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Gr. Sarantis S.A.

Annual / Quarterly Financial Statement Sep 25, 2015

2712_10-k_2015-09-25_1ba1dc66-b88b-43f7-aaf4-28ad0b379e34.pdf

Annual / Quarterly Financial Statement

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GR. SARANTIS A.B.E.E.

FINANCIAL STATEMENTS FOR THE PERIOD 01/01/2005 UNTIL 31/12/2005 ACCORDING TO THE INTERNATIONAL FINANCIAL REPORTING STANDARDS

AUDITORS' REPORT

To the Shareholders of << GR.SARANTIS S.A.>>

We have audited the accompanying financial statements as well as the consolidated financial statements of 'GR.SARANTIS S.A.', as of and for the year ended 31 December 2005. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the Greek Auditing Standards, which are based on the International Standards on Auditing. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, evaluating the overall financial statement presentation as well as assessing the consistency of the Board of Directors' report with the aforementioned financial statements. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the aforementioned financial statements give a true and fair view of the financial position of the Company and that of the Group (of which this Company is the holding company), as of 31 December 2005, and of the results of its operations and those of the Group and their cash flows and changes in shareholders' equity for the year then ended in accordance with the International Financial Reporting Standards that have been adopted by the European Union and the Board of Directors' Report is consistent with the aforementioned financial statements.

BAKER TILLY HELLAS Certified Public Accountants-Consultants A.E. 76, 3rd Septembriou Str. 104 33 Athens Greece SOEL Rea.No: E148

Athens, 23rd February 2006 The Certified Public Accountant

John V. Kalogeropoulos SOEL. Reg. No: 10741

PROFIT & LOSS ACCOUNTS (amounts in Euros)

GROUP COMPANY
$01/01 -$
31/12/2005
$01/01 -$
31/12/2004
$01/10 -$
31/12/2005
$01/10$ .
31/12/2004
$01/01 -$
31/12/2005
$01/01 -$
31/12/2004
$01/10 -$
31/12/2005
$01/10 -$
31/12/2004
Tumover 208,661,993.31 187.630.242.50 63,179,055.68 56,570,200.54 111,007,882.68 106,892,397.05 31.135.173.78 28,765,263.35
Cost of sales 108.568.589.56 101.551.466.60 33.441.357.56 30.654.055.03 57.980.880.12 55.758.413.45 17.456.517.55 15.036.754.69
Gross profit 100.093.403.75 86.078.775.90 29,737.698.12 25.916.145.51 53.027.002.56 51.133.983.60 13.678.656.23 13,728,508.66
Other income -
expenses (net)
11.920.370.24 10.667.466.88 4.368.931.95 3.905.062.88 2.389.089.60 1.569.631.46 693.635.65 45.550.59
Distribution costs
Administrative
71,400.632.34 61.120.622.02 20,940,025.18 17.866.271.51 38.306.178.25 36,964,934.77 10,109,072.94 9,944,315.67
expenses 12,463,560.99 11.078.395.01 3.952.240.39 3.580.636.22 6.073.195.01 6.745.669.48 1.660.412.89 2,277,167.88
Operating profit 28,149,580.66 24, 547, 225. 75 9,214,364.50 8,374,300.66 11,036,718.90 8,993,010.81 2,602,806.05 1,552,575.70
Finance cost
(net)
$-2,866,399.88$ $-2,594,092,40$ $-857,950.06$ -252.934.91 $-1,615,620.47$ $-1,190,069.36$ $-315.723.37$ $-608.237.72$
Net profit before
taxes
25,283,180.78 21,953,133.35 8.356.414.44 8.121.365.75 9.421.098.43 7.802.941.45 2,287,082.68 944.337.98
Income tax 5.419.586.82 4.389.181.18 1,760,291.84 1.657.730.58 1.056.292.44 726.863.65 $-68.807.76$ 125,178.29
Deferred
Taxes
698,886.15 247,114.22 80,853.31 52,689.44 666,324.93 218.070.29 40,129.87 59,605.40
Net profit for the
fiscal period
19,164,707.81 17.316.837.95 6.515.269.29 6.410.945.73 7,698,481.06 6.858.007.51 2.315.760.57 759.554.29
Allocated to: 0.00 0.00 0.00 0.00
Shareholders of
the parent
19,330,092.34 16.966.281.78 6,882,810.04 6.290.027.85 7,698,481.06 6,858,007.51 2.315.760.57 759.554.29
Minority interest -165,384.53 350,556.17 -367,540.75 120,917.88 0.00 0.00 0.00 0.00
Earnings per
share which
correspond to
the parent's
shareholders for
the fiscal period
0.51 0.44 0.18 0.16 0.20 0.18 0.06 0.02
Proposed
Dividend per
share
0.13 0.10

BALANCE SHEETS (amounts in Euros)

