O R T H E B O O M G E N E R AT I O N

M E T R O

↑

During the Era Nowe Horyzonty (Era New Horizons) International Film Festival in Wrocław Metro set up a rent-a-bike service for the Festival’s audience. Agora’s free daily was a media patron of the Festival.

notes:

Operating EBITDA = EBITDA + non-cash expenses relating to share-based payments. Operating EBITDA of Metro is calculated based on cost directly attributable to the appropriate area of the business line of the Agora Group and excludes allocations of all Company’s overheads (such as: cost of Agora’s Management Board and cost of the supporting divisions), which are almost in full factored in the Newspapers and Internet line of business. source:

circulation distribution: ZKDP (Circulation Audit Ofﬁ ce), average monthly free circulation, 2008,

readership: PBC, MillwardBrown SMG/KRC, CPW (daily readership), n = 47 749, 2008.

K E Y F I G U R E S I N 2 0 0 8

Operating EBITDA

₁

PLN million

Ad revenues

_37.4

PLN million

Share of advertising spending

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Metro

L I N K S

K E Y E V E N T S

Social activities In 2008,

Metro focused on social-civic activities. In response to the situation in China, the editorial team initiated the pro-Tibet

campaign Vlepka – protest dla Tybetu (Sticker—the

Protest Supporting Tibet) and supported the World Association of Newspapers’ (WAN) campaign for press freedom in China. In cooperation with Polska Akcja Humanitarna (Polish Humanitarian Organisation) and

Amnesty International, Metro collected signatures

under a petition against capital punishment, that was subsequently handed to politicians. The title also published a special edition devoted to the mentally handicapped and their job opportunities. The paper traditionally engaged in pro-environment activities

organising the second edition of the Ekopozytywni

(Ecopositive) campaign, and promoting bike riding

at the Era Nowe Horyzonty (Era New Horizons) ﬁ lm

festival in Wrocław. www.emetro.pl

www.metropraca.pl www.cafeanimal.pl

↑

Special editions of Metro are popular with readers while thematic supplements and ﬂ exible ad oﬀ er apeals to advertisers.

←

The Metro Generation—the slogan promoted a new editorial line and the remodelled layout of Metro.

february

Waldemar Paś becomes Metro’s new editor-in-chief.

april recruitment supplement

MetroPraca in Warsaw, Katowice, Cracow, Łódź, Poznań, Szczecin, the TriCity and Wrocław.

june

Metro wins Strong Reputation Brand title in the Premium Brand ranking.

june organiating the

Vlepka – protest dla Tybetu exhibition (Sticker—the Protest Supporting Tibet).

july launching the community service

Cafeanimal.pl.

august

changing the editorial line and layout of Metro, starting the image campaign Pokolenie Metra (The Metro Generation).

november

Metro’s and Gazeta Wyborcza’s advertising departments ranked the best among all dailies’ sales teams in the ranking by Media&Marketing Polska.

december

Metro publishes results of the large-scale polling of young Poles project

called Pokolenie Metra (The Metro Generation)

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C O L L E C T I O N S

As a part of its publication activity, Agora has to date introduced 40 collections and over 90 one-off projects, selling by the end of 2008 over 34 million books and booklets with CDs and DVDs for over PLN 550 million. The company offers series of books, practical guides and audio-books, music and ﬁ lm collections and one-off projects—books with premiere albums by Polish musicians.

Agora continued its publishing and phonographic activities in 2008, issuing new books with music

albums, like Marek Niedźwiecki’s The Best Of Smooth

Jazz Cafe, Męska muzyka (Male Music) by Waglewski, Fisz and Emade or new records by Martyna Jakubowicz and Bracia band.

The company also successfully introduced the literature collections of renowned Polish writers— Ryszard Kapuściński and Stanisław Lem.

New areas of the company’s activity in 2008 included a ﬁ lm co-production and an organisation of important artistic events. Agora’s most prestigious project was participation in the production and organisation of

the international premiere of the ﬁ lm Świadectwo

(Testimony) in the Vatican. The company was also a co-producer of the ﬁ rst Woody Allen concert in Poland, which was organised alongside the STX Jamboree.

M U S I C A N D F I L M P R O D U C T I O N

→↓

Reputation of Agora’s brands allowed to broaden the publishing operations of the company and to oﬀ er collections of literature and music and ﬁ lm series.

