GTC - Globe Trade Centre S.A. — Interim / Quarterly Report 2005

Jun 30, 2005

GLOBE TRADE CENTRE S.A.

IFRS CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIODS ENDED 30 JUNE 2005 AND 2004

Globe Trade Centre S.A. Condensed Consolidated Balance Sheets as of 30 June 2005, 2004 and 31 December 2004 (in thousands of US Dollars)

		30 June 2005	30 June 2004	31 December 2004
ASSETS		(unaudited)	(unaudited; restated)	(restated)
Non current assets
Investment property		552,435	409,464	442,951
Property, plant and equipment		139,651	93,113	179,138
Investment in associates	11	18,596	14,410	18,338
Investment in marketable securities	10	15,905	14,756	19,106
Deferred tax asset		6,129	288	2,332
Advances to contractors		10,500	3,345	9,439
Other non-current assets	12	4,383	5,160	5,350
Current Assets		747,599	540,536	676,654
Inventory		23,314	23,839	23,551
Debtors		2,530	2,075	2,817
Accrued income	13	6,180	3,826	1,715
VAT and other tax recoverable		10,664	8,211	13,028
Prepayments, deferred expenses and other debtors		2,804	1,655	1,687
Short-term deposits		11,157	32,865	11,651
Cash and cash equivalents		111,906	106,440	115,729
		168,555	178,911	170,178
TOTAL ASSETS		916,154	719,447	846,832
EQUITY AND LIABILITIES
Capital attributable to equity holders of the parent
Share capital	15	5,632	5,601	5,602
Share premium		139,480	136,773	138,209
Capital reserve		1,231	1,231	1,231
Hedge reserve		(1,978)	-	(1,719)
Net unrealized provision on investment in marketable securities		(1,447)	(2,874)	1,699
Foreign currency translation		(7,961)	141	4,762
Accumulated profit		307,654 442,611	237,046 377,918	265,419 415,203
Minority Interest		7,624	5,271	11,131
Total Equity		450,235	383,189	426,334
Long-term Liabilities
Long-term portion of long-term loans	14	362,082	270,546	333,014
Deposits from tenants		2,990	1,963	2,790
Long term payable		3,805	-	6,992
Provisions		50	-	450
Provision for deferred tax liability		23,253	12,383	10,088
		392,180	284,892	353,334
Current Liabilities Trade and other payables		18,969	8,554	23,920
Credit line		-	2,000	2,015
Current portion of long-term loans	14	30,797	32,040	22,135
Current portion of long term payable		3,287	-	673
VAT and other taxes payable		1,219	1,051	676
Accruals		7,779	4,372	11,834
Advances received		5,782	1,029	2,131
Deferred income		248	391	-
Derivatives		5,658	1,929	3,780
		73,739	51,366	67,164
TOTAL EQUITY AND LIABILITIES		916,154	719,447	846,832

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

Globe Trade Centre S.A. Condensed Consolidated Income Statements for the six-month period ended 30 June 2005, 2004 and year ended 31 December 2004 (in thousands of US Dollars)

			Six-month period ended 30 June	Three-month period ended 30 June		Year ended 31 December
		2005 (unaudited)	2004 (unaudited; restated)	2005 (unaudited)	2004 (unaudited; restated)	2004 (restated)
	Note
Revenues from operations	7	45,529	26,667	24,145	14,286	56,367
Cost of operations	8	(17,198)	(8,681)	(5,495)	(4,804)	(21,069)
Gross margin from operations		28,331	17,986	18,650	9,482	35,298
Selling expenses		(1,766)	(580)	(1,025)	(388)	(1,838)
Administration expenses		(3,274)	(2,390)	(1,544)	(1,604)	(4,681)
Share based payment		(1,172)	(498)	(485)	(478)	(1,899)
Profit from revaluation of investment property		42,621	-	-	-	23,246
Other income/ (expenses)		295	(175)	222	(145)	(596)
Profit from continuing operations before tax and financial related income / (expense)		65,035	14,343	15,818	6,867	49,530
Foreign currency gain/(loss), net		(2,161)	1,432	(1,678)	1,329	5,062
Financial income/(expense), net		(10,787)	(7,687)	(5,856)	(5,405)	(15,276)
Share of profit/ (losses) from associates		(40)	409	(81)	409	1,456
Profit before taxation		52,047	8,497	8,203	3,200	40,772
Taxation		(10,534)	(1,018)	(3,176)	(70)	170
Profit for the period		41,513	7,479	5,027	3,130	40,942
Attributable to: Equity holders Minority interest		42,235 (722)	7,636 (157)	5,439 (412)	3,252 (122)	36,009 4,933
Basic earnings per share (USD) Diluted earnings per share (USD)	16 16	2.27 2.23	0.38 0.37	0.30 0.29	0.23 0.22	1.98 1.94

