Annual Report 2006 En

WOOLWORTH (CYPRUS) PROPERTIES PUBLIC LIMITED ANNUAL REPORT 2006 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Contents

4 Financial Highlights 4 Share Capital 6 Notice of Annual General Meeting 7 Board of Directors and other Consultants 8 Chairman’s Statement

OUR PROPERTIES 14 Investment Properties 18 Commercial Centres 21 Other Properties and Investments

FINANCIAL STATEMENTS 24 Directors’ Declaration 25 Directors’ Report 30 Directors’ Report on Corporate Governance 37 Auditors’ Report 39 78 Consolidated Profit & Loss Account 40 79 Consolidated Balance Sheet 41 80 Consolidated Statement of Changes in Shareholders’ Equity 43 82 Consolidated Cash Flow 44 83 Notes to the Consolidated Financial Statements

í f WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Financial Highlights

2002 2003 2004 2005 2006

PROFIT BEFORE TAXATION (Cí mil) 1,2 7,6 4,3 2,7 5,3 EARNINGS PER SHARE OF 20 CENTS BASIC (cent) - Basic 0,7 7,0 3,0 2,4 4,5 TOTAL ASSETS (Cí mil) 123,3 122,6 145,8 156,1 169,7 SHAREHOLDERS’ EQUITY (Cí mil) 53,9 72,0 71,2 68,2 73,8 BOOK VALUE PER SHARE (cents) 55,6 75,8 75,1 70,9 77

Number of Shareholders 19 April 2007 – Ten thousand nine hundred fifteen (10.915)

Share Capital

The issued share capital of Woolworth (Cyprus) Properties Public Ltd on 19 April 2007 was:

Number of shares of 20 cents each

Authorised 125 000 000

Issued

Issued and fully paid shares 114 623 855

4 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 7,6

5,3 4,3

2,7

1,2

PROFIT BEFORE TAXATION Cí mil 2002 2003 2004 2005 2006

169,7

156,1

145,8

123,3 122,6 2002 2003 2004 2005 TOTAL ASSETS Cí mil 2006

5 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Notice of Annual General Meeting

Notice is hereby given that the Annual General Meeting of Woolworth (Cyprus) Properties Public Limited will be held at the International Conference Centre, in Nicosia, on Thursday 7 June 2007 at 6:30 pm.

AGENDA

1. To review the Report of the Directors and the Financial Statements for the year ended 31 December 2006 2. Approval of dividend 3. Approval of remunerations policy 4. To elect members of the Board of Directors 5. To fix the Directors’ remuneration 6. To re-appoint the auditors and authorize the Board of Directors to fix their remuneration

Every member who is entitled to attend and vote the Meeting can authorize a proxy to attend and vote on his/her behalf. A proxy does not need to be a member of the Company. The notification of the appointment of a proxy must be submitted at the Company’s Registered Office, Shacolas House, Old Nicosia – Limassol road, Athalassa, P.O. Box 21744, 1589 Nicosia, at least 48 hours before the opening of the Meeting.

George P. Mitsides Secretary

Nicosia 19 April 2007

6 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Board of Directors and other Consultants WOOLWORTH (CYPRUS) PROPERTIES PUBLIC LIMITED

BOARD OF DIRECTORS

EXECUTIVE CHAIRMAN Nicolas K. Shacolas - (a, d)

DEPUTY CHAIRMAN Renos Solomides - (b, c)

MANAGING DIRECTOR Marios Panayides - (a, d)

EXECUTIVE DIRECTORS ( in alphabetical order ) Eleni N. Shacola (a, d) Marios N. Shacolas (a, d)

DIRECTORS (in alphabetical order) Demetris Demetriou (b, d) Pambos Ioannides (b, d) Michalakis Koniotis (b, c) Andreas Louroutziatis (b, c) Marios A. Savvides (b, d) Menelaos K. Shacolas (b, c)

SECRETARY George P. Mitsides

AUDITORS PricewaterhouseCoopers Limited Julia House, 3 Themistocles Dervis 1066 Nicosia P. O.Box 21612, 1591 Nicosia, Cyprus

LEGAL ADVISORS Tassos Papadopoulos & Associates

REGISTERED OFFICE Shacolas Building Old road Nicosia – Limassol, Athalassa, Nicosia a = executive b = non-executive c = independent d = non-independent

7 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Report of the Chairman of the Board of Directors

Dear Shareholders,

RESULTS

The profits before tax of Woolworth (Cyprus) Properties Public Ltd for the year 2006 amounted to í5.274.874 (f9.141.000 Euro). Net Profits after deducting taxation of í982.443 (f1.702.000 Euro) amounted to í4.292.431 (f7.439.000 Euro) rising significantly by 90,1% compared to net profits of í2.257.000 (f3.936.000 Euro) in 2005.

The revenues from the license fees for the use of space and leasing of the Group’s property amounted to í4.184.207 (f7.251.000 Euro) compared to í2.874.000 (f4.980.000 Euro) in 2005. Included in these revenues is an amount of f2 million Euro, which was received as license fee for the use of space for the creation of commercial stores in the Shacolas Emporium Park complex and the Commercial Center ‘Agora Engomi’.

In 2006, fair value gains from investment properties rose to í1.717.761 (f2.975.000 Euro). There was a more conservative increase, lower by 24%, on the values of the Groups’ properties compared to the appreciation in 2005.

The expenses of the Group rose to í1.689.562 (f2.928.000 Euro) rising by 35% compared to the previous year. The increase is mainly due to expenditure incurred for activities that have not yet started to generate revenues such as the construction of the Shacolas Emporium Park and the Agora Engomi Commercial Center. These investments are expected to contribute significantly to the property values and revenues of the Group from the end of 2007 on. There was however a reduction in financing costs compared to 2005.

The results of the associated companies Olymbos Investments Limited and Akinita Lakkos Mikelli Limited had a significant positive impact on the results of the Group. In addition, the accounts of the Group for the first time included the share of profit from the associated company CTC-ARI Airports Ltd, in which Woolworth holds a 20% stake, which started operations on 1st July 2006. CTC-ARI Airports Ltd manages all the commercial operations of the two airports of Larnaca and Pafos and its results, in the first months of operations, are already very encouraging.

Taxation was significantly higher at í982.443 (f1.702.000 Euro) due mainly to provisions for tax liabilities referring to previous years but also due to deferred taxation on the fair value gains of investment properties, which is a contingent liability.

8 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 PROJECTS AND INVESTMENTS

ITTL Trade Tourist & Leisure Park Ltd – Shacolas Emporium Park During the year, ITTL Trade Toursit and Leisure Park Ltd proceeded further with the development of the Shacolas Emporium Park complex in Athalassa Strovolos on freehold land. The Shacolas Emporium Park complex will include ‘The Mall of Cyprus’, the large Swedish furniture store IKEA, two adjacent buildings with showrooms, the ‘Mana Square’, an open amphitheatre and a playground. The Shacolas Emporium Park will have about 60.000 square meters of retail space and 2.500 parking places. The Mall of Cyprus, which is expected to become operational in September 2007, will include Debenhams, Carrefour, Zara and other well known retail fashion and other stores, a multiplex cinema, restaurants, cafes and leisure areas all contributing to the success of the project. After completion, ITTL is expected to obtain annual income in excess of f10 million Euro.

Woolworth Commercial Centre Ltd – Agora Engomi In parallel, during 2006 the subsidiary Woolworth Commercial Centre Ltd proceeded in the development of the Commercial Centre ‘Agora Engomi’ on freehold land by the 28th October Avenue in Engomi Nicosia. The development is expected to be completed and become operational by the end of 2007. Agora Engomi will have a total retail area of about 13.600 square meters and parking space of 500 places. The commercial centre will include Carrefour, Super Home Center D.I.Y., Debenhams, Oviesse, Starbucks and other concepts.

Cyprus Limni Resort & GolfCourses Plc In line with the Company’s strategy of incurring further investments in land development, Woolworth (Cyprus) Properties Public Ltd proceeded in December 2006 with the acquisition of 100% of the share capital of N. K. Shacolas (Merchants) Ltd, which owns 11,73% of the shares in Cyprus Limni Resorts & GolfCourses Plc. The latter is a large owner of land of an area of about 2.800.000 square meters (2.800 decares) in the areas of Limni, Pelathousa, Macounta, Kinousa and Polis Chrysochous where a large resort will be developed with 2 golf courses, land plots, villas, apartments and other lodgings, golf club, a reasonably sized hotel and other facilities. The land has access to the sea with a pier extending 150 meters into the sea, which is now under restoration. The company is in a position to meet all the irrigation needs of the whole development. In addition, within the above area, a land of 280.000 square meters (280 decares) is included in the hills of the Kinousa village next to the national forest, which will be developed separately in the future. There is already the permit from the appropriate authorities for the separation of land into building plots for a large part of this estate.

Cyprus Limni Resorts & GolfCourses Plc is already taking the necessary steps for the listing of its shares to the Cyprus Stock Exchange within 2007.

ERMES DEPARTMENT STORES PUBLIC LTD

During 2007, following the successful offering of Ermes Department Stores Public Ltd shares to the shareholders of Woolworth, institutional investors and the broader public last year, Woolworth has sold shares in Ermes at 35 cents per share, realizing significant profits.

As already announced the shares of Ermes Department Stores Public Limited are expected to be listed very soon on the Cyprus Stock Exchange.

9 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Report of the Chairman of the Board of Directors

PROSPECTS

Woolworth aims to develop further its real estate property potential, create wealth for its shareholders and restructure its obligations in order to be in a position to exploit any opportunities that arise in the property sector.

The business prospects of the Group are promising. Cyprus accession into the European Union, the recent entry of Cyprus in the Eurozone and the introduction of the Euro on 1 January 2008 as the official currency replacing the Cyprus Pound as well as the improvement of the Cyprus Economy have contributed to the increased interest for investments by foreign investment funds both in properties and in other investments. Without doubt, the use of the Euro, which is the stable national currency of 13 other large and healthy European Economies, as the national currency of the Cyprus Republic, adds to the standing and confidence of the economy, through which Cyprus and its citizens are expected to benefit.

At the end of this Annual Report we present, for informational purposes, the financial statements for the year 2006 in Euro.

SHARE WARRANTS

In March 2007, at their expiry, the Share Warrants of Woolworth were exercised at the exercise price of í0,30 cents per share. For every warrant a new share of Woolworth was issued of nominal value í0,20 cents. In total, 18.243.644 new shares were issued raising the total issued shares of the Company to 114.226.864. From the exercise of these Warrants, the Company received the amount of í4,9 million while a small number of shares were exercised by the Company.

DIVIDEND

The Board of Directors decided to propose at the Annual General Meeting of the Company, which will take place in June 7, at the International Conference Center in Nicosia the distribution of a dividend equal to 8% of the nominal value per share, which amounts to 1,6 cents per share.

In addition, it is reminded that, based on an earlier decision of the Board of Directors, on 30 June 2007, the Company will pay the second instalment of the dividend, of 10% of the nominal value, amounting to 2 cents per share, to the Shareholders registered on the Company’s Register as at 30 December 2005.

NET BOOK VALUE PER SHARE

Following the exercise of the Share Warrants, the net book value per share of the Company, which was 77 cent (Euro 1,33) as at 31 December 2006, was adjusted to 70 cent (Euro 1,21).

CORPORATE GOVERNANCE

The Board of Directors and the Management of the Company are taking all necessary steps to comply fully with the Code of Corporate Governance and proceeded with the adoption of systems and procedures aiming to ensure the best possible management of and yield to the shareholders’ wealth.

10 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 CHANGE OF CHAIRMAN

As already announced, due to excessive workload and responsibilities following the takeover of the management of the operations of the two new international airports of Larnaca and Pafos by Hermes Airports Ltd, of which I am the Chairman, and also due to other activities of the Shacolas Group, I have recommended and the Board of Directors unanimously accepted my resignation as Chairman of the Company, which will take place after the completion of the Annual General Meeting.

I have recommended the Deputy Chairman of the Company Mr Renos Solomides as the new Chairman of Woolworth (Cyprus) Properties Public Ltd. Mr Solomides a prominent economist, ex Minister of Finance, served as Chairman of the Cyprus Development Bank, Chairman of the Cyprus Employers and Industrialists Federation (OEB) and Chairman of other public and private companies.

I will of course continue to be an active member of the Board of Directors of Woolworth and also Chairman of the Management Committee.

THANKS

I wish to express my warm thanks to all the Group’s staff members for their productive work and dedication and to our associates for their valuable cooperation.

I wish to express special thanks to all the members of the Board of Directors of Woolworth (Cyprus) Properties Public Ltd and its subsidiaries and associated companies for their creative collaboration and contribution to the progress of operations of the Group.

Finally I thank all of you, the Shareholders, for your trust and constant support.

Yours sincerely

Nicolas K. Shacolas

Executive Chairman

Nicosia 19 April 2007

11 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Our Properties WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Investment Properties

DEBENHAMS CENTRAL

The department store DEBENHAMS CENTRAL is located in a unique location in Nicosia at the corner of Makarios Avenue and Griva Dhigenis Avenue with access and facede from the parallel street Annas Komninis. The land has a total area of 3.700 m2, the store has a total area of 4000 m2 and 105 parking places.

DEBENHAMS OLYMPIA

The Department Store DEBENHAMS OLYMPIA is located in a prime location by the Limassol main coastal road. The land covers 10.100 m2 with total building area 9.200 m2 and 250 parking places.

14 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 DEBENHAMS APOLLON DEBENHAMS ZENON

The DEBENHAMS APOLLON Department Store is located The DEBENHAMS ZENON Department Store in Larnaca on Makarios Avenue in Limassol. The land covers 8.700 m2, on Strategou Timayia Avenue, has a land area of 10.300 m2 the building area is 6.900 m2 and 174 parking places. and a building area of 9.000 m2, with parking places for 246 cars.

KORIVOS COMMERCIAL CENTER

The KORIVOS COMMERCIAL CENTER in Paphos is near the Korivos football Stadium and the round about at the entrance to the town . At the Commercial Center operates a DEBENHAMS Department Store, a NEXT shop and a Super Home Center D.I.Y Store. The total land area is 42.200 m2 and the buildings have an area of 9.200 m2. There is a scope for further expansion on this property. The total parking area serves up to 450 cars.

15 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Investment Properties

LEDRA ARCADE – OLD NICOSIA

The Ledra Arcade within the Old Nicosia area is one of the recent projects of the Group which operates with a great success since 2004, in a total area of 1.875 m2. At the basement of the Arcade there is a parking place with a capacity for 170 cars.

LEDRA NEOCLASSICAL BUILDING

Woolworth also owns a five-storey building on Ledra Street in Nicosia with total area of 1.125 m2 opposite the DEBENHAMS LEDRA Department Store. In the store the fashion brand Peacocks is operated.

16 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 OTHER RETAIL INVESTMENT PROPERTIES

The Company also owns various smaller retail stores in Paphos, Larnaca, Limassol and Aglandzia which in total exceed 6.000 m2.

HEAD OFFICE – ERMES DEPARTMENT STORES

The Woolworth Group also owns the land and buildings of the Head Office of Ermes Department Stores Public Limited in Latsia, which has a total area of 10.000 m2 and 7.500 m2 respectively.

17 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Commercial Centres

SHACOLAS EMPORIUM PARK

The works for the construction of the Shacolas Emporium Park continue with intensive pace, a unique retail complex for Cyprus, with comfortable basement and open car park spaces for 2.500 cars. The total land area of the Park is 102.000 m2. In a big part of this property the "Mall of Cyprus" is currently under development. Next to the "Mall of Cyprus", a detached large furniture and home accessories store of the famous Swedish chain IKEA is also under construction. Two more buildings with showrooms will be developed as well.

The works for the development of the "Mall of Cyprus" are expected to be completed within September 2007.

18 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 "The Mall of Cyprus" will include Debenhams, Carrefour, Zara, Multiplex Cinema with 5 screens, restaurants and other shops. It will also have various other commercial and cultural activities, which will offer to the visitor the ideal place to spend a lot of hours with his family.

The Shacolas Emporium Park will have also a playground, an open amphitheatre for cultural events, next to the "Mana square" in which the mother statue will be built in honour to the Cypriot Mother.

19 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Commercial Centres

COMMERCIAL CENTER "AGORA ENGOMIS"

The Group, through its subsidiary company Woolworth Commercial Centre Ltd owns, a commercial piece of land of 20.100 m2 at a prime location by the 28th October Avenue in Engomi Nicosia.

Woolworth Commercial Centre Ltd continues the development of the Commercial Centre "Agora Engomi" with a total leasable area of 13.600 m2, where will operate Carrefour, Debenhams, Super Home Centre D.I.Y, an Oviensse fashion shop, Starbucks and other shops. There will be also a basement and a ground floor car park with a capacity for 500 cars.

The Commercial Centre is expected to be operational by the end of 2007.

20 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Other Properties

CYPRUS LIMNI RESORTS & GOLFCOURSES PLC – LIMNI GOLF RESORT

In December 2007, Woolworth acquired 11,8% of the share capital of Cyprus Limni Resorts & Golfcourses Plc, which is the owner of land of an area of about 2,8 million m2 in the area of Limni, Polis Chrysochous. According to recent legislation for the development of 14 golfcourses in Cyprus, Cyprus Limni Resorts & Golfcourses Plc has been granted license for the development of two golf courses.

The planning is already under process for the large development project with two golf courses, plots of land, villas, apartments and other lodgings, golf club, a reasonably sized hotel and other facilities. The land has access to the sea with a pier extending 150 meters into the sea, which is currently under restoration.

Additionally, the above land includes another 280.000 m2 at the village Kinousa next to the national forest and close to the other property which will be developed in the near future.

Th company Akinita Lakkos Mikelli Ltd has a share of 108.000 m2 of land in a prime location at the entrance of Nicosia.

