GTC - Globe Trade Centre S.A. — Interim / Quarterly Report 2004

Oct 3, 2004

GLOBE TRADE CENTRE S.A.

IFRS CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE-MONTH PERIODS ENDED 30 SEPTEMBER 2004 AND 2003

Globe Trade Centre S.A. Condensed Consolidated Balance Sheets as of 30 September 2004 and 31 of December 2003 (in thousands of US Dollars)

		30 September 2004	31 December 2003
	Note	(unaudited)
ASSETS
Property Plant and Equipment
Buildings		250	254
Land		16,150	16,150
Other fixed assets		612	308
Construction in progress		107,793	30,393
		124,805	47,105
Investment property		435,794	373,996
Investment in and loans granted to associates	9	13,309	-
Marketable securities	11	15,027	17,061
Other Non-current Assets	12	4,289	1,377
Current Assets Inventory		23,259	16,008
Debtors		1,684	862
Accrued income	13	3,251	4,164
VAT and other tax recoverable		7,596	2,281
Deferred tax asset		1,321	-
Prepayments		5,791	396
Short-term deposits		34,730	11,070
Cash and cash equivalents		94,692	46,529
		172,324	81,310
TOTAL ASSETS		765,548	520,849
EQUITY AND LIABILITIES
Capital and Reserves
Share capital	15	5,602	4,362
Share premium	15	135,175	33,543
Translation differences		53	474
Hedge reserve Capital Reserve	18	(310) 1,231	- 1,231
Accumulated profit		255,582	229,545
		397,333	269,155
Minority Interest		9,926	697
Long-term Liabilities
Long-term portion of long-term loans	14	275,301	212,953
Deposits from tenants		2,130	1,796
Provisions for deferred tax liability and other	17	17,918 295,349	11,407 226,156
Current Liabilities
Trade and other payables		12,014	5,157
Short term credit line		2,011	-
Current portion of long-term loans	14	33,634	15,569
VAT and other taxes payable		1,005	591
Accruals		10,995	1,079
Derivatives		1,479	2,323
Advances received		1,802	-
Deferred income		- 62,940	122 24,841
TOTAL EQUITY AND LIABILITIES		765,548	520,849

The accompanying notes are an integral part of these Condensed Consolidated Balance Sheets

Globe Trade Centre S.A. Condensed Consolidated Income Statements for the nine-month periods ended 30 September 2004 and 2003 (in thousands of US Dollars)

			Nine-month period ended 30 September	Three-month period ended 30 September		Year ended 31 December
		2004 (unaudited)	2003 (unaudited)	2004 (unaudited)	2003 (unaudited)	2003
	Note
Revenues from operations	6	39,882	47,819	13,215	13,443	62,399
Cost of sales	7	(13,095)	(15,913)	(4,414)	(4,755)	(21,538)
Gross margin from operations		26,787	31,906	8,801	8,688	40,861
Selling expenses		(1,200)	(1,004)	(620)	(307)	(1,446)
Administration expenses		(3,480)	(2,948)	(1,090)	(1,263)	(3,402)
Operating profit		22,107	27,954	7,091	7,118	36,013
Foreign currency gain/(loss), net		2,128	(1,085)	696	(271)	(1,062)
Financial income/(expenses), net		(10,473)	(14,603)	(2,786)	(4,614)	(19,417)
Profit from revaluation of investment property, net of impairment of fixed asset		23,677	17,374	23,677	2,606	6,616
Other income/(expenses)		(355)	1,222	(180)	-	928
Result on sale of investment		-	(351)	-	173	(531)
Gain/(loss) on marketable securities	11	(2,034)	3,287	271	3,053	6,918
Share of profit from associates		556		147
Profit before taxation		35,606	33,798	28,916	8,065	29,465
Taxation		(5,077)	(11,162)	(4,490)	(2,431)	(4,806)
Profit after taxation		30,529	22,636	24,426	5,634	24,659
Minority Interests		(4,492)	(153)	(4,649)	(62)	(192)
Net profit		26,037	22,483	19,777	5,572	24,467
Basic earnings per share (USD)	19	1.47	1.51	1.00	0.37	1.64
Diluted earnings per share (USD)	19	1.45	n/a	0.97	n/a	n/a

The accompanying notes are an integral part of these Condensed Consolidated Income Statements

Globe Trade Centre S.A. Condensed Consolidated Statements of Changes in Equity for the nine-month periods ended 30 September 2004 and 2003 (in thousands of US Dollars)

	Issued and Paid in Share Capital	Share Premium	Translation differences	Capital reserve	Accumulated Profit	Total
Balance as of 1 January 2003	4,367	33,543	253	-	226,589	264,752
Acquisition of treasury shares	(5)	-	-	-	-	(5)
Currency translation differences	-	-	138	-	-	138
Dividend						(20,308
	-	-	-	-	(20,308)	)
Allocation of profit from retained earnings to Capital reserve Profit for the Nine-month period ended 30 September 2003	-	-	-	1,231	(1,231)	-
(unaudited)	-	-	-	-	22,483	22,483
Balance as of 30 September 2003
(unaudited)	4,362	33,543	391	1,231	227,533	267,060

	Issued and Paid in Share Capital	Share Premium	Translation differences	Hedge reserve	Capital reserve	Accumulated Profit	Total
Balance as of 1 January 2003	4,367	33,543	253	-	-	226,589	264,752
Acquisition of treasury shares	(5)	-	-	-	-	-	(5)
Currency translation differences Dividend	-	-	221	-	-	-	221
Allocation of profit from retained earnings to	-	-	-	-	-	(20,280)	(20,280)
Capital reserve Profit for the year ended	-	-	-	-	1,231	(1,231)	-
31 December 2003	-	-	-	-	-	24,467	24,467
Balance as of 31 December 2003	4,362	33,543	474	-	1,231	229,545	269,155
Issuance of shares Hedge reserve	1,240 -	101,632 -	- -	(310)	- -	- -	102,872 (310)
Currency translation differences	-	-	(421)	-	-	-	(421)
Profit for the Nine-month period ended 30 September 2004 (unaudited)	-	-	-	-	-	26,037	26,037
Balance as of 30 September 2004 (unaudited)	5,602	135,175	53	(310)	1,231	255,582	397,333