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 six-month period ended 30 June 2005, 2004 and year ended 31 December 2004 (in thousand of US Dollars)

	Issued and paid in share capital	Share premium	Capital reserve	Foreign currency translation	Net unrealized provision on investment in marketable securities	Accumulated profit	Minority interest	Total
Balance as of 1 January 2004	4,362	33,543	1,231	474	-	229,545	697	269,852
Reclassification of loss from investment in marketable securities	-	-	-	-	(1,000)	1,000	-	-
Reclassification due to adoption of share base payment (IFRS 2) [Note 3]	-	1,135	-	-	-	(1,135)	-	-
Restated balance as of 1 January 2004	4,362	34,678	1,231	474	(1,000)	229,410	697	269,852
Issuance of shares	1,239	101,597						102,836
Currency translation differences	-	-	-	(333)	-	-	(114)	(447)
Share based payment	-	498	-	-	-	-	-	498
Profit from investment in marketable securities	-	-	-	-	(1,874)	-	-	(1,874)
Acquisition of subsidiaries							4,845	4,845
Profit for the six-months period ended 30 June 2004 (unaudited)	-	-	-	-	-	7,636	(157)	7,479
Balance as of 30 June 2004 (unaudited)	5,601	136,773	1,231	141	(2,874)	237,046	5,271	383,189

	Issued and Paid in Share Capital	Share Premium	Capital reserve	Hedge reserve	Foreign currency translation	Net unrealized provision on Investment in Marketable securities	Accumulated Profit	Minority interest	Total
Restated balance as of 1 January 2004	4,362	34,678	1,231	-	474	(1,000)	229,410	697	269,852
Issuance of shares	1,240	101,632	-	-	-	-	-	-	102,872
Share based payment Profit from investment in	-	1,899	-	-	-	-	-	-	1,899
marketable security Currency translation	-	-	-	-	-	2,699	-	-	2,699
differences	-	-	-	-	4,288	-	-	656	4,944
Acquisition of subsidiaries	-	-	-	-	-	-	-	4,845	4,845
Hedge transactions	-	-	-	(1,719)	-	-	-	-	(1,719)
Profit for the year ended 31 December 2004	-	-	-	-	-	-	36,009	4,933	40,942
Restated Balance as of 31 December 2004	5,602	138,209	1,231	(1,719)	4,762	1,699	265,419	11,131	426,334
Issuance of shares	30	99	-	-	-	-	-	-	129
Share base payment	-	1,172	-	-	-	-	-	-	1,172
Currency translation differences	-	-	-	-	(12,723)	-	-	(2,001)	(14,724)
Net change in investment in marketable securities	-	-	-	-	-	(3,146)	-	-	(3,146)
Acquisition of shares	-	-	-	-	-	-	-	(784)	(784)
Hedge transactions Profit for the six-months period ended 30 June 2005 (unaudited)	- -	- -	- -	(259) -	- -	- -	- 42,235	- (722)	(259) 41,513
Balance as of 30 June 2005 (unaudited)	5,632	139,480	1,231	(1,978)	(7,961)	(1,447)	307,654	7,624	450,235

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 six-month period ended 30 June 2005, 2004 and year ended 31 December 2004 (In thousands of US Dollars)