K E Y F I G U R E S I N 2 0 0 8

Sales revenue

_63.2

PLN million

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19

Collections

L I N K S

K E Y E V E N T S

Social activities Total revenues from the sales of

the album Nawet gdy wichura (Even if the Tempest)

consisting of a book, CD and DVD with a concert of

actress Ewa Błaszczyk, were passed on to the Akogo?

(And Whom?) Foundation to support its statutory activity.

www.kulturalnysklep.pl www.swiadectwoﬁ lm.pl

↑↓

New areas of activity—participation in a ﬁ lm production and an organization of important cultural events.

january

Ewa Bem’s music album Kakadu reached the status of gold disc.

february

Asy Empiku (Empik’s Aces) awards for Gazeta Wyborcza and the book Świadectwo (Testimony)—the interview with Cardinal Stanisław Dziwisz by Gianfranco Svidercoschi.

february

11 nominations to Fryderyki 2008 music awards for projects by Agora.

july

Męska muzyka (Male music) album by Waglewski, Fisz and Emade became gold.

october

the world premiere of the ﬁ lm Świadectwo (Testimony) at the Vatican.

december the DVD premiere of

Poste Restante— the latest documentary by Marcel Łoziński produced by Agora, TBA Group and Arkana Studio.

december

Agora co-organises the ﬁ rst Polish concert of Woody Allen and his New Orleans Jazz Band.

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20

A M S

AMS is the leader of outdoor advertising in Poland. The company offers advertising panels in all segments of the outdoor market: Universal, Premium, Superpremium and Spectacular. AMS’s portfolio also includes mobile outdoor advertising (buses and trams), the small format ad panels at petrol stations and digital ad panels in Warsaw metro cars. The diversiﬁ ed panel portfolio enables the company to run effective, targeted and multiformat advertising campaigns.

In 2008, the company continued to invest in developing panels of the Premium and Superpremium segments and implemented a number of innovative projects. In mid-year, AMS launched a pioneering outdoor ad channel in the Warsaw metro cars—the digital CityINFOtv. On LCD screens installed in the metro cars passengers can watch tailored news and

entertainment programs combining content produced by Agora with commercials.

AMS also won some attractive tenders, like the bid to provide news stands and ad posts for Krakowskie Przedmieście Street in Warsaw, and ran many non-standard promotional campaigns for its clients, beeﬁ ng up its leading position in the non-standard solutions for outdoor advertising in Poland.

AMS’s dynamic revenue growth in 2008 far outpaced the average outdoor market growth and the company increased its share in the ad spend for outdoor. AMS’s intensive revenue growth was the result of increased portfolio of popular 18 sq m billboard panels, providing the unique digital ad space in the Warsaw metro cars, and the effective sales of the company’s multi-format campaigns.

I N N O VAT I V E S O L U T I O N S

Social activities

Social involvement has been for some years the company’s visiting card. AMS runs programs for activating the physically disabled people through sport and work. The company employs over 130 physically disabled, more than half of its total work force. Among them are athletes—fencers, who took part in the Para-Olympics at Beijing in 2008 and Szabla Kilińskiego World Cup. In recognition of AMS’s commitment to activating physically disabled

the company was awareded with Przyjaciel Integracji

(A Friend of Integration) medal by Stowarzyszenie Przyjaciół Integracji (Association of the Friends of Integration).

AMS is also engaged in the social debate on the role of outdoor advertising in urban areas. In November 2008,

the conference Reklama w mieście, miasto w reklamie

(Advertising in the City, the City in Advertising)

inaugurated the fourth edition of the Bramy Kraju

(Country’s Gateways) project devoted to the presence of outdoor advertising, commercial information and social communications in the city’s public space.

The last edition of AMS’s Galeria Plakatu (Poster

Gallery) contest entitled Myśl rowerowo (Think Biking)

promoted biking as means of an attractive recreation, healthy lifestyle and eco-friendly commuting around large cities. O U T D O O R A D V E R T I S I N G M A R K E T I N 2 0 0 8 Cityboard Media 16% AMS 28% Stroer 19.5% News Outdoor 10% CCP 10.5%

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21

AMS L I N K S K E Y E V E N T S www.ams.com.pl www.cityinfotv.pl www.bramykraju.pl K E Y F I G U R E S I N 2 0 0 8 Revenues

_189.7

PLN million

Operating EBITDA

_27.8

PLN million

_14.7%

january

setting up the department for cooperation with shopping malls within the AMS sales

department.

march

winning the tender for furnishing Krakowskie Przedmieście Street in Warsaw.

may

assembling the ﬁ rst test CityINFOtv screens

in the Warsaw metro cars.

june

AMS becomes the exclusive partner of Shell Polska in using gas station locations to build new advertising panels.

july

winning the tender for providing ad panels at bus stops in the centre of Lublin and along the main communication tracts in Gdansk.

december the

Przyjaciel Integracji (A Friend

of Integration) medal from Stowarzyszenie

Przyjaciół Integracji (Association of the Friends of Integration) for supporting the handicapped. notes:

Operating EBITDA = EBITDA + non-cash expenses relating to share-based payments.