GROUP COMPANY
31/12/2005 31/12/2004 31/12/2005 31/12/2004
ASSETS
Non-current assets 70,012,652.42 64,158,315.28 90,999,580.70 81,040,339.40
Tangible fixed assets 44,788,257.74 44,393,678.59 38,066,277.03 38,544,854.00
Intangible assets 0.00 26,632.97 0.00 0.00
Deferred tax asset 3,442,212.79 6,024,941.69 3,324,532.83 5,852,241.49
Investments in associates 21,406,994.63 13,350,715.13 49,361,268.33 36,374,966.80
Other long-term assets 375,187.26 362,346.90 247,502.51 268,277.11
Current assets 147,546,387.18 128,971,689.64 93,882,010.43 88,654,495.83
Inventories 40,036,691.78 33,269,254.95 17,841,350.05 17,135,800.87
Trade and other receivables 73,424,196.88 64,496,248.46 48,203,450.40 46,448,096.65
Other receivables 6,828,142.79 6,969,033.99 5,983,963.65 5,235,429.30
Cash & cash equivalents 26,418,780.88 23,809,104.78 21,147,459.11 19,640,370.78
Prepayments and accrued income 838,574.85 428,047.46 705,787.22 194,798.23
Total Assets 217,559,039.60 193,130,004.92 184,881,591.13 169,694,835.23
EQUITY of the Parent:
Share capital 57,220,410.00 57,220,410.00 57,220,410.00 57,220,410.00
Share premium account 38,750,355.98 38,750,355.98 38,750,355.98 38,750,355.98
Reserves $-826,736.28$ 380,987.13 $-826,736.28$ 380, 987. 13
Profit (losses) carried forward $-34,214,587.90$ $-61,705,812.39$ $-46,003,159.47$ $-66,170,879.88$
Minority interest: 1,848,607.24 1,991,143.84 0.00 0.00
Total Equity 62,778,049.04 36,637,084.56 49,140,870.23 30,180,873.23
LIABILITIES
Long-term liabilities 98,317,624.19 103,774,392.84 105,169,867.03 106,535,102.76
Loans 92,800,000.00 96,000,000.00 92,800,000.00 96,000,000.00
Deferred tax liability 23,360.95 787,084.68 0.00 753,290.45
Provisions for post employment
employee benefits
2,384,931.84 2,531,160.00 2,239,782.19 2,334,502.00
Provisions and other long-term
lia bilities
3,109,331.40 4,456,148.16 10,130,084.84 7,447,310.31
Short-term liabilities 56,463,366.37 52,718,527.52 30,570,853.87 32,978,859.24
Suppliers and other liabilities 38,289,812.11 33,242,349.54 25,012,793.12 24,731,761.58
Other liabilities 4,480,091.54 8,638,130.20 2,672,488.19 6,010,548.92
Income taxes and other taxes
payable
3,297,113.99 2,699,999.13 2,044,749.80 1,267,086.10
Loans 7,814,499.80 6,832,881.93 0.00 180.15
Transitory Liability Accounts
Total Equity & Liabilities
2,581,848.93
217,559,039.60
1,305,166.72
193,130,004.92
840,822.76
184,881,591.13
969,282.49
169,694,835.23
CASH FLOW STATEMENT
(amounts are in euros) GROUP COMPANY
01/01
31/12/2005
$01/01 -$
31/12/2004
$01/01 -$
31/12/2005
$01/01 -$
31/12/2004
CASH FLOWS FROM OPERATING ACTIVITIES
Profits before tax 25.283.180,78 21.953.133,35 9.421.098,43 7.802.941,45
Adjustments for:
Depreciation of fixed assets 3.605.366,82 3.530.778,40 2.194.111,37 2.211.653,26
Provisions $-1.483.638,66$ $-290.891,82$ 0,00 0,00
Foreign Exchange differences 54.648,62 $-767.316,74$ 683.359,34 -461.492,58
Results(income. expenses. profits and losses) from
investing activities
$-11.871.432.16$ 11.556.764,83 $-2.737.766,65$ 6.299.132,54
Interest expense and related expenses 4.870.889,55 5.363.280,40 3 436 036,64 4.464.205,68
Plus/minus adjustments for changes in working capital
accounts or accounts related to operating activities:
Decrease / (increase) in inventories $-6.767.436,83$ $-1.536.981,41$ $-705.549.18$ $-8.628.939,46$
Decrease / (increase) in receivables $-6.614.855,71$ $-1.737.247,96$ $-487.168,43$ $-368.303,93$
(Decrease) / increase in liabilities (other than to banks) 5.488.469.14 2.663.752,74 661.819,58 1.340.403,63
Less:
Interest and related expenses paid $-4.870.889,55$ $-5.363.280,40$ -3.436.036,64 -4 464 205,68
Tax paid $-5.521.358,11$ $-6.832.481,69$ 1.389.483,85 $-1.936.837.69$
NET INFLOWS / (OUTFLOWS) FROM OPERATING
ACTIVITIES (a)
2.172.943,89 5.425.980,04 7.640.420,61 6.258.557,22
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions of subsidiaries. associates. joint ventures and
other investments 9.610.453,21 12.234.860,75 $-1.100.000,00$ 0,00
Purchase of tangible and intangible fixed assets $-3.568.925,00$ $-4.080.679,21$ $-1.823.053,62$ $-3.079.213,21$
Proceeds from sale of tangible and intangible assets 0,00 0,00 67.014,96 29.101,33
Interest received 396.944,00 185.958.09 75.122,64 78.861,17
Dividends received 651.668,42 653.860,13 0,00 1.567.888,24
NET INFLOWS / (OUTFLOWS) FROM INVESTING
ACIIVIIIES (D)
7.090.140.63 8.993.999.76 2.780.916.02 $-1.403.362.47$
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of share capital 0,00 0,00 0,00 603.196,30
Proceeds from loans granted / assumed 981.617,87 64.631.000,00 837.998,86 69.006.110,44
Payment of loans $-3.200.000,00$ $-80.398.587,13$ $-180,15$ -73.817.296,98
Payment of finance lease liabilities (payments of principal) 0,00 0,00 $-132.025,26$ $-147$ 157,56
Dividends paid 4 150 141,63 $-1.567.481,13$ 3.822.935,25 $-1.160.656,92$
TOTAL INFLOWS / (OUTFLOWS) FROM FINANCING
ACTIVITIES (c)
6.368.523,76 17.335.068,26 3.117.141,80 $-5.515.804,72$
Increase / (decrease) in cash and cash equivalents (a) $+$ (b)
+ (c)
2.894.560,76 $-2.915.088,46$ 1.742.362,79 $-660.609,97$
Cash and cash equivalents at the start of the period 7.005.034,80 9.920.123,26 2.893.094.00 3.553.703,97
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD 9.899.595,56 7.005.034,80 4.635.456,79 2.893.094,00
GROUP COMPANY
$01/01 -$
31/12/2005
$01/01 -$
31/12/2004
$01/01 -$
31/12/2005
$01/01 -$
31/12/2004
Equity at the beginning of the period
(01/01/2005 and 01/01/2004 respectively)
36.637.084,56 25.494.415,39 30.180.873,23 63.235.715,94
Profits/(losses) for the period after tax 19 164 707.81 17 316 837.95 7.698.481.06 6.858.007.51
55.801.792.37 42.811.253.34 37.879.354,29 70.093.723,45
Increase/decrease in share capital due to
absorption
603.196.30 603.196.30
Decrease in share premium account due to
absorption of companies in accordance with
article 29 L, 3091/2002
-36 744 675.68 -36.744.675.68
Revaluation of Assets 954.712,46 954.712,46
Net income recorded directly in shareholders'
funds
6.976.256,67 29.012.598,14 11.261.515,94 -4.726.083,30
Purchase of own shares 0,00 0,00 0,00 0,00
Equity at the end of the period (31/12/2005 and
31/12/2004 respectively)
62.778.049,04 36.637.084.56 49.140.870.23 30.180.873.23

A. General Information about the Company and the Group

The company "GR. SARANTIS SA, INDUSTRIAL AND COMMERCIAL COMPANY OF COSMETICS - CLOTHING - HOUSEHOLD AND PHARMACEUTICAL PRODUCTS" under the trade name "GR. SARANTIS S.A." (hereinafter the "Company" or the "Parent") and its subsidiaries (hereinafter the "Group") operate in the field of production, trade and distribution of cosmetics, household and pharmaceutical goods. The Company and Group's domicile is in the Amarrousio Municipality, 26 Amarrousiou - Chalandriou Street, while the Group employs 1,510 individuals and the parent 650.

The company's shares are listed in the main market of the Athens Stock Exchange.

The financial statements of the Company and the Group for the period ended on December 31st 2005, were approved for disclosure by decision of the Board of Directors on 30/01/2006.

The subsidiary companies that have been included in the attached consolidated financial statements of the Group are described in note B (ii).

B. Main accounting principles followed by the Group

The main accounting principles adopted during the preparation of the consolidated financial statements, are analyzed as follows:

i. Basis for the preparation of the financial statements

The interim financial statements, which are in accordance with IAS 34, have been prepared according to the historic cost principle, except for the valuation of specific items in the assets and liabilities accounts, which was made at current values, and based on the going concern principle for the Group.

The statements have been compiled according to the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Council, which have been adopted by the European Union, and the Interpretations supplied by the Regular Interpretation Committee.

The Company will compile its financial statements according to IFRS for the first time for the fiscal year ending 31st of December 2005. No standards have been applied before their effective date.

These consolidated statements are based on the financial statements prepared by the Group according to Greek Commercial Law, after making the necessary out-of-books adjustments to bring them in line with the IFRS.

The preparation of financial statements according to generally accepted accounting principles requires use of estimations and assumptions that affect the balances of asset and liability accounts. It also requires knowledge of the contingent assets and liabilities on the date of compilation of the financial statements as well as the presented income and expenses for the financial years under examination. Although these estimations are based on the (Group) Management's best knowledge, the actual results may eventually differ.

ii. Consolidation

(1) Basis of Consolidation

The consolidated financial statements consist of the financial statements of the Parent and its subsidiaries. The following table presents the subsidiaries included in the consolidation, the consolidation method along with the relevant participation shares, and the activity of each subsidiary as well as their tax un-audited fiscal years.

STRUCTURE
COMPANY DOMICILE DIRECT
PARTICIPATI
ON SHARE
INDIRECT
PARTICIPATI
ON SHARE
TOTAL UN-AUDITED
TAX YEARS
FULL CONSOLIDATION METHOD
K. THEODORIDIS SA GREECE 50.00% $0.00\%$ 50.00% 2004-2005
OTO TOP EOOD BULGARIA $0.00\%$ 25 50% 25 50% 1999-2005
ST. PAROS SA GREECE 86.60% $0.00\%$ 86 60% 2002-2005
GRECOVET L.T.D. GREECE 1.65% 85 16% 86.81% 2003-2005
VENTURES SA GREECE 70.00% $0.00\%$ 70 00% 2003-2005
GR SARANTIS CYPRUS LIMITED CYPRUS 100.00% $0.00\%$ 100.00%
BRIARDALE SERVICES S.A ISLE OF MAN $0.00\%$ 100.00% 100.00%
SARANTIS BULGARIA L.T.D BULGARIA $0.00\%$ 100.00% 100.00% 1999-2005
SARANTIS ROMANIA S.A ROMANIA $0.00\%$ 100.00% 100.00% 2005
SARANTIS DISTRIBUTION S.C ROMANIA $0.00\%$ 100.00% 100.00% 2005
SARANTIS L.T.D BELGRADE SERBIA $0.00\%$ 100.00% 100.00%
SARANTIS SKOPJE L.T.D SKOPJE $0.00\%$ 100.00% 100.00%
SARANTIS POLSKA S.A POLAND $0.00\%$ 99.40% 99 40% 2005
LINCO L.T.D POLAND $0.00\%$ 99 40% 99 40% 2005
NET WEST POLAND S.A POLAND $0.00\%$ 99 40% 99.40% 2005
SARANTIS CZECH REPUBLIC sro CZECH
REPUBLIC
$0.00\%$ 99 40% 99.40% 2005
VENUS S.A LUXEMBOURG $0.00\%$ 100.00% 100.00%
ZETA AE GREECE $0.00\%$ 100.00% 100.00% 2005
ZETA FIN LTD CYPRUS $0.00\%$ 100.00% 100.00% 2002-2005
WALDECK LIMITED CYPRUS $0.00\%$ 100,00% 100.00%
ZETA COSMETICS LTD 0,00% 100,00% 100,00% 2002-2005 0,00%
SARANTIS ANADOL S.A TURKEY 59,98% 0,00% 59,98%
SARANTIS UKRAINE S.A UKRAINE 59 98% $0.00\%$ 59.98%
EQUITY METHOD
K.P. MARINOPOULOS GREECE 49.00% 49.00% 2003-2005
ELCA COSMETICS LTD CYPRUS $0.00\%$ 49.00% 49.00% 2001-2005
ESTEE LAUDER HELLAS GREECE 0.00% 49.00% 49.00% 2001-2005
ESTEE LAUDER BULGARIA BULGARIA 0.00% 49.00% 49 00% 2001-2005
IM COSMETICS SA ROMANIA 0.00% 49.00% 49.00% 2001-2005