	Six-month period ended 30 June 2005 (unaudited)	Six-month period ended 30 June 2004 (unaudited; restated)	Year ended 31 December 2004 (restated)
CASH FLOWS FROM OPERATING ACTIVITIES: Profit from continuing operations Adjustments for:	65,035	14,343	49,530
Revaluation of investment properties Share based payment	(42,621) 1,172	- 498	(23,246) 1,899
Depreciation and amortization	168	288	493
Operating cash before working capital changes	23,754	15,129	28,676
Decrease/(increase) in debtors and prepayments and other current assets	(4,700)	2,972	(625)
Decrease/(increase) in inventory	(733)	1,366	2,279
Increase/(decrease) in provisions	(400)	-	450
Increase in advances received	3,571	-	1,739
Increase in other non-current assets	(550)	(93)	(211)
Increase/(decrease) in short-term payables and accruals	(20)	418	332
Cash generated from operations	20,922	19,792	32,640
Interest paid	(10,021)	(9,029)	(18,596)
Interest received	1,358	1,602	4,187
Tax paid in the period	(2,126)	(329)	(1,064)
Net cash from operating activities	10,133	12,036	17,167
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment	(61,593)	(25,646)	(77,979)
Sale of investment properties and fixed assets	-	500	517
Lease origination expenses	(833)	(3,770)	(4,400)
Purchase of shares in subsidiaries	(684)	3,489	(773)
Loans granted	(1,941)	(155)	(4,125)
Loans repayments	-	1,457	3,680
Increase in short term deposits	-	-	(581)
Decrease in short term deposits	662	255	23,092
Dividend received	-	-	193
Net cash used in investing activities	(64,389)	(23,870)	(60,376)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of shares	129	85,785	85,785
Proceeds from the issuance of share capital to minority in subsidiary	-	-	5
Proceeds from long-term borrowings	76,976	16,698	107,966
Repayment of long-term borrowings	(24,543)	(26,961)	(78,989)
Loans and shares origination cost	(387)	(3,662)	(4,891)
Deposits received from tenants	200	166	994
Net cash from / (used) financing activities	52,375	72,026	110,870
Effect of foreign currency translation	(1,942)	(281)	1,539
Net increase in cash and cash equivalents	(3,823)	59,911	69,200
Cash and cash equivalents, at the beginning of the year	115,729	46,529	46,529
Cash and cash equivalents, at the end of the period	111,906	106,440	115,729

1. Principal activities

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), Croatia and Czech Republic. The Company is developing, and leasing or selling space to commercial and individual tenants, through its directly and indirectly owned subsidiaries.

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 June 2005 the number of full time equivalent working in the Group companies was 77.

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 50.69% of the Company's shares (see note 15).

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, and the International Financial Reporting Interpretations Committee ("IFRIC"). These adjustments and their effect on earnings for the six-month periods ended 30 June 2005 and 2004 and net assets as of 30 June 2005 and 31 December 2004 are shown in note 18 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 June 2005. 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 2004. The interim financial results are not necessarily indicative of the full year results.

The interim condensed consolidated financial statements have been prepared on a historical cost basis, except for investment properties, land and buildings, derivative financial instruments, and available-for-sale financial assets that have been measured at fair value. The carrying values of recognised assets and liabilities that are hedged (fair value hedge) are adjusted to record changes in the fair values attributable to the risks that are being hedged

Impairment of assets

The carrying value of assets is periodically reviewed by 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 June 2005.

3. Accounting polices

The Company applied to the condensed consolidated financial statements for the six-month period ended on 30 June 2005 all International Financial Reporting Standards (IFRS) effective for accounting periods beginning on or before 1 January 2005.

Effective 1 January 2005, the change in the Polish Accounting Act requires the Group to prepare its consolidated financial statement in accordance with IFRS that have been adopted by European Union ("EU"). At this particular time, due to the endorsement process of the EU, and activities of the Company, there is no differences in the policies applied by the Company between IFRS and IFRS that have been endorsed by the Commission of the European Communities.

The interim condensed consolidated financial statements have been prepared in accordance with IFRS and all applicable IFRS that have been adopted by the EU.

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 2004. There have been no changes in International Financial Reporting Standards for the year beginning 1 January 2005, except the followings:

In December 2003, the IASB revised 13 existing International Accounting Standards. The new revised standards is applied for annual periods beginning on or after 1 January 2005.

In February 2004, the IASB issued IFRS 2 "Share-based Payment" ("IFRS 2"). The new standard is applied for annual periods beginning on or after 1 January 2005 and applied retrospectively to issues after November 2002 and not vested as at 1 January 2004.