Woolworth controls 40% of this company, a participation that was acquired in 2004.

It is expected that gradually there will be improvement in the town planning zoning specifications in the area, after which the land will be divided into smaller plots for sale.

AKINITA LAKKOS MIKELLI LTD 21 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Financial Statements WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Statement of the Members of the Board of Directors and the Company officials for the drafting of the Financial Statements

In accordance with section 140 (1) of the Cyprus Securities and Stock Exchange Law, we the members of the Board of Directors and the company officials responsible for the drafting of the annual consolidated financial statements of Woolworth (Cyprus) Properties Public Limited for the year ended 31 December 2006, based on our knowledge, which is the product of careful and conscientious work, declare that the particulars which are specified in the consolidated financial statements are true and complete.

MEMBERS OF THE BOARD OF DIRECTORS

EXECUTIVE CHAIRMAN Nicolas K. Shacolas

DEPUTY CHAIRMAN Renos Solomides

MANAGING DIRECTOR Marios Panayides

MEMBERS OF THE BOARD Demetris Demetriou Pambos Ioannides Michalakis Koniotis Andreas Louroutziatis Marios Savvides Eleni Shacola Marios Shacolas Menelaos Shacolas

RESPONSIBLE FOR THE DRAFTING OF THE FINANCIAL STATEMENTS Maria Aristidou – Financial Controller

Nicosia, 19 April 2007

24 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 ‘∂ÎıÂÛËReport of ¢ÈÔÈÎËÙÈÎÔ‡ the Board ™˘Ì‚Ô˘Ï›Ô˘of Directors

The Board of Directors of Woolworth (Cyprus) Properties Public Limited (the "Company") and its subsidiary undertakings, collectively referred to as the "Group", presents its Annual Report together with the audited consolidated financial statements for the year ended 31 December 2006.

ACTIVITIES

The main activity of the Group is the ownership, exploitation, management and trading of real estate property.

The consolidated results of the Group for the year 2006 include the subsidiary Companies of Woolworth (Cyprus) Properties Public Limited that are property owners, that is, Zako Limited, FWW Super Department Stores Limited, Zako Estate Limited and Apex Limited. The majority of this property’s usage is licensed/rented to Ermes Department Stores Public Limited, which operates its retail operation in these properties. It is also the parent company of ITTL Trade Tourist and Leisure Park Limited, which owns the land in which the Shacolas Emporium Park is being developed, which will include the large Shopping Mall "The Mall of Cyprus", an IKEA multistore and other operations. Also included is the subsidiary company Woolworth Commercial Center Limited, owner of a large plot of land in Engomi, in which the large Commercial Centre "Agora Engomi" is being developed. During the year 2006, Woolworth (Cyprus) Properties Public Limited acquired 100% of the share capital of Christis Farms Limited a company which owns land and 100% of the share capital of N.K Shacolas (Merchants) which owns 11,73% of the share capital of Cyprus Limni Resorts and GolfCourses Plc which owns a large plot of land in Polis Chrysohous.

The associated companies Akinita Lakkos Mikelli Limited, Olymbos Investments Limited and CTC – ARI Airports Limited are also included in the Groups results.

FINANCIAL RESULTS

The operating profits for the year 2006 arose to Cí5.784.604 compared to Cí5.100.780 in 2005.

In the above results an amount of í1.245.777 is included which represents fees received for the granting of space for the creation of commercial shops at the Shacolas Emporium Park and at the Commercial Centre "Agora Engomi".

2006 2005 Cí Cí

Profit before tax 5.274.874 2.733.241 Corporation tax and defence contribution (761.709) (102.302 ) Deferred tax (220.734) (380.725 )

Profit after tax 4.292.431 2.250.214 Minority interest - 7.620

Profit attributable to the shareholders 4.292.431 2.257.834

Basic earnings per share (cents) 4,5 2,4

Fully diluted earnings per share (cents) 3,8 2,0 25 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Report of the Board of Directors

NEW ACTIVITIES AND INVESTMENTS

According to the Company’s policy regarding new investments in the land development sector, Woolworth (Cyprus) Properties Public Ltd acquired in December 2006 100% of the share capital of N.K. Shacolas (Merchants) Ltd, which owns 11,73% of the share capital of Cyprus Limni Resorts and GolfCourses Plc. The latter, is the owner of a large plot of land of about 2.800.000 sq.m. (2.800 decares) in the area of Limni, Pelathousa, Makounta, Kinousa, and Poli Chrysohous, where a large project will be developed with 2 golf courses, plots, villas, apartments and other lodgings, a golf club, a hotel and useful facilities will be constructed. The land has access to the sea with a pier extending 150 meters into to the sea, which is currently under restoration. Furthermore, in the above mentioned plot of land a plot of about 280.000 sq.m. (280 decares) is included, situated on the hill of Kinousa village, near the government forest, which will be developed separately in the near future, which will be for the benefit of the to the Community and the wider area.

Cyprus Limni Resorts and GolfCourses Plc is already taking the necessary steps for the listing of its shares to the Cyprus Stock Exchange within 2007.

During the year, the subsidiary Company ITTL Trade Tourist and Leisure Park Limited entered into long-term contracts for the granting of space in its building under construction, the completion of which is expected in September 2007.

DIVIDEND

The Board of Directors decided to propose at the Annual General Meeting of the Company, which will take place on 7 June 2007, the payment of a dividend of 8% on the nominal value of the share (20 cents), that is 1,6 cents per share.

On 30 June 2006 the first instalment of the dividend declared on 30 December 2005 was paid. The second instalment of the dividend, which amounts to 10% of the nominal value of the share (20 cents), that is 2 cents per share, will be paid on 30 June 2007 to the shareholders that were registered on the Company’s Register at 31 December 2005.

PRINCIPAL RISKS AND UNCERTAINTIES

Due to the nature of the Group’s activities, the main risks of the Group are:

ñ The fluctuation in property prices. ñ The successful completion of the projects within the predetermined timeframe and within the context of the original budget as well as the commercial exploitation after the completion. ñ The leasing or granting license for use of space in the Group’s property relates mainly to Ermes Department Stores Public Limited. ñ Financial risk factors as described in note 3.

ANTICIPATED DEVELOPMENTS

The Company’s prospects are very positive. The accession of Cyprus to the European Union, the recent entry of Cyprus to the Eurozone, the introduction of Euro on 1 January 2008 as the official currency replacing the Cyprus Pound and the improvement of the Cyprus economy have increased the interest for investments, by foreign inventors for both property and other investments. Indisputably, the use of Euro, which is the stable 26 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 national currency of 13 other large and healthy economies of Europe, as the national currency of the Cyprus Republic, adds to the standing and confidence of the economy through which, Cyprus and its citizens are expected to benefit.

Offering of shares of Ermes Department Stores Public Limited In 2007, and after the successful disposal of Ermes Department Stores Public Limited shares to the Shareholders of Woolworth (Cyprus) Properties Public Limited, to institutional investors and to the general public the preceding year, Woolworth (Cyprus) Properties Public Limited has disposed shares of Ermes Department Stores Public Limited at 35 cents each generating significant profits. As already announced, the shares of Ermes Department Stores Public Limited are expected to be listed very soon on the Cyprus Stock Exchange.

Profitability It is expected that the real estate property potential will continue to increase due to the favourable conditions in the wider property sector and the efforts of management to exploit further these assets.

EXISTENCE OF GROUP BRANCHES The Group does not maintain any branches in either Cyprus or abroad.

SHARE CAPITAL During the year there were no changes in the share capital of the Company. The Issued Share Capital of the Company is 96 380 211 shares with a nominal value of 20 cents each. On 24 April 2003, the Company issued 18 243 644 Share Warrants (SW) with an exercise price of 30 cents and exercise period between 1-30 March 2007. On their maturity, they were exercised at an exercise price of 30 cents per share. For each SW one new share of Woolworth (Cyprus) Properties Public Limited with a nominal value of 20 cents was issued. In total, 18 243 644 new shares were issued, increasing the total issued share capital of the Company at 114 623 855. From this exercise, the Company received the amount of í4,9 millions. A small number of SW has been exercised by the Company.

BOOK VALUE OF THE SHARES

The book value of the Company’s share, with a nominal value of 20 cents, on 31 December 2006 was 77 cents (Euro 1,33). The book value of the Company’s share less the provision for deferred tax, which constitutes a contingent liability, amounts to 88 cents (Euro 1,53).

TREASURY SHARES

During 2006 the Company acquired 247 562 of its own shares by purchases from the Cyprus Stock Exchange. The total acquisition price was í104.395 which has been deducted from Shareholder’s equity. These shares have not been cancelled and are held as treasury shares.

On 19 April 2007, the Board of Directors decided to call an Extraordinary General Meeting on 7 June 2007 (right before the Annual General Meeting) for the purpose of re-approving the Special Resolution authorizing the Board of Directors to purchase the Company’s own shares, if this is considered to be necessary. 27 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Report of the Board of Directors

BOARD OF DIRECTORS

The members of the Board of Directors at the date of this report are shown on page 1. All of them were members of the Board throughout the year 2006.

According to the Company’s Articles, of Association Messrs Nicolas K. Shacolas, Marios Panayides, Marios N. Shacolas and Eleni N. Shacola retire by rotation, and being eligible offer themselves for re-election.

There were no other significant changes in the assignment of responsibilities or in the remuneration of the Members of the Board of Directors.

DIRECTORS’ INTERESTS IN THE COMPANY’S SHARE CAPITAL

The direct and indirect interests of the members of the Board of Directors in the share capital of the Company at 31 December 2006 and at the date of this report, were as follows:

31 December 19 April 2006 2007 %%

Nicolas K. Shacolas 45,48 45,48 Renos Solomides 0,09 0,09 Marios A. Savvides 0,03 0,03 Eleni N. Shacola 0,88 0,88 Marios N. Shacolas 0,02 0,02 Menelaos Shacolas 0,35 0,35 Demetris Demetriou - - Pambos Ioannides 0,01 0,01 Michalakis Koniotis 0,09 0,09 Marios Panayides - - Andreas Louroutziatis - -

The interests of Mr Nicolas K. Shacolas include the interest of his wife and children, who are not members of the Board of Directors, as well as those of Cyprus Trading Corporation Public Limited and of other companies in which he owns, directly or indirectly, at least 20% of the voting rights.

Except for balances and transactions disclosed in Notes 28 and 31, there was no other significant contract with the Company or its subsidiaries or associates, in which a Director or related parties had a material interest.

28 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 MAJOR SHAREHOLDERS

At the date of this report, the following Shareholders held directly or indirectly over 5% of the Company’s issued share capital.

Percentage holding %

Nicolas K. Shacolas 45,48 Cyprus Trading Corporation Public Limited 31,87 Lambousa Venture Capital Limited 5,55

AUDITORS

The Independent Auditors, PricewaterhouseCoopers Limited, have expressed their willingness to continue in office. A resolution giving authority to the Board of Directors to fix their remuneration will be proposed at the Annual General Meeting.

By Order of the Board

Nicolas K. Shacolas Executive Chairman

Nicosia 19 April 2007

29 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Directors Report on Corporate Governance

Part A

The Board of Directors recognising the importance of the Code of Corporate Governance for the proper and prudent management of the Company and the continuing protection of the interests of all the Shareholders, has adopted the Code of Corporate Governance and fully applies its Principles.

Part B

The Board of Directors confirms the compliance with all the Provisions of the Code of Corporate Governance, with the exception of the Provision A.2.3 as explained below.

BOARD OF DIRECTORS AND DIRECTORS’ REMUNERATION

Duties and Responsibilities of the Board of Directors

The Company is managed by the Board of Directors which consists of 11 members, seven of them are Non- executive and of whom four are independent.

The position of the Executive Chairman of the Board of Directors is held by Mr Nicolas K. Shacolas. The following segregation exists between the positions of the Executive Chairman and the Managing Director, position held by Mr Marios Panayides. The occupation of the Executive Chairman who chairs the meeting of the Board of Directors and the General Meetings of the Company, concerns the strategy and Company policy and the submission of issues for decision making to the Board of Directors, whereas the Managing Director is responsible for the management of the Company regarding the day to day conduct of the Company’s operations and activities.

Once the Board of Directors of the Company obtains timely, complete and reliable information, it meets at regular intervals for consideration and reaching of decisions, which are recorded accurately in Minutes. During 2006, 6 meetings were held. The Board of Directors has set out a formal agenda of issues on which decisions must be taken by the Board. No committee of the Board of Directors is differentiated as to its responsibility towards any other.

The Board of Directors at the date of this report is composed from the Directors shown in table 1 below. All of them have been members of the Board of Directors through out the year 2006.

According to the Company’s Articles of Association, at each Annual General Meeting, 1/3 of the longest serving members of the Board retire by rotation as well as those appointed after the previous Annual General Meeting.

During the next Annual General Meeting Messrs Nicolas K. Shacolas, Marios Panayides, Marios N. Shacolas and Eleni N. Shacola retire and, being eligible, offer themselves for re-election.

As required by the Code, short biographical details are given below for all the Directors who retire and offer themselves for re-election.

Nicolas K. Shacolas - Executive Chairman of N.K. Shacolas (Holdings) Limited, Cyprus Trading Corporation Public Limited, Woolworth (Cyprus) Properties Public Limited and Chairman of Hermes Airports Limited and CTC-ARI Airports Limited. He has been Honorary Consul of Mexico in Cyprus from 1990 until very recently. He has obtained various honours, such as the Metal for Exceptional Offer of the Cyprus Republic, the metal of the Honorary Member of the Battalion of the British Empire (√µ∂)

30 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 and the medal of Aetos Azteka, which is the highest honour of Mexico. In July 2006, the President of the French Republic awarded him with the medal of the Officer of the National Battalion of the Legion of Honour, one of the highest honours that are awarded at non French liegemen. Furthermore, in 2003, the President of the Italian Republic declared Mr. Shacolas Knight of the Italian Republic.

Marios Panayides - He is a graduate of the University of Bristol in England with a degree of B.Sc in Economics and Accounting and a Chartered Accountant (ACA). He has worked in London in Ernst & Young and as an investment counterpart in various large Stock Exchange Companies of Greece and Cyprus. He is the Deputy General Director of N.K. Shacolas (Holdings) Limited, Member of the Board of Directors of Cyprus Trading Corporation Public Limited, Ermes Department Stores Public Limited and of other companies.

Marios N. Shacolas - He studied business administration in America and he holds a postgraduate degree. He holds the position of the Executive Vice-President of N.K. Shacolas (Holdings) Limited and he is the Executive Director of Woolworth (Cyprus) Properties Public Limited and Ermes Department Stores Public Limited.

Eleni N. Shacola - She is a BA graduate of University of London. She has worked as Human Capital Manager of N.K. Shacolas (Holdings) Limited from 1978 to 1985. She is the Executive Director of Ermes Department Stores Public Limited.

Independence of Directors

The structure of the Board of Directors and the assignment of the Directors to committees categories are presented in table 1 below:

Table 1: The Company’s Board of Directors

Executive Directors

Nicolas K. Shacolas Marios Panayides Eleni N. Shacola Marios N. Shacolas

Non-executive Directors

Renos Solomides - Independent Demetris Demetriou Pambos Ioannides Michalakis Koniotis - Independent Andreas Louroutziatis - Independent Marios Savvides Menelaos Shacolas - Independent

The above categorisation complies with the criteria on the independency which are included in the Code of Corporate Governance of March 2006. The provisions of Provision A.2.3. of the new Code of Corporate Governance (issued on January 2007), have differentiated the criteria on independency, and as a result this Provision is not fully implemented. The Board of Directors intends to take immediate action in order for this Provision to be implemented.

31 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Directors Report on Corporate Governance

Committees of the Board of Directors

The Board of Directors of the Company, adopting the Principles of the Code, proceeded with the formation of the following Committees and the approval of Regulations, which are consistent with the Code and are available for inspection by anyone who may be interested to obtain more information at the Company’s Head Office.

(a) Nominations Committee

The main purpose of the Nominations Committee is the operation of a defined and comprehensive procedure when it comes to suggestions for the appointment of new members of the Board of Directors. The members of the Appointment Committee, the majority of which are Non-Executive Directors, are the following:

Nicolas K. Shacolas, President - Executive Director Renos Solomides - Non Executive, Independent Andreas Louroutziatis - Non Executive, Independent

The Nomination Committee meets at least once a year and reports to the Board of Directors, at least once a year, presenting in summary its activities during the previous financial year as well as any suggestions it may have.

(b) Remunerations Committee

The Remuneration Committee constitutes of the following Non-Executive Directors, the majority of which are Independent:

Marios Savvides, President - Non Executive Renos Solomides - Non Executive, Independent Andreas Louroutziatis - Non Executive, Independent

The Remunerations Committee meets at least once a year and its responsibility is the submission of suggestions to the Board of Directors over the context and amount of the remuneration of the Non-Executive Directors, as well as the conditions of the relevant employment contracts. The remuneration of the Non- Executive Directors is determined by the Annual General Meeting.

Its role and responsibility includes matters relating to the services of the External and Internal Auditors, including their independence affirmation, matters of accounting treatment, matters of review of significant transactions in which there might be a conflict of interest, as well as the preparation of the Report of the Board of Directors on Corporate Governance. The Audit Committee reports to the Board of Directors. The Internal Control Systems are inspected on a continual basis from the Group’s Internal Control Department, which reports to the Audit Committee and reviews their effectiveness.

The Audit Committee of the Company consists of the following members, the majority of which are Independent Non-executive Directors:

32 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Demetris Demetriou, President - Non Executive Renos Solomides - Non Executive, Independent Andreas Louroutziatis - Non Executive, Independent

The Audit Committee meets at least four times a year. It examines, amongst others, the financial statements of the Company, the reports of the Internal Audit Department and the effectiveness of the Systems of Internal Control of the Company, it suggests the appointment or termination of the services of the Internal and External Auditors and it observes their relationship with the Company, including the balance between the audit and other non-audit services they may provide.