(2) Subsidiary companies

Subsidiary companies are those on which the parent has control. The existence of possible exercisable voting rights during the compilation of the financial statements is taken into account in order to establish whether the parent controls the subsidiaries. Subsidiaries are fully consolidated (full consolidation) apart from three: FRANGOS S.A., P. MARINOPOULOS S.A. and ELCA COSMETICS L.T.D. along with its subsidiaries ESTEE LAUDER HELLAS S.A. and ESTEE LAUDER BULGARIA IM COSMETICS S.A, which are consolidated using the equity method.

The accounting method used for the consolidation is the acquisition method. The acquisition cost of a subsidiary is the fair value of assets provided, participating securities issued and liabilities assumed at the acquisition date, plus any cost directly related to the transaction. The individual assets, liabilities and contingent liabilities that comprise a business combination, are valued upon acquisition at fair value irrespective of the participation percentage. The cost in excess of the fair value of acquired items, is booked as goodwill. If the total acquisition cost is less than the fair value of the acquired items, then the difference is directly recognized in the results.

Intra-company transactions - Intra-company balances and unrealized profit from transactions between group companies are eliminated. Unrealized losses are eliminated as long as there is no indication of impairment for the transferred assets.

iii) Valuation of participations - securities

a) The company values its participations in subsidiaries and associates at acquisition cost less any impairment.

b) Investments in securities and shares

All financial assets are initially valued at their acquisition cost.

In accordance with IAS 39 financial assets, with the exception of investments in subsidiaries, associated companies and joint ventures, are classified in one of the following categories (a) available for sale, (b) financial assets valued at fair value through the income statement, (c) held to maturity, (d) loans and receivables.

The Group classifies investments in shares in one of the first two categories.

The subsequent valuation of financial assets depends on their classification. Investments available for sale and financial assets at fair value through the income statement are valued at fair value. Profits or losses from the valuation of investments available for sale (with the exception of impairment losses) are recorded directly in shareholders' funds in a special reserve account until they are sold, at which point the cumulative profits/losses that have been recoded in the shareholders' funds are recognized in the profit and loss account. Profits or losses from the valuation of financial assets valued at fair value through the income statement are recognized in the profit and loss account.

Investments held to maturity are valued at acquisition cost less accumulated depreciation using the effective interest rate method and the relevant discounting results are recognized in the profit and loss account through the process of depreciation or upon disposal.

iv) Foreign Currency Conversion

(1) Measurement and reporting currency

The measurement and reporting currency of the Group as of January 1st, 2002 is the Euro, as a result the consolidated financial statements are presented in euros $(\epsilon)$ , the valuation currency of the parent company.

(2) Transactions and balances

Transactions in foreign currency are converted into euros using the rates in effect at the date of the transaction. Assets and liabilities in foreign currency at the date of compilation of the financial statements are adjusted so as to reflect the foreign exchange rates at the date of compilation. Profits and losses resulting from such transactions (and from the conversion of assets and liabilities denominated in foreign currency) are recognized in the income statement except when they are classified as equity as a recognised cash flow hedge.

(3) Group companies

The conversion of the financial statements of Group companies which have a different operating currency from the parent is performed as follows:

  • The assets and liabilities are converted using the rates in effect at the balance sheet date.
  • Equity is converted using the rates in effect at the date it emerged.
  • Income and expenses are converted using the period average rates.

The resulting foreign currency differences are booked in an equity reserve and are transferred to the income statement upon sale of these companies.

The goodwill and fair value adjustments that result from the acquisition of economic units abroad are converted using the balance sheet date rates.

v) Tangible fixed assets

Real estate property (land, buildings) is valued at fair value, at least every three years by independent surveyors. Increases in the book value of the real estate property, which arise from fair value adjustments, are registered in an equity reserve. Decreases in the book value reduce the reserve, if such a reserve had been previously created for the same asset. Decreases in value beyond the reserve, as well as decreases in the book value of assets for which there is no revaluation reserve, are recorded in the income statement as an expense.

Land is not depreciated. Depreciations of other tangible fixed assets are calculated using the straight-line method throughout their useful economic life, which is as follows:

Buildings $25-60$ years
Machinery 8-10 years
Transportation means 5-9 years
Fixtures and fittings 3-5 years

Other tangible fixed assets are valued at their acquisition cost less depreciation. Acquisition costs include all directly attributable expenditures for the acquisition of the items. The costs may also include profits or losses from the hedging of foreign exchange risk during the acquisition of these assets, which had been recorded in an equity reserve.

Repairs and maintenance are recognized as an expense in the fiscal year they are incurred. Significant subsequent additions and improvements are capitalized in the cost of the relevant fixed assets provided that they increase the useful economic life or/and the productive capacity of the fixed asset or they decrease its operating cost.

The residual values and the useful economic lives of tangible fixed assets are subject to revision at each annual balance sheet.

When the book values of tangible fixed assets exceed their recoverable amount, the differences (impairment) are recorded in the income statement as an expense.

Upon withdrawal or disposal of an asset, the relevant cost and accumulated depreciation is written off the respective accounts at the time of their withdrawal or disposal, and the relevant profits or losses are recorded in the income statement. When the withdrawn or disposed tangible assets have been valued at their fair value, the revaluation reserve -if any- which has been recorded in equity is transferred to the profits carried forward account at the time of the withdrawal or disposal.

(Relevant tables in pages 28-32)

vi) Impairment of assets

Tangible assets are examined for potential impairment loss, whenever facts or changes in circumstances indicate that their book value may not be recoverable. Whenever the book value of an asset exceeds its recoverable amount, the respective impairment loss is recorded in the income statement. The recoverable amount of an asset is the largest amount between the estimated net sales value and its value in use. Net sales value is the plausible revenue from the sale of an asset in the context of an arm's length transaction, in which all parties engage willingly and in full knowledge, after the deduction of every additional direct cost required for the sale of the asset. On the other hand, value in use is the present value of estimated future cash flows expected to occur from the continued use of the asset and from its disposal at the end of its expected useful economic life. If a company is not in a position to estimate the recoverable amount of an asset, for which there is indication of impairment, then it defines the recoverable amount of the cash-flow generating unit to which the asset belongs.

Reversal of the loss from the impairment of an asset that was recorded in a previous year is performed only when there are sufficient indications that such impairment no longer pertains or is reduced. In these cases the reversing entry is recognised as income.

The Management consider that none of the Company's fixed assets have suffered impairment and as a result no calculation of the assets' recoverable amounts was made.

vii) Inventories

Inventories are valued at the lower of the acquisition cost and the net realizable value. The cost is determined by the average weighted cost method. The cost for finished products and work-in-progress inventories includes the cost of materials, direct labor costs and the proportion of the general common production cost. Finance costs are not included in acquisition cost of the inventories. The net realizable value

is estimated according to the current sale prices of the inventories in the context of ordinary activity, after the deduction of possible sale expenses whenever required.