In March 2004, the IASB issued IFRS 4 "Insurance Contracts" ("IFRS 4"). The new standard is applied for annual periods beginning on or after 1 January 2005. The new standard issued will have no impact on the accounting policies used by the Group.

3. Accounting polices (continued)

In March 2004, the IASB issued IFRS 5 "Non-current Assets Held for Sale and Discontinued Operations" ("IFRS 5"). The new standard should be applied for annual periods beginning on or after 1 January 2005. The new standard issued will have no impact on the accounting policies used by the Group as presently it does not relate to the Company.

Purchase of shares of minority

If the Company increase/decrease its share in the net assets of its controlled subsidiaries, the appropriate share of the net assets is transferred from the minority interest to the proper component of the equity attributable to equity holders of the parent.

Restatement of comparable periods

The Company applied to the condensed consolidated financial statements for the six-month period ended on 30 June 2005 all International Financial Reporting Standards effective for accounting periods beginning on or before 1 January 2005. In particular, the Company adopted each of the following new standards and applied them retrospectively:

IAS 39 "Financial instruments"

According to the revised IAS 39 the investment in available for sale financial asset is presented at fair value. A recognised gain or loss arising from a change in the fair value of such asset is recognised directly in equity.

This presentation differs from the previous presentation, which the Company used till 31 December 2004.

Under previous IAS 39, the Company used to recognise gain or loss arising from a change in the fair value of a financial asset in the net profit or loss for the period.

IFRS 2 "Share-based Payment"

A share-based payment is a transaction in which the entity receives or acquires goods or services as consideration for its equity instruments. The Company applied IFRS 2 in relation to series F, B and B1 shares.

The issuance of shares or rights to shares requires an increase in a component of equity. IFRS 2 requires the offsetting debit entry to be expensed when the payment for goods or services does not represent an asset.

3. Accounting polices (continued)

Restatement of comparable periods (continued)

The total expense related to equity-settled share-based payments will equal the multiple of the total fair value of instruments that vest at the grant-date.

Impact on profit and loss and equity statements comprises the following:

	30 June 2004 – reported	30 June 2004 – restated	Difference
Selected items from profit and loss statement
Share based payment	-	(498)	(498)
Loss from marketable securities	(2,305)	-	2,305
Tax expenses	(587)	(1,018)	(431)
Profit for the period	6,103	7,479	1,376
Selected items from equity statement
Share premium	135,140	136,773	1,633
Net unrealized provision on investment in marketable
securities	-	(2,874)	(2,874)
Accumulated profit	235,805	237,046	1,241
Total equity	383,189	383,189	-
	31 December 2004 – reported	31 December 2004 – restated	Difference
Selected items from profit and loss statement
Share based payment
Profit from marketable securities	-	(1,899)	(1,899)
Tax expenses	2,045 824	- 170	(2,045) (654)
Profit for the year	45,540	40,942	(4,598)
Selected items from equity statement
Share premium	135,175	138,209	3,034
Net unrealized provision on investment in marketable
securities	-	1,699	1,699
Accumulated profit Total equity	270,152 426,334	265,419 426,334	(4,733) -