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22

Agora SA Annual report 2008 M O N T H L I E S A D V E R T I S I N G M A R K E T I N 2 0 0 8 Murator 8% Gruner+Jahr 12% Agora 12% Marquard 12%

Burda Media Polska 10%

Bauer 15% Edipresse 7% Axel Springer 4% Media Point Group 5%

M A G A Z I N E S

Agora’s 14 colour magazines include: Cztery Kąty (Home

Design)—the best selling interior design magazine, Avanti and Logo—the ﬁ rst shopping-lifestyle magazines

on the Polish market, and Kuchnia (Cuisine), the only

high end cooking magazine in Poland.

To enrich the offer and to make it even more apealing to readers, the magazine team refreshed the editorial proﬁ le of several titles. New editorial content was

developed for Poradnik Domowy (Housekeeping)

and Dziecko (Child) and special thematic issues of selected magazines hit the news stands. In April, a new

shopping magazine Galeria (Gallery) was launched.

The title presents current interior decoration market

offer and provides information on trends and helpful hints on home decorating.

While building a close relationship with readers we have encouraged them to engage in our activities. We have organized competitions and rankings, like Kucharz – odkrycie roku (Chef—the Discovery of the

Year) contest by Kuchnia magazine or Miejsce szczególne

(A Unique Spot)—a ranking of unique public spaces with an unforgettable atmosphere and original interior

design by Cztery Kąty. We also launched Logo24.pl

service, where Internet users can ﬁ nd interesting information on traveling, fashion and sports as well as news on cars and gadgets.

C L O S E C O N TA C T W I T H R E A D E R S

source: rate card data from monitoring by Expert Monitor; commercial brand advertising in monthlies, excluding specialized monthlies, accounted for 128 titles.

K E Y F I G U R E S I N 2 0 0 8

Revenues

_109.7

PLN million

Operating EBITDA

_19.2

PLN million

_17.5%

notes:

Operating EBITDA = EBITDA + non-cash expenses relating to share-based payments. Operating EBITDA of Magazines is calculated based on cost directly attributable to the appropriate area of the business line of the Agora Group and excludes allocations of all Company’s overheads (such as: cost of Agora’s Management Board and cost of the supporting divisions), which are almost in full factored in

the Newspapers and Internet line of business.

↑

Avanti presents fashionable cloths, advices what to wear and organizes contests for its readers.

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23

Magazines L I N K S K E Y E V E N T S www.edziecko.pl www.avantimoda.pl www.logo24.pl www.smart24.pl ugotuj.to www.ﬁ rmaprzyjaznamamie.pl

Social activity

The social involvement of Agora’s magazines is associated mainly with promotion of friendly maternity and introduction of improvements in companies which enable combining professional career with parenting. In 2008 we held the fourth edition of Firma przyjazna mamie (Mom Friendly Company) ranking.

The organisers of the campaign, Poradnik Domowy and

Dziecko, received a record number of over 400 applications from 320 companies across Poland. Other titles ran

pro-health, social and ecological campaigns like Mądry

buduje lepiej (The Wise Builds Better) campaign by Ładny

Dom (House Beautiful), which promoted building with

a greater attention to energy saving. Agora’s monthlies

also willingly took part in other campaigns: Dziecko

monthly together with eDziecko service became patrons of Dobry rodzic – Dobry start (Good Parent—Good Start)

program by Dzieci Niczyje (Nobody’s Kids) Foundation.

The title also supported Równi rodzice (Equal Parents)

campaign by Social Communication Foundation and MaMa Foundation and a campaign by Pampers and

UNICEF 1 paczka = 1 szczepionka (1 pack—1 vaccine) related

to tetanus vaccines program.

march

launching the Smart magazine in a large format.

april introducing the new shopping title

Galeria (Gallery).

june starting the contest for readers of

Avanti monthly and audience of Agora’s radio stations: Radio Złote Przeboje and and Radio Roxy Fm.

july

launching the Logo24.pl Internet service.

september starting the new edition of

Firma przyjazna mamie ranking.