(Relevant table in page 16)

viii) Trade receivables

Trade receivables are initially recorded at their fair value and subsequently valued at unamortised cost using the effective interest rate, after deducting impairment losses. Impairment losses (losses from doubtful receivables) are recognized when there is objective evidence that the Group is not in a position to collect the amounts owed in accordance with the contractual clauses. The amount of impairment loss is the difference between the book value of the receivables and the present value of the expected future cash flows, discounted using the effective interest rate. The amount of the loss is recorded as an expense in the profit and loss account.

(Relevant tables in pages 16-17)

ix) Cash and cash equivalents

Cash and cash equivalents include cash, sight deposits and short term - up to 3 months - investments with high liquidity and low risk.

(Relevant table in page 18)

x) Share capital

The common registered shares are classified as equity.

(Relevant table in page 27)

xi) Loans

Loans are recorded at their fair value. Subsequently, they are valued at unamortised cost using the effective interest rate.

The Management of the Group considers that the interest rates payable in relation to the loans assumed are equivalent to the current fair market rates, and therefore no conditions arise for the adjustment of the value of these liabilities.

Any difference between the amount granted (excluding the acquisition cost) and the repayment value is recognized in the profit and loss account during the lending period.

(Relevant tables in pages 19-20)

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$(b)$ Rendering of services

Revenue from the rendering of services is accounted for based on the stage of completion of the service rendered in relation with the estimated total cost.

Revenue from interest $(c)$

Interest revenue is recognized on a time proportion basis using the effective yield.

$(d)$ Dividends

Dividends are accounted for as revenue when the right to receive payment has been established.

xvii) Analysis of selected asset and liability items

1. Inventories

INVENTORIES
A. Parent company 31/12/2005 31/12/2004
Merchandise 7,662,859.03 6,807,615.47
Products 5,682,628.50 3,458,097.08
Raw materials 4,495,862.52 6,870,088.32
17,841,350.05 17,135,800.87
B. Group 31/12/2005 31/12/2004
Merchandise 29,514,655.92 22,741,533.68
Products 5,833,205.13 3,536,889.90
Raw materials 4,688,830.73 6,990,831.37
40,036,691.78 33,269,254.95

2. Receivables

Group Company
31/12/2005 31/12/2004 31/12/2005 31/12/2004
Trade receivables 55,763,243.34 46,696,757.63 33,753,849.18 30,812,321.58
Post-dated cheques 16,225,830.30 16,719,748.30 13,904,720.55 15,039,381.16
Prepayments 360,791.09 356,294.05 312,552.85 225,867.48
Other debtors 6,031,711.58 5,449,900.91 5, 115, 166. 21 3,774,391.61
Prepaid expenses 436,270.39 193,939.96 544,761.85 39,728.90
TRADE AND OTHER RECEIVABLES
A. Parent company 31/12/2005 31/12/2004
Trade receivables 33.753.849,18 30.812.321,58
Less provisions 0,00 0,00
Net trade receivables 33.753.849,18 30.812.321,58
Cheques and bills of exchange receivable 14.449.601,22 15 635 775,07
Other debtors 5.983.963,65 5.235.429,30
Accrued income 95.527,46 140.816,41
Prepaid expenses 544.761,85 39.728,90
Other transitory accounts 65.497,91 14.252,92
54.893.201,27 51.878.324,18
B. Group
Trade receivables
Less provisions 56.491.226,25 46.726.179,23
Net trade receivables 727.982,91 29.421,60
Cheques and bills of exchange receivable 55.763.243,34 46.696.757,63
Other debtors 17.660.953,54 17.799.490,83
Accrued income 6.828.142,79 6.969.033,99
Prepaid expenses 136.689,55 123.834,09
Other transitory accounts 436.270,39 193,939,96
A. Parent company 265.614,91 110.273,41
81.090.914,52 71.893.329,91

All receivables are short-term hence discounting is not required at the Balance Sheet date.

There is no credit risk concentration with respect to trade receivables given that the Group has a large number of customers and the risk is dispersed.

3. Cash & cash equivalents

Cash & cash equivalents relate to cash in hand at the Group and the Company and bank deposits available on demand.

CASH & CASH EQUIVALENTS
31/12/2005 31/12/2004
A. Parent company
Cash 26,593.86 65,700.83
Bank deposits 4,608,862.93 2,827,393.17
Securities 16,512,002.32 16,747,276.78
21,147,459.11 19,640,370.78
B. Group
Cash 132,665.76 172,331.10
Bank deposits 9,766,929.80 6,832,703.70
Securities 16,519,185.32 16,804,069.98
26,418,780.88 23,809,104.78

4. Trade and other creditors

Group Company
31/12/2005 31/12/2004 31/12/2005 31/12/2004
Trade creditors 30,626,368.22 27,902,150.20 17,727,815.93 19,842,573.41
Social security 1,292,868.91 1,326,110.44 780,634.70 754,652.36
Accrued expenses 1,805,456.37 432,663.99 286,133.68 275,337.85
Other creditors 852,953.84 1,292,929.19 376,913.10 752,895.47
TRADE AND OTHER CREDITORS
31/12/2005 31/12/2004
A. Parent company
Trade creditors 17,727,815.93 19,842,573.41
Cheques payable 7,284,977.19 4,889,188.17
Social security funds 780,634.70 754,652.36
Accrued expenses 286,133.68 275,337.85
Deferred income 554,689.08 692,701.04
Other transitory accounts 0.00 1,243.60
Other creditors 1,891,853.49 5,255,896.56
28,526,104.07 31,711,592.99
B. Group
Trade creditors 30,626,368.22 27,902,150.20
Cheques payable 7,663,443.89 5,340,199.34
Social security funds 1,292,868.91 1,326,110.44
Accrued expenses 1,805,456.37 432,663.99
Deferred income 712,243.56 855,829.38
Other transitory accounts 64,149.00 16,673.35
Other creditors 3,187,222.63 7,312,019.76
45,351,752.58 43,185,646.46

5. Loans

Group Company
Long-term loans 31/12/2005 31/12/2004 31/12/2005 31/12/2004
Debentures 92,800,000.00 96,000,000.00 92,800,000.00 96,000,000.00
Short-term loans
Bank loans 7,814,499.80 6,832,881.93 0.00 180.15
Total loans 100,614,499.80 102,832,881.93 92,800,000.00 96,000,180.15
ANALYSIS OF DEBENTURES
BANK MATURITY AMOUNT
NBG SERIES A' 30/03/2007 13,500,000
ALPHA BANK SERIES A' 30/03/2007 10,000,000
ALPHA BANK SERIES B' 30/04/2007 9,000,000
HSBC 30/03/2007 5,500,000
BANK OF ATTICA 08/07/2007 3,500,000
PIRAEUS BANK 30/04/2007 5,500,000
LAIKI BANK 30/04/2007 4,500,000
ABN AMRO 30/04/2007 4,500,000
EFG EUROBANK 30/04/2007 21,500,000
EMPORIKI 30/07/2008 15,300,000
TOTAL 92,800,000

6. Income tax

Income tax is analysed as follows:

Group Company
2005 2004 2005 2004
Income tax for the period 5,419,586.82 4,389,181.18 1,056,292.44 726,863.65
Deferred tax 698,886.15 247,114.22 666,324.93 218,070.29
TOTAL 6,118,472.97 4,636,295.40 1,722,617.37 944,933.94

The amount for tax has been calculated using the actual tax rates of the previous years. The Management of the Group consistently follows a policy aiming to minimize the tax burden based on the incentives provided by tax laws.

Non tax deductible expenses mainly comprise provisions which are adjusted by the Management during the calculation of income tax.