4. Investment in Subsidiaries, Associates and Joint Ventures

Investment in Subsidiaries and Joint Ventures

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 Company	Country of	30 June 2005 **	30 June	31 December
		incorporation		2004**	2004 **
GTC Mars Sp. z o.o. ("GTC Mars")	GTC S.A	Poland	100%	100%	100%
GTC Galeria Sp. z o.o. ("GTC Galeria")	GTC S.A	Poland	100%	100%	100%
GTC Taurus Sp. z o.o. ("GTC Taurus")	GTC S.A	Poland	100%	100%	100%
GTC CH Galeria Sp. z o.o ("GTC CH Galeria")	GTC Galeria	Poland	100%	100%	100%
Darat Sp. z o.o. ("Darat")	GTC S.A	Poland	100%	100%	100%
GTC Konstancja Sp. z o.o. ("GTC Konstancja")	GTC S.A	Poland	100%	100%	100%
GTC Korona S.A ("GTC Korona")	GTC S.A	Poland	100%	100%	100%
Globis Poznań Sp. z o.o ("Globis Poznan")	GTC S.A	Poland	100%	75%	75%
GTC Alp Sp. z o.o (formerly "GTC Topaz"), (GTC Alp)	GTC S.A	Poland	100%	100%	100%
GTC Vega Sp. z o.o. ("GTC Vega")	GTC S.A	Poland	100%	100%	100%
GTC Aeropark Sp. z o.o. ("GTC Aeropark")	GTC S.A	Poland	100%	100%	100%
GTC Neptune Sp. z o.o. ("GTC Neptune")	GTC S.A	Poland	100%	100%	100%
Globis Wroclaw Sp. z o.o ("Globis Wroclaw")	GTC S.A	Poland	100%	75%	75%
GTC Galeria Kazimierz Sp. z o.o. (formerly GTC Mercury Sp.
z o.o.) ("GTC Galeria Kazimierz")	GTC S.A	Poland	100%	100%	100%
GTC Orion Sp. z o.o. ("GTC Orion")	GTC S.A	Poland	100%	100%	100%
GTC Satellite Sp. z o.o. ("GTC Satellite") (formerly GTC
Saturn Sp. z o.o.)	GTC S.A	Poland	100%	100%	100%
Rodamco CH1 Sp. z o.o. ("Rodamco CH1")*	GTC CH Galeria	Poland	50%	50%	50%
GTC Galaxy-Jupiter Sp. z o.o. ("GTC Galaxy-Jupiter")	GTC S.A	Poland	100%	100%	100%
GTC Hungary Real Estate Development Company Ltd. ("GTC		Hungary
Hungary")	GTC S.A		65.6%	-	65.6%
Vaci Ut 81-85 Ltd.	GTC Hungary	Hungary	65.6%	-	65.6%
Riverside Apartments Ltd. ("Riverside)	GTC Hungary	Hungary	65.6%	-	65.6%
Vector-H Ltd.	GTC Hungary	Hungary	65.6%	-	65.6%
Center Point I. Ltd. ("Center Point I')	GTC Hungary	Hungary	65.6%	-	65.6%
Center Point II. Ltd. ("Center Point II')	GTC Hungary	Hungary	65.6%	-	65.6%
River Loft Ltd.	GTC Hungary	Hungary	65.6%	-	65.6%
GTC Real Estate Investments Romania B.V. ("GTC
Romania")	GTC S.A	Netherlands	54.4%	-	54.4%
Complexul Multifunctional Victoria S.R.L	Titulescu
		Romania	54.4%	-	54.4%
	Investments B.V
Towers International Property S.R.L	GTC Romania	Romania	54.4%	-	54.4%
International Hotel and Tourism S.R.L	GTC Romania	Romania	54.4%	-	54.4%
International Shopping Centre S.R.L	GTC Romania	Romania	54.4%	-	54.4%
Titulescu Investments B.V ("Titulescu")	GTC Romania	Romania	54.4%	-	54.4%
GTC Real Estate Investments Serbia B.V. ("GTC Serbia")	GTC S.A	Netherlands	65.6%	-	65.6%
GTC Business Park Doo	GTC Serbia	Serbia and	65.6%	-	65.6%
		Montenegro (Serbia)
GTC Commercial Centres Doo	GTC Serbia	Serbia and	65.6%	-	65.6%
		Montenegro (Serbia)
GTC International Development Doo	GTC Serbia	Serbia and	65.6%	-	65.6%
		Montenegro (Serbia)
GTC Real Estate Investments Croatia BV "(GTC Croatia")	GTC S.A	Netherlands	82.5%	-	82.5%
Euro Structor d.o.o.	GTC Croatia	Croatia	57.8%	-	57.8%
GTC Zagreb d.o.o.	GTC Croatia	Croatia	82.5%	-	82.5%

* Proportionate consolidation

** Share of GTC

4. Investment in Subsidiaries, Associates and Joint Ventures

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") Holesovice Residential Holdings S.A. ("Holesovice")

The above associates hold 87.5% in companies which involve in real estate development in Czech Republic (see note 11).