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24

Agora SA Annual report 2008 R A D I O A D V E R T I S I N G M A R K E T I N 2 0 0 8 Broker 27% Polskie Radio 10% Agora 12% Eurozet 28% Time 17%

R A D I O

Agora’s radio offer consists of two brands of music local radio stations: Złote Przeboje (Golden Oldies) and Roxy FM, the Internet radio platform TUBA.FM and the superregional Radio TOK FM—the ﬁ rst Polish radio station in the news&talk format.

New programs and the development of the Internet offer were the two main areas of Agora’s radio stations activities in 2008. Since February Radio Roxy FM has started to introduce in the evening slots programs hosted by famous ﬁ gures from the world of culture.

Radio Złote Przeboje preserved its interactive character for listeners, inviting them to participate in games and competitions. Both stations have created special projects in cooperation with popular Internet social networking portals.

The Internet platform TUBA.FM set up several new thematic channels—at year’s end it already had over 20 audio music channels and a Kiss.tv video channel launched in August.

Radio TOK FM, which celebrated in 2008 fi ve years on the air as the fi rst news radio station in Poland, achieved impressive market and fi nancial results and reached the top spots in the most recognized and the most quoted radio brand rankings. In November,

a unique project was launched—Teatr Radia TOK FM

(Radio TOK FM Theatre)—a series of theatrical productions broadcast on air.

The sales team of Agora’s Radio Group won the

highest marks in the Media&Marketing Polska ranking

for the best radio ad sales teams. This high appreciation was accompanied by ad sales growth that exceeded the market growth rate.

R A D I O T O B E H E A R D A N D W AT C H E D

source: Agora estimates based on Expert Monitor, Agora’s ad revenues include Radio TOK FM and exclude revenues from brokerage activity.

K E Y F I G U R E S I N 2 0 0 8

Revenues

_85.8

PLN million

Operating EBITDA

_7.4

PLN million

_8.6%

notes:

Data related to results of Agora’s local stations: Radio Złote Przeboje and Roxy FM.

Operating EBITDA = EBITDA + non-cash expenses relating to share-based payments.

↑

TUBA.FM – even more music audio channels and the video music channel online.

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25

Radio L I N K S K E Y E V E N T S www.zloteprzeboje.pl www.roxy.fm www.tok.fm www.tuba.fm

Social activity Agora’s radio stations cover social,

civic and ecological issues in their broadcasts while supporting charity organizations. Radio TOK FM took part in collecting funds for the SYNAPSIS Foundation and conducted an auction of Christmas tree ornament signed by the Dalajlama. The station became the media

patron of many social campaigns, including Umierać

po Ludzku (Humane Death) campaign, the Christmas

campaign Szlachetna Paczka (The Noble Parcel), the

Widzialni.eu – strony internetowe bez barier (Widzialni.

eu—Websites Without Barriers) project and the Być

może Ty? Zbadaj się – zostań w grze (Maybe you? Get Examined—Stay in the Game) campaign related to prevention of the type C hepatitis program. Radio TOK FM

also supported the campaign Wiedza dla każdego – zysk

dla wszystkich (Knowledge for All, Beneﬁ t to Everybody) organized by Komitet Obrony Praw Dziecka (Children’s Rights Protecion Committee) and Fundacja Funduszu Współpracy (Cooperation Fund Foundation).

Agora’s radio stations were also patrons of many musical and cultural events, including the 13th Festiwal Gwiazd w Trójmieście (Festival of the Stars

in the TriCity), Lato Filmów w Warszawie (Summer of

Films in Warsaw), the Malta Theatre Festival and the Cracow Screen Festival.

january launching the Marek Niedźwiecki’s Hit

List on Radio Złote Przeboje.

february introducing the ﬁ rst authors’ programs

on Radio Roxy FM.

march 5th anniversary of Radio TOK FM as the

ﬁ rst news radio station in Poland; the station awarded with the title The Station of the Year 2007 by Media&Marketing Polska.

april

Homo Twist plays Najmniejszy koncert świata Radia Roxy FM (The Smallest Concert in the World of Roxy FM Radio).

may Radio Roxy FM starts brodacasting in Opole.

july start of cooperation of Radio Złote Przeboje

with the Nasza-klasa.pl portal.

august introducing the video music channel

Kiss.tv on the TUBA.FM platform.

august starting the joint program of Radio Roxy

FM and the MySpace service.

november launching

Teatr Radia TOK FM (Radio TOK FM Theatre) project.

november

Agora Group’s radio sales team awarded with the title of the best radio station

ad sales team in the ranking by Media&Marketing

Polska.