The deferred tax accounts are analyzed as follows:

Group Company
2005 2004 2004
Deferred tax assets 3,442,212.79 6,024,941.69 3,324,532.83 5,852,241.49
Deferred tax liabilities 23,360.95 787,084.68 0.00 753,290.45

DEFERRED TAX

A. PARENT COMPANY

DEFERRED TAX ASSETS

PERIOD
31/12/2004 01/01/2005-
31/12/2005
31/12/2005
Write-off of Capitalized expenses 2,757,633.13 $-787,517.28$ 1,970,115.85
Write-off of fixed assets under construction 9,073.15 $-3,929,74$ 5,143.41
Write-off of fixed assets 147,353.97 $-39,472.19$ 107,881.78
Write-off of inventories 416,500.00 $-416,500.00$ 0.00
Write-off of trade receivables 150,798.29 $-44,229.17$ 106,569.12
Write-off of other debtors 1,189,489.06 $-707,585.58$ 481,903.48
Transfer of profit from sale and lease back
transaction
289,825.12 $-261,760.24$ 28,064.88
(sales and lease back) 0.00
Provisions 891,568.77 $-266,714.45$ 624,854.32
TOTAL 5,852,241.49 $-2,527,708,66$ 3,324,532.83
DEFERRED TAX LIABILITIES
PERIOD
31/12/2004 01/01/2005
31/12/2005
31/12/2005
From building sale and lease back 181,144.07 $-181,144.07$ 0.00
From the reversal of a receivable previously
written-off
570,344.43 $-570,344.43$ 0.00
Other 1,801.95 $-1,801.95$ 0.00
TOTAL 753,290.45 $-753,290.45$ 0.00

DEFERRED TAX

B. GROUP

DEFERRED TAX ASSETS PERIOD
31/12/2004 01/01/2005
31/12/2005
31/12/2005
Write off of Capitalized expenses 2,806,211.98 $-816,429.16$ 1,989,782.82
Write-off of fixed assets under construction 22,594.47 $-5.088.71$ 17,505.76
Write-off of fixed assets 158,712.20 $-42,039.17$ 116,673.03
Write-off of inventories 416,500.00 $-416,500.00$ 0.00
Write-off of trade receivables 181,209.79 $-44,229.17$ 136,980.62
Write-off of other debtors 1.189,489.06 $-707.585.58$ 481,903.48
Transfer of profit from sale and lease back
transaction
289,825.12 $-261,760.24$ 28,064.88
(sales and lease back) 0.00
Provisions 960,399.07 $-289,096.86$ 671,302.21
TOTAL 6,024,941.69 $-2,582,728.90$ 3,442,212.79
DEFERRED TAX LIABILITIES
PERIOD
31/12/2004 01/01/2005
31/12/2005
31/12/2005
From building sale and lease back 181,144.07 $-181.144.07$ 0.00
From the reversal of a receivable previously
written off
570,344.43 $-570,344.43$ 0.00
Other 35,596.18 $-12,235,23$ 23,360.95
TOTAL 787.084.68 -763.723.73 23,360.95

7. Adjustment to the International Accounting Standards

The present financial statements are the first financial statements compiled and published by the Group according to the International Accounting Standards.

In view of the need to present comparable financial accounts for the previous financial year on the same basis, the Company and the Group valued and adjusted their individual assets and liabilities on 31 December 2003. This resulted in the differentiation of the financial statements, which had been previously compiled and published, according to the provisions of Greek company law.

The major adjustments, which were deemed necessary, concern the following:

  • The direct depreciation of various expenses, which had been capitalized in the past and depreciated gradually, the adjustment of depreciation rates concerning tangible fixed assets, in order to reflect their useful economic life.

  • The accounting recognition of the liabilities of the Company and the Group to employees, concerning the future payment of benefits based on years of service for each employee, and

  • The accounting recognition of the effects of deferred tax,

  • The valuation of participations and securities

  • The reassessment of inventories and other receivables

8. Table Appendix

RECONCILIATION OF OPENING EQUITY (AS AT 01/01/2005 and 01/01/2004) BETWEEN THE GREEK ACCOUNTING
STANDARDS AND THE INTERNATIONAL ACCOUNTING STANDARDS (IAS)
COMPANY GROUP
01/01/2005 01/01/2004 01/01/2005 01/01/2004
EQUITY AT THE BEGINNING OF THE
PERIOD (1/1/2005 AND 1/1/2004)
ACCORDING TO G.A.S.
104,729,531.00 138,966,184.15 106,372,927.56 142, 287, 454.43
ADJUSTMENTS TO LAND AND BUILDINGS
DUE TO VALUATION AT FAIR VALUE
12,788,521.47 13,212,467.52 12,788,521.47 13,212,467.52
DEPRECIATION OF EXPENSES THAT WERE
CAPITALIZED IN THE PAST
EFFECT OF SALE AND LEASE BACK
$-7,878,951.80$ $-6,169,269.44$ $-7,878,951.80$ $-6,169,269.44$
AGREEMENT $-310,517.29$ $-786,243.08$ $-310,517.29$ $-786,243.08$
EFFECT OF VALUATION OF
PARTICIPATIONS
-45,223,078.39 -46,720,610.91 -39,652,392.36 -41,149,924.88
EFFECT OF VALUATION OF SECURITIES $-26,998,768,25$ $-27.005.467.58$ $-26,998,768.25$ $-27,005,467.58$
EFFECT OF REASSESSMENT OF
INVENTORIES
$-3,190,000.00$ $-3,190,000.00$ $-3,190,000.00$ $-3,190,000.00$
OTHER RECEIVABLE WRITE-OFFS $-3,598,655.01$ $-4,507,972,22$ $-3,598,655.01$ $-4,507,972.22$
PROVISION FOR STAFF RETIREMENT
INDEMNITIES BASED ON ACTUARIAL
STUDY
$-2,334,502.00$ $-2,334,502.00$ $-2,334,502.00$ $-2,334,502.00$
OTHER PROVISIONS $-2,901,657,54$ $-2,994,851.58$ $-2,901,657,54$ $-2,994,851,58$
RECOGNITION OF DEFERRED TAX
ASSETS/LIABILITIES
5.098.951.04 4,765,981.08 5,098,951.04 4.765.981.08
OTHER AMOUNTS $-369.622.92$
WRITE-OFF OF DIVIDENDS THAT ARE
NOT RECOGNIZED
-986,357.37 $-2,140,418.06$
DEPRECIATED CONSOLIDATION
DIFFERENCES AND MINORITY INTERESTS
598,109.03 $-44,492,838.80$
30,180,873.23 63, 235, 715.94 36,637,084.56 25,494,415.39
RECONCILIATION OF RESULTS (AS AT 30/09/2004 AND 31/12/2004) BETWEEN THE GREEK ACCOUNTING STANDARDS
AND THE INTERNATIONAL ACCOUNTING STANDARDS (IAS)
COMPANY GROUP
30/09/2004 31/12/2004 30/09/2004 31/12/2004
NET PROFIT FOR THE PERIOD (30/09/2004 AND
31/12/2004) ACCORDING TO THE G.A.S.
6,520,282.34 7,876,801.63 17,354,916.99 29,333,344.68
WRITE-OFF OF EXPENSES THAT HAD BEEN
CAPITALISED
$-1,057,612.62$ $-1,524,493.56$ $-1,068,010.41$ $-1,552,465.53$
DEPRECIATION CHARGED TO THE INCOME
STATEMENT FROM THE WRITE-OFF OF
INTANGIBLE ASSETS
EFFECT ON THE RESULTS FROM THE NON-
RECOGNITION AS AN EXPENSE OF LEASE
PAYMENTS RELATING TO THE SALE AND LEASE
150,807.21 321,128.22 161,637.08 347,294.35
BACK OF A BUILDING 44.141.87 58,855.83 44.141.87 58,855.83
EFFECT OF THE NON-RECOGNITION OF A LOSS
FROM THE VALUATION OF SECURITIES DUE TO
PREVIOUS WRITE-OOF
1,222,166.59 1,629,555.50 1,222,166.59 1,629,555.50
PROPORTION OF PROFIT FROM THE SALE AND
LEASE BACK OF A BUILDING
103,508.97 138,011.96 103,508.97 138,011.96
INCOME TAX FOR THE PERIOD AND DEFERRED
TAX
$-760,150.25$ -944,933.94 $-2,925,875.38$ $-4,636,295.40$
OTHER AMOUNTS $-124.690.89$ $-346.918.13$ 72,593.41 $-104.594.83$
REMUNERATIONS OF BoD MEMBERS 0.00 $-350,000,00$ 0.00 $-380,000.00$
EFFECT FROM THE CHANGE OF CONSOLIDATION
METHOD (FROM FULL CONSOLIDATION METHOD
TO NET EOUITY METHOD)
$-4.059.186.90$ $-7,516,868.58$
NET PROFIT FOR THE PERIOD (30/09/2004 AND
31/12/2004) ACCORDING TO IAS
6,098,453,22 6,858,007,51 10,905,892.22 17,316,837.95
RECONCILIATION OF EQUITY FOR THE PERIOD (30/06/2005 and 30/06/2004) BETWEEN THE GREEK
ACCOUNTING STANDARDS AND THE INTERNATIONAL ACCOUNTING STANDARDS (IAS)
30/06/2004 30/06/2004
EQUITY FOR THE PERIOD (30/6/2004) ACCORDING TO THE G.A.S. 107,896,053.72 108,746,053.72
ADJUSTMENTS TO LAND AND BUILDINGS DUE TO VALUATION AT
FAIR VALUE
12,788,521.47 12,788,521.47
DEPRECIATION OF EXPENSES THAT WERE CAPITALISED IN THE
PAST
$-6,581,221.34$ $-6,581,221.34$
EFFECT OF SALE AND LEASE BACK AGREEMENT $-408,951.19$ $-408,951.19$
EFFECT OF VALUATION OF PARTICIPATIONS -46,722,078.26 -41.151.392.23
EFFECT OF VALUATION OF SECURITIES $-26,784,742.24$ $-26,784,742.24$
EFFECT OF REASSESSMENT OF INVENTORIES $-3,190,000.00$ $-3,190,000.00$
OTHER RECEIVABLE WRITE-OFFS $-4,639,237.34$ $-4.639.237.34$
PROVISION FOR STAFF RETIREMENT INDEMNITIES BASED ON
ACTUARIAL STUDY
$-2,334,502.00$ $-2,334,502,00$
OTHER PROVISIONS $-2,994,851.58$ $-2,994,851.58$
RECOGNITION OF DEFERRED TAX ASSETS/LIABILITIES 4,469,072.17 4,469,072.17
OTHER AMOUNTS 0.00
WRITE-OFF OF DIVIDENDS THAT ARE NOT RECOGNISED $-1,023,848.18$
DEPRECIATED CONSOLIDATION DIFFERENCES AND MINORITY
INTERESTS
$-251,228.72$
EQUITY AT THE BEGINNING OF THE PERIOD (30/6/2004)
ACCORDING TO I.A.S.
31,498,063.41 36,643,672.54
COMPANY GROUP
30/09/2004 30/09/2004
EQUITY FOR THE PERIOD (30/9/2004) ACCORDING TO THE G.A.S. 109,010,032.58 110,285,032.58
ADJUSTMENTS TO LAND AND BUILDINGS DUE TO VALUATION AT FAIR VALUE 12,788,521.47 12,788,521.47
DEPRECIATION OF EXPENSES THAT WERE CAPITALIZED IN THE PAST $-7,582,391.87$ $-7,582,391.87$
EFFECT OF SALE AND LEASE BACK AGREEMENT -359,734.24 $-359,734.24$
EFFECT OF VALUATION OF PARTICIPATIONS -46,722,078.26 $-41, 151, 392.23$
EFFECT OF VALUATION OF SECURITIES $-26,784,742.24$ $-26,784,742.24$
EFFECT OF REASSESSMENT OF INVENTORIES $-3.190.000.00$ $-3,190,000.00$
OTHER RECEIVABLE WRITE-OFFS $-5,454,015.06$ $-5,454,015.06$
PROVISION FOR STAFF RETIREMENT INDEMNITIES BASED ON ACTUARIAL STUDY $-2,334,502.00$ $-2,334,502.00$
OTHER PROVISIONS $-2,994,851.58$ $-2,994,851.58$
RECOGNITION OF DEFERRED TAX ASSETS/LIABILITIES 4,984,629.74 4,984,629.74
OTHER AMOUNTS 0.00
WRITE-OFF OF DIVIDENDS THAT ARE NOT RECOGNIZED $-1,432,607.37$
DEPRECIATED CONSOLIDATION DIFFERENCES AND MINORITY INTERESTS
842,518.86
EQUITY AT THE BEGINNING OF THE PERIOD (30/9/2004) ACCORDING TO I.A.S. 31,360,868.54 37,616,466.06
EMPLOYEE BENEFITS
31/12/2005
31/12/2004
A Parent company
Employee salaries 14,113,824.48 13,196,988.75
Employee benefits 208,992.15 193,763.57
Employer contributions 3,426,581.23 3,185,735.01
Compensations for dismissal 355,860.71 146, 169. 37
18,105,258.57 16,722,656.70
Average number of employees 650 659
B. Group
Employee salaries 22,841,429.54 19,529,608.97
Employee benefits 622,717.38 480.345.37
Employer contributions 5,281,220.56 4,751,959.31
Compensations for dismissal 639,281.80 230,049.20
29,384,649.28 24,991,962.85
Average number of employees 1510 1500