Directors’ Remuneration

The remuneration of the Executive Directors is determined by the Board of Directors after the recommendation of the Remuneration Committee. The Remuneration Committee acts within the boundaries of the Remuneration Policy, as defined in paragraph B2 of the Code on Corporate Governance which is described at the end of this Report.

No Executive Director is involved in the determination of his/her remuneration. There are no employment contracts of a definite duration that exceed 5 years, nor employment contracts of an indefinite duration with a notice period exceeding one year.

The remuneration of the Directors, under their capacity as members of Committees of the Board of Directors, is determined by the Board of Directors and is proportional to the time spent on the Management of the Company. The remuneration of the Directors, under their capacity as members of the Board of Directors, is approved by the Shareholders at the General Meeting. The remuneration of the Non-Executive Directors is not associated with profitability, nor does it take the form of participation in a pension or insurance scheme of the Company.

The Executive Directors, who are at the same time employees of the Company, participate in the existing Benefit Schemes of the Group (Provident Fund, Medical Fund, Life Insurance Fund), the participation terms of which do not differ from the participation terms that applies to the remaining staff of the Group.

Any other benefits that are provided to the Executive Directors, are granted according to the existing regulations as they are applied to the remaining staff of the Group.

During the year ended 31 December 2006, the Company had not paid any remuneration to Non-Executive Directors, besides their annual fees as members of the Board of Directors, which was approved at the previous General Meeting of the Company and amounts in total to Cí20.300.

Details regarding the Directors’ remuneration are presented in Note 28(g) of the Consolidated Financial Statements of the Group.

The total remuneration of the Board of Directors is presented below:

Table 2: Remuneration of Executive Directors

Number of Executive Directors Total remuneration

One Cí1 - í50.000

33 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Directors Report on Corporate Governance

Table 3 : Directors’ Remuneration as Members of the Board of Directors

Cí

Executive Directors non employees of the Company 22.400 Non-executive Directors 20.300

42.700

RESPONSIBILITY AND CONTROL

Internal Control System

The Board of Directors makes sure that the Company maintains an adequate Internal Control System to ensure the greatest possible protection of the Shareholders’ investment and of the assets of the Company.

The Board of Directors of the Company verifies that it has reviewed the procedures and methods of validation of the correctness, completeness and accuracy of the information provided to the Investors and confirms that they are effective.

The Board of Directors confirms that it reviews the effectiveness of the Internal Control System of the Company through its Internal Control Department of the Shacola’s Group of Companies, which acts independently, reports to the Audit Committee of the Company and confirms that the effectiveness of the Internal Control Systems is satisfactory. The review of the Internal Control Systems by the Internal Control Department covers, on a sample basis, the financial, operating, and software systems, including the applied systems and security systems.

The objective of the Internal Control Department of the Group is the provision of independent and objective Internal Control services and advisory services designed to add value and improve the operation of the Groups’ Companies.

The Internal Control Department helps the Companies of the Group to achieve their goals through the application of systematic and disciplined methodology in the evaluation and improvement of the Risk Management Systems, Internal Control Systems, and in the application of the Code of Corporate Governance by each company.

The Internal Control Department, regarding the implementation of its duties, is liable to the Board of Directors and to the Audit Committee of the Company. In the context of its independency, its staff reports both administratively and operationally directy to the Audit Committee.

The Board of Directors of the Company confirms that nothing has come to its knowledge concerning any breach of the Cyprus Stock Exchange Laws and Regulations, except of those that are known to the relevant Stock Exchange authorities.

Loans to Directors

Any loans to Directors of the Group from Group companies and information relating to contingent interest of Directors in transactions or matters that also affect the Company, are disclosed in note 28 of the Financial Statements.

34 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Going Concern

The Board of Directors confirms that the Company has sufficient resources to continue in operational existence as a going concern for the next twelve months.

Compliance with the Code of Corporate Governance

The Board of Directors appointed Messrs George Mitsides and Demetris Demetriou as Compliance Officers under the Code of Corporate Governance, to observe, in cooperation with the Audit Committee, the implementation of the Code.

RELATIONSHIPS WITH THE SHAREHOLDERS

The Directors consider an important part of their responsibilities the provision of timely, clear and reliable information to the Shareholders and the adoption of the provisions of the Code on Corporate Governance regarding the constructive use of the General Meeting and the equitable treatment of Shareholders. The Board of Directors has appointed Mr Marios Panayides and Mrs Maria Aristidou as the Company’s Shareholder liaison Officers.

The Board of Directors has appointed Mr. Andreas Louroutziatis, Independent Non Executive Director, as Executive Independent Director, who is responsible to listen to the Shareholders’ concerns whose problems have not been solved via the normal communication channels of the Company.

BOARD OF DIRECTOR’S REMUNERATION POLICY

After a relevant suggestion of the Remunerations Committee, the Board of Directors approved the following Board of Director’s Remuneration Policy, which complies with the relevant provisions of the Code of Corporate Governance, and was implemented during 2006. The Remuneration Policy is submitted to the Shareholders for voting at the Annual General Meeting.

Executive Directors

1. 1 No Director is involved in the determination of his/her remuneration.

2. The objective is the provision of remuneration needed for the attraction, continuance and provision of insentives to the Executive Directors who have the required knowledge and experience, and avoiding at the same time paying them more than what is required for this purpose.

3. The determination of the total remuneration of the Executive Directors takes seriously into account the academic knowledge, the experience and the remuneration levels of people in similar positions in other companies or trade business in particular, as well as the wider environment of the Company, including the remuneration terms and the employment conditions in other levels of the Group.

4. In the case where part of the remunerations of the Executive Directors will be associated with performance, this part of the remuneration is designed in such a way so that they are aligned with the Shareolders’ interests, providing in this way insentives to the Directors for high level performance.

35 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Directors Report on Corporate Governance

5. Schemes with which share options are provided will comply with the provision B.2.5 of the Code of Corporate Governance, according to which no shares options must be provided to Executive Directors at a lower price than the average stock exchange closing price of the last 30 stock exchange meetings, before the date of their concession. The share options are adopted only after approval at an Extraordinary General Meeting of the Shareholders of the Company.

6. At the new appointments (contracts) of Executive Directors the determination of employment contracts of a definite duration that do not exceed 5 years is promoted. For the employment contracts of an indefinite duration the notice period does not exceed one year.

7. Emphasis is given on the provisions of the employment contracts of the Directors and on the indemnity commitments in particular (including pension contributions) that arise, if any, in the case of premature termination. These employment contracts do not include provisions which can be considered to be prohibitory in the cases of purchase or merger of the Company, or provisions for any fines that were imposed to Directors to be charged on the Company.

8. The Executive Directors, who are at the same time employees of the Company, participate in the existing Benefit Schemes of the Group (Provident Fund, Medical Fund, Life Insurance Fund), the participation terms of which do not differ from the participation terms that applies to the remaining staff of the Group.

9. Any other benefits that are provided to the Executive Directors, are granted according to the existing regulations as they are applied to the remaining staff of the Group.

Non Executive Directors

The remuneration of the non executive members of the Board of Directors is propotional to the responsibilities and the time spend on the meetings of the Board of Directors and on the decision making for the management of the Company and on their participation in Commitees of the Board of Directors; they are not associated on the other hand with the profitability of the Company nor do they take the form of participation in a pension Scheme of the Company (Provident Fund).

The remuneration of the Directors under their capacity as members of the Board of Directors, is approved by the Shareholders at the General Meeting.

By order of the Board of Directors,

Nicolas K. Shacolas Executive Chairman

Nicosia, 19 April 2007

36 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Independent Auditors’ Report to the Members of Woolworth (Cyprus) Properties Public Limited

REPORT ON THE FINANCIAL STATEMENTS

We have audited the financial statements of Woolworth (Cyprus) Properties Public Limited (the "Company") and its subsidiaries ("the Group") on pages 39 to 76, which comprise the balance sheet as at 31 December 2006, and the income statement, statement of changes in equity and cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory notes.

Board of Directors’ responsibility for the Financial Statements

The Company’s Board of Directors is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards as adopted by the European Union (EU) and International Financial Reporting Standards as issued by the International Accounting Standards Board (IASB) and the requirements of the Cyprus Companies Law, Cap. 113. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, 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 is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of 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 the auditor's 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, the auditor considers 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 policies used and the reasonableness of accounting estimates made by the Board of Directors, as well as evaluating the overall financial statement presentation.

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

Opinion

In our opinion, the financial statements give a true and fair view of the financial position of Woolworth (Cyprus) Properties Public Limited and of the Group as of 31 December 2006, 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 EU and International Financial Reporting Standards as issued by the IASB and the requirements of the Cyprus Companies Law, Cap. 113. 37 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Independent Auditors’ Report to the Members of Woolworth (Cyprus) Properties Public Limited

Report on Other Legal Requirements

Pursuant to the requirements of the Companies Law, Cap. 113, we report the following: ñ We have obtained all the information and explanations we considered necessary for the purposes of our audit. ñ In our opinion, proper books of account have been kept by the Company. ñ The Company’s financial statements are in agreement with the books of account. ñ In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Companies Law, Cap. 113, in the manner so required. ñ In our opinion, the information given in the report of the Board of Directors on pages 25 to 29 is consistent with the financial statements.

OTHER MATTER

This report, including the opinion, is made solely to the Company’s members, as a body, in accordance with Section 156 of the Companies Law, Cap. 113 and for no other purpose. By giving this opinion, we do not accept or assume responsibility for any other purpose or to any other person at the attention of whom this report is possible to come to.

PricewaterhouseCoopers Limited Chartered Accountants

Nicosia, 19 April 2007

38 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Consolidated Income Statement for the year ended 31 December 2006

Note 2006 2005 Cí Cí

Rights for use of space and other income 2.938.430 2.874.132 Fair value gains from investment property 15 1.717.761 2.266.121 Interest income 5 1.188.806 1.210.103 Rights for granting of space 7 1.245.777 - General and administrative expenses 8 (1.689.562) (1.249.576) Other gains - net 6 383.392 -

Operating profit 5.784.604 5.100.780 Finance costs 10 (3.388.036) (4.153.229) Share of profit of associates 17 2.878.306 1.785.690

Profit before taxation 5.274.874 2.733.241

Corporation tax and defence contribution (761.709) (102.302) Deferred tax (220.734) (380.725)

Taxation 11 (982.443) (483.027)

Net profit for the year 4.292.431 2.250.214

Attributable to: Company Shareholders 4.292.431 2.257.834 Minority Interest - (7.620)

4.292.431 2.250.214

Earnings per share (cents per share): 12 Basic 4,5 2,4 Fully diluted 3,8 2,0

39 The notes on pages 44 to 76 are an integral part of these consolidated financial statements. WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Consolidated Balance Sheet at 31 December 2006

Note 2006 2005 Cí Cí ASSETS Non-current assets Property, plant and equipment 14 49.115.941 37.259.674 Investment property 15 78.478.854 74.418.336 Intangible asset 16 957.450 957.450 Investments in associates 17 19.849.788 15.729.204 Available-for-sale financial assets 18 4.254.785 2.962.000 Financial assets at fair value through profit and loss 19 10.000.000 - Receivables 20 - 16.787.580

162.656.818 148.114.244 Current assets Receivables 20 6.063.524 7.367.877 Cash and cash equivalents 21 968.124 609.506 7.031.648 7.977.383 Total assets 169.688.466 156.091.627 EQUITY Capital and reserves attributable to the Company’s shareholders Share capital 22 19.276.041 19.276.041 Share premium 22 12.818.245 12.818.245 Treasury shares 22 (108.064) (3.669) Fair value reserves 23 16.380.050 14.961.768 Retained earnings 25.476.809 21.184.378 Total equity 73.843.081 68.236.763 LIABILITIES Non-current liabilities Borrowings 24 33.164.331 27.369.801 Payables and accrued expenses 26 946.115 1.731.437 Deferred tax liabilities 25 10.308.359 10.108.674

44.418.805 39.209.912 Current liabilities Borrowings 24 37.483.925 44.363.600 Payables and accrued expenses 26 12.603.071 3.704.364 Current tax liabilities 1.339.584 576.988 51.426.580 48.644.952 Total liabilities 95.845.385 87.854.864 Total equity and liabilities 169.688.466 156.091.627

On 19 April 2007 the Board of Directors of Woolworth (Cyprus) Properties Public Limited authorized these consolidated financial statements for issue.

Nicolas K. Shacolas Marios Panayides Executive Chairman Managing Director 40 The notes on pages 44 to 76 are an integral part of these consolidated financial statements. WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Consolidated Statement of changes in equity for the year ended 31 December 2006

∞Ó·ÏÔÁÂ› ÛÙÔ˘˜ ÌÂÙﬁ¯Ô˘˜ ÙË˜ ∂Ù·ÈÚÂ›·˜

Share Treasury Share Fair value Retained Minority capital shares premium reserves earnings (1) Interest Total

Cí Cí Cí Cí Cí Cí Cí

Balance at 1 January 2005 19.276.041 (360.713) 12.818.245 14.905.324 24.576.637 4.709.102 75.924.636

Fair value adjustment on investment properties (Note 31) - - - - - (83.144) (83.144) Deferred tax adjustment (Note 31) - - - - - (83.585) (83.585)

Available-for-sale financial assets: Revaluation surplus of investments of associated company (Note 23) - - - 33.999 - - 33.999 Deferred tax on revaluation of land and buildings (Note 25) - - - 22.445 - - 22.445

Net income recognized directly in equity - - - 56.444 - (166.729) (110.285) Net profit for the year - - - - 2.257.834 - 2.257.834 Share of loss of subsidiary company for the year - - - - - (7.620) (7.620)

Total recognized income for 2005 - - - 56.444 2.257.834 (174.349) 2.139.929

Dividend (Note 13) - - - - (5.280.246) - (5.280.246) Purchase of treasury shares (Note 22) - (12.803) - - - - (12.803) Bonus distribution of treasury shares (Note 13) - 369.847 - - (369.847) - - Acquisition of remainder share of subsidiary company for the year (Note 31) - - - - - (4.534.753) (4.534.753)

- 357.044 - - (5.650.093) (4.534.753) (9.827.802)

Balance at 31 December 2005 19.276.041 (3.669) 12.818.245 14.961.768 21.184.378 - 68.236.763 41

WorldReginfoThe notes -on 452cafe9-3d92-4272-af61-cdf7f9147e53 pages 44 to 76 are an integral part of these consolidated financial statements. 42

Consolidated Statement of changes in equity for the year ended 31 December 2006 (continued)

∞Ó·ÏÔÁÂ› ÛÙÔ˘˜ ÌÂÙﬁ¯Ô˘˜ ÙË˜ ∂Ù·ÈÚÂ›·˜

Share Treasury Share Fair value Retained Minority capital shares premium reserves earnings (1) Interest Total

Cí Cí Cí Cí Cí Cí Cí

Balance at 1 January 2006 19.276.041 (3.669) 12.818.245 14.961.768 21.184.378 - 68.236.763

Available for sale financial assets: Revaluation surplus of investments of associated company (Note 23) - - - 1.397.233 - - 1.397.233 Deferred tax on revaluation of land and buildings (Note 25) - - - 21.049 - - 21.049

Net income recognized directly in equity - - - 1.418.282 - - 1.418.282 Net profit for the year - - - - 4.292.431 - 4.292.431

Total recognized income for 2006 - - - 1.418.282 4.292.431 - 5.710.713

Purchase of treasury shares (Note 22) - (104.395) - - - - (104.395)

Balance at 31 December 2006 19.276.041 (108.064) 12.818.245 16.380.050 25.476.809 - 73.843.081

WorldReginfoThe notes -on 452cafe9-3d92-4272-af61-cdf7f9147e53 pages 44 to 76 are an integral part of these consolidated financial statements. Consolidated cash flow statement for the year ended 31 December 2006

Note 2006 2005 Cí Cí CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax 5.274.874 2.733.241 Adjustments for: Depreciation of property, plant and equipment 14 427.120 273.197 Interest expense 10 3.407.011 4.104.108 Interest income 5 (1.188.806) (1.210.103) Share of profit of associated companies 17 (2.878.306) (1.785.690) Fair value gains on investment property 15 (1.717.761) (2.266.121) Dividend income 6 (280.000) - Profit on sale of property, plant and equipment 14 (2) - Loss on sale of investment property 6 14.000 -

3.058.130 1.848.632 Changes in working capital: Receivables 18.091.933 434.927 Payables and accrued expenses 9.407.276 453.217

Cash generated from operations 30.557.339 2.736.776 Tax received/(paid) 887 (118.374)

Net cash from operating activities 30.558.226 2.618.402

CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property, plant and equipment 14 (10.429.033) (4.232.693) Purchases of shares in associated companies 17 (12.000) - Purchase of investment property 15 (2.016.757) (515.610) Proceeds from sale of investment property 30.000 69.000 Proceeds from sale of property, plant and equipment 14 3.496 - Interest received 1.188.806 1.210.103 Purchases of available for sale financial assets 18 (1.292.785) - Acquisition of subsidiary companies 31 (10.370.000) (4.818.826) Dividend received from associated companies 17 166.955 207.549 Dividend received 280.000 -

Net cash used in investing activities (22.451.318) (8.080.477)

CASH FLOWS FROM FINANCING ACTIVITIES Net borrowings (1.085.145) 12.646.954 Interest paid (5.264.859) (5.164.322) Purchase of treasury shares 22 (104.395) (12.803) Dividend paid 13 (1.293.891) (1.425.693)

Net cash (used in)/from financing activities (7.748.290) 6.044.136

Net increase in cash and cash equivalents 358.618 582.061 Cash and cash equivalents at beginning of year 609.506 27.445

Cash and cash equivalents at end of year 21 968.124 609.506

43 The notes on pages 44 to 76 are an integral part of these consolidated financial statements. WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Notes to the Consolidated Financial Statements

1. GENERAL INFORMATION

Country of incorporation

The Company was incorporated in Cyprus in 1971 as a private limited liability company in accordance with the provisions of the Companies Law, Cap. 113 and in 1987 it became a public company. In 1996 the Company’s shares became quoted on the Cyprus Stock Exchange.