The accompanying notes are an integral part of these Condensed Consolidated Statements of Changes in Equity

Globe Trade Centre S.A. Condensed Consolidated Cash Flow Statements for the nine-month periods ended 30 September 2004 and 2003 (In thousands of US Dollars)

	Nine-month period ended 30 September 2004 (unaudited)	Nine-month period ended 30 September 2003 (unaudited)	Year ended 31 December 2003
CASH FLOWS FROM OPERATING ACTIVITIES:
Operating profit Adjustments for:	22,107	27,954	36,013
Depreciation and amortization Operating cash before working capital changes	460 22,567	744 28,698	886 36,899
Decrease in debtors and prepayments Decrease in inventory Increase in other non-current assets Increase in short-term payables and accruals	2,415 1,949 (121) 2,008	477 3,715 (201) 750	43 6,665 (190) 1,055
Cash generated from operations Interest paid Interest received Tax paid	28,818 (14,583) 2,790 (364)	33,439 (16,107) 3,815 (3,353)	44,472 (20,273) 5,049 (3,762)
Net cash from operating activities	16,661	17,794	25,486
CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property, plant and equipment Sale of investment property and fixed assets Lease origination costs Purchase of subsidiaries, net of cash 16 Loans granted to associates Loans repaid by associates Partial sale of subsidiary Increase (decrease) in short-term deposits Dividend received	(49,785) 506 (3,852) 3,124 (660) 3,288 - (159) 184	(18,689) 23,487 - - - - - 6,376 168	(22,532) - - - - - 23,307 5,188 168
Net cash from/(used in) investing activities	(47,354)	11,342	6,131
CASH FLOWS FROM FINANCING ACTIVITIES Acquisition of treasury shares Issuance of shares Proceeds from long-term borrowings Repayment of long-term borrowings Payment of dividend Loan and shares origination cost Deposits received from tenants	85,785 25,094 (29,119) - (4,767) 334	(5) 7,067 (15,357) (10,214) - 237	(5) - 7,004 (17,623) (20,280) - 162
Net cash from/(used in) financing activities	77,327	(18,272)	(30,742)
Effect of foreign currency translation	1,529	(123)	515
Net increase in cash and cash equivalents	48,163	10,741	1,390
Cash and cash equivalents, at beginning of period	46,529	45,139	45,139
Cash and cash equivalents, at end of period	94,692	55,880	46,529

The accompanying notes are an integral part of these Condensed Consolidated Cash Flow Statements

1. Principal activities and shareholders structure

Globe Trade Centre S.A. (the "Company", "GTC") was registered in Warsaw on December 19, 1996, having previously operated under the name of Globe Trade Centre Sp. z o.o. The Company's registered office is in Warsaw at 41 Domaniewska Street. The Company owns through subsidiaries and associates commercial and residential real estate companies in Poland, Hungary, Romania, Serbia and Montenegro (Serbia) and Czech Republic.

Globe Trade Centre S.A. is the parent company of the capital group Globe Trade Centre (the "Group").

The Group's business activities are:

• a) Development and rental of office and retail space,
• b) Development and sale of residential units.

As of 30 September 2004 the number of full time equivalent working in the Group companies was 65.

GTC is listed on the Warsaw Stock exchange.

The Company is a majority-owned subsidiary of GTC International B.V. ("GTC International") of the Netherlands that holds 50.9% of the Company's shares (see note 16).

2. Basis of presentation

The Company maintains its books of account in accordance with accounting principles and practices employed by enterprises in Poland as required by Polish accounting regulations. The accompanying condensed consolidated financial statements reflect certain adjustments not reflected in the Company's books to present these statements in accordance with standards issued by the International Accounting Standards Board. These adjustments and their effect on earnings for the nine-month periods ended 30 September 2004 and 2003 and net assets as of 30 September 2004 and 31 December 2003 are shown in note 20 to these condensed consolidated financial statements.

Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with International Financial Reporting Standards have been condensed or omitted pursuant to International Accounting Standard No. 34, "Interim Financial Reporting" (IAS 34).

2. Basis of presentation (continued)

The accompanying condensed consolidated balance sheet, condensed consolidated income statements, condensed consolidated statement of cash flows and condensed consolidated statement of changes in equity are unaudited but, in the opinion of the Company's Management, reflect all adjustments which are necessary for a fair statement of the Company's consolidated results of operations and cash flow for the interim period and the Company's financial position as of 30 September 2004. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto for the year 2003. The interim financial results are not necessarily indicative of the full year results.

Fair value of financial instruments

The Group's financial instruments include cash and cash equivalents, accounts receivable and prepayments, short-term deposits, loans granted, shares, accounts payable, accrued expenses, derivatives, advances received, loans, borrowings and overdrafts. The carrying value of these financial instruments in the accompanying financial statements approximates fair value of these instruments.

Impairment of assets

The carrying value of assets is periodically reviewed by the Management to determine whether impairment may exist. Based upon its most recent analysis, management believes that no material impairment of assets exists as of 30 September 2004.

Accounting polices

The Company applied to the condensed consolidated financial statements for the Ninemonth period ended on 30 September 2004 all International Financial Reporting Standards effective for accounting periods beginning on or before 1 January 2004.