INFORMATION REGARDING THE ACTUARIAL STUDY

The main actuarial assumptions are the following:

A. Inflation

Salaries, wages and compensations will be automatically adjusted according to the prevailing change in the consumer price index

B. Salary scale

Salaries and wages increase by 4.0% per annum in nominal prices i.e. including inflation.

C. Interest Rate The discounting rate for the calculation is 5.0%

EXPENSES BY CLASS
31/12/2005 31/12/2004
A Parent company
Cost of sales 57,980,880.12 55,758,413.45
Employee expenses 16,689,569.42 15,843,369.66
Third party fees 1,958,156.12 1,308,624.95
Third-party benefits 3,886,714.95 3,356,018.65
Taxes - duties 646,732.66 614,048.68
Various expenses 19,045,709.27 20,620,828.32
Fixed asset depreciation 2,152,490.84 1,967,713.99
102,360,253.38 99,469,017.70
B. Group
Cost of sales 108,568,589.56 101,551,466.60
Employee expenses 27,968,960.13 24,112,675.82
Third-party fees 5,062,231.67 3,543,750.26
Third-party benefits 10,595,477.19 8,599,584.77
Taxes - duties 924,288.65 807,331.01
Various expenses 35,869,452.47 32,151,901.68
Fixed asset depreciation 3,443,783.22 2,983,773.49
192,432,782.89 173,750,483.63

Note:

Employee expenses have been reduced by the amount relating to expenses that have
been charged to the production of the parent company

SHARE CAPITAL
NUMBER OF
SHARES
NOMINAL
VALUE OF
THE SHARES
SHARE
CAPITAL
SHARE
PREMIUM
TOTAL
31.12.2005 38,146,940 1.50 57,220,410.00 38,750,355.98 95,970,765.98
31.12.2004 38,146,940 1.50 57,220,410.00 38,750,355.98 95,970,765.98
31.12.2003 37,744,809 1.50 56,617,213.70 75,495,031.66 132, 112, 245, 36

Parent Company

TABLE OF CHANGES TO FIXED ASSETS
ACQUISITION IAS MOVEMENT IN THE FINANCIAL YEAR
DESCRIPTION NET BOOK
VALUE
31/12/2003
IAS
ADJUSTMENT
31/12/2003
COST OF
ABSORBED
COs
31/12/2003
ADJUSTMENT
OF ABSORBED
COS
ADDITIONS
TRANSFERS
ADJUSTMENT DISPOSALS
TRANSFERS
NET BOOK
VALUE
31/12/2004
LAND 1,996,236.41 5,008,659.09 19,448.50 632,940.02 906,587.24 8,563,871.26
BUILDINGS - BUILDING
INSTALLATIONS AND
CONSTRUCTION
PROJECTS
16,523,381.67 8,385,271.74 1,436,694.14 71,600.06 55,636 41 57,520.18 26,530,104.20
MACHINERY TECHNICAL
EOUIPMENT AND OTHER
MECHANICAL EQUIPMENT
2,086,849.80 3,571,554.20 $-27,619.17$ 623,535.42 0.00 76.30 6,254,243.95
MEANS OF
TRANSPORTATION
1,060,713.97 594,158.00 $-40,396,68$ 169,571.77 0.00 51,458.35 1,732,588.71
FIXTURES AND FITTINGS 4,703,092.36 2,674,883.65 $-354,055.62$ 705,976.05 0.00 53.314.79 7,676,581 65
FIXED ASSETS UNDER
CONSTRUCTION AND
DOWN PAYMENTS
0.00 2,934.70 $-2,934.70$ 307,623.95 39,266.75 268,357.20
TOTAL 26,370,274.21 13,393,930.83 8,299,673.19 279,533.91 1,862,343.60 964, 107.42 144, 116 19 51,025,746.97