The Company’s registered office is at Shacolas Building, Old Road Nicosia-Limassol, Athalassa, Nicosia.

Principal activities

The Company is the parent company of the Woolworth Group. From 31 December 2003 the Company’s activities involve mainly the ownership, development, management and trading of property. It also owns 35% in the company Akinita Lakkos Mikelli Ltd, engages in investing activities through its associated company Olympos Investments Limited and owns 20% in the company CTC – ARI Airports Limited which manages the duty free shops of Larnaca and Pafos Airport which began its operations on 1 July 2006.

The principal activity of the Group up until 31 December 2003 was the conduct of retail trading in Cyprus and in Greece, through multi stores and specialised stores. From that date onwards, after the restructuring that took place, all the trading activities were transferred to Ermes Department Stores Public Limited, in which the Company had a participation of 10% in its share capital until 31 December 2006. This restructuring resulted in the separation of the trading activities of the Group in its property and investing activities.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all years presented in these consolidated financial statements unless otherwise stated.

Basis of preparation

The consolidated financial statements of Woolworth (Cyrpus) Properties Public Limited have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union (EU) and International Financial Reporting Standards (IFRSs) as issued by the International Accounting Standards Board (IASB). The consolidated financial statements comply with both these reporting frameworks because at the time of their preparation all applicable IFRSs issued by the IASB have been adopted by the EU through the endorsement procedure established by the European Commission. In addition the consolidated financial statements have been prepared in accordance with the requirements of the Cyprus Companies Law, Cap. 113. The consolidated financial statements have been prepared under the historical cost convention as modified by the revaluation of land and buildings, investment property, available-for-sale financial assets and financial assets at fair value through profit or loss.

44 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 The preparation of consolidated financial statements in conformity with IFRS requires the use of certain critical accounting estimates and requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 4.

Adoption of new and revised IFRS

In the current year the Group adopted tall new and revised IFRS that are relevant to its operations and are effective for accounting periods beginning on 1 January 2006.

This adoption did not result in substantial changes to the Company’s accounting policies.

At the date of authorisation of these financial statements the following Standards were in issue but not yet effective:

New standard/ Interpretation Effective date

IFRS 7 "Financial Instruments: Disclosures" and IAS 1 amendment 1 January 2007 "Presentation of Financial Statements"

IFRIC Interpretation 7 "Applying the Restatement Approach under 1 March 2006 IAS 29 Financial Reporting in Hyperinflationary Economies"

IFRIC Interpretation 8 "Scope of IFRS 2" 1 May 2006

IFRIC Interpretation 9 "Reassessment of Embedded Derivatives" 1 June 2006

IFRIC Interpretation 10 "Interim Financial Reporting and Impairment" 1 November 2006

IFRIC Interpretation 11 "IFRS 2 – Group and Treasury Share Transactions" 1 March 2007

IFRIC Interpretation 12 "Service Concession Arrangements" 1 January 2008

IFRS 8 "Operating Segments" 1 January 2009

The Board of Directors anticipates that the adoption of these Standards in future periods will have no material impact on the consolidated financial statements of the Group.

Consolidated financial statements

General

The consolidated financial statements include the financial statements of Woolworth (Cyprus) Properties Public Limited (the "Company") and all its subsidiaries which are collectively referred to as the "Group".

45 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Notes to the Consolidated Financial Statements

(a) Subsidiaries

Subsidiaries are all entities over which the Group has the power to govern the financial and operating policies and generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases.

The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group. The cost of an acquisition is measured at the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest. The excess of the cost of acquisition over the fair value of the Group’s share of the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised directly in the consolidated income statement.

Inter-company transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

(b) Associates

Associates are entities in which the Group has a shareholding of between 20% and 50% of the voting rights or over which the Group has significant influence but not control. Investments in associates are initially recognised at cost and subsequently are accounted for by the equity method of accounting.

The Group’s investment in associates includes goodwill (net of any accumulated impairment losses) identified on acquisition. The Group’s share of its associates’ post-acquisition profits or losses is recognised in the consolidated income statement, and its share of post-acquisition movements in reserves is recognised in reserves. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate.

Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment in the value of the asset transferred. Accounting policies of associates have been changed where necessary to ensure consistency with the policies adopted by the Group.

46 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Sale of subsidiary or associated companies

The gain or loss from the disposal of subsidiary or associated companies is estimated as the difference between the sale proceeds and the Group’s share of net assets of the subsidiary or associated company at the date of disposal, less any unamortised goodwill resulting during the acquisition of the subsidiary or associated company.

Revenue recognition

The accounting principle applied by the Group for the revenue recognition in the consolidated income statement is as follows:

(a) Income from rights for use of space The income from rights for use of space is recognised on an accrual basis according to the substance of the relevant rights agreements.

(b) Rental income Rental income is recognised on a straight-line basis over the lease term.

(d) Dividend income Dividend income is recognised when the Group’s right to receive payment is established.

Foreign currency translation

(a) Functional and presentation currency Items included in the financial statements of each of the Group’s entity are measured using the currency of the primary economic environment in which each of the Group’s entity operates ("the functional currency"). The consolidated financial statements are presented in Cyprus pounds (Cí), which is the functional and presentation currency of each of the Entities.

(b) Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the consolidated income statement.

Tax

Current tax liabilities and assets for the current and prior periods are measured at the amount expected to be paid to or recovered from the taxation authorities using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. 47 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Notes to the Consolidated Financial Statements

Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax is determined using tax rates and laws that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.

Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

Deferred tax on investments in subsidiaries and associates does not arise, as the profit on sale of securities is not taxable.

Dividend distribution

Dividend distribution to the Company’s shareholders is recognised as a liability in the Group’s financial statements in the period in which the dividends are approved by the Company’s shareholders.

Property, plant and equipment

Land and buildings comprising mainly buildings under constructon are shown at fair value, based on valuations by external independent valuers, less subsequent depreciation for buildings. Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset. Revaluations are carried out with sufficient regularity to ensure that the carrying amount does not differ materially from that which would be determined using fair value at the balance sheet date. All other property, plant and equipment are stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of property, plant and equipment.

Increases in the carrying amount arising on revaluation of land and buildings are credited to fair value reserves in shareholders’ equity. Decreases that offset previous increases of the same asset are charged against fair value reserves directly in equity. All other decreases are charged to the consolidated income statement. Each year the difference between depreciation based on the revalued carrying amount of the asset charged to the income statement and depreciation based on the asset’s original cost is transferred from fair value reserves to retained earnings.

The land and buildings under construction that are not yet ready for their intended use are not depreciated. Depreciation on other property, plant and equipment is calculated using the straight-line method to allocate their cost or revalued amounts to their residual values, over their estimated useful lives. The annual depreciation rates are as follows:

48 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 % Land Nil Buildings under construction Nil Buildings 1 Plant and equipment 10 Motor vehicles 20 Furniture and fittings 10 Office equipment 33

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

Expenditure for repairs and maintenance of property, plant and equipment is charged to the consolidated income statement of the year in which they were incurred. The cost of major renovations and other subsequent expenditure are included in the carrying amount of the asset or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably.

Gains and losses on disposal of property, plant and equipment are determined by comparing proceeds with carrying amount and these are included in the consolidated income statement. When revalued assets are sold, the amounts included in the fair value reserves are transferred to retained earnings.

Loan interest expense for the financing of the construction of property are capitalised until the asset is completed and ready for its intended use.

Leases

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the consolidated income statement on a straight-line basis over the period of the lease.

Investment property

Investment property is held for long-term rental yields or for increase in its value and is not occupied by the Group. Investment property is carried at fair value, representing open market value determined annually by external valuers and the management of the Group. Changes in fair values are recorded in the consolidated income statement.

49 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Notes to the Consolidated Financial Statements

Goodwill

Goodwill represents the excess of the cost of an acquisition over the fair value of the net identifiable assets of the acquired undertaking at the date of acquisition. Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill on acquisitions of associates is included in investments in associates. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Gains and losses on the disposal of an undertaking include the carrying amount of goodwill relating to the undertaking sold.

Goodwill is allocated to cash generating units for the purpose of impairment testing. The allocation is made to those cash generating units expected to benefit from the business combinations from which the goodwill arose.

Impairment of assets

Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets that are subject to depreciation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units).

Investments

The Group classifies its investments in the following categories: financial assets at fair value through profit or loss, loans and receivables, held to maturity investments and available-for-sale financial assets. The classification depends on the purpose for which the investments were acquired. Management determines the classification of investments at initial recognition and re-evaluates this designation at every reporting date.

(a) Financial assets at fair value through profit or loss This category has two sub-categories: financial assets held for trading and those designated at fair value through profit or loss at inception. A financial asset is classified as held for trading if acquired principally for the purpose of selling in the short term. Financial assets designated as at fair value through profit or loss at inception are those that are managed and their performance is evaluated on a fair value basis, in accordance with the Group’s documented investment strategy. Information about these financial assets is provided internally on a fair value basis to the Group’s key management personnel.

50 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Assets in this category are classified as current assets if they are either held for trading or are expected to be realised within twelve months of the balance sheet date. Financial assets designated at fair value through profit and loss at inception and for which there is no intension of realising within twelve months of the balance sheet date, are included in non-current assets.

(b) Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and for which there is no intention of trading the receivable. Loans and receivables are included in current assets, except for maturities greater than twelve months after the balance sheet date. These are classified as non-current assets.

(c) Held-to-maturity investments Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities that the Group’s management has the positive intention and ability to hold to maturity. During the year, the Group did not hold any investments in this category.

(d) Available-for-sale financial assets Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless management intends to dispose of the investment within twelve months of the balance sheet date.

Regular way purchases and sales of investments are recognised on trade-date which is the date on which the Group commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Investments are derecognised when the rights to receive cash flows from the investments have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership. Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequently carried at fair value. Loans and receivables and held- to-maturity investments are carried at amortised cost using the effective interest method.

Unrealised gains and losses arising from changes in the fair value of available-for-sale financial assets are recognised in equity. When available-for-sale financial assets are sold or impaired, the accumulated fair value adjustments are included in the consolidated income statement.

The fair values of quoted investments are based on current bid prices. If the market for a financial asset is not active (and for unlisted securities), the Group establishes fair value by using valuation techniques. These include the use of recent arm’s length transactions, reference to other instruments that are substantially the same and discounted cash flow analysis, making maximum use of market inputs and relying as little as possible on Group specific inputs.

51 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Notes to the Consolidated Financial Statements

The Group assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial assets is impaired. In the case of equity securities classified as available for sale, a significant or prolonged decline in the fair value of the security below its cost is considered as an indicator that the securities are impaired. If any such evidence exists for available-for-sale financial assets the cumulative loss which is measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit or loss, is removed from equity and recognised in the consolidated income statement. Impairment losses recognised in the consolidated income statement on equity instruments are not reversed through the consolidated income statement.

Share capital

Ordinary shares are classified as equity.

Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax, from the proceeds. Incremental costs for the issue of shares directly attributable to the acquisition of a business are included in the cost of acquisition as part of the purchase consideration.

Where any Company of the Group purchases the Company’s equity share capital (treasury shares), the consideration paid, including any directly attributable incremental costs (net of tax) is deducted from shareholders’ equity as treasury shares until they are cancelled, reissued or disposed of. Where such shares are subsequently sold or reissued, any consideration received, net of any directly attributable incremental transaction costs, is included in shareholders’ equity attributable to the Company’s equity holders.

Provisions

Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is more likely than not that an outflow of resources will be required to settle the obligation, and the amount has been reliably estimated.

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.

Borrowings

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the consolidated income statement over the period of the borrowings using the effective interest method.

52 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least twelve months after the consolidated balance sheet date.

Cash and cash equivalents

Cash and cash equivalents include cash in hand and current deposits held at call with banks less bank overdrafts. In the consolidated balance sheet, bank overdrafts are shown within borrowings in current liabilities.

Comparatives

Where necessary, comparative figures have been adjusted to conform with changes in presentation in the current year.

3. FINANCIAL RISK MANAGEMENT

(a) Financial risk factors

The Group’s activities expose it to market price risk, interest rate risk, credit risk, liquidity risk and currency risk arising from the financial instruments it holds. The risk management policies employed by the Group to manage these risks are discussed below:

(i) Market price risk Market price risk is the risk that the value of financial instruments will fluctuate as a result of changes in market prices. The Group’s available-for-sale financial assets and financial assets at fair value through profit or loss are susceptible to market price risk arising from uncertainties about future prices of the investments. The Group monitors the price fluctuations of investments on a systematic basis and acts accordingly.

(ii) Interest rate risk Interest rate risk is the risk that the value of financial instruments will fluctuate due to changes in market interest rates. Part of the Group’s income and operating cash flows may be affected by changes in market interest rates as the Group has significant interest-bearing assets comprising mainly of balances with related companies. The Group is exposed to interest rate risk in relation to its non-current borrowings. Borrowings issued at variable rates expose the Group to cash flow interest rate risk. Borrowings issued at fixed rates expose the Group to fair value interest rate risk. The Group’s management monitors the interest rate fluctuations on a continuous basis and acts accordingly.

(iii) Credit risk Credit risk arises when a failure by counterparties to discharge their obligations could reduce the amount of future cash inflows from financial assets on hand at the balance sheet date. The Group has significant concentrations of credit risk. The Group has policies in place to ensure that receivables resulted only from transactions with individuals and companies with an appropriate credit history and monitors on a continuous

53 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Notes to the Consolidated Financial Statements

basis the ageing profile of its receivables. Bank balances are held with high credit quality financial institutions and the Group has policies to limit the amount of credit exposure to any financial institution and from receivables from related companies.

(iv) Liquidity risk Liquidity risk is the risk that arises when the maturity of assets and liabilities does not match. An unmatched position potentially enhances profitability, but can also increase the risk of losses. The Group has procedures with the object of minimising such losses by having available an adequate amount of committed credit facilities. The Group has the ability to increase these committed credit facilities, using property.

(v) Currency risk Currency risk is the risk that the value of financial instruments will fluctuate due to changes in foreign exchange rates. Currency risk arises when future commercial transactions and recognised assets and liabilities are denominated in a currency that is not the Group’s functional currency. The Group is exposed to foreign exchange risk arising from various currency exposures primarily with respect to Euro and US Dollars. The Company’s management monitors the exchange rate fluctuations on a continuous basis and acts accordingly.

The foreign exchange differences charged to the income statement are shown in Note 10.

(b) Fair value estimation

The fair value of financial instruments traded in active markets, such as available-for-sale financial assets is based on quoted market prices at the consolidated balance sheet date. The quoted market price used for financial assets held by the Group is the current bid price. The appropriate quoted market price for financial liabilities is the current ask price.

The fair value of financial instruments that are not traded in active markets is determined using various valuation techniques that are based on market conditions existing at the balance sheet date.

The nominal value less any estimated credit adjustments for financial assets and liabilities with a maturity of less than one year are assumed to approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate available to the Group for similar financial instruments.

4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

54 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Critical accounting estimates and assumptions

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

(i) Estimated impairment of goodwill

The Group tests annually whether goodwill has suffered any impairment, in accordance with the accounting policy stated in Note 2. The recoverable amount of cash-generating units has been determined based on value-in-use calculations. These calculations require the use of estimates as disclosed in Note 16.

Given the negotiations and agreements for the rights of use of space in the Shacolas Emporium Park which is owned by ITTL Trade Tourist and Leisure Park Limited, even if the expected rent per square meter in Shacolas Emporium Park, based on which the assessment for impairment of goodwill that resulted from the acquisition of ITTL Trade Tourist and Leisure Park Limited was based, was 10% lower compared to management’s calculations at 31 December 2006, there would not have been any reduction in the book value of goodwill.

(ii) Income taxes

Significant judgment is required in determining the provision for income taxes. There are transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

If the actual final outcome on the judgement areas stated in Note 33, is based on the income tax assessments raised, the Group would need to increase the income tax liability by Cí800.000.

5. INTEREST INCOME

2006 2005 Cí Cí

Loans to related companies 1.188.627 1.207.021 Bank balances 179 1.882 Other interest - 1.200

1.188.806 1.210.103

55 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Notes to the Consolidated Financial Statements

6. OTHER GAINS - NET

2006 2005 Cí Cí

Investment property: Loss on sales (14.000) - Dividend income 280.000 - Other gains 117.392 -

383.392 -

7. RIGHTS FOR GRANTING OF SPACE

The amount of Cí1.245.777 represents income from rights received for the granting of space for the creation of commercial shops in Shacolas Emporium Park and in commercial centre "Agora Engomi".