The Company followed the same accounting policies and methods of computation in these condensed consolidated financial statements as compared with the consolidated financial statements for the year 2003. There have been no changes in International Financial Reporting Standards for the year beginning 1 January 2004, except for IFRS 3 and amendments to IFRS 36 and 38, which came into force from 1 April 2004 and will be effective for all future companies' acquisitions.

As disclosed in note 15 the Company has issued conditional share capital as a share option scheme (series F). The Company's policy is to record the share option issued at the amount received, if any, for granting the option. At the date of the execution of the option amounts paid in will be recognized as equity.

3. Investment in Subsidiaries and Associates

Investment in Subsidiaries

The condensed consolidated financial statements include the financial statements of the Company, its subsidiaries and jointly controlled entity listed below together with direct and indirect ownership of these consolidated subsidiaries as at the end of each period:

Name	Holding	Country of	30	31 December
	company	incorporation	September	2003
			2004
GTC Mars Sp. z o.o. ("GTC Mars")	GTC S.A	Poland	100%	100%
GTC Galeria Sp. z o.o. ("GTC Galeria")	GTC S.A	Poland	100%	100%
GTC Taurus Sp. z o.o. ("GTC Taurus")	GTC S.A	Poland	100%	100%
GTC CH Galeria Sp. z o.o ("GTC CH Galeria")	GTC Galeria	Poland	100%	100%
Darat Sp. z o.o. ("Darat")	GTC S.A	Poland	100%	100%
GTC Konstancja Sp. z o.o. ("GTC Konstancja")	GTC S.A	Poland	100%	100%
GTC Korona S.A ("GTC Korona")	GTC S.A	Poland	100%	100%
Globis Poznań Sp. z o.o ("Globis Poznan")*	GTC S.A	Poland	75%	75%
GTC Alp Sp. z o.o (formerly "GTC Topaz")	GTC S.A	Poland	100%	100%
GTC Vega Sp. z o.o. ("GTC Vega")	GTC S.A	Poland	100%	100%
GTC Aeropark Sp. z o.o. ("GTC Aeropark")	GTC S.A	Poland	100%	100%
GTC Neptune Sp. z o.o. ("GTC Neptune")	GTC S.A	Poland	100%	100%
Globis Wroclaw Sp. z o.o ("Globis Wroclaw")*	GTC S.A	Poland	75%	75%
GTC Galeria Kazimierz Sp. z o.o. (formerly GTC Mercury	GTC S.A	Poland
Sp. z o.o.) ("GTC Galeria Kazimierz")			100%	100%
GTC Orion Sp. z o.o. ("GTC Orion")	GTC S.A	Poland	100%	100%
GTC Saturn Sp. Z o.o. ("GTC Saturn")	GTC S.A	Poland	100%	100%
Rodamco CH1 Sp. z o.o. ("Rodamco CH1")**	GTC CH	Poland	50%	50%
	Galeria
GTC Galaxy-Jupiter Sp. z o.o. ("GTC Galaxy-Jupiter")	GTC S.A	Poland	100%	100%
GTC Hungary Real Estate Development Company Ltd.	GTC S.A	Hungary	65.6%	-
("GTC Hungary")
Vaci Ut 81-85 Ltd.	GTC Hungary	Hungary	65.6%	-
Riverside Apartments Ltd. ("Riverside)	GTC Hungary	Hungary	65.6%	-
Vector-H Ltd. Center Point I. Ltd. ("Center Point')	GTC Hungary GTC Hungary	Hungary Hungary	65.6% 65.6%	- -
Center Point II. Ltd. ("Center Point')	GTC Hungary	Hungary	65.6%
River Loft Ltd.	GTC Hungary	Hungary	65.6%	-
GTC Real Estate Investments Romania B.V. ("GTC	GTC S.A		54.4%	-
Romania")		Netherlands
Complexul Multifunctional Victoria S.R.L	Titulescu	Romania	54.4%	-
	Investments B.V
Towers International Property S.R.L	GTC Romania	Romania	54.4%	-
International Hotel and Tourism S.R.L	GTC Romania	Romania	54.4%	-
International Shopping Centre S.R.L	GTC Romania	Romania	54.4%	-
Titulescu Investments B.V	GTC Romania	Romania	54.4%
GTC Real Estate Investments Serbia B.V. ("GTC Serbia")	GTC S.A	Netherlands	65.6%	-
GTC Business Park Doo	GTC Serbia	Serbia and	65.6%	-
		Montenegro (Serbia)
GTC Commercial Centres Doo	GTC Serbia	Serbia and	65.6%
		Montenegro (Serbia)
GTC International Development Doo	GTC Serbia	Serbia and	65.6%	-
		Montenegro (Serbia)
GTC Real Estate Investments Croatia BV "(GTC Croatia")	GTC S.A	Netherlands	82.5%	-

* Additionally the Company holds indirectly 1.25% in Globis Poznan and Globis Wroclaw through its 5% stake in Orbis share

** Proportionate consolidation

Globe Trade Centre S.A. Notes to the Condensed Consolidated Financial Statements for the nine-month period ended 30 September 2004 (In thousands of US Dollars)

3. Investment in Subsidiaries and Associates (continued)

Investment in Associates

The Company has a 31.6% interest in the following associates:

Lighthouse Holdings Limited S.A ("Lighthouse") Vokovice BCP Holding S.A. ("Vokovice")

The above associates are involved in real estate development in Czech Republic (see note 9).

Globe Trade Centre S.A. Notes to the Condensed Consolidated Financial Statements for the nine-month period ended 30 September 2004 (In thousands of US Dollars)

4. Projects description

The Company is developing, and leasing or selling space to commercial and individual tenants, through its direct and indirect investments in subsidiaries and associates.