Parent Company

TABLE OF CHANGES TO FIXED ASSETS
DESCRIPTION NET BOOK
VALUE
DEPRECIATION
UP TO
DEPRECIATION
OF ABSORBED
MOVEMENT IN THE FINANCIAL
TOTAL
YEAR
DEPRECIATION
NET BOOK VALUE
31/12/2004 31/12/2003 CO s
31/12/2003
DEPRECIATION DISPOSALS
TRANSFERS
31/12/2004 31/12/2004
LAND 8,563,871.26 0.00 0.00 8,563,871.26
BUILDINGS -
BUILDING
INSTALLATIONS
AND
CONSTRUCTION
PROJECTS
26,530,104.20 9,529.95 243,628.72 1,128,021.22 $-9,394.96$ 1,390,574,85 25,139,529.35
MACHINERY
TECHNICAL
EQUIPMENT AND
OTHER
MECHANICAL
EQUIPMENT
6,254,243.95 1,357,652.05 2,234,409.41 335,901.27 76.29 3,927,886.44 2,326,357.51
MEANS OF
TRANSPORTATION
1,732,588.71 855,267.51 326,701.38 134,940.94 12,174.39 1,304,735,44 427,853.27
FIXTURES AND
FITTINGS
7,676,581.65 3,348,930.68 1,854,795.74 675,823.19 21,853.37 5,857,696.24 1,818,885.41
FIXED ASSETS
UNDER
CONSTRUCTION
AND DOWN
PAYMENTS
268,357.20 0.00 0.00 268,357.20
TOTAL 51,025,746.97 5,571,380.19 4,659,535.25 2,274,686.62 24,709.09 12,480,89227 38,544,854.00

Parent Company

NET BOOK VALUE
31/12/2004
ADDITIONS
TRASFERS
$01/01/05$ -
31/12/05
DISPOSALS
TRANSFERS
$01/01/05$ -
31/12/05
TOTAL
DEPRECIATION
31/12/2005
NET BOOK
BALUE
31/12/2005
LAND 8,563,871.26 0.00 8,563,871.26
BUILDINGS - BUILDING
INSTALLATIONS AND
CONSTRUCTION
PROJECTS
26,530,104.20 394,703.07 2,455,446.79 24,469,360.48
MACHINERY TECHNICAL
EQUIPMENT AND
OTHER MECHANICAL
EOUIPMENT
6,254,243.95 431,521.41 167,937.60 4,220,016.17 2,297,811.59
MEANS OF
TRANSPORTATION
1,732,588.71 29,052.14 217,691.33 1,260,849.38 283,100.14
FIXTURES AND
FITTINGS
7,676,581.65 920.718.67 73,389.17 6,541,420.56 2,072,490.59
FIXED ASSETS UNDER
CONSTRUCTION AND
DOWN PAYMENTS
268,357.20 111,285.77 0.00 379,642.97
TOTAL 51,025,7746.97 1,887,281.06 459,018.10 14,387,732.90 38,066,277.03

GR. SARANTIS A.B.E.E.

Financial Statements For the period 1 January $-31$ December 2005

GROUP

TABLE OF CHANGES TO FIXED ASSETS
NET BOOK IAS MOVEMENT IN FINANCIAL
YEAR 2004
ACQUISITION TOTAL NET BOOK
DESCRIPTION VALUE
31/12/2003
ADJUSTMENT
31/12/2003
ADDITIONS
TRANSFERS
DISPOSALS
TRANSFERS
COST
31/12/2004
DEPRECIATION VALUE
31/12/2004
LAND 3,095,103.21 5.849.599.11 1,067,212.40 237,032.14 9,774,882.58 9,774,882.58
BUILDINGS - BUILDING
INSTALLATIONS AND
CONSTRUCTION
PROJECTS
20,029,765.50 8,441,051.88 393,701.18 28,864,518.56 2,126,080.85 26,738,437.71
MACHINERY TECHNICAL
EQUIPMENT AND OTHER
MECHANICAL
EQUIPMENT
6,229,926.12 $-29.038.32$ 777.308.14 5,326.03 6,972,869.91 4,417,661.08 2,555,208.83
MEANS OF
TRANSPORTATION
4,890,340.41 $-40,396,68$ 1,494,485.57 768,597.84 5,582,153,90 2,835,037.84 2,747,116.06
FIXTURES AND
FITTINGS
12,151,562.89 $-354.055.62$ 867,344.81 213,202.68 12,451,649.40 10,168,796.89 2,282,852.51
FIXED ASSETS UNDER
CONSTRUCTION AND
DOWN PAYMENTS
128,227.86 $-128,227.86$ 334,447.65 39,266.75 295,180.90 0.00 295,180.90
TOTAL 46,524,925.99 13,738,932.51 4,934,499.75 1,263,425.44 63,941,255.25 19,547,576.66 44,393,678.59

GROUP

NET BOOK
VALUE
31/12/2004
ADDITIONS
DISPOSALS
$01/01/05$ -
31/12/05
TOTAL
DEPRECIATION
31/12/2005
NET BOOK
VALUE
31/12/2005
LAND 9,774,882.58 79,463.68 0.00 9,854,346.26
BUILDINGS - BUILDING
INSTALLATIONS AND
CONSTRUCTION PROJECTS
28,864,518.56 586,193.19 3,311836.22 26,138,875.53
MACHINERY TECHNICAL
EOUIPMENT AND OTHER
MECHANICAL EQUIPMENT
6,972,869.91 627,082.45 4,743,610.35 2,856,342.01
MEANS OF TRANSPORTATION 5,582,153.90 693,224.49 3,176,552.25 3,098,826.14
FIXTURES AND FITTINGS 12,451,649.40 572,178.31 10,566,357.88 2,457,469.83
FIXED ASSETS UNDER
CONSTRUCTION AND DOWN
PAYMENTS
295,180.90 87,217.07 382,397.97
TOTAL 63,941,255.25 2,645,359.19 21,798,356.70 44,788,257.74

INTRA-COMPANY TRANSACTIONS

RECEIVABLES
LIABILITIES
BALANCES GR. SARANTIS
ABEE
VENTURES ZETA FIN PAROS SA ROMSAR GRECOVET LTD TOTAL
GR. SARANTIS
ABEE
0.00 200.00 7,875,133.00 200.00 200.00 37,213,08 7,912,946.08
VENTURES SA 918,698.36
VENUS SA 0.00
ZETA SA 246,728.72
SARANTIS
BELGRADE
1,071,995.19
SARANTIS
BULGARIA LTD
89,128.84
SARANTIS
SKOPJE LTD
52,316.30
SC SAR ROM 7,021.04
К.
THEODORIDIS
SA
833,861.03
SARANTIS
CZECH
249,302.96
SARANTIS
POLSKA
911,583.58
PAROS SA 377,720.59
GRECOVET LTD 11,847.44
SARANTIS
UKRAINE
276, 362.57
ZETAFIN 416,537.15
SARANTIS
TURKEY
3,591.387.46
TOTAL 9,054,491.23