8. GENERAL AND ADMINISTRATIVE EXPENSES

2006 2005 Cí Cí

Depreciation of property, plant and equipment (Note 14) 427.120 273.197 Directors’ remuneration 42.700 40.750 Remuneration of directors of subsidiaries 10.000 - Professional fees 401.566 294.867 Building and equipment expenses 15.183 92.039 Office expenses 27.351 23.876 Travelling expenses 3.138 21.412 Insurance 66.458 66.667 Auditors’ remuneration 51.293 32.596 Legal fees 5.500 12.612 Bank charges 56.470 52.221 Donations and subscriptions 53.390 5.350 Cyprus stock exchange expenses 26.912 26.431 Staff costs (Note 9) 13.605 - Advertising and promotional expenses 46.352 65.211 Taxes, licences and penalties 86.431 50.000 Other expenses 62.935 118.053 Annual General Meeting expenses 1.571 5.294 Debenture costs 291.587 69.000

1.689.562 1.249.576 56 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 9. STAFF COST

2006 2005 Cí Cí

Wages and salaries 11.782 - Social insurance costs 1.823 -

13.605 -

10. FINANCE COSTS

2006 2005 Cí Cí

Interest expense: Bank borrowings (1.098.059) (1.256.670) Bank facilities (645.525) (1.070.003) Interest on taxation (1.189) (95.760) Debenture loan (475.678) (475.677) Debenture with related company (Note 28 (f)) (668.757) - Loans from associated companies (Note 28 (d)) (252.596) (258.546) Balances with related companies (38.208) (614.224) Loan from related parties (Note 28 (e)) (133.957) (157.503) Other interest (93.042) (175.725)

(3.407.011) (4.104.108)

Net foreign exchange transaction gain/(loss) from financing activities 18.975 (49.121)

(3.388.036) (4.153.229)

11. TAXATION

2006 2005 Cí Cí

Current taxation: Corporation tax 46.120 86.505 Corporation tax of previous years 700.692 - Defence contribution 14.897 15.797 Deferred tax (Note 25) 220.734 380.725

982.443 483.027 57 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Notes to the Consolidated Financial Statements

The tax on the Group’s profit before tax differs from the theoretical amount that would arise using the applicable tax rates as follows:

2006 2005 Cí Cí

Profit before tax 5.274.874 2.733.241

Tax calculated at the applicable corporation tax rate of 10% 527.487 273.324 Tax effect of expenses not deductible for tax purposes 94.485 482.568 Tax effect of allowances and income not subject to tax (340.221) (272.865) Corporation tax of previous years 700.692 -

Tax charge 982.443 483.027

From 1 January 2003 onwards the Group’s companies are subject to corporation tax on taxable profits at the rate of 10%.

Under certain conditions interest may be subject to defence contribution at the rate of 10%. In such cases 50% of the same interest will be exempt from corporation tax thus having an effective tax rate burden of approximately 15%.

Capital gains from the sale of property are subject to capital gains tax at the rate of 20%.

12. EARNINGS PER SHARE

The basic earnings per share are calculated by dividing the profit attributable to the Company’s shareholders by the weighted average number of issued shares during the year excluding the ordinary shares purchased by the Company which are held as treasury shares (Note 22).

2006 2005 Cí Cí

Profit for the year attributable to shareholders 4.292.431 2.257.834

Weighted average number of issued shares 96 075 941 95 038 959

Basic earnings per share - cents 4,5 2,4

Adjusted weighted average number of shares 114 319 585 114 315 000

Fully diluted earnings per share 3,8 2,0

58 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 13. DIVIDEND PER SHARE

The Board of Directors decided to propose at the Annual General Meeting of the Company the payment of a dividend of 8% on the nominal value of the share, that is 1,6 cents per share. These financial statements do not include this payable dividend which will be accounted in equity as distribution of retained earnings for the year ended 31 December 2007.

The dividends declared at the General Meeting on 8 June 2005 and paid during 2005 were Cí1.425.693 and relate to 2003 profits.

The interim dividends declared and approved in December 2005 which relate to 2003 profits were Cí3.854.553. On 30 June 2006 the first instalment of the dividend declared on 31 December 2005 was paid. The second instalment will be paid on 30 June 2007.

As from 1 January 2003 dividends paid to individuals who are tax residents of Cyprus are subject to a deduction of special contribution for defence at the rate of 15%.

Offering of free shares

During 2005, following a decision of an Extraordinary General Meeting of the Company’s shareholders, 1 460 174 shares of the Company with a nominal value of 20 cents each were offered to the Companys’ Shareholders for free, in a proportion of one share for every 65 held. These shares are fully paid, registered in the Company’s name and were the result of the acquisition of treasury shares (Note 22).

14. PROPERTY, PLANT AND EQUIPMENT

Land and Plant and buildings equipment Total Cí Cí Cí

At 1 January 2005 Cost or valuation 31.486.615 1.043.476 32.530.091 Accumulated depreciation (22.003) (268.124) (290.127)

Net book amount 31.464.612 775.352 32.239.964

Year ended 31 December 2005 Opening net book amount 31.464.612 775.352 32.239.964 Additions 5.617.726 38.167 5.655.893 Fair value adjustment on investment property (Note 16 and 31) (362.986) - (362.986) Depreciation charge (613) (272.584) (273.197)

Closing net book amount 36.718.739 540.935 37.259.674

At 31 December 2005 Cost or valuation 36.741.355 1.081.643 37.822.998 Accumulated depreciation (22.616) (540.708) (563.324)

Net book amount 36.718.739 540.935 37.259.674 59 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Notes to the Consolidated Financial Statements

14. PROPERTY, PLANT AND EQUIPMENT

Land and Plant and buildings equipment Total Cí Cí Cí

Year ended 31 December 2006 Opening net book amount 36.718.739 540.935 37.259.674 Additions 12.192.357 94.524 12.286.881 Disposals - (3.494) (3.494) Depreciation charge (613) (426.507) (427.120)

Closing net book amount 48.910.483 205.458 49.115.941

At 31 December 2006 Cost or valuation 48.933.712 1.172.673 50.106.385 Accumulated depreciation (23.229) (967.215) (990.444)

Net book amount 48.910.483 205.458 49.115.941

Land and buildings include buildings under construction of the subsidiary company ITTL Trade Tourist and Leisure Park Limited with a cost of Cí22.445.345 (2005: Cí10.252.986).

The net book value of the Group’s land and buildings at 31 December includes the following:

2006 2005 Cí Cí

Revalued land 26.500.000 26.500.00 Buildings under construction 15.854.556 5.596.211 Capitalised interest and expenses 6.555.927 4.622.528

48.910.483 36.718.739

Interest of Cí1.857.848 (2005: Cí911.614) relating to borrowings made specifically for the financing of the building cost of the project, were capitalized during the year and were included in the cost of the building. The interest rate used for the capitalization is 6,5% and represents the borrowings cost for financing the project for 2006.

In the cash flow statement proceeds from sale of property, plant and equipment comprise:

2006 2005 Cí Cí

Net book amount 3.494 - Profit on sale of property, plant and equipment 2 - Proceeds from sale of property, plant and equipment 3.496 - 60 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 If the land and buildings were stated on a historical cost basis, the amounts would be as follows: 2006 2005 Cí Cí

Cost 26.206.512 14.014.155 Accumulated depreciation - -

Net book amount 26.206.512 14.014.155

Part of the bank loans and facilities are secured on land and buildings of the Group for an amount of Cí9.232.320 (2005: Cí10.495.333) (Note 24).

15. INVESTMENT PROPERTY 2006 2005 Cí Cí

At the beginning of year 74.418.336 71.705.605 Additions 2.016.757 515.610 Investment property acquired through the acquisition of subsidiary company (Note 31) 370.000 - Sales (44.000) (69.000) Fair value gains 1.717.761 2.266.121

At end of year 78.478.854 74.418.336

Part of the bank loans and facilities are secured on investment property of the Group for an amount of Cí48.220.000 (2005: Cí47.770.333) (Note 24).

Investment property is revalued annually on 31 December at fair value representing the open-market value, as estimated by the management of the Company and by an independent, professional qualified valuer, with significant experience in the valuation of similar properties in Cyprus.

16. INTANGIBLE ASSET Goodwill Cí At 1 January 2005 Cost 110.517 Year ended 31 December 2005 Opening net book value 110.517 Deferred tax adjustment (Note 25) 283.018 Property fair value adjustment (Note 14) 279.842 Purchase of remainder shares of subsidiary company (Note 31) 284.073 Closing net book value 957.450 At 31 December 2005 Cost 957.450 Accumulated amortisation and impairment - Net book value 957.450

61 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Notes to the Consolidated Financial Statements

16. INTANGIBLE ASSET Goodwill Cí Year ended 31 December 2006 Opening net book value 957.450 Impairment charge - Closing net book value 957.450 At 31 December 2006 Cost 957.450 Accumulated amortisation and impairment -

Net book value 957.450

Impairment test for goodwill

Goodwill is allocated to cash-generating units. The goodwill included in the Company’s financial statements represents the premium paid to acquire the company ITTL Trade Tourist and Leisure Park Limited, ("ITTL"), which represents a single cash-generating unit.

The recoverable amount of the ITTL cash-generating unit is determined based on value-in-use calculations. These calculations use cash flow projections based on financial budgets which are based on the prices and the proposed duration of the granting of space at Shacolas Emporium Park which is expected to commence operations in 2007 and have been approved by management. The growth rates used do not exceed those used in similar space granting agreements.

The key assumptions used for the value-in-use calculations are as follows:

ñ Percentage increase of fees for space usage: expected inflation +1% annually ñ Discount rate: 7%

The discount rate used is pre-tax and reflects specific risks relating to the cash-generating unit.

17. INVESTMENTS IN ASSOCIATES

2006 2005 Cí Cí

At the beginning of the year 15.729.204 14.117.064 Share of profit after taxation 2.878.306 1.785.690 Acquisition of associated company 12.000 - Share of surplus from revaluation of investments of associated company (Note 23) 1.397.233 33.999 Dividend paid (166.955) (207.549)

At the end of the year 19.849.788 15.729.204

62 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 The Group’s interest in its associates, all of which are unlisted, was as follows:

Country of Profit/ % of voting incorporation Assets Liabilities Revenue (loss) rights Cí Cí Cí Cí 2006 Olymbos Investments Limited Cyprus 11.825.755 233.020 1.178.252 1.053.558 50 Akinita Lakkos Mikelli Limited Cyprus 8.340.413 329.908 2.024.439 1.531.350 35 CTC – ARI Airports Limited Cyprus 1.869.523 1.564.495 4.729.016 293.398 20

2.878.306

2005 Olymbos Investments Limited Cyprus 10.223.212 920.234 1.098.224 963.314 50 Akinita Lakkos Mikelli Limited Cyprus 6.678.192 251.966 911.597 822.376 35

1.785.690

18. AVAILABLE-FOR-SALE FINANCIAL ASSETS 2006 2005 Cí Cí

At the beginning of the year 2.962.000 2.962.000 Additions 1.292.785 - At the end of the year 4.254.785 2.962.000

Available-for-sale financial assets are analysed as follows:

2006 2005 Cí Cí

Listed equity securities: Cyprus Stock Exchange 21.170 - Unlisted securities 4.233.615 2.962.000

At the end of the year 4.254.785 2.962.000

19. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS 2006 2005 Cí Cí Unlisted securities: Financial assets acquired by acquisition of subsidiary company (Note 31) 10.000.000 - 63 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Notes to the Consolidated Financial Statements

The carrying amounts of the above financial assets are classified as follows:

2006 2005 Cí Cí Designated at fair value through profit and loss on initial recognition 10.000.000 -

Financial assets designated as at fair value through profit or loss at inception are those that are managed and whose performance is evaluated on a fair value basis, in accordance with a documented investment strategy. Information about these financial assets is provided internally on a fair value basis to the Company’s key management personnel. The Group investment strategy is to invest cash available in equity securities of companies whose main activities are similar to the activities of the Group.

20. RECEIVABLES 2006 2005 Cí Cí Current Receivable from related companies (Note 28 (c)) 3.831.842 4.656.170 Receivable from associated company (Note 28 (c)) 76.108 2.070 Advances and prepayments 652.609 784.381 Other receivables 1.502.965 1.925.256

6.063.524 7.367.877

Non-current Receivable from related companies (Note 28 (c)) - 16.787.580 Total receivables 6.063.524 24.155.457

Maturity of non-current receivables Between 1 and 2 years - 3.656.058 Between 2 and 5 years - 13.131.522 - 16.787.580

Management believes that there is no credit risk concerning the amounts receivable from related companies, mainly Lambousa Venture Capital Limited, amounting to Cí2.832.197.

The concentrations of credit risk of the receivables from non-related companies are considered to be limited and the Management believes that there is no credit risk arising from their collection.

The fair value of current receivables approximates their book value at the balance sheet date.

The fair value of non-current receivables approximates their book value at the balance sheet date, since their underlying interest rate fluctuates annually based on the basic interest rate as determined by the Central Bank. The effective average interest rate on non-current receivables was 6% (2005: 6%).

64 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 21. CASH AND CASH EQUIVALENTS

2006 2005 Cí Cí

Cash at bank and in hand 968.124 609.506

The effective interest rate on cash at bank was 4% (2005: 2%).

For the purposes of the cash flow statement cash and bank overdrafts include the following:

2006 2005 Cí Cí

Cash and cash equivalents 968.124 609.506

22. SHARE CAPITAL, SHARE PREMIUM AND TREASURY SHARES

Number of Share Share Premium Treasury ordinary shares capital Reserve shares Total of 20 cents each Cí Cí Cí Cí

At 1 January 2005 94 795 597 19.276.041 12.818.245 (360.713) 31.733.573

Purchase of own shares (56 049) - - (12.803) (12.803) Bonus distribution of treasury shares (Note 13) 1 460 174 - - 369.847 369.847

At 31 December 2005 96 199 722 19.276.041 12.818.245 (3.669) 32.090.617

At 1 January 2006 96 199 722 19.276.041 12.818.245 (3.669) 32.090.617

Purchase of own shares (247 562) - - (104.395) (104.395)

At 31 December 2006 95 952 160 19.276.041 12.818.245 (108.064) 31.986.222

The share premium reserve is non-distributable. The total authorized number of ordinary shares is 125 000 000 shares (2005: 125 000 000 shares) with a par value of Cí0,20 per share. The issued share capital of the Company before the purchase of treasury shares was 96 380 211 shares. All issued shares are fully paid. During 2006 the Company acquired 247 562 of its own shares through purchases on the Cyprus Stock Exchange. The total amount paid to acquire the shares was Cí104.395 which has been deducted from shareholders’ equity. These shares have not been cancelled and are held as treasury shares. During 2005 the Company offered for free to its shareholders 1 460 174 treasury shares (Note 13) with a book value of Cí369.847. 65 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Notes to the Consolidated Financial Statements

Share Warrants (SW):

The numbers of SW that had been totally issued on 24 April 2003 and have not been exercised until 31 December 2006 are 18 243 644.

Every SW provides the right for the purchase of one share in the Company, with a nominal value of 20 cents, in March 2007, at a price of 30 cents each.

On their maturity, they were exercised at an exercise price of 30 cents per share. For each SW one new share of Woolworth (Cyprus) Properties Public Limited with a nominal value of 20 cents was issued. In total, 18 243 644 new shares were issued, increasing the total issued share capital of the Company at 114 623 855. From this exercise, the Company received the amount of í4,9 million. A small number of SW has been exercised by the Company.

23. FAIR VALUE RESERVES

Available-for- Land and sale financial buildings assets Total CíCíCí

At 1 January 2005 17.205.347 (2.300.023) 14.905.324 Revaluation surplus of associated companys’ investments (Note 17) - 33.999 33.999 Deferred tax on revaluation (Note 25) 22.445 - 22.445

At 31 December 2005/1 January 2006 17.227.792 (2.266.024) 14.961.768 Revaluation surplus of associated companys’ investments (Note 17) - 1.397.233 1.397.233 Deferred tax on revaluation (Note 25) 21.049 - 21.049

As at 31 December 2006 17.248.841 (868.791) 16.380.050

These reserves are available for distribution.

66 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 24. BORROWINGS 2006 2005 Cí Cí Current Bank facilities (1) 10.132.257 14.060.522 Bank loans 14.404.742 13.075.857 Loan from associated company (Note 28 (d)) 4.295.565 4.209.924 Loans from related parties (Note 28 (e)) 1.095.244 1.112.098 Debenture with related company (Note 28 (f)) - 11.145.955 Debenture loan (2) 6.807.388 - Other borrowings 748.729 759.244

37.483.925 44.363.600

Non-current Bank loans 31.981.174 17.350.907 Debenture loan (2) - 6.807.388 Loan from related parties (Note 28 (e)) 877.732 1.909.095 Other borrowings 305.425 1.302.411

33.164.331 27.369.801

Total borrowings 70.648.256 71.733.401

Maturity of non-current borrowings Between 1 and 2 years 6.172.787 12.622.587 Between 2 and 5 years 14.068.145 11.329.749 Over 5 years 12.923.399 3.417.465

33.164.331 27.369.801

1.The limit of bank facilities of the Group is Cí16.000.000.

2. The Debenture loan of Cí6.807.388, was issued on 24 April 2003 and is repayable at 31 December 2007, while the Company has the right to repurchase it fully or partly in the period from 31 December 2005 until its expiration. The Debenture loan carries interest of 7% annually, payable every six months and it is guaranteed by the related company Cyprus Trading Corporation Public Limited.

The carrying amounts of current and non-current borrowings approximate their fair value.

67 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Notes to the Consolidated Financial Statements

The weighted average effective borrowing interest rates at the balance sheet date were as follows:

2006 2005 % %

Loans and overdrafts 6,5 7 Loans from related parties 5,5 5,5 Loan from associated Company 6 6 Debenture loan 7 7 Other borrowings 5,5 5,5 Debenture with related Company 6 6

The bank loans and overdrafts of the Company have variable interest rates. Borrowing at fixed interest rate exposes the Group at interest rate risk that relates to fair value. For variable interest rate borrowings, the interest rates are determined monthly exposing the Group to interest rate risk in relation to cash flows.

The bank loans are repayable by monthly instalments until 2012.