Current projects in different stages of development are described in the tables below:

Completed projects

Country	Names of Building	Total rentable/saleable space (sq.m)
Poland	Mokotow Business Park	107,200
	Galeria Mokotow	58,600
	Galileo office building	10,300
	Globis Poznan office building	13,000
	Konstancja Residential phases 1 (90% has already been
	sold)	17,500
Hungary	Center Point Phase I	18,600
	Riverside 1 residential project (over 90% sold)	33,500

Projects under construction / to be constructed

Country	Property	Estimated Net Rentable/Saleable space (sq.m)
Poland	Galeria Kazimierz shopping centre	36,200
	Korona offices	20,400
	Vega	17,000
	Allianz building	12,000
	Topaz 1 building	12,000
	Topaz 2 building	18,000
	Konstancja Residential phase 2	16,000
	Konstancja Residential phases 3-4	30,000
	Sattelite office park	40,000
	Konstancja Commercial	42,000
	Aeropark (6 buildings)	51,000
Hungary	Centre Point Phase II	23,000
	Riverside 2 – Residential (planned)	16,500
	Riverside 2 – Commercial (planned)	6,300
Czech	Lighthouse- Office	27,000
	Phase II – Holesovice residential / office	Not yet evident
	Vokovice (existing logistic center.
	To be converted into residential project)	23,000
Romania	America House- Office	26,000
Serbia	GTC House- Office	13,500

There is no seasonality in the business of the Group companies.

5. Events in the period

Issuance of shares

On February 2, 2004, the Extraordinary Shareholders' Meeting of the Company was held. The Extraordinary Shareholders' Meeting adopted resolutions regarding share capital increase (see note 15).

On February 3, 2004, the Company filed with the Securities and Exchange Commission an issue prospectus with a motion to admit the newly issued shares to public trading.

On 16 March 2004, GTC and GTC International signed a conditional subscription agreement. According the agreement GTC will issue shares to GTC International, in exchange for certain in-kind contributions as described in note 16, upon successful Initial Public Offer.

The allotment of the new shares offered to the public took place on 30 April, 2004 based on the issue price of 87 PLN (USD 21.6) per share. On the same day shares were allotted to GTC International (see note 15 and 16)

The first listing of the Company shares on the Warsaw Stock Exchange was on 6 May, 2004. All shares are registered in court.

Significant new lease agreements

On 12 March 2004, GTC Topaz signed a lease agreement with 5 companies from the Allianz group. According to the agreement Allianz will lease for 10 years the Allianz office building. The Allianz building is the first building to be built by GTC Topaz. It comprises of c.a. 12,000 square meter of net area, and it is expected to be completed at the end of year 2005.

On 17 June 2004, GTC Topaz signed a lease agreement for a total net area of 4,000 sq.m for 7 years. Topaz building is the second building, near Galeria Mokotow and Allianz Building to be built by GTC Topaz, and it is expected to be completed at the end of year 2005.

On August 16, 2004, GTC Serbia signed a contract with Raiffeisen bank a.d. Belgrade for the lease of office premises. The total Net Usable Area of the leased premises is 6,257 sq.m.

Significant transactions in shares

On April 8, 2004 the shareholders of GTC Romania signed a Share Purchase Agreement, according to which one of the shareholders, Firestorm, will sell its holdings in GTC Romania to the other shareholders. The shares will be transferred in three separate tranches, constituting 41.67%, 8.33% and 50% of the shares and consideration for the shares will be paid accordingly in three instalments.

5. Events in the period (continued)

Upon completion of the payment and transfer of the shares, GTC will hold 60.8% of the company's shares.

As of September 30, 2004 two tranches had been transferred, after which GTC holds 54.4% of the company's shares.

The third tranche will take place after the completion of the construction of the America House project.

6. Revenue from operations

	Nine-month period ended 30 September 2004 (unaudited)	Nine-month period ended 30 September 2003 (unaudited)	Three-month period ended 30 September 2004 (unaudited)	Three-month period ended 30 September 2003 (unaudited)	Year ended 31 December 2003
Rental revenue Contract revenue	36,134 3,748 39,882	43,389 4,430 47,819	12,161 1,054 13,215	11,964 1,479 13,443	54,839 7,560 62,399

Revenue from operations comprises the following:

The majority of revenue from operations is earned predominantly on the basis of amounts denominated in, directly linked to or indexed by reference to the US Dollar.

7. Cost of operations

Cost of operations comprise the following:

	Nine-month period ended 30 September 2004 (unaudited)	Nine-month period ended 30 September 2003 (unaudited)	Three-month period ended 30 September 2004 (unaudited)	Three-month period ended 30 September 2003 (unaudited)	Year ended 31 December 2003
Cost of rental operations Contract costs	10,124 2,971 13,095	11,731 4,182 15,913	3,480 934 4,414	3,420 1,335 4,755	14,599 6,939 21,538

8. Segmental analysis

The Group's business activities, which are the primary segments, can be categorised into two main segments:

• 1. Development and rental of office space and shopping malls ("office and retail space rental") and
• 1. Development and sale of houses and apartment units ("housing development and sale").

The Group's activities are located in Poland, Hungary, Romania and Serbia.

The following table presents revenue and gross profit information regarding business and geographical segments in the periods ended 30 September 2004.