↑

Radio stations of Agora—attractive oﬀ er for various target

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C O N S O L I D AT E D

F I N A N C I A L

S TAT E M E N T S

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28

Agora SA Annual Report 2008

To the General Shareholders’ Meeting of Agora S.A.

We have audited the accompanying consolidated financial statements of Agora S.A. Group seated in Warsaw, ul. Czerska 8/10 (“the Group”), which comprise the consolidated balance sheet as at 31 December 2008, with total assets and total liabilities and equity of PLN 1,598,561 thousand, the consolidated profit and loss account for the year then ended with a net profit of PLN 23,302 thousand, the consolidated statement of changes in equity for the year then ended with an a decrease in equity of PLN 48,470 thousand, the consolidated cash flow statement for the year then ended with a decrease in cash amounting to PLN 73,917 thousand and notes to the consolidated financial statements.

Management’s Responsibility for the Financial Statements

Management of the parent entity is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards as adopted by European Union and with other applicable regulations. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatements, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor’s Responsibility

Our responsibility, based on our audit, is to express an opinion on these consolidated financial statements. We conducted our audit in accordance with section 7 of the Accounting Act dated 29 September 1994 (Official Journal from 2002, No. 76, item 694 with amendments) (“the Accounting Act”), the professional standards established by the Polish National Council of Certified Auditors and International Standards on Auditing. Those standards require that we comply with relevant ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting principles used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

A G o R A S . A . G R 0 u p

o p i n i o n o f

t H e i n d e p e n d e n t

a U d i t o R

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29

Opinion of the independent auditor

opinion

In our opinion, the accompanying consolidated financial statements of Agora S.A. Group have been prepared and present fairly in all material respects the financial position of the Group as at 31 December 2008 and of its financial performance and its cash flows for the year then ended, in accordance with International Financial Reporting Standards as adopted by the European Union, and are in compliance with the respective regulations that apply to the consolidated financial statements, applicable to the Group.

other Matters

As required under the Accounting Act we also report that the Report on the Group’s activities includes, in all material respects, the information required by Art. 49 of the Accounting Act and by the Decree of the Ministry of Finance dated 19 February 2009 on current and periodic information provided by issuers of securities and the conditions for recognition as equivalent information required by the law of a non-Member State (Official Journal from 2009, No 33, item 259) and the information is consistent with the consolidated financial statements.

Signed on the Polish original Signed on the Polish original

Certified Auditor No. 90046/7419 Marcin Domagała

For KPMG Audyt Sp. z o.o. ul. Chłodna 51; 00-867 Warsaw Certified Auditor No. 90046/7419 Marcin Domagała, Member of the Management Board 10 April 2009

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30

AGoRA GRoup

c o n s o l i d at e d

f i n a n c i a l

s tat e m e n t s

as at 31 December 2008 and for 12 month period ended thereon April 10, 2009

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31

Consolidated financial statements

AGoRA GRoup

c o n s o l i d at e d

f i n a n c i a l

s tat e m e n t s

32

Consolidated balance sheet

34

Consolidated income statement

35

Consolidated statement of changes

in shareholders’ equity

37

Consolidated cash flow statement

38

Notes to the consolidated financial

statements

32

C o n S o l i d AT e d b A l A n C e S h e e T A S AT 3 1 d e C e M b e R 2 0 0 8

note As at 31 december 2008 As at 31 december 2007*

ASSETS

Non-current assets:

Intangible assets 3 396,986 289,871

Property, plant and equipment 4 650,692 616,036

Investments 5 248 3,162

Investments in associates and joint ventures 6 399 –

Receivables and prepayments 6,802 6,970

Deferred tax assets 14 10,692 14,720

1,065,819 930,759

Current assets:

Inventories 7 18,861 17,501

Accounts receivable and prepayments 8 244,860 249,257

Income tax receivable 5,271 2,199

Short-term securities and other financial assets 9 7 63,455

Cash and cash equivalents 10 263,743 337,660

532,742 670,072

Total assets 1,598,561 1,600,831

* Due to change in presentation of deferred tax assets and liabilities descibed In note 14, the comparative figures in the table above were restated thereupon.