The bank loans and overdrafts are secured as follows:

(a) By mortgage on land and buildings for Cí9.232.320 (Note 14). (b) By mortgage on investment property for Cí48.220.000 (Note 15). (c) By guarantees from related companies for Cí14.746.000. (d) By assignment of insurance for fire and earthquake on the property of the Group. (e) By general assignment of rental income which will be received by the Group’s subsidiary company "Woolworth Commercial Centre Limited" from the leaseholders of the shops at the commercial centre which will be constructed in Engomi. (f) By commitment of 2 075 000 shares of Akinita Lakkos Mikelli Limited. (g) By commitment of 2 355 000 shares of the subsidiary company ITTL Trade Tourist and Leisure Park Limited.

The carrying amounts of the Group’s borrowings are analysed per currency as follows:

2006 2005 Cí Cí

Cyprus pound – functional and presentational currency 51.839.748 64.812.319 Euro 17.954.538 5.569.123 United States Dollars 853.970 1.351.959

70.648.256 71.733.401

68 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 25. DEFERRED TAX LIABILITIES

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred taxes relate to the same fiscal authority.

The movement on the deferred tax account is as follows:

Difference between Fair value depreciation Revaluation of gains on and wear and land and investment tear allowance buildings property Tax losses Total

Cí Cí Cí Cí Cí

At 1 January 2005 949.585 8.396.166 580.590 (542.550) 9.383.791 Deferred tax adjustment of Subsidiary Company (Notes 16 and 31) - 366.603 - - 366.603 Transfer to fair value reserves (Note 23) - (22.445) - - (22.445) Charged/(credited) to: Income statement (Note 11) 29.651 - 493.582 (142.508) 380.725

At 31 December 2005/ 1 January 2006 979.236 8.740.324 1.074.172 (685.058) 10.108.674 Transfer to fair value reserves (Note 23) - (21.049) - - (21.049) Charged/(credited) to: Income statement (Note 11) 52.659 - 247.767 (79.692) 220.734

1.031.895 8.719.275 1.321.939 (764.750) 10.308.359

The amounts in the balance sheet include the following:

2006 2005 Cí Cí

Deferred tax assets to be recovered after more than twelve months (764.750) (685.058) Deferred tax liabilities to be settled after more than twelve months 11.073.109 10.793.732

69 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Notes to the Consolidated Financial Statements

26. PAYABLES AND ACCRUED EXPENSES 2006 2005 Cí Cí Current Related companies (Note 28 (c)) 8.046.879 1.044.454 Associated companies (Note 28 (c)) 182.036 109.072 Creditor for building under construction 2.536.898 945.417 Other payables and accrued expenses 806.204 442.949 Dividend payable 1.031.054 1.162.472

12.603.071 3.704.364

Non-current Contractors’ retentions 946.115 568.964 Dividend payable - 1.162.473

946.115 1.731.437

Total payables and accrued expenses 13.549.186 5.435.801

Maturity of non-current payables and accrued expenses Between 1 and 2 years 946.115 568.964

The fair value of the current and non-current payables approximates their carrying value at the balance sheet date.

27. CONTINGENCIES

Capital commitments

At 31 December 2006 there were capital commitments by subsidiary companies for Cí12.011.690 (2005: Cí18.881.963). The Group’s share in the share capital of these subsidiary companies is 100%. These capital commitments, relate to the construction of "Shacolas Emporium Park" and the commercial centre "AGORA ENGOMI" and the necessary funding for the relevant expenditure has been secured.

Guarantees

The Company has provided guarantees for Cí15.487.000 (2005: Cí4.975.000) in order to secure bank facilities of related companies.

Operating lease commitments – where the Group is the lessor

The future aggregate minimum usage/rentals receivable under non-cancellable operating leases are as follows:

70 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 2006 2005 Cí Cí

Not later than 1 year 5.018.456 2.872.076 Later than 1 year and not later than 5 years 28.122.618 11.746.791 Later than 5 years 64.832.756 26.956.259

97.973.830 41.575.126

28. RELATED PARTY TRANSACTIONS

At the date of this report the main shareholder of the Company is Cyprus Trading Corporation Public Limited which owns 31,87% of the Company’s shares. Mr Nicolas K Shacolas, Executive Chairman, directly or indirectly owns (including his share in Cyrpus Trading Corporation Public Limited) 45,48% of the Company’s shares. Lambousa Venture Capital Limited owns 5,55% of the Company’s share capital and Olymbos Investments Limited owns 2,24% of the Company’s share capital. The remaining shares are widely spread.

The following transactions were carried out on a commercial basis with related companies (companies in which Mr Nicolas K Shacolas has a significant interest) and with associated companies:

(a) Sale of goods and services 2006 2005 Nature of transaction Cí Cí

Related companies Financing and interest 1.188.627 1.207.021 Rights for use of space 2.733.969 2.636.623

3.922.596 3.843.644

(b) Purchase of goods and services

2006 2005 Nature of transaction Cí Cí

Related companies Purchase of shares 1.292.785 - Financing and interest 706.965 614.224 Consulting services 145.222 144.126 Fixed assets and goods 47.630 -

2.192.602 758.350

Associated companies Financing and interest 252.596 258.546

Related parties Purchase of shares - 2.863.690 Financing and interest 133.957 157.503

133.957 3.021.193

71 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Notes to the Consolidated Financial Statements

2006 2005 Cí Cí

Amounts receivable Related companies (1) (Note 20) 3.831.842 21.443.750 Associated companies (3) (Note 20) 76.108 2.070

3.907.950 21.445.820

Amounts payable Related companies (2) (Note 26) 8.046.879 1.044.454 Associated companies (3) (Note 26) 182.036 109.072

8.228.915 1.153.526

(1) Amounts receivable from related companies include:

(a) a balance of Cí694.523 (2005: Cí18.508.160) on the sale of the shares of Ermes Department Stores Public Limited to Cyprus Trading Corporation Public Limited. This amount bears interest of 1% above the basic interest rate as determined by the Central Bank of Cyprus.

(b) balance of Cí3.137.319 (2005: Cí2.842.846) which bears interest of 5,5% and is repayable on demand.

(2) Amounts payable to related companies are of a financing nature, bear interest of 5,5% and are payable on demand.

(3) The balances with associated companies do not bear interest and are payable on demand.

(d) Loans from associated company

2006 2005 Cí Cí

At the beginning of the year 4.209.924 4.320.777 Interest payable (Note 10) 252.596 258.546 Payments during the year (166.955) (369.399)

At the end of the year (Note 24) 4.295.565 4.209.924

Above loans are of a financing nature, bear interest with an average rate of 6% annually and there is no agreement for a repayment date.

72 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 (e) Loan from related parties

2006 2005 Cí Cí

At the beginning of the year 3.021.193 - Loan advanced for share acquisition of subsidiary company - 2.863.690 Loan repayable during the year (1.182.174) - Interest payable (Note 10) 133.957 157.503

At the end of the year (Note 24) 1.972.976 3.021.193

The above amount relates to the acquisition of the remaining shares of ITTL (Note 31), bears interest of 5,5% and is repayable from 2 to 4 years from the balance sheet date.

(f) Debenture with related company

2006 2005 Cí Cí

At the beginning of the year 11.145.955 - Debenture granted at the end of 2005 - 11.145.955 Interest payable (Note 10) 668.757 - Debenture repayment (11.814.712) -

At the end of the year (Note 24) - 11.145.955

The debenture bears interest of 6% and does not bear any guarantee. The full amount of the debenture was repaid at the end of 2006.

(g) Directors’ remuneration

The total remuneration of the Directors was as follows: 2006 2005 Cí Cí

Fees as Non-executive directors 20.300 19.000 Fees as Executive directors 22.400 21.750

42.700 40.750

73 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Notes to the Consolidated Financial Statements

29. INVESTMENTS IN SUBSIDIARY COMPANIES

The details of subsidiary companies are as follows:

Interest Country on Name Principal activity held incorporation %

Company’s subsidiaries

F.W.W. Super Department Stores Rental of property in Larnaca 100 Cyprus Limited

Woolworth Commercial Owner of land in Engomi area 100 Cyprus Centre Limited in Nicosia

ZAKO Limited Rental of property in 100 Cyprus Limassol, Larnaca, Paphos

π∆∆L Trade Tourist and Construction of Emporium Park on 100 Cyprus Leisure Park Limited freehold land in Athalassa area, Nicosia

Christis Farms Limited Investment property 100 Cyprus

N.K. Shacolas (Merchants) Limited Investment property 100 Cyprus

Subsidiaries of ∑∞∫√ Limited

Zako Estate Limited Rental of property in Ledras 100 Cyprus Street, Nicosia

The Cyprus Supply Company Limited Dormant 100 Cyprus

Elermi General Trading Limited Dormant 100 Cyprus

Apex Limited Exploitation of rights of use 100 Cyprus of space of the Ledra Arcade Building in Ledras Street, Nicosia and owner of property in Latsia, and management of own parking space in Ledras Street 74 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 30. PROPERTY PURCHASE RIGHT

The Company has the right anytime it so wishes until 19 June 2007 to request from the owner of the Shacolas Tower, in Ledras Street Nicosia, where the multistore Debenhams Ledra operates, to purchase the property at cost. From 20 June 2007, the owner has the right to request from the Company to purchase the property at the same price. The Company also has the right anytime it so wishes during the leasing period of the property in Athalassas area where the Super Home Centre (D.I.Y.) megastore operates, that is until 2007, to request from the owner to purchase the property at a predetermined price. The Board of Directors at its meeting on 30 January 2007 has approved the exercise of the above purchase rights. It is estimated that from the exercise of these rights there will be profit from the difference of the exercise price (including acquisition expenses) and the assessed value of the building, of more than í3,0 millions. The acquisition cost of the above property amounting to í9.645.429 will be fully financed using bank borrowings.

31. ACQUISITION OF SUBSIDIARY COMPANIES

1. Acquisition of Christis Farms Limited and N.K. Shacolas (Merchants) Limited in 2006 During 2006 the Group acquired 100% of the shares of Christis Farms Limited and of N.K. Shacolas (Merchants) Limited. No goodwill arose from the above acquisition. The assets and liabilities arisen from the acquisition were the following:

¡.∫. Shacolas Christis Farms (Merchants) Limited Limited Cí Cí

Investments on property (Note 15) 370.000 - Financial assets at fair value through profit and loss (Note 19) - 10.000.000 Cash and cash equivalents - 385 Trade and other payables - (385)

Fair value of net assets 370.000 10.000.000 Goodwill - -

Total acquisition price 370.000 10.000.000

2. Acquisition of ITTL Trade Tourist and Leisure Park Limited in 2005

(a) During the year 2005 the Group acquired the remaining 22,8% of the shares of ITTL Trade Tourist and Leisure Park Limited. Along with the investment of 77,2% previously owned, the participation in the share capital of the company reached 100%. As a result the minority interest has been eliminated.

75 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Notes to the Consolidated Financial Statements

As a result of the above acquisition, goodwill of Cí284.073 (Note 16) arose, calculated as follows:

2005 Cí

Minority interest at beginning of year 4.709.102 Property fair value adjustment (Note 14) (83.144) Deferred tax adjustment (Note 25) (83.585)

Minority interest as adjusted (1) 4.542.373 Share of loss for the year (7.620)

Minority interest at the date of acquisition 4.534.753 Acquisition price (4.818.826)

Goodwill (284.073)

(1) The adjustment relates to adjustments made to the fair value of the property but also to the deferred tax within twelve months from the date of acquisition of ITTL Trade Tourist and Leisure Park Limited.

32. MATERIAL DIFFERENCES BETWEEN THE INDICATIVE RESULTS ANNOUNCED AND THE AUDITED CONSOLIDATED RESULTS FOR THE YEAR

The audited consolidated financial results of the Group do not present any material differences between the indicative results announced and the audited consolidated results for the year.

33. CONTINGENCIES

On 31 December 2006 there was a dispute with the Cyprus Tax Authorities relating to assessments issued after the balance sheet date for a subsidiary company of the Group, for the years 1989 to 2002, amounting to Cí1.799.411 including interest and for which a provision of Cí1.000.000 was included in the accounts.

34. EVENTS AFTER THE BALANCE SHEET DATE

There were no post balance sheet events, which have a material bearing on the understanding of the financial statements except as stated in Notes 22 and 30 of the financial statements.

Independent Auditors’ Report on pages 37 and 38.

76 WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Financial Statements in Euro

The Financial Statements in Euro, are presented for information purposes only and they do not constiture part of the audited Financial Statements. The exchange rate used for all amounts is: Cí 1,00 = f1,7330 (31 December 2006) WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Consolidated Income Statement for the year ended 31 December 2006

Note 2006 2005 lf

Rights for use of space and other income 5.092.417 4.980.986 Fair value gains from investment property 15 2.976.949 3.927.278 Interest income 5 2.060.248 2.097.157 Rights for granting of space 7 2.158.981 - General and administrative expenses 8 (2.928.078) (2.165.565) Other gains - net 6 664.434 -

Operating profit 10.024.951 8.839.856 Finance costs 10 (5.871.602) (7.197.712) Share of profit of associates 17 4.988.219 3.094.672

Profit before taxation 9.141.568 4.736.816

Corporation tax and defence contribution (1.320.072) (177.293) Deferred tax (382.541) (659.812)

Taxation 11 (1.702.613) (837.105)

Net profit for the year 7.438.955 3.899.711

Attributable to: Company Shareholders 7.438.955 3.912.917 Minority Interest - (13.206)

7.438.955 3.899.711

Earnings per share (cents per share): 12 Basic 7,8 4,2 Fully diluted 6,6 3,5

The Financial Statements in Euro, are presented for information purposes only. 78 The exchange rate used for all amounts is: Cí 1,00 = f1,7330 (31 December 2006) The notes on pages 83 to 104 are an integral part of these consolidated financial statements. WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Consolidated Balance Sheet at 31 December 2006

Note 2006 2005 lf ASSETS Non-current assets Property, plant and equipment 14 85.119.890 64.572.505 Investment property 15 136.006.993 128.969.953 Intangible asset 16 1.659.299 1.659.299 Investments in associates 17 34.400.477 27.259.340 Available-for-sale financial assets 18 7.373.713 5.133.265 Financial assets at fair value through profit and loss 19 17.330.400 - Receivables 20 - 29.093.548 281.890.772 256.687.910 Current assets Receivables 20 10.508.330 12.768.826 Cash and cash equivalents 21 1.677.798 1.056.298 12.186.128 13.825.124 Total assets 294.076.900 270.513.034 EQUITY Capital and reserves attributable to the Company’s shareholders Share capital 22 33.406.150 33.406.150 Share premium 22 22.214.531 22.214.531 Treasury shares 22 (187.279) (6.358) Fair value reserves 23 28.387.282 25.929.343 Retained earnings 44.152.329 36.713.374 Total equity 127.973.013 118.257.040 LIABILITIES Non-current liabilities Borrowings 24 57.475.112 47.432.960 Payables and accrued expenses 26 1.639.655 3.000.650 Deferred tax liabilities 25 17.864.798 17.518.736 76.979.565 67.952.346 Current liabilities Borrowings 24 64.961.141 76.883.893 Payables and accrued expenses 26 21.841.626 6.419.811 Current tax liabilities 2.321.555 999.944 89.124.322 84.303.648 Total liabilities 166.103.887 152.255.994 Total equity and liabilities 294.076.900 270.513.034

On 19 April 2007 the Board of Directors of Woolworth (Cyprus) Properties Public Limited authorized these consolidated financial statements for issue. Nicolas K. Shacolas Marios Panayides Executive Chairman Managing Director

The Financial Statements in Euro, are presented for information purposes only. The exchange rate used for all amounts is: Cí 1,00 = f1,7330 (31 December 2006) 79 The notes on pages 83 to 104 are an integral part of these consolidated financial statements. WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 80

Consolidated statement of changes in equity for the year ended 31 December 2006

Share Treasury Share Fair value Retained Minority capital shares premium reserves earnings (1) Interest Total

ƒƒƒ ƒ ƒƒl

Balance at 1 January 2005 33.406.150 (625.130) 22.214.531 25.831.523 42.592.295 8.161.062 131.580.431

Fair value adjustment on investment properties (Note 31) - - - - - (144.092) (144.092) Deferred tax adjustment (Note 31) - - - - - (144.856) (144.856) Available-for-sale financial assets: Revaluation surplus of investments of associated company (Note 23) - - - 58.922 - - 58.922 Deferred tax on revaluation of land and buildings (Note 25) - - - 38.898 - - 38.898

Net income recognized directly in equity - - - 97.820 - (288.948) (191.128) Net profit for the year - - - - 3.912.917 - 3.912.917 Share of loss of subsidiary company for the year - - - - - (13.206) (13.206)

Total recognized income for 2005 - - - 97.820 3.912.917 (302.154) 3.708.583

Dividend (Note 13) - - - - (9.150.878) - (9.150.878) Purchase of treasury shares (Note 22) - (22.188) - - - - (22.188) Bonus distribution of treasury shares (Note 13) - 640.960 - - (640.960) - - Acquisition of remainder share of subsidiary company for the year (Note 31) - - - - - (7.858.908) (7.858.908)

- 618.772 - - (9.791.838) (7.858.908) (17.031.974)

Balance at 31 December 2005 33.406.150 (6.358) 22.214.531 25.929.343 36.713.374 - 118.257.040

The Financial Statements in Euro, are presented for information purposes only.. The exchange rate used for all amounts is: Cí 1,00 = f1,7330 (31 December 2006)

WorldReginfoThe notes on- 452cafe9-3d92-4272-af61-cdf7f9147e53 pages 83 to 104 are an integral part of these consolidated financial statements. Consolidated statement of changes in equity for the year ended 31 December 2006 (continued)

∞Ó·ÏÔÁÂ› ÛÙÔ˘˜ ÌÂÙﬁ¯Ô˘˜ ÙË˜ ∂Ù·ÈÚÂ›·˜

Share Treasury Share Fair value Retained Minority capital shares premium reserves earnings (1) Interest Total

fff f ffl

Balance at 1 January 2006 33.406.150 (6.358) 22.214.531 25.929.343 36.713.374 - 118.257.040