5. 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)	Details
Poland	Mokotow Business Park	107,200	Nine office buildings in Warsaw
	Galeria Kazimierz	36,200	Shopping centre in Krakow
	Galeria Mokotow	58,600	Shopping centre in Warsaw
	Galileo office building	10,300	Office building in Krakow
	Globis Poznan office building	13,000	Office building in Poznan
	Konstancja Residential phases 1 (over 90% has been sold)	17,500	Residential project in Konstancin
Hungary	Center Point Phase I	18,600	Office building in Budapest
	Riverside 1 residential project (over 90% has been sold)	33,500	Residential project in Budapest

5. Projects description (continues)

Projects under construction / to be constructed

		Estimated Net
		Rentable/Saleable
Country Poland	Property	space (sq.m)	Details
	Korona offices	23,000	Office buildings in Krakow
	Kazimierz commercial	21,000	Commercial project in Krakow
	Vega	18,500	Office building in Warsaw
	Allianz building	11,800	Office building in Warsaw
	Topaz 1 building	11,100	Office building in Warsaw
	Topaz 2 building	18,000	Office building in Warsaw
	Wrocław	12,300	Office building in Wroclaw
	Czestochowa	49,800	Shopping center in Czestochowa
	Konstancja Residential phase 2	15,800	Residential project in Konstancin
	Konstancja Residential phases 3-4	32,000	Residential project in Konstancin
	Sattelite office park	40,000	Commercial project in Warsaw
	Konstancja Commercial	42,000	Commercial project in Konstancin
	Aeropark (6 buildings)	51,000	Commercial project in Warsaw
Hungary	Centre Point Phase II	23,000	Office building in Budapest
	District 11	45,000	Residential project in Budapest
	Riverloft – Residential	16,000	Residential project in Budapest
	Riverloft – Commercial	5,800	Commercial project in Budapest
Czech	Lighthouse- Office	27,000	Office buildings in Prague
	Jarow	38,600	Residential project in Prague
	Holesovice residential / office	41,000	Residential project in Prague
	Vokovice (existing logistic center to
	be converted into residential project)	23,000
Romania	Galeria Bucharest	54,000	Shopping centre in Bucharest
	Petricani	60,000	Residential project in Bucharest
	Green Dream	19,500	Residential project in Bucharest
	America House- Office	26,000	Office building in Bucharest
Serbia	GTC House- Office	13,500	Office building in Belgrad
	Block 19a	29,800	Residential project
Croatia	Galeria Zagreb	33,600	Shopping and office centre in Zagreb

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

6. Events in the period

In February 2005, GTC Romania, through one of its subsidiaries, International Hotel and Tourism SRL, signed an agreement for the purchase of a land plot of 120,000 sq.m. in Bucharest, Romania for a total consideration of EUR 15.5 million. The land, located in a prime location in the northern part of Bucharest will be developed into a major shopping center, office and residential complex.

6. Events in the period (continued)

On 3 March 2005, the Company purchased from Orbis 2,000 shares in Globis Poznan and 25 shares in Globis Wrocław constituting 25% of their share capital. After the transaction the Company owns 100% of the share capital of Globis Poznan and Globis Wrocław.

On 16 March 2005, Galeria Kazimierz shopping centre was successfully completed and opened to public.

On 7 April 2005 the Regional Court in Warsaw updated the National Court Register entry concerning the share capital, which increased up to 19 964 841 PLN.

On 12 April 2005 FIC Globe B.V. has exercised the option to redeem/sell its shares in GTC Serbia, GTC Romania and GTC Hungary (see note 15):

The shares to be sold by FIC Globe to the respective shareholders of the subsidiaries constitute of:

• 13.87% of the share capital in GTC Romania (out of which 8.4% would be purchased by the Company based on its current pro-rata holdings, if other shareholders would exercise their right);
• 13.13% of the share capital of GTC Serbia and GTC Hungary (out of which 8.6% would be purchased by the Company based on its current pro-rata holdings, if other shareholders would exercise their right).

The Company negotiates with FIC Globe in order to agree the value of these subsidiaries and thus purchase the shares. GTC has the option to accept or reject the offer, depending on the value that will be concluded as described hereunder. If GTC considers the value to be too high it will reject the offer and then, all shareholders of such GTC subsidiary are obliged to offer their shares for sale in the subsidiary to a third party.

The loans granted by FIC Globe to those subsidiaries in the amount of \$ 5.2 million will be repaid.