		Poland		Hungary		Romania		Serbia		Consolidated
	Nine months period ended 30 September 2004	Three months period ended 30 September 2004	Nine months period ended 30 September 2004	Three months period ended 30 September 2004	Nine months period ended 30 September 2004	Three months period ended 30 September 2004	Nine months period ended 30 September 2004	Three months period ended 30 September 2004	Nine months period ended 30 September 2004	Three months period ended 30 September 2004
Rental income	34,909	11,588	1,225	573	-	-	-	-	36,134	12,161
Contract income	1,622	527	2,126	527	-	-	-	-	3,748	1,054
Total income	36,531	12,115	3,351	1,100	-	-	-	-	39,882	13,215
Rental costs	9,752	3,256	372	224	-	-	-	-	10,124	3,480
Contract costs	1,466	486	1,505	448	-	-	-	-	2,971	934
Total costs	11,218	3,742	1,877	672	-	-	-	-	13,095	4,414
Rental result	25,157	8,332	853	349	-	-	-	-	26,010	8,681
Contract result	156	41	621	79	-	-	-	-	777	120
Total result	25,313	8,373	1,474	428	-	-	-	-	26,787	8,801

The following table presents revenue and gross profit information regarding business and geographical segments in the periods ended 30 September 2003.

		Poland		Hungary		Romania		Serbia		Consolidated
	Nine	Three	Nine	Three	Nine	Three	Nine	Three	Nine	Three
	months	months	months	months	months	months	months	months	months	months
	period	period	period	period	period	period	period	period	period	period
	ended 30	ended 30	ended 30	ended 30	ended 30	ended 30	ended 30	ended 30	ended 30	ended 30
	September	September	September	September	September	September	September	September	September	September
	2003	2003	2003	2003	2003	2003	2003	2003	2003	2003
Rental income	43,389	11,964	-	-	-	-	-	-	43,389	11,964
Contract income	4,430	1,479	-	-	-	-	-	-	4,430	1,479
Total income	47,819	13,443	-	-	-	-	-	-	47,819	13,443
Rental costs	11,731	3,420	-	-	-	-	-	-	11,731	3,420
Contract costs	4,182	1,335	-	-	-	-	-	-	4,182	1,335
Total costs	15,913	4,755	-	-	-	-	-	-	15,913	4,755
Rental result	31,658	8,544	-	-	-	-	-	-	31,658	8,544
Contract result	248	144	-	-	-	-	-	-	248	144
Total result	31,906	8,688	-	-	-	-	-	-	31,906	8,688

9. Investment in and loans granted to associates

The Company has a 31.6% interest in the following associates:

Lighthouse Holdings Limited S.A Vokovice BCP Holding S.A.

The above associates are involved in real estate development in Czech Republic.

The investment in associates comprises the following:

	As of 30 September 2004 (unaudited)	As of 31 December 2003 (unaudited)
Shares	6,305	-
Translation differences	16	-
Equity profit	556	-
Investment in associates	6,877	-
Loans receivable	6,432	-
Total	13,309	-

The shares were acquired on 30 April 2004 (see note 16)

10. Proportionate consolidation

The company has 50% interest in Rodamco CH1, which holds Galeria Mokotow Shopping centre. Accordingly, the Company proportionally consolidated the assets and liabilities of Rodamco CH1.

The Company's share in Rodamco CH1 comprises the following:

	As of 30 September 2004 (unaudited)	As of 31 December 2003 (unaudited)
Cash	2,544	2,945
Blocked deposits	817	506
Investment property	100,000	89,500
Fixed assets	79	61
Other assets (other than cash and blocked deposits)	240	1,052
Long term liabilities	(56,869)	(56,410)
Current liabilities	(3,184)	(3,072)
Net Assets	43,627	34,582

Total share in income of Rodamco CH1 for the nine months period ended 30 September 2004 was income of USD 20.4 million, and total share in expenses was USD 6.7 million.

11. Marketable securities

Marketable securities represents investment in Orbis S.A shares, which constitutes a long term investment.

On July 26, 2000 a consortium, of which the Company is a member, purchased from the Ministry of Treasury 35.37% stake in Orbis S.A. Apart from GTC, the consortium includes Accor and FIC Globe LLC (a shareholder of the Company at the transaction date). According to the agreement GTC purchased 2,303,853 shares (5% of the Orbis share capital).

The market value an Orbis share as of 30 September 2004 is PLN 23.2 (6.5 USD) (PLN 27.7 as of 31 December 2003 (USD 7.4)).

12. Other non-current assets

Included within other non-current assets are the following:

	30 September 2004 (unaudited)	31 December 2003
Lease origination costs Deferred debt expenses	3,852 437	1,377 -
	4,289	1,377

13. Accrued income

Accrued income consists of the following:

	30 September 2004 (unaudited)	31 December 2003
Accrued rent	1,519	1,114
Sale of residential units	395	2,003
Accrued financial income	602	345
Services and other	735	702
	3,251	4,164

Globe Trade Centre S.A. Notes to the Condensed Consolidated Financial Statements for the nine-month period ended 30 September 2004 (In thousands of US Dollars)

14. Long-term loans

.

Long-term loans comprise the following:

	30 September	31 December 2003
	2004
	(unaudited)
Loans from BPH Bank (MBP)	122,509
		128,300
Loans from Aareal Bank (Galeria Kazimierz)	14,467	-
Loans from Aareal Bank (Galeria Mokotow)	55,068	57,050
Loan from BPH (Taurus)	20,206	20,890
Loan from WBK (Globis Poznan)	9,614	9,302
Loan from BRE Bank S.A.	-	8,522
Loan from WBK (Korona)	8,439	8,439
Loan from Orbis S.A (Globis Poznan)	899	532
Loan from MKB (Centre Point 1)	28,743	-
Loan from MKB (Riverside)	20,615	-
Loans from GTC International	17,082	-
Loan from EBRD and Raiffeisen Bank (Serbia)	2,673	-
Loan from minorities in subsidiaries	14,030	-
Deferred Issuance debt expenses	(5,410)	(4,513)
	308,935	228,522

Long-term loans have been separated into the current portion and the long-term portion as disclosed below:

	30 September 2004	31 December 2003
	(unaudited)
Current portion of long-term loans:
Loans from BPH Bank (MBP)	7,100	7,700
Loans from Aareal Bank (Galeria Kazimierz)	1,356	-
Loan from BRE Bank S.A.		4,272
Loans from Aareal Bank (Galeria Mokotow)	2,450	2,450
Loan from BPH (Taurus)	982	920
Loan from WBK (Globis Poznan)	616	158
Loan from WBK (Korona)	500	125
Loan from MKB (Riverside)	20,615	-
Loan from EBRD and Raiffeisen Bank (Serbia)	67	-
Deferred Issuance debt expenses	(52)	(56)
	33,634	15,569
Long-term portion of long-term loans:
Loans from BPH Bank (MBP)	115,409	120,600
Loans from Aareal Bank (Galeria Kazimierz)	13,111	-
Loans from Aareal Bank (Galeria Mokotow)	52,618	54,600
Loan from BPH (Taurus)	19,224	19,970
Loan from WBK (Globis Poznan)	8,998	9,144
Loan from WBK (Korona)	7,939	8,314
Loan from BRE Bank S.A.	-	4,250
Loan from Orbis S.A (Globis Poznan)	899	532
Loan from MKB (Centre Point 1)	28,743	-
Loans from GTC International	17,082	-
Loan from EBRD and Raiffeisen Bank (Serbia)	2,606	-
Loan from minorities in subsidiaries	14,030	-
Deferred Issuance debt expenses	(5,358)	(4,457)
	275,301	212,953

14. Long-term loans (continued)

Galeria Kazimierz shopping centre construction loan

A loan agreement was concluded between GTC Galeria Kazimierz as borrower, and Aareal Bank A.G. and others as lenders, dated 10 March 2004 for a total available balance of Euro 68 million. The loan will finance the construction of Galeria Kazimierz shopping centre.

The loan has an interest rate, determined based on a formula of Euribor+1.9% p.a during construction and Euribor+1.6% after completion. Advances made under this loan agreement are repayable in monthly instalments during 10 years starting from completion of construction, with a 4% annual amortization.

The pledge for the loan comprises of a mortgage on the shares of GTC Galeria Kazimierz, the Galeria Kazimierz shopping centre together with an assignment of the associated receivables and insurance policy rights.

Loan agreement between GTC Mars (MBP) and Aareal Bank

On 25 March 2004, GTC Mars signed an annex to the loan agreement dated 15 August 1999 with Aareal Bank

According to the annex, BPH Bank replaced Aareal Bank as the consortium manager, and the margin on the loan has been decreased by 0.5% p.a effective from 1 April 2004. All pledges and other securities have been assigned from Aareal Bank towards BPH Bank.

Hungarian Foreign Trade Bank ("MKB") (Centre Point I)

A loan agreement was concluded between Centre Point I as borrower and MKB as lender, in 2001 for a total available balance of Euro 20,452 thousand. The loan financed the construction of Center Point I office building.

The loan has an interest rate of Euribor+1.85% p.a. Advances made under this loan agreement are repayable during 12 years starting from completion of construction.

The pledge for the loan comprises of a pledge on the shares and bank accounts of Centre Point I and Váci Út 81-85 Ltd, and the mortgage on Centre Point I office building.

14. Long-term loans (continued)

Hungarian Foreign Trade Bank ("MKB") (Riverside)

A loan agreement was concluded between Riverside as borrower, and MKB as lender, in 2001 for a total available balance of HUF 6,638 million. The loan financed the construction of Riverside residential project. The remaining loan has an interest rate of BUBOR (Budapest Interbank Offered Rate) plus 2% margin

The final repayment date is 31 December 2004.

The pledge for the loan comprises of a mortgage on the shares of Riverside, Riverside real estate, and the bank accounts of the company.

GTC International

As part of the contributions of shares of companies conducting business operations similar to the Company's activities, in the Czech Republic, Romania, Serbia and Hungary by GTC International (see note 16), all loans granted by GTC International to those subsidiaries were assigned towards GTC. As result of the assignment GTC International became a lender to the Company.

Loan agreement between GTC Alp and EUROHYPO AG Bank

A loan agreement was concluded between GTC Alp as borrower, and EUROHYPO AG Bank, dated 10 September 2004 for a total available balance of Euro 24 million. The loan will finance the construction of Allianz office building.

The loan has an interest rate, determined based on a formula of Euribor+1.3% p.a during construction and Euribor+1.2% after completion. Advances made under this loan agreement are repayable in monthly instalments during 10 years starting from completion of construction. As of 30 September 2004 no draw down has been made.

Loan agreement between Complexul and EBRD

On July 15, 2004, Complexul signed a loan agreement with European Bank for Reconstruction and Development ("EBRD"). According to the loan agreement, EBRD will provide Complexul a credit facility up to EUR 27.12 million to finance the development of America House project in Bucharest, Romania. The loan has an interest of EURIBOR increased by a margin that ranges from 2.5% to 4.5% depending on certain conditions and will be repaid according to a defined schedule, starting in August 2006. The credit facility matures in 2018. As of 30 September 2004 no draw down has been made.

14. Long-term loans (continued)

Loan agreement between GTC International Development (Serbia) as lender and EBRD and Raiffeisen Bank as borrowers

On September 12, 2003 the Company signed the loan agreement with EBRD and Raiffeisen Bank. The Bank provides a senior loan of Euro 10.16 million.

The loan has an interest rate of Euribor+2.5% p.a. Advances made under this loan agreement are repayable in 34 quarterly instalments starting from May, 2005.

The pledge for the loan comprises of a mortgage on the shares of the company, GTC House office building together with an assignment of the associated receivables and insurance policy rights.