Available for sale financial assets: Revaluation surplus of investments of associated company (Note 23) - - - 2.421.460 - - 2.421.460 Deferred tax on revaluation of land and buildings (Note 25) - - - 36.479 - - 36.479

Net income recognized directly in equity - - - 2.457.939 - - 2.457.939 Net profit for the year - - - - 7.438.955 - 7.438.955

Total recognized income for 2006 - - - 2.457.939 7.438.955 - 9.896.894

Purchase of treasury shares (Note 22) - (180.921) - - - - (180.921)

Balance at 31 December 2006 33.406.150 (187.279) 22.214.531 28.387.282 44.152.329 - 127.973.013

As from 1 January 2003, companies which do not distribute 70% of their profits after tax, as defined by the Special Contribution for the Defence of the Republic Law, during the two years after the end of the year of assessment to which the profits refer, will be deemed to have distributed this amount as dividend. Special contribution for defence at 15% will be payable on such deemed dividend to the extent that the shareholders (individuals and companies) at the end of the period of two years from the end of the year of assessment to which the profits refer are Cyprus tax residents. The amount of this deemed dividend distribution is reduced by any actual dividend paid out of the profits of the relevant year at any time. This special contribution for defence is paid by the Company for the account of the shareholders. 81 The Financial Statements in Euro, are presented for information purposes only.. The exchange rate used for all amounts is: Cí 1,00 = f1,7330 (31 December 2006) WorldReginfoThe notes -on 452cafe9-3d92-4272-af61-cdf7f9147e53 pages 83 to 104 are an integral part of these consolidated financial statements. Consolidated cash flow statement for the year ended 31 December 2006

Note 2006 2005 lf

CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax 9.141.568 4.736.816 Adjustments for: Depreciation of property, plant and equipment 14 740.216 473.461 Interest expense 10 5.904.486 7.112.583 Interest income 5 (2.060.248) (2.097.157) Share of profit of associated companies 17 (4.988.219) (3.094.672) Fair value gains on investment property 15 (2.976.949) (3.927.278) Dividend income 6 (485.251) - Profit on sale of property, plant and equipment 14 (3) - Loss on sale of investment property 6 24.263 -

5.299.863 3.203.753 Changes in working capital: Receivables 31.354.044 753.746 Payables and accrued expenses 16.303.186 785.443

Cash generated from operations 52.957.093 4.742.942 Tax received/(paid) 1.539 (205.147)

Net cash from operating activities 52.958.632 4.537.795

CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property, plant and equipment 14 (18.073.931) (7.335.426) Purchases of shares in associated companies 17 (20.796) - Purchase of investment property 15 (3.495.121) (893.573) Proceeds from sale of investment property 51.991 119.580 Proceeds from sale of property, plant and equipment 14 6.058 - Interest received 2.060.248 2.097.157 Purchases of available for sale financial assets ‰È·ı¤ÛÈÌˆÓ ÚÔ˜ ÒÏËÛË 18 (2.240.448) - Acquisition of subsidiary companies 31 (17.971.625) (8.351.218) Dividend received from associated companies 17 289.338 359.691 Dividend received 485.251 -

Net cash used in investing activities (38.909.035) (14.003.789)

CASH FLOWS FROM FINANCING ACTIVITIES Net borrowings (1.880.600) 21.917.677 Interest paid (9.124.211) (8.949.977) Purchase of treasury shares 22 (180.921) (22.188) Dividend paid 13 (2.242.365) (2.470.783)

Net cash (used in)/from financing activities (13.428.097) 10.474.729

Net increase in cash and cash equivalents 621.500 1.008.735 Cash and cash equivalents at beginning of year 1.056.298 47.563

Cash and cash equivalents at end of year 21 1.677.798 1.056.298

The Financial Statements in Euro, are presented for information purposes only. 82 The exchange rate used for all amounts is: Cí 1,00 = f1,7330 (31 December 2006) WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 The notes on pages 83 to 104 are an integral part of these consolidated financial statements. Notes to the Consolidated Financial Statements

Notes 1 to 3 to the consolidated financial statements are presented on pages 44 to 54.

4. Critical accounting estimates and judgements

Critical accounting estimates and assumptions

(i) Estimated impairment of goodwill

(ii) Income taxes

If the actual final outcome on the judgement areas stated in Note 33, is based on the income tax assessments raised, the Group would need to increase the income tax liability by _1.386.432.

5. Interest income 2006 2005 lf

Loans to related companies 2.059.938 2.091.816 Bank balances 310 3.262 Other interest - 2.079

2.060.248 2.097.157

The Financial Statements in Euro, are presented for information purposes only. 83

The exchange rate used for all amounts is: Cí 1,00 = f1,7330 (31 December 2006) WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Notes to the Consolidated Financial Statements

6. OTHER GAINS - NET 2006 2005 lf

Investment property: Loss on sales (24.263) - Dividends income 485.251 - Other gains 203.446 -

664.434 -

7. RIGHTS FOR GRANTING OF SPACE

The amount of f2.158.981 represents income from rights received for the granting of space for the creation of commercial shops in Shacolas Emporium Park and in commercial centre "Agora Engomis".

8. GENERAL AND ADMINISTRATIVE EXPENSES

2006 2005 lf

Depreciation of property, plant and equipment (Note 14) 740.216 473.461 Directors’ remuneration 74.001 70.621 Remuneration of directors of subsidiaries 17.330 - Professional fees 695.930 511.016 Building and equipment expenses 26.313 159.507 Office expenses 47.400 41.378 Travelling expenses 5.438 37.108 Insurance 115.174 115.537 Auditors’ remuneration 88.893 56.490 Legal fees 9.532 21.857 Bank charges 97.865 90.502 Donations and subscriptions 92.527 9.272 Cyprus stock exchange expenses 46.640 45.806 Staff costs (Note 9)) 23.578 - Advertising and promotional expenses 80.330 113.013 Taxes, licences and penalties 149.788 86.652 Other expenses 109.068 204.590 Annual General Meeting expenses 2.723 9.175 Debenture costs 505.332 119.580

2.928.078 2.165.565

84 The Financial Statements in Euro, are presented for information purposes only.

The exchange rate used for all amounts is: Cí 1,00 = f1,7330 (31 December 2006) WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 9. STAFF COST

2006 2005 lf

Wages and salaries 20.419 - Social insurance costs 3.159 -

23.578 -

10. FINANCE COSTS

2006 2005 lf

Interest expense: Bank borrowings (1.902.980) (2.177.859) Bank facilities (1.118.721) (1.854.358) Interest on taxation (2.061) (165.956) Debenture loan (824.369) (824.367) Debenture with related company (Note 28 (f)) (1.158.983) - Loans from associated companies (Note 28 (d)) (437.759) (448.071) Balances with related companies (66.216) (1.064.475) Loan from related parties (Note 28 (e)) (232.153) (272.959) Other interest (161.244) (304.538)

(5.904.486) (7.112.583)

Net foreign exchange transaction gain/(loss) from financing activities 32.884 (85.129)

(5.871.602) (7.197.712)

11. TAXATION

2006 2005 lf

Current taxation: Corporation tax 79.928 149.916 Corporation tax of previous years 1.214.327 - Defence contribution 25.817 27.377 Deferred tax (Note 25) 382.541 659.812

1.702.613 837.105

The Financial Statements in Euro, are presented for information purposes only. 85

The exchange rate used for all amounts is: Cí 1,00 = f1,7330 (31 December 2006) WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Notes to the Consolidated Financial Statements

The tax on the Group’s profit before tax differs from the theoretical amount that would arise using the applicable tax rates as follows:

2006 2005 lf

Profit before tax 9.141.568 4.736.816

Tax calculated at the applicable corporation tax rate of 10% 914.157 473.681 Tax effect of expenses not deductible for tax purposes 163.746 836.310 Tax effect of allowances and income not subject to tax (589.617) (472.886) Corporation tax of previous years 1.214.327 -

Tax charge 1.702.613 837.105

From 1 January 2003 onwards the Group’s companies are subject to corporation tax on taxable profits at the rate of 10%.

Capital gains from the sale of property are subject to capital gains tax at the rate of 20%.

12. EARNINGS PER SHARE

2006 2005 lf

Profit for the year attributable to shareholders 7.438.955 3.912.917

Weighted average number of issued shares 96 075 941 95 038 959

Basic earnings per share - cents 7,8 4,2

Adjusted weighted average number of shares 114 319 585 114 315 000

Fully diluted earnings per share 6,6 3,5

86 The Financial Statements in Euro, are presented for information purposes only.

The exchange rate used for all amounts is: Cí 1,00 = f1,7330 (31 December 2006) WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 13. DIVIDEND PER SHARE

The Board of Directors decided to propose at the Annual General Meeting of the Company the payment of a dividend of 8% on the nominal value of the share, that is 2,8 cents per share. These financial statements do not include this payable dividend which will be accounted in equity as distribution of retained earnings for the year ended 31 December 2007.

The dividends declared at the General Meeting on 8 June 2005 and paid during 2005 were f2.470.783 and relate to 2003 profits.

The interim dividends declared and approved in December 2005 which relate to 2003 profits were f6.680.095. On 30 June 2006 the first instalment of the dividend declared on 31 December 2005 was paid. The second instalment will be paid on 30 June 2007.

As from 1 January 2003 dividends paid to individuals who are tax residents of Cyprus are subject to a deduction of special contribution for defence at the rate of 15%.

Offering of free shares

During 2005, following a decision of an Extraordinary General Meeting of the Company’s shareholders, 1 460 174 shares of the Company with a nominal value of 20 Cyprus cents each were offered to the Company’s Shareholders for free, in a proportion of one share for every 65 held. These shares are fully paid, registered in the Company’s name and were the result of the acquisition of treasury shares (Note 22).

14. PROPERTY, PLANT AND EQUIPMENT

Land and Plant and Buildings equipment Total ff l

At 1 January 2005 Cost or valuation 54.567.563 1.808.385 56.375.948 Accumulated depreciation (38.132) (464.670) (502.802)

Net book amount 54.529.431 1.343.715 55.873.146

Year ended 31 December 2005 Opening net book amount 54.529.431 1.343.715 55.873.146 Additions 9.735.744 66.145 9.801.889 Fair value adjustment on investment property (Note 16 and 31) (629.069) - (629.069) Depreciation charge (1.062) (472.399) (473.461)

Closing net book amount 63.635.044 937.461 64.572.505

At 31 December 2005 Cost or valuation 63.674.238 1.874.530 65.548.768 Accumulated depreciation (39.194) (937.069) (976.263)

Net book amount 63.635.044 937.461 64.572.505

The Financial Statements in Euro, are presented for information purposes only. 87

The exchange rate used for all amounts is: Cí 1,00 = f1,7330 (31 December 2006) WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Notes to the Consolidated Financial Statements

14. PROPERTY, PLANT AND EQUIPMENT

Land and Plant and buildings equipment Total ff l

Year ended 31 December 2006 Opening net book amount 63.635.044 937.461 64.572.505 Additions 21.129.842 163.814 21.293.656 Disposals - (6.055) (6.055) Depreciation charge (1.062) (739.154) (740.216)

Closing net book amount 84.763.824 356.066 85.119.890

At 31 December 2006 Cost or valuation 84.804.080 2.032.289 86.836.369 Accumulated depreciation (40.256) (1.676.223) (1.716.479)

Net book amount 84.763.824 356.066 85.119.890

Land and building include buildings under construction of the subsidiary company ITTL Trade Tourist and Leisure Park Limited with a cost of f38.898.681 (2005: f17.768.835).

The net book value of the Group’s land and buildings at 31 December includes the following:

2006 2005 lf

Revalued land 45.925.560 45.925.560 Building under construction 27.476.580 9.698.458 Capitalised interest and expenses 11.361.684 8.011.026

84.763.824 63.635.044

Interest of f3.219.725 (2005: f1.579.864) relating to borrowings made specifically for the financing of the building cost of the project, were capitalized during the year and were included in the cost of the building. The interest rate used for the capitalization is 6,5% and represents the borrowings cost for financing the project for 2006.

In the cash flow statement proceeds from sale of property, plant and equipment comprise:

2006 2005 lf

Net book amount 6.055 - Profit on sale of property, plant and equipment 3 - Proceeds from sale of property, plant and equipment 6.058 -

88 The Financial Statements in Euro, are presented for information purposes only.

The exchange rate used for all amounts is: Cí 1,00 = f1,7330 (31 December 2006) WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 If the land and buildings were stated on a historical cost basis, the amounts would be as follows: 2006 2005 lf

Cost 45.416.934 24.287.091 Accumulated depreciation - -

Net book amount 45.416.934 24.287.091

Part of the bank loans and facilities are secured on land and building of the Group for an amount of f15.999.980 (2005: f18.188.832) (Note 24).

15. INVESTMENT PROPERTY 2006 2005 lf

At the beginning of year 128.969.953 127.268.682 Additions 3.495.121 893.573 Investment property acquired through the acquisition of subsidiary company (Note 31) 641.225 - Sales (76.255) (119.580) Fair value gains 2.976.949 3.927.278

At end of year 136.006.993 128.969.953

Part of the bank loans and facilities are secured on investment property of the Group for an amount of f83.567.189 (2005: f82.787.898) (Note 24).

16. INTANGIBLE ASSET Goodwill f At 1 January 2005 Cost 191.530 Year ended 31 December 2005 Opening net book value 191.530 Deferred tax adjustment (Note 25) 490.482 Property fair value adjustment (Note 14) 484.977 Purchase of remainder shares of subsidiary company (Note 31) 492.310 Net book value 1.659.299 At 31 December 2006 Cost 1.659.299 Accumulated amortisation and impairment - Net book value 1.659.299

The Financial Statements in Euro, are presented for information purposes only. 89

The exchange rate used for all amounts is: Cí 1,00 = f1,7330 (31 December 2006) WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Notes to the Consolidated Financial Statements

16. INTANGIBLE ASSET Goodwill f Year ended 31 December 2006 Opening net book value 1.659.299 Impairment charge - Closing net book value 1.659.299 At 31 December 2006 Cost 1.659.299 Accumulated amortisation and impairment -

Net book value 1.659.299

Impairment test for goodwill

The key assumptions used for the value-in-use calculations are as follows:

ñ Percentage increase of fees for space usage: expected inflation +1% annually ñ Discount rate: 7%

The discount rate used is pre-tax and reflects specific risks relating to the cash-generating unit.

17. INVESTMENTS IN ASSOCIATES

2006 2005 lf

At the beginning of the year 27.259.340 24.465.437 Share of profit after taxation 4.988.219 3.094.672 Acquisition of associated company 20.796 - Share of surplus from revaluation of investments of associated company (Note 23) 2.421.460 58.922 Dividend paid (289.338) (359.691)

At the end of the year 34.400.477 27.259.340

90 The Financial Statements in Euro, are presented for information purposes only.

The exchange rate used for all amounts is: Cí 1,00 = f1,7330 (31 December 2006) WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 The Group’s interest in its associates, all of which are unlisted, was as follows:

Country of Profit/ % of voting incorporation Assets Liabilities Revenue (loss) rights ffff 2006 Olymbos Investments Limited Cyprus 20.494.506 403.833 2.041.958 1.825.858 50 Akinita Lakkos Mikelli Limited Cyprus 14.454.269 571.744 3.508.434 2.653.891 35 CTC – ARI Airports Limited Cyprus 3.239.958 2.711.332 8.195.574 508.470 20

4.988.219

2005 Olymbos Investments Limited Cyprus 17.717.235 1.594.802 1.903.266 1.669.462 50 Akinita Lakkos Mikelli Limited Cyprus 11.573.574 436.667 1.579.834 1.425.210 35

3.094.672

18. AVAILABLE-FOR-SALE FINANCIAL ASSETS 2006 2005 lf

At the beginning of the year 5.133.265 5.133.265 Additions 2.240.448 - At the end of the year 7.373.713 5.133.265

Available-for-sale financial assets are analysed as follows:

2006 2005 lf

Listed equity securities: Cyprus Stock Exchange 36.688 - Unlisted securities 7.337.025 5.133.265

At the end of the year 7.373.713 5.133.265

19. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

2006 2005 lf

Unlisted securities: Financial assets acquired by acquisition of subsidiary company (Note 31) 17.330.400 -

The Financial Statements in Euro, are presented for information purposes only. 91

The exchange rate used for all amounts is: Cí 1,00 = f1,7330 (31 December 2006) WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Notes to the Consolidated Financial Statements

The carrying amounts of the above financial assets are classified as follows:

2006 2005 lf

Designated at fair value through profit and loss on initial recognition 17.330.400 -

20. RECEIVABLES 2006 2005 lf Current Receivable from related companies (Note 28 (c)) 6.640.735 8.069.329 Receivable from associated company (Note 28 (c)) 131.898 3.587 Advances and prepayments 1.130.997 1.359.364 Other receivables 2.604.700 3.336.546

10.508.330 12.768.826

Non-current Receivable from related companies (Note 28 (c)) - 29.093.548 Total receivables 10.508.330 41.862.374

Maturity of non-current receivables Between 1 and 2 years - 6.336.095 Between 2 and 5 years - 22.757.453 - 29.093.548

Management believes that there is no credit risk concerning the amounts receivable from related companies, mainly Lambousa Venture Capital Limited, amounting to f4.908.311.

The concentrations of credit risk of the receivables from non-related companies are considered to be limited and the Management believes that there is no credit risk arising from their collection.

The fair value of current receivables approximates their book value at the balance sheet date.