On 9 May 2005 the Company executed with T.U. Allianz Polska Sp. z o.o. preliminary Sale of Shares Agreement of 43 511 shares of the company GTC Alp with the total nominal value of 21 755 500 PLN representing 100% of the share capital and votes on the Shareholders Meeting of GTC Alp.

The Preliminary Agreement shall provide for signing of the final agreement on the sale of Shares under conditions of (i) receipt of necessary permits and (ii) completion of Allianz building being build on the company's site on Domaniewska street but in any event no later than on 1st December 2005.

On 19 May 2005 GTC Poland signed a preliminary agreement for the acquisition of a land plot of 90,000 sq.m. in Czestochowa, Poland. GTC Poland intends to develop the land into a third generation shopping centre. The completion of the transaction is subject to certain conditions, as stipulated in the preliminary agreement.

7. Revenue from operations

Revenue from operations comprises the following:

	Six-month period ended 30 June 2005 (unaudited)	Six-month period ended 30 June 2004 (unaudited; restated)	Three-month period ended 30 June 2005 (unaudited)	Three-month period ended 30 June 2004 (unaudited; restated)	Year ended 31 December 2004 (restated)
Office and Commercial revenue Residential revenue	31,713 13,816	23,973 2,694	17,295 6,850	12,259 2,027	49,542 6,825
	45,529	26,667	24,145	14,286	56,367

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.

8. Cost of operations

Costs of operations comprise the following:

	Six-month period ended 30 June 2005 (unaudited)	Six-month period ended 30 June 2004 (unaudited; restated)	Three-month period ended 30 June 2005 (unaudited)	Three-month period ended 30 June 2004 (unaudited; restated)	Year ended 31 December 2004 (restated)
Cost of office and commercial operations	8,593	6,644	3,783	3,385	14,975
Residential costs	8,605 17,198	2,037 8,681	1,712 5,495	1,419 4,804	6,094 21,069

9. Segmental analysis

The Group's business activities can be categorised into two main segments:

• 1. Development and rental of office space and shopping malls ("office and commercial") and
• 1. Development and sale of houses and apartment units ("residential").

All the Group's activities and assets are located in Poland, Hungary, Romania, Serbia and Montenegro, Croatia and Czech Republic.

Segment analysis for the six-month periods ended 30 June 2005 and 30 June 2004 is presented below:

	Poland		Hungary		Romania		Serbia		Croatia		Consolidated
	30 June 2005	30 June 2004	30 June 2005	30 June 2004	30 June 2005	30 June 2004	30 June 2005	30 June 2004	30 June 2005	30 June 2004	30 June 2005	30 June 2004
Office and commercial income	29,518	23,321	2,057	652	-	-	84	-	54	-	31,713	23,973
Residential income	12,731	1,095	1,085	1,599	-	-	-	-	-	-	13,816	2,694
Total income	42,249	24,416	3,142	2,251	-	-	84	-	54	-	45,529	26,667
Office and commercial costs	8,141	6,496	407	148		-	45	-	-	-	8,593	6,644
Residential costs	7,585	980	1,020	1,057	-	-	-	-	-	-	8,605	2,037
Total costs	15,726	7,476	1,427	1,205	-	-	45	-	-	-	17,198	8,681
Office and commercial result	21,377	16,825	1,650	504	-	-	39	-	54	-	23,120	17,329
Residential result	5,146	115	65	542	-	-	-	-	-	-	5,211	657
Total result	26,523	16,940	1,715	1,046	-	-	39	-	54	-	28,331	17,986

Segment analysis for the three-month periods ended 30 June 2005 and 30 June 2004 is presented below:

Poland Hungary Romania Serbia Croatia	Consolidated 30 June 30 June
30 June 30 June 30 June 30 June 30 June 30 June 30 June 30 June 30 June 30 June 2005 2004 2005 2004 2005 2004 2005 2004 2005 2004	2005 2004
Office and commercial 16,110 11,607 1,047 652 - - 84 - 54 - income	17,295 12,259
Residential 6,029 428 821 1,599 - - - - - - income	6,850 2,027
Total income 22,139 12,035 1,868 2,251 - - 84 - 54 -	24,145 14,286
Office and 3,572 3,237 166 148 - - 45 - - - commercial costs	3,783 3,385
Residential costs 899 362 813 1,057 - - - - - -	1,712 1,419
Total costs 4,471 3,599 979 1,205 - - 45 - - -	5,495 4,804
Office and 12,538 8,370 881 504 - - 39 - 54 - commercial result	13,512 8,874
Residential result 5,130 8 542 - - - - - - 66	5,138 608
Total result 17,668 8,436 889 1,046 - - 39 - 54 -	18,650 9,482