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33

C o n S o l i d AT e d b A l A n C e S h e e T A S AT 3 1 d e C e M b e R 2 0 0 8 ( C o n T i n u e d )

note As at 31 december 2008 As at 31 december 2007*

Equity and liabilities

Equity attributable to equity holders of the parent

Share capital 11 54,978 54,978

Treasury shares (71,007) –

Share premium 290,506 290,506

Foreign currency translation reserve (37) (21)

Retained earnings and other reserves 12 892,771 870,220

1,167,211 1,215,683

Minority interest (93) (95)

Total equity 1,167,118 1,215,588

Non-current liabilities:

Deferred tax liabilities 14 41,121 41,110

Interest-bearing loans and borrowings 13 95,497 104,430

Retirement severance provision 15 1,829 1,334

Deferred revenues and accruals 17 101 767

138,548 147,641

Current liabilities:

Retirement severance provision 15 91 130

Accounts payable 18 167,611 138,742

Income tax liabilities 20 177

Short-term borrowings 13 59,736 34,810

Provisions 16 14,975 2,876

Deferred revenues and accruals 17 50,462 60,867

292,895 237,602

Total equity and liabilities 1,598,561 1,600,831

* Due to change in presentation of deferred tax assets and liabilities descibed In note 14, the comparative figures in the table above were restated thereupon.

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34

Agora SA Annual Report 2008 C o n S o l i d AT e d i n C o M e S TAT e M e n T F o R T W e lV e M o n T h S e n d e d 3 1 d e C e M b e R 2 0 0 8 note 2008 2007 Sales 19 1,277,670 1,272,323 Cost of sales 20 (694,889) (722,579) Gross profit 582,781 549,744 Selling expenses 20 (350,794) (318,835) Administrative expenses 20 (140,369) (109,721)

Other operating income 21 15,899 17,835

Other operating expenses 22 (62,907) (18,750)

Operating profit 44,610 120,273

Finance income 26 21,138 17,077

Finance cost 27 (16,230) (8,034)

Share of results of equity accounted investees (1,633) 6

Profit before income taxes 47,885 129,322

Income tax expense 28 (24,583) (29,141)

Net profit for the period 23,302 100,181

Attributable to:

Equity holders of the parent 23,421 100,264

Minority interest (119) (83)

23,302 100,181

Basic/diluted earnings per share (in PLN) 30 0.43 1.82

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35

C o n S o l i d AT e d S TAT e M e n T o F C h A n G e S i n S h A R e h o l d e R S ’ e q u i T y F o R T W e lV e M o n T h S e n d e d 3 1 d e C e M b e R 2 0 0 8 eq ui ty a tt rib ut ab le t o eq ui ty h ol de rs o f th e pa re nt M in or ity in te re st To ta l e qu ity S ha re c ap ita l Tr ea su ry s ha re s S ha re p re m iu m Fo re ig n cu rr en cy tr an sl at io n re se rv e Re ta in ed e ar ni ng s To ta l Ye ar e n d ed 3 1 D ec em b er 2 0 0 8 A s at 3 1 D ec em b er 2 0 0 7 54 ,9 78 – 29 0 ,5 0 6 (2 1) 8 70 ,2 20 1, 21 5, 68 3 (9 5) 1, 21 5, 58 8 N et p ro fi t fo r th e p er io d – – – – 23 ,4 21 23 ,4 21 (1 19 ) 23 ,3 0 2 C u rr en cy t ra n sl at io n – – – (1 6) – (1 6) – (1 6) To ta l r ec og n iz ed i n co m e an d e xp en se f or th e p er io d – – – (1 6) 23 ,4 21 23 ,4 0 5 (1 19 ) 23 ,2 8 6 A d d it io n al c on tr ib u ti on o f m in or it y sh ar eh ol d er – – – – – – 1, 0 32 1, 0 32 A d ju st m en t fr om c on so li d at io n o f su b si d ia ry p re vi ou sl y n ot c on so li d at ed – – – – (6 17 ) (6 17 ) – (6 17 ) S h ar e-b as ed p ay m en ts – – – – 27 ,2 36 27 ,2 36 – 27 ,2 36 S h ar e b u y-b ac k f or t h ei r re d em p ti on – (7 1, 0 0 7) – – – (7 1, 0 0 7) – (7 1, 0 0 7) D iv id en d s d ec la re d – – – – (2 7, 48 9) (2 7, 48 9) – (2 7, 48 9) D iv id en d s of s u b si d ia ri es – – – – – – (9 10 ) (9 10 ) A s at 3 1 D ec em b er 2 0 0 8 54 ,9 78 (7 1, 0 0 7) 29 0 ,5 0 6 (3 7) 8 92 ,7 71 1, 16 7, 21 1 (9 3) 1, 16 7, 11 8 A cc om pa n yi n g n ot es a re a n in te gr al p ar t of t h es e co n so lid at ed fi n an ci al s ta te m en ts .