INTRA-COMPANY TRANSACTIONS FOR THE PERIOD 01/01/2005 TILL 31/12/2005

SALES
PURCHASES
GR. SARANTIS
ABEE
ZETA FIN LTD PAROS SA GRECOVET
LTD
SARANTIS
POLSKA
TOTAL
GR. SARANTIS ABEE 0.00 4,728,144.17 133,707.00 4,861,851.17
PAROS SA 229,436.02 125,965.71 355,401.73
GRECOVET LTD 32,878,43 813,486.25 846,364.68
VENTURES SA 1,325,057.49 1,325,057.49
SARANTIS ROMANIA 3,181,516,56 352,635.00 3,534,151.56
SARANTIS
BULGARIA
2,558,047.40 71,160.00 2,629,207.40
SARANTIS
BELGRADE
2,125,412.13 276,825.00 2,402,237.13
SARANTIS SKOPJE 671,920.73 671,920.73
SARANTIS ANADOL
SA
1,304,418.78 1,304,418.78
SARANTIS UKRAINE 384,397.48 105,078.00 489,475.48
SARANTIS POLSKA 4,508,834.44 4,508,834.44
K. THEODORIDIS
S.A.
18, 121. 76
TOTAL 16,340,041.22 4,728,144.17 813,486.25 125,965.71 939,405.00 22,947,042.35
GR. SARANTIS ABEE
PARENT COMPANY
STAKOD DESCRIPTION VALUE
157.2 PRODUCTION OF PET FOOD PESTICIDES 5,759 95
1588 PRODUCTION OF HOMOGENIZED DIET FOOD 732,465.44
242.0 PRODUCTION OF PESTICIDES & OTHER FARM CHEMICALS
2451 PRODUCTION OF SOAPS & DETERGENTS, CLEANING AND
POLISHING PRODUCTS
2,427,928.50
2452 PRODUCTION OF FRAGRANCES & BEAUTY PRODUCTS 25,236,966.48
251.9 PRODUCTION OF OTHER PRODUCTS MADE OF RUBBER 95,310.47
252.9 CONSTRUCTION OF OTHER PLASTIC PRODUCTS 2,811,638.00
274.2 ALUMINUM PRODUCTION 11,623,746 62
503.0 WHOLESALE TRADE OF CAR ACCESSORIES 766 47
513.8 WHOLESALE TRADE OF OTHER FOOD 3,077,114.07
514.5 WHOLESALE TRADE OF FRAGRANCES & COSMETICS 24,398,726 60
514.6 WHOLESALE TRADE OF PHARMACEUTICAL PRODUCTS 14,514,831 87
514.9 WHOLESALE TRADE OF OTHER HOUSEHOLD UTENSILS 26,082,628 21
TOTAL 111,007,882.68
GR. SARANTIS ABEE
GROUP 31/12/2005
STAKOD DESCRIPTION VALUE
1572 PRODUCTION OF PET FOOD PESTICIDES 5,759.95
1588 PRODUCTION OF HOMOGENIZED DIET FOOD 732,465.44
245.1 PRODUCTION OF SOAPS & DETERGENTS, CLEANING AND 2,427,928.50
POLISHING PRODUCTS
2452 PRODUCTION OF FRAGRANCES & BEAUTY PRODUCTS 86,859,339.27
2519 PRODUCTION OF OTHER PRODUCTS MADE OF RUBBER 95,310.47
252.9 CONSTRUCTION OF OTHER PLASTIC PRODUCTS 2,811,638.00
2742 ALUMINUM PRODUCTION 11,623,746 62
503.0 WHOLESALE TRADE OF CAR ACCESSORIES 12,905,362.29
5138 WHOLESALE TRADE OF OTHER FOOD 6,474,512.89
514.5 WHOLESALE TRADE OF FRAGRANCES & COSMETICS 44,128,469.80
5146 WHOLESALE TRADE OF PHARMACEUTICAL PRODUCTS 14,514,831 87
514.9 WHOLESALE TRADE OF OTHER HOUSEHOLD UTENSILS 26,082,628 21

$|208,661_3993.31|$

SECTOR AND GEOGRAPHIC BREAKDOWN TABLES

FINANCIAL RESULTS FOR THE NINE MONTHS OF 2005 (IFRS)

1. SECTORS OF ACTIVITY

CONSOLIDATED TURNOVER (In EUR mn) 12m 2005 y-o-y growth 12m 2004
Luxury W/o Estee Lauder 15.88 7.49% 14.77
Mass Market Cosmetics 73.53 20.31% 61.12
Household 76.00 9.67% 69.30
Health & Care Products 19.09 22.61% 15.57
Car Accessories 13.27 $6.09\%$ 12.51
PET 6.32 $-24.23%$ 8.34
Services to Estee Lauder J.V.* 4.57 $-24.07\%$ 6.02
Total Sales 208.66 11.21% 187.63

Consolidated Turnover Breakdown

* Notes: Sarantis Group offers specialized services to Estee Lauder JV. Sarantis Group reports the particular income category for the last time.

Consolidated EBIT Breakdown

CONSOLIDATED EBIT (In EUR mn) 12m 2005 y-o-y growth 12m 2004
Luxury W/o Estee Lauder 0.42 67.13% 0.25
Mass Market Cosmetics 8.25 54.95% 5.32
Household 7.17 5.53% 6.79
Health & Care Products 2.58 24.79% 2.06
Car Accessories 0.80 $-17.61%$ 0.97
PET $-0.16$ 0.05
Services to Estee Lauder J.V. $-0.08$ 0.23
Income from Affil. Companies* 9.18 3.53% 8.87
Total EBIT 28.15 14.68% 24.55

* Notes: This particular income is treated as operating and not as financial income, as Gr. Sarantis has a dominant position in the above affiliated companies.

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BOARD OF DIRECTORS' REPORT OF 'SARANTIS S.A.' TO THE ANNUAL SHAREHOLDERS MEETING FOR THE FINANCIAL PERFORMANCE OF THE FISCAL YEAR 01.01.2005-31.12.2005

Dear Shareholders,

I welcome you and I would like to thank you for your participation in this General Shareholder's meeting. During 2005 Sarantis financial results demonstrated a constant growth in turnover as well as improved profit margins, which served the company's reinforcement.

During 2005 the company presented strong financial results in terms of turnover and profitability. This was the result of the Group's stable strategic growth, which is based on the company's greater expansion in the Eastern Europe, and mainly in the markets of Turkey and Ukraine, as well as in the strong support of its own products. The Group's turnover reached 208.66 mio $\epsilon$ , increased by 11.21% compared with the same period in 2004 (187,63 mio $\epsilon$ ). Earnings before taxes & interest (EBIT) amounted to 28,15 mio $\epsilon$ an increase of 14,68% versus 2004 (24,55 mio $\epsilon$ ). The Group for the specific period of time presented earnings before taxes (EBT) 25,28 mio €, increased by 15,17% versus 2004 (21,95 mio €). Finally, the Group presented earnings after taxes and minority interests (EATAM) 19,33 mio $\epsilon$ , increased by 13,93 % compared to 2004 (16,97 mio €). Regarding the breakdown of the Group's turnover per business unit, we can observe that the Group's core business units, mass market cosmetics, household products and health care products were the best performers and demonstrated growth of +20,31%, +9,67% and +22,61% respectively. Finally, the luxury cosmetics division also realized strong growth $(+7,49\%)$ .

Turnover's geographical breakdown indicates that Greece contributed 55,25% to total sales for 2005 (versus 61,77% in 2004), while Eastern European countries contribution advanced to 44,75% (versus 38,23% in 2004). Moreover, the Eastern European markets as a total realized double digit growth (+30,18%), with the highest performers Poland (+32,08%), Czech Republic (+44,73%), Serbia (+38,79%) and FYROM (+28,70%). Regarding the breakdown of the Group's EBIT per business unit we can observe that mass market cosmetics generated significant growth rates for 2005 (+54,95%). Moreover, household products and health & care products' profitability was increased by 5,53% and 24,79% respectively. Finally, luxury cosmetics realised significant growth for the period examined (+67,13%). Regarding EBIT geographical breakdown, we can observe that Eastern Europe generated significant performance (+45,69%), with Poland posting the highest growth rate of 169,59% compared to 2004. Finally, significant growth rates for the specific period were generated by Serbia (+101,75%), Bulgaria (+45,31%), and FYROM (+72,09%).

Sarantis management expects that the positive trends during 2005 will also continue for 2006. Additionally, according to the estimates of Sarantis' management, prospects for stronger demand of consumer products in Eastern Europe will remain strong over the following 5 years, and especially in countries, which recently joined or will join the European Union, and where Sarantis Group has established subsidiaries. At the same time, the management considers that the Company's expansion in the Russian market during 2006 will further serve the group's objectives.

Athens, 30th January 2006

THE VICE THE FINANCIAL THE MANAGER OF
PRESIDENT THE CEO. DIRECTOR THE ACCOUNTING
KIRIAKOS P. GEORGIOS A. KONSTANTINOS DPT.
SARANTIS KOLETSOS P. ROZAKEAS VASSILIOS D.
I.D.No. P I.D. No. X I.D.No.P MEINTANIS
539590/95 926090/03 534498/94 LD No = 016419/86

We certify that, the above mentioned Board of Directors' Report, which is consistent with the financial statements, and consists of 36 pages, is the one mentioned in the Auditor's Report dated February 23, 2006

Athens, 23rd February 2006 The Certified Public Accountant

John V. Kalogeropoulos SOEL. Reg. No: 10741

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