92 The Financial Statements in Euro, are presented for information purposes only.

The exchange rate used for all amounts is: Cí 1,00 = f1,7330 (31 December 2006) WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 21. CASH AND CASH EQUIVALENTS

2006 2005 lf

Cash at bank and in hand 1.677.798 1.056.298

The effective interest rate on cash at bank was 4% (2005: 2%).

For the purposes of the cash flow statement cash and bank overdrafts include the following:

2006 2005 lf

Cash and cash equivalents 1.677.798 1.056.298

22. SHARE CAPITAL, SHARE PREMIUM AND TREASURY SHARES

Number of Share Share Treasury ordinary shares of capital Premium reserve shares Total 20 cents each fffl

At 1 January 2005 94 795 597 33.406.150 22.214.531 (625.130) 54.995.551

Purchase of own shares (56 049) - - (22.188) (22.188) Bonus distribution of treasury shares (Note 13) 1 460 174 - - 640.960 640.960

At 31 December 2005 96 199 722 33.406.150 22.214.531 (6.358) 55.614.323

At 1 January 2006 96 199 722 33.406.150 22.214.531 (6.358) 55.614.323

Purchase of own shares (247 562) - - (180.921) (180.921)

At 31 December 2006 95 952 160 33.406.150 22.214.531 (187.279) 55.433.402

The share premium reserve is non-distributable. The total authorized number of ordinary shares is 125 000 000 shares (2005: 125 000 000 shares) with a par value of 20 Cyprus cents per share. The issued share capital of the Company before the purchase of treasury shares was 96 380 211 shares. All issued shares are fully paid. During 2006 the Company acquired 247 562 of its own shares through purchases on the Cyprus Stock Exchange. The total amount paid to acquire the shares was f180.921 which has been deducted from shareholders’ equity. These shares have not been cancelled and are held as treasury shares. During 2005 the Company offered for free to its shareholders 1 460 174 treasury shares (Note 13) with a book value of f640.960.

The Financial Statements in Euro, are presented for information purposes only. 93

The exchange rate used for all amounts is: Cí 1,00 = f1,7330 (31 December 2006) WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Notes to the Consolidated Financial Statements

Share warrants (SW):

The number of SW that had been totally issued on 24 April 2003 and have not been exercised until 31 December 2006 are 18 243 644.

Every SW provides the right for the purchase of one share in the Company, with a nominal value of 20 Cyprus cents, in March 2007, at a price of 30 Cyprus cents each.

On their maturity, they were exercised at an exercise price of 30 Cyprus cents per share. For each SW one new share of Woolworth (Cyprus) Properties Public Limited with a nominal value of 20 Cyprus cents was issued. In total, 18 243 644 new shares were issued, increasing the total issued share capital of the Company at 114 623 855. From this exercise, the Company received the amount of f8,5 million. A small number of SW has been exercised by the Company.

23. FAIR VALUE RESERVES

Available- for-sale Land and Financial buildings assets Total ffl

At 1 January 2005 29.817.555 (3.986.032) 25.831.523 Revaluation surplus of associated companys’ investments (Note 17) - 58.922 58.922 Deferred tax on revaluation (Note 25) 38.898 - 38.898

At 31 December 2005/1 January 2006 29.856.453 (3.927.110) 25.929.343 Revaluation surplus of associated companys’ investments (Note 17) - 2.421.460 2.421.460 Deferred tax on revaluation (Note 25) 36.479 - 36.479

As at 31 December 2006 29.892.932 (1.505.650) 28.387.282

These reserves are available for distribution.

94 The Financial Statements in Euro, are presented for information purposes only.

The exchange rate used for all amounts is: Cí 1,00 = f1,7330 (31 December 2006) WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 24. BORROWINGS 2006 2005 lf

Current Bank facilities (1) 17.559.607 24.367.447 Bank loans 24.963.994 22.660.983 Loan from associated company (Note 28 (d)) 7.444.385 7.295.967 Loans from related parties (Note 28 (e)) 1.898.102 1.927.310 Debenture with related company (Note 28 (f)) - 19.316.386 Debenture loan (2) 11.797.476 - Other borrowings 1.297.577 1.315.800

64.961.141 76.883.893

Non-current Bank loans 55.424.654 30.069.816 Debenture loan (2) - 11.797.476 Loan from related parties (Note 28 (e) 1.521.145 3.308.538 Other borrowings 529.313 2.257.130

57.475.112 47.432.960

Total borrowings 122.436.253 124.316.853

Maturity of non-current borrowings Between 1 and 2 years 10.697.687 21.875.448 Between 2 and 5 years 24.380.658 19.634.908 Over 5 years 22.396.767 5.922.604

57.475.112 47.432.960

1. The limit of bank facilities of the Group is f27.728.640.

2. The Debenture loan of f11.797.476, was issued on 24 April 2003 and is repayable at 31 December 2007, while the Company has the right to repurchase it fully or partly in the period from 31 December 2005 until its expiration. The Debenture loan carries interest of 7% annually, payable every six months and it is guaranteed by the related company Cyprus Trading Corporation Public Limited.

The carrying amounts of current and non-current borrowings approximate their fair value.

The Financial Statements in Euro, are presented for information purposes only. 95

The exchange rate used for all amounts is: Cí 1,00 = f1,7330 (31 December 2006) WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Notes to the Consolidated Financial Statements

The weighted average effective borrowing interest rates at the balance sheet date were as follows:

2006 2005 % %

Loans and overdrafts 6,5 7 Loans from related parties 5,5 5,5 Loan from associated Company 6 6 Debenture loan 7 7 Other borrowings 5,5 5,5 Debenture with related Company 6 6

The bank loans are repayable by monthly instalments until 2012.

The bank loans and overdrafts are secured as follows:

(·) By mortgage on land and buildings for f15.999.980 (Note 14). (b) By mortgage on investment property for f83.567.189 (Note 15). (c) By guarantees from related companies for f25.555.408. (d) By assignment of insurance for fire and earthquake on the property of the Group. (e) By general assignment of rental income which will be received by the Group’s subsidiary company "Woolworth Commercial Centre Limited" from the leaseholders of the shops at the commercial centre which will be constructed in Engomi. (f) By commitment of 2 075 000 shares of Akinita Lakkos Mikelli Limited. (g) By commitment of 2 355 000 shares of the subsidiary company ITTL Trade Tourist and Leisure Park Limited.

The carrying amounts of the Group’s borrowings are analysed per currency as follows:

2006 2005 lf

Cyprus pound – functional and presentational currency 89.840.357 112.322.341 Euro 31.115.933 9.651.513 United States Dollars 1.479.964 2.342.999

122.436.254 124.316.853

96 The Financial Statements in Euro, are presented for information purposes only.

The exchange rate used for all amounts is: Cí 1,00 = f1,7330 (31 December 2006) WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 25. DEFERRED TAX LIABILITIES

The movement on the deferred tax account is as follows:

Difference between Fair value depreciation Revaluation of gains on and wear and land and investment Tax tear allowance buildings property losses Total

ffffl

At 1 January 2005 1.645.669 14.550.892 1.006.184 (940.261) 16.262.484 Deferred tax adjustment of Subsidiary Company (Notes 16 and 31) - 635.338 - - 635.338 Transfer to fair value reserves (Note 23) - (38.898) - - (38.898) Charged/(credited) to: Income statement (Note 11) 51.386 - 855.398 (246.972) 659.812

At 31 December 2005/ 1 January 2006 1.697.055 15.147.332 1.861.582 (1.187.233) 17.518.736 Transfer to fair value reserves (Note 23) - (36.479) - - (36.479) Charged/(credited) to: Income statement (Note 11) 91.260 - 429.390 (138.109) 382.541

1.788.315 15.110.853 2.290.972 (1.325.342) 17.864.798

The amounts in the balance sheet include the following:

2006 2005 lf

Deferred tax assets to be recovered after more than twelve months (1.325.342) (1.187.233) Deferred tax liabilities to be settled after more than twelve months 19.190.140 18.705.969

The Financial Statements in Euro, are presented for information purposes only. 97

The exchange rate used for all amounts is: Cí 1,00 = f1,7330 (31 December 2006) WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Notes to the Consolidated Financial Statements

26. PAYABLES AND ACCRUED EXPENSES 2006 2005 lf

Current Related companies (Note 28 (c)) 13.945.563 1.810.081 Associated companies (Note 28 (c)) 315.476 189.026 Creditors for building under construction 4.396.546 1.638.445 Other payables and accrued expenses 1.397.183 767.649 Dividend payable 1.786.858 2.014.610

21.841.626 6.419.811

Non-current Contractors’ retentions 1.639.655 986.038 Dividend payable - 2.014.612

1.639.655 3.000.650

Total payables and accrued expenses 23.481.281 9.420.461

Maturity of non-current payables and accrued expenses Between 1 and 2 years 1.639.655 986.037

The fair value of the current and non-current payables approximates their carrying value at the balance sheet date.

27. CONTINGENCIES

Capital commitments

At 31 December 2006 there were capital commitments by subsidiary companies for f20.816.739 (2005: f32.723.197). The Group’s share in the share capital of these subsidiary companies is 100%. These capital commitments, relate to the construction of "Shacolas Emporium Park" and the commercial centre "AGORA ENGOMI" and the necessary funding for the relevant expenditure has been secured.

Guarantees

The Company has provided guarantees for f26.839.590 (2005: f8.621.874) in order to secure bank facilities of related companies.

Operating lease commitments – where the Group is the lessor

The future aggregate minimum usage/rentals receivable under non-cancellable operating leases are as follows:

98 The Financial Statements in Euro, are presented for information purposes only.

The exchange rate used for all amounts is: Cí 1,00 = f1,7330 (31 December 2006) WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 2006 2005 lf

Not later than 1 year 8.697.185 4.977.423 Later than 1 year and not later than 5 years 48.737.622 20.357.659 Later than 5 years 112.357.758 46.716.275

169.792.565 72.051.357

28. Related party transactions

The following transactions were carried out on a commercial basis with related companies (companies in which Mr Nicolas K Shacolas has a significant interest) and with associated companies:

(a) Sale of goods and services 2006 2005 Nature of transaction lf

Related companies Financing and interest 2.059.938 2.091.816 Rights for use of space 4.738.078 4.569.373

6.798.016 6.661.189

(b) Purchase of goods and services

2006 2005 Nature of transaction lf

Related companies Purchase of shares 2.240.448 - Financing and interest 1.225.199 1.064.475 Consulting services 251.676 249.776 Fixed assets and goods 82.545 -

3.799.868 1.314.251

Associated companies Financing and interest 437.759 448.071

Related parties Purchase of shares - 4.962.889 Financing and interest 232.153 272.959

232.153 5.235.848

The Financial Statements in Euro, are presented for information purposes only. 99

The exchange rate used for all amounts is: Cí 1,00 = f1,7330 (31 December 2006) WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Notes to the Consolidated Financial Statements

2006 2005 lf

Amounts receivable Related companies (1) (Note 20) 6.640.735 37.162.877 Associated companies (3) (Note 20) 131.898 3.587

6.772.633 37.166.464

Amounts payable Related companies (2) (Note 26) 13.945.563 1.810.081 Associated companies (3) (Note 26) 315.476 189.026

14.261.039 1.999.107

(1) Amounts receivable from related companies include:

(a) a balance of f1.203.636 (2005: f32.075.382) on the sale of the shares of Ermes Department Stores Public Limited to Cyprus Trading Corporation Public Limited. This amount bears interest of 1% above the basic interest rate as determined by the Central Bank of Cyprus.

(b) balance of f5.437.099 (2005: f4.926.766) which bears interest of 5,5% and is repayable on demand.

(2) Amounts payable to related companies are of a financing nature, bear interest of 5,5% and are payable on demand.

(3) The balances with associated companies do not bear interest and are payable on demand.

(d) Loans from associated company

2006 2005 lf

At the beginning of the year 7.295.967 7.488.079 Interest payable (Note 10) 437.759 448.071 Payments during the year (289.341) (640.183)

At the end of the year (Note 24) 7.444.385 7.295.967

Above loans are of a financing nature, bear interest with an average rate of 6% annually and there is no agreement for a repayment date.

100 The Financial Statements in Euro, are presented for information purposes only.

The exchange rate used for all amounts is: Cí 1,00 = f1,7330 (31 December 2006) WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 (e) Loan from related parties

2006 2005 lf

At the beginning of the year 5.235.848 - Loan advanced for share acquisition of subsidiary company - 4.962.889 Loan repayable during the year (2.048.754) - Interest payable (Note 10) 232.153 272.959

At the end of the year (Note 24) 3.419.247 5.235.848

The above amount relates to the acquisition of the remaining shares of ITTL (Note 31), bears interest of 5,5% and is repayable from 2 to 4 years from the balance sheet date.

(f) Debenture with related company

2006 2005 lf

At the beginning of the year 19.316.386 - Debenture granted at the end of 2005 - 19.316.386 Interest payable (Note 10) 1.158.983 - Debenture repayment (20.475.369) -

At the end of the year (Note 24) - 19.316.386

The debenture bears interest of 6% and does not bear any guarantee. The full amount of the debenture was repaid at the end of 2006.

(g) Directors’ remuneration

The total remuneration of the Directors was as follows: 2006 2005 lf

Fees as Non-executive directors 35.181 32.928 Fees as Executive directors 38.820 37.694

74.001 70.622

The Financial Statements in Euro, are presented for information purposes only. 101

The exchange rate used for all amounts is: Cí 1,00 = f1,7330 (31 December 2006) WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Notes to the Consolidated Financial Statements

29. INVESTMENTS IN SUBSIDIARY COMPANIES

The details of subsidiary companies are as follows:

Interest Country on Name Principal activity held incorporation %

Company’s subsidiaries

F.W.W. Super Department Stores Rental of property 100 Cyprus Limited in Larnaca

Woolworth Commercial Owner of land in Engomi area 100 Cyprus Centre Limited in Nicosia

ZAKO Limited Rental of property in 100 Cyprus Limassol, Larnaca, Paphos

π∆∆L Trade Tourist and Construction of Emporium Park 100 Cyprus Leisure Park Limited on freehold land in Athalassa area, Nicosia.

Christis Farms Limited Investment property 100 Cyprus

N.K. Shacolas (Merchants) Limited Investment property 100 Cyprus

Subsidiaries of ∑∞∫√ Limited

Zako Estate Limited Rental of property in Ledras 100 Cyprus Street, Nicosia

The Cyprus Supply Company Limited Dormant 100 Cyprus

Elermi General Trading Limited Dormant 100 Cyprus

Apex Limited Exploitation of rights of use of space 100 Cyprus of the Ledra Arcade Building in Ledras Street, Nicosia and owner of property in Latsia, and management of own parking space in Ledras Street

102 The Financial Statements in Euro, are presented for information purposes only.

The exchange rate used for all amounts is: Cí 1,00 = f1,7330 (31 December 2006) WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 30. PROPERTY PURCHASE RIGHT The Company has the right anytime it so wishes until 19 June 2007 to request from the owner of the Shacolas Tower, in Ledras Street Nicosia, where the multistore Debenhams Ledra operates, to purchase the property at cost. From 20 June 2007, the owner has the right to request from the Company to purchase the property at the same price.

The Company also has the right anytime it so wishes during the leasing period of the property in Athalassas area where the Super Home Centre (D.I.Y.) megastore operates, that is until 2007, to request from the owner to purchase the property at a predetermined price.

The Board of Directors at its meeting on 30 January 2007 has approved the exercise of the above purchase rights. It is calculated that from the exercise of these rights there will be profit from the difference of the exercise price (including acquisition expenses) and the assessed value of the building, of more than f5,2 millions. The acquisition cost of the above property amounting to f16.715.914 will be fully financed using bank borrowings.

31. ACQUISITION OF SUBSIDIARY COMPANIES

¡.∫. Shacolas Christis Farms (Merchants) Limited Limited ff

Investments on property (Note 15) 641.225 - Financial assets at fair value through profit and loss (Note 19) - 17.330.400 Cash and cash equivalents - 667 Trade and other payables - (667)

Fair value of net assets 641.225 17.330.400 Goodwill - -

Total acquisition price 641.225 17.330.400

2. Acquisition of ITTL Trade Tourist and Leisure Park Limited in 2005

The Financial Statements in Euro, are presented for information purposes only. 103

The exchange rate used for all amounts is: Cí 1,00 = f1,7330 (31 December 2006) WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53 Notes to the Consolidated Financial Statements

As a result of the above acquisition, goodwill of f492.310 (Note 16) arose, calculated as follows:

2005 f

Minority interest at beginning of year 8.161.062 Property fair value adjustment (Note 14) (144.092) Deferred tax adjustment (Note 25) (144.856)

Minority interest as adjusted (1) 7.872.114 Share of loss for the year (13.206)

Minority interest at the date of acquisition 7.858.908 Acquisition price (8.351.218)

Goodwill (492.310)

32. MATERIAL DIFFERENCES BETWEEN THE INDICATIVE RESULTS ANNOUNCED AND THE AUDITED CONSOLIDATED RESULTS FOR THE YEAR

The audited consolidated financial results of the Group do not present any material differences between the indicative results announced and the audited consolidated results for the year.

33. CONTINGENCIES

On 31 December 2006 there was a dispute with the Cyprus Tax Authorities relating to assessments issued after the balance sheet date for a subsidiary company of the Group, for the years 1989 to 2002, amounting to f3.118.451 including interest and for which a provision of f1.733.040 was included in the accounts.

34. EVENTS AFTER THE BALANCE SHEET DATE

There were no post balance sheet events, which have a material bearing on the understanding of the financial statements except as stated in Notes 22 and 30 of the financial statements.

Independent Auditors’ Report on pages 37 and 38.

104 The Financial Statements in Euro, are presented for information purposes only. The exchange rate used for all amounts is: Cí 1,00 = f1,7330 (31 December 2006) WorldReginfo - 452cafe9-3d92-4272-af61-cdf7f9147e53