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36

Agora SA Annual Report 2008 C o n S o l i d AT e d S TAT e M e n T o F C h A n G e S i n S h A R e h o l d e R S ’ e q u i T y F o R T W e lV e M o n T h S e n d e d 3 1 d e C e M b e R 2 0 0 8 C o n T i n u e d eq ui ty a tt rib ut ab le t o eq ui ty h ol de rs o f th e pa re nt M in or ity in te re st To ta l e qu ity S ha re c ap ita l Tr ea su ry sh ar es S ha re p re m iu m Fo re ig n cu rr en cy tr an sl at io n re se rv e Re ta in ed ea rn in gs To ta l Ye ar e n d ed 3 1 D ec em b er 2 0 0 7 A s at 3 1 D ec em b er 2 0 0 6 54 ,9 78 – 29 0 ,5 0 6 – 8 19 ,6 8 5 1, 16 5, 16 9 (5 0 3) 1, 16 4, 66 6 N et p ro fi t / (l os s) f or t h e p er io d – – – – 10 0 ,2 64 10 0 ,2 64 (8 3) 10 0 ,1 8 1 C u rr en cy t ra n sl at io n – – – (2 1) – (2 1) – (2 1) To ta l r ec og n iz ed i n co m e an d e xp en se f or t h e p er io d – – – (2 1) 10 0 ,2 64 10 0 ,2 43 (8 3) 10 0 ,1 60 A d d it io n al c on tr ib u ti on o f m in or it y sh ar eh ol d er – – – – – – 1, 55 7 1, 55 7 A d ju st m en t fr om c on so li d at io n o f su b si d ia ri es p re vi ou sl y ac co u n te d f or u si n g eq u it y m et h od – – – – 16 0 16 0 – 16 0 S h ar e-b as ed p ay m en ts – – – – 32 ,5 77 32 ,5 77 – 32 ,5 77 D iv id en d s d ec la re d – – – – (8 2, 46 6) (8 2, 46 6) – (8 2, 46 6) D iv id en d s of s u b si d ia ri es – – – – – – (1 ,0 66 ) (1 ,0 66 ) A s at 3 1 D ec em b er 2 0 0 7 54 ,9 78 – 29 0 ,5 0 6 (2 1) 8 70 ,2 20 1, 21 5, 68 3 (9 5) 1, 21 5, 58 8 A cc om pa n yi n g n ot es a re a n in te gr al p ar t of t h es e co n so lid at ed fi n an ci al s ta te m en ts .

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37

C o n S o l i d AT e d C A S h F l o W S TAT e M e n T F o R T W e lV e M o n T h S e n d e d 3 1 d e C e M b e R 2 0 0 8 note 2008 2007

Cash flows from operating activities

Profit before income taxes 47,885 129,322

Adjustments for:

Share of results of equity accounted investees 1,633 (6)

Depreciation of property, plant and equipment 73,372 71,328

Amortisation of intangible assets 10,445 7,001

Interest, net 9,433 7,031

(Profit) /loss on investing activities 30,384 (2,471)

Change in provisions 12,303 (1,851)

Change in inventories (1,360) 1,087

Change in receivables and prepayments 7,736 (53,278)

Change in payables 14,477 35,153

Change in deferred revenues and accruals (12,845) 10,324

Other adjustments (1) 28,270 32,352

Cash generated from operations 221,733 235,992

Income taxes paid (32,135) (32,825)

Net cash from operating activities 189,598 203,167

Cash flows from investing activities

Proceeds from sale of property, plant and equipment and intangibles 1,396 974

Disposal of financial assets – 231

Loan repayment received 1,027 –

Interest received 451 1,291

Disposal of short-term securities 63,431 39,781

Purchase of property plant and equipment and intangibles (115,965) (52,126) Acquisition of subsidiary (net of cash acquired) associates and jointly

controlled entities

31 (119,968) 59

Acquisition of short-term securities – (100,000)

Loans granted – (7)

Net cash used in investing activities (169,628) (109,797)

Cash flows from financing activities

Proceeds from borrowings 17,103 960

Repurchase of own shares (71,007) –

Dividends paid to equity holders of the parent (27,489) (82,433)

Dividends paid to minority shareholders (910) (1,066)

Interest paid (9,433) (7,576)

Other (2,151) (300)

Net cash used in financing activities (93,887) (90,415)

Net increase (decrease) in cash and cash equivalents (73,917) 2,955 Cash and cash equivalents

At start of period 337,660 334,705

At end of period 263,743 337,660

(1) “other adjustments” include mainly share-based payment costs in the amount of PLN 27,236 thousand in 2008 (2007: PLN 32,577 thousand).