Loan agreement between River Loft (Hungary) and MKB

On July 29, 2004, River Loft (Hungarian subsidiary) signed a loan agreement with MKB. According to the loan agreement, MKB will provide River Loft a credit facility in amount of HUF 691 million (approximately USD 3.3 million). The loan has an interest of BUBOR+1.85% (Budapest Interbank Offered Rate) and will be repaid within 23 months. The loan is secured by a pledge over River Loft land and the shares of the company. As of 30 September 2004 no draw down has been made.

Loans from minorities in subsidiaries

Other loans include agreements that were concluded between the Company's subsidiaries in Romania, Serbia and Hungary as borrower, and other shareholders of those companies as lenders.

15. Capital and Reserves

The shares structure as of 30 September 2004 is as follows:

Number of Shares	Share series	Total value	Total value	Percentage
		in PLN	in USD
13,928,621	A	13,928,621	4,151,715	70.1
115,224	B	115,224	26,660	0.6
23,544	B1	23,544	5,849	0.1
835,654	C	835,654	183,824	4.2
996,162	D	996,162	247,469	5.0
3,968,915	E	3,968,915	985,968	20.0
-	F (*)	-	-	-
19,868,120		19,868,120	5,601,485	100.0

(*) The Company has issued conditional share capital as a share option scheme (series F). The option to subscribe for 446,385 of the Company's shares in three equal tranches until 31 December 2007 has been granted to certain executives, for a premium of USD 13.44 per share.

All classes of shares are equal in all respects.

Issuance of shares

On February 2, 2004, the Extraordinary Shareholders' Meeting of the Company was held. The Extraordinary Shareholders' Meeting adopted resolutions regarding the increase of share capital.

As part of the increase, four new series of ordinary bearer shares were issued: (i) to qualified investors in a public offering, (ii) to GTC International (the majority shareholder of the Company), in a private allocation, in exchange for in-kind contributions consisting of shares and stock of five companies conducting business operations similar to the Company's activities in the Czech Republic, Romania, Serbia and Hungary, and (iii) to a stand-by underwriter, a part of the employees incentive plan.

The shareholder's meeting resolved to issue conditional share capital to be subscribed for in tranches, until 31 December 2007, by a related party as an incentive plan.

15. Capital and Reserves (continued)

The four new series of ordinary bearer shares consist the following:

Series E Shares – 3,968,915 shares with the nominal value of 1 PLN per share Series D Shares – 996,162 shares with the nominal value of 1 PLN per share Series B1 Shares – 23,544 shares with the nominal value of 1 PLN per share Series F Shares – 446,385 conditional shares with the nominal value of 1 PLN per share.

On 18 February 2004 the Warsaw Stock Exchange approved admitting shares series A,B,C for listing.

On 21 April 2004, the Warsaw Stock Exchange approved admitting shares series E and D for listing (see note 16).

The allotment of Series E Shares took place on 30 April 2004. All of the offered Series E Shares (total of 3,968,915 shares) were allotted to the investors, based on the issue price of 87 PLN (USD 21.6) per share.

On the same day Series D Shares were allotted to GTC International and as a result the Company effectively took control over shares in the companies in the Czech Republic, Romania, Serbia and Hungary (see note 16).

Trading in the shares commenced on 6 May 2004.

Movement in share premium

Movement in share premium is presented in the table below:

Balance as of 1 January 2004	33,543
Issuance of shares	104,021
Shares issuance expenses	(2,950)
Tax benefit resulted from shares issuance
expenses	561
Balance as of 30 September 2004	135,175

15. Capital and Reserves (continued)

EBRD Shares

On 11 December 2000 the Company and the European Bank for Reconstruction and Development ("EBRD") signed a subscription agreement according to which EBRD purchased 835,654 new shares.

On 11 December 2000 the Company and the EBRD signed a Sale Option Agreement. According to the agreement, EBRD has the right to sell to the Company for the purpose of their redemption 835,654 shares at a sale price equal to the offering price increased by the calculated interest, in the case the shares of the Company would not be listed on the Warsaw Stock Exchange at a price higher than the zloty equivalent of USD 17.95 per share.

After the allotment of Series E Shares, that took place on 30 April 2004 the conditions for exercising the above option ceased to exist, and as a result the option expired.

Profit distribution

On 16 March 2004, the Shareholders of the Company adopted a resolution regarding the distribution of dividend from previous years profit, amounting to 2.7 PLN per share.

Due to the fact that on 16 October 2003 an advance payment of dividend in the amount of 2.7 PLN per one share was made, the advance payment of dividend that has already been paid offset the amount allocated for dividend according to this resolution.

16. Acquisition of shares in subsidiaries and associates

On 8 April 2004, the Company purchased shares in the following companies:

Name of Company	Percentage acquired
GTC Hungary	65.5%
GTC Serbia	65.5%
GTC Romania	48.1% (*)
Lighthouse	31.6%
Vokovice	50.0%

(*) On 24 June 2004, the Company purchased a 6.4% stake in GTC Romania. After the acquisition the Company holds 54.5% in GTC Romania. The Company signed agreement to increase its stake up to 60.8% of the company's shares.

The assets acquired and liabilities assumed as at the date of acquisition were as follows:

Cash	4,646
Investment in associates	6,305
Other current asset	34,599
Investment property	35,123
Fixed assets	26,292
Long term liabilities	(54,682)
Short term liabilities	(27,528)
	24,755
Minority shares in subsidiaries	(4,914)
Total purchase price (stakes of shares as described
above)	19,841
Issuance of shares to GTC International	(19,476)
Cash paid	(365)
Cash acquired	4,646
Cash-outflow on acquisition, net of cash acquired		4,281

On 20 May 2004, the Company sold 18.4% of the shares in Vokovice for their nominal value. After the sale Company holds 31.6% in Vokovice.