(40)

38

n o T e S T o T h e C o n S o l i d AT e d F i n A n C i A l S TAT e M e n T S A S AT 3 1 d e C e M b e R 2 0 0 8 A n d F o R T W e lV e M o n T h S e n d e d T h e R e o n

1. General information

a) Core business activity

Agora SA (“the Company”, “parent company”) principally produces newspapers (including Gazeta Wyborcza), magazines and other periodicals and run an Internet business.

Additionally, the Company controls 5 radio companies. Agora’s radio group consists of 18 Golden Oldies (Zlote Przeboje) radio stations, seven local radio stations (Radio Roxy FM) and a superregional news radio TOK FM broadcasting in nine cities. Agora’s radio group includes also one local station which plays in AC format (Adult Contemporary). The Company is also active in the outdoor segment through its subsidiary, Art Marketing Syndicate SA (“AMS”).

As at 31 December 2008, the Group comprises Agora SA, 14 fully consolidated subsidiaries and a one joint-venture company A2 Multimedia Sp. z o.o. (50% controlled by Agora SA, 50% by ATM Grupa S.A.). The Group operates in all major cities in Poland.

To start from 2007 the Group operates also in the Ukraine through two companies LLC Agora Ukraine and Agora Press Ltd.

b) Registered Office

Czerska 8/10 Street 00-732 Warsaw

c) Registration of the Company in the National Court Register

Seat of the court: Regional Court in Warszawa, XIII Commercial Department Registration number: KRS 0000059944

d) Tax Office and Provincial Statistical Office registration of the Company

NIP: 526-030-56-44 REGON: 011559486

e) Management Board

During the period reported in the unconsolidated financial statements, the Management Board of Agora SA comprised the following members:

Piotr Niemczycki President* from 13 November 2008

Marek Sowa President to 13 November 2008

Zbigniew Bak Deputy President for the whole year Jaroslaw Szalinski Deputy President** to 28 November 2008 Tomasz Jozefacki Member from 13 November 2008

(*) till 13 November 2008 the Deputy President of the Management Board (**) till 20 June 2008 the Member of the Management Board

On 8 January 2009, the Management Board of the Company elected by way of co-option Member of the Management Board, Mr. Grzegorz Kossakowski, the Financial Director of the Company.

f) Supervisory Board

The Supervisory Board of the Company comprised the following members: Andrzej Szlezak Chairman for the whole year Slawomir Sikora Member for the whole year Tomasz Sielicki Member for the whole year Bruce Richard Rabb Member for the whole year Sanford Schwartz Member for the whole year

On 22 January 2009, the Company has received the resignation of Bruce Richard Rabb from the Supervisory Board of Agora SA . The Members of the Subervisory Board have appointed by way of co-option Marcin Hejka to the post.

g) Information about the financial statements

A N N U A L R E P O R T

A N N U A L

R E P O R T

2 0 0 8

CONTENTS

4

6

10

14

16

18

20

22

24

4

Dear Shareholders, Another year of intense changes

L E T T E R T O

S H A R E H O L D E R S

„

5

6

A M U LT I M E D I A P U B L I S H E R

A G O R A

7

1 277.7

14.3%

916.1

23.4

200.2

189.6

63.2

73.6

1 205.9

3.7

182.2

8

Most important awards in 2008

Social activities For many years Agora have been

↓

↘

9

june

november

10

G A Z E TA

W Y B O R C Z A

A M O D E R N N E W S P A P E R

W I T H L O N G T R A D I T I O N

486

152

11

↑

12

↗

→

13

Social activities

↑

↑

march

june launching the editorial series

may Andrzej Wajda chosen

august launching the remodelled Wyborcza.pl

september

october

november

november

14

I N T E R N E T

A N I N C R E A S I N G LY W I D E

A N D D I V E R S E O F F E R

77.1

47.9

18.6

(8.3)

(4.1)

(5.3) %

↗

15

Social activities Sport.pl in cooperation with the

_{1 277.7}

_14.3%

_916.1

_23.4

_200.2

_189.6

_63.2

_73.6

_{1 205.9}

_182.2

₄₈₆

₁₅₂

_77.1

_47.9

_18.6

_(8.3)

_(4.1)

_{(5.3) %}

₁

_37.4

_63.2

_189.7

_27.8

_14.7%

_109.7

_19.2

_17.5%