On 27 September 2004, the Company incorporated GTC Croatia. The Company has 82.5% stake in GTC Croatia.

16. Acquisition of shares in subsidiaries and associates (continued)

On April 8, 2004 and in connection with the Head of Terms signed on November 4, 2003, GTC Romania signed an agreement with a party related to its shareholder Firestorm Services LLC ("Firestorm"), according to which that party sold to GTC Romania 100% of the shares of Titulescu Investments B.V.

GTC Romania paid for the shares of Titulescu on 24 May 2004.

Titulescu owns land in Bucharest and intends to develop an office building on this land.

The assets acquired and liabilities assumed as at the date of acquisition were as follows:

Cash	23
Fixed assets	3,565
Total purchase price	3,588
Remaining consideration to be paid	(2,408)
Cash acquired	(23)
Cash-outflow on acquisition, net of cash
acquired	(1,157)

17. Provisions for deferred tax liability and other

The balance of the provision for deferred tax liability as at 30 September 2004 amounted to USD 17,718 thousand.

The other provision in the amount of USD 200 thousand that was recorded in connection with a legal dispute is included within this item. The dispute relates to construction works in one of the Company's projects.

It is uncertain when this dispute would be settled.

18. Hedge reserve

On August 11, 2004 GTC Galeria Kazimierz has entered into a hedge transaction with Aareal bank.

According to the agreement the Company swapped a floating interest rate on the Aareal loan (see note 14) with a fixed interest for the period from 1 April 2005 to 31 March 2007. For the period from 1 April 2007 to 31 March 2011 the company purchased a collar to hedge the risk of one month Euribor rising above 5.5%, whilst undertaking to pay at least 3.25% in case the one month Euribor is lower than 3.25%.

According to IAS 39 a hedge is a financial instrument, which should be presented at its fair value. The changes in fair value are reflected net of tax directly in equity.

19. Earnings per share

Basic and diluted earnings per share were calculated as follows:

	Nine-month period ended 30 September		Three-month period ended 30 September		Year ended 31 December
	2004	2003	2004	2003	2003
	(unaudited)	(unaudited)	(unaudited)	(unaudited)
Net profit after tax (USD)	26,037,123	22,482,612	19,777,406	5,572,034	24,466,695
Weighted average number of shares for calculating
basic earnings per share	17,693,593	14,889,707	19,868,120	14,885,192	14,887,134
Basic earnings per share
(USD)	1.47	1.51	1.00	0.37	1.64
Weighted average number of shares for calculating
diluted earnings per share	17,945,400	n/a	20,314,505	n/a	n/a
Diluted earnings per share
(USD)	1.45	n/a	0.97	n/a	n/a

20. Supplementary information to the financial statements

Set out below is a reconciliation of the results of operations between Polish statutory accounting regulations (expressed in Polish zloty and translated into US Dollars at period average exchange rate) and International Financial Reporting Standards.

	Nine-month period ended	Nine-month period ended
	30 September 2004	30 September 2003 (**)
	(unaudited)	(unaudited)
	'000 PLN	'000 PLN
Profit/(Loss) for the period under Polish accounting
regulations in thousands of Polish zloty	37,761	121,741
	'000 USD	'000 USD
Profit/(Loss) for the period under Polish accounting
regulations translated to US Dollars at average rate for
the period	9,989	31,347
Adjustments to IFRS translated to US Dollars at
average rate for the period:
Revaluation of investment property	23,677	17,374
Sale of investment	-	(26,061)
Interest capitalised	709	125
Contract margin recognition	123	216
Depreciation and amortisation charge	74	4
Minority interest	(4,754)	(226)
Deferred tax	(8,021)	(4,815)
Effect of translation differences (*)	4,240	4,519
Profit for the period under International Financial
Reporting Standards in US Dollars	26,037	22,483

(*) Effect of translation differences includes the effect of profit for the period under Polish accounting principles being translated into US Dollars at the average rate and the effect of the use of a different reporting currency under IFRS.

(**) Figures restated due to change in the Polish accounting act adopted on 15 January 2004

20. Supplementary information to the financial statements (continued)

Set out below is a reconciliation of the net assets between Polish statutory accounting regulations (expressed in Polish zloty and translated into US Dollars at period end exchange rate) and International Financial Reporting Standards.

	30 September 2004 (unaudited)	31 December 2003 (**)
	'000 PLN	'000 PLN
Net assets at the end of the period under Polish
accounting regulations in thousands of Polish zloty	1,382,703	963,743
	'000 USD	'000 USD
Net assets as at the end of the period under Polish
accounting regulations translated to US Dollars at rate for
the year end	388,738	257,651
Adjustments to IFRS translated to US Dollars:
Interest capitalised	8,122	7,414
Deferred tax	(228)	4,060
Costs capitalised	821	821
Depreciation and amortization charge	(322)	(396)
Contract margin recognition	(41)	(164)
Effect of translation differences (*)	243	(231)
Net assets at the end of the period under International
Financial Reporting Standards in US Dollars	397,333	269,155

(*) Includes the effect of foreign translation differences on equity due to different reporting currency.

(**) Figures restated due to change in the Polish accounting act adopted on 15 January 2004

21. Other

According to the statutory financial statements of GTC Hungary as of September 30, 2004 prepared in accordance with Hungarian Accounting Standards, the shareholders' equity of GTC Hungary and some of its subsidiaries is negative. According to Hungarian law, if the equity of a business association is less than its minimum required registered capital, in a certain period, the business association is obliged to transformed into other business form. The Hungarian Act on Business Associations requires that the shareholders should take the necessary steps to address this matter. The management of the GTC Hungary has prepared a detailed business plan. According to the business plan, the GTC Hungary will achieve the minimum required registered capital

The financial statements were authorised for issue by the Management Board on 4 November 2004.