10. Investment in marketable securities

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 of an Orbis share as of 30 June 2005 is 6.9 USD (PLN 23.1) (USD 8.3 as of 31 December 2004 (PLN 24.8)).

The whole amount of the marketable securities relates to Orbis shares. Orbis shares constitute a long term investment classified according to IAS 39 as available for sale financial asset.

11. Investment in associates

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

Lighthouse Holdings Limited S.A.

Vokovice BCP Holding S.A.

Holesovice Residential Holdings S.A.

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

The investment in associates comprises the following:

	30 June 2005 (unaudited)	30 June 2004 (unaudited; restated)	31 December 2004 (restated)
Shares	6,308	6,305	6,305
Translation differences	(131)	30	(41)
Equity profit	1,416	409	1,456
Loans receivable	11,003	7,666	10,618
Investment in associates	18,596	14,410	18,338

12. Other non-current assets

Included within other non-current assets are the following:

	30 June 2005 (unaudited)	30 June 2004 (unaudited; restated)	31 December 2004 (restated)
Lease origination costs	4,153	5,036	4,789
Tenants deferred incentive expenses Deferred debt expenses (*)	230 -	- 124	- 561
	4,383	5,160	5,350

(*)Expenses related to loan that has not been drawn-down.

13. Accrued income

Accrued income consists of the following:

	30 June 2005 (unaudited)	30 June 2004 (unaudited; restated)	31 December 2004 (restated)
Accrued rent	-	1,432	-
Accrued financial income Sale of residential units	- 5,386	90 1,589	- 450
Services and other	794	715	1,265
	6,180	3,826	1,715

14. Long-term loans

Long-term loans comprise the following:

	30 June 2005 (unaudited)	30 June 2004 (unaudited; restated)	31 December 2004 (restated)
Loan from BPH Bank (GTC Mars)	117,634	124,408	120,884
Loan from Aareal Bank (Rodamco CH1)	53,543	55,872	54,645
Loan from BPH (GTC Taurus)	19,476	20,437	19,969
Loan from Aareal Bank (GTC Galeria Kazimierz)	81,282	13,975	39,222
Loan from WBK (Globis Poznan)	9,297	9,395	10,776
Loan from WBK (GTC Korona)	8,663	8,439	8,888
Loan from EUROHYPO (GTC Alp)	7,774	-	6,421
Loan from EUROHYPO (GTC Neptune)	1,479	-	-
Loan from Orbis S.A (Globis Poznan)	-	878	1,055
Loan from MKB (Centre Point I)	39,664	24,404	45,744
Loan from MKB (Centre Point II)	5,780	-	-
Loan from MKB (Riverside)	-	20,084	-
Loan from MKB (Riverloft)	3,377	-	3,961
Loans from GTC International (GTC)	8,491	16,711	17,629
Loan from EBRD and Raiffeisen Bank (GTC Serbia)	12,355	-	6,771
Loan from EBRD and Raiffeisen Bank (GTC Romania)	8,281	-	-
Loan from OVAG (GTC Croatia)	4,897	-	5,428
Loans from minorities in subsidiaries	16,702	12,794	19,212
Deferred issuance debt expenses	(5,816)	(4,811)	(5,456)
	392,879	302,586	355,149

14. Long-term loans (continued)

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

	30 June 2005 (unaudited)	30 June 2004 (unaudited; restated)	31 December 2004 (restated)
Current portion of long term loans:
Loan from BPH Bank (GTC Mars)	6,500	7,100	6,500
Loan from Aareal Bank (Rodamco CH1)	2,450	2,450	2,450
Loan from BPH (GTC Taurus)	1,046	961	998
Loan from Aareal Bank (GTC Galeria Kazimierz)	3,284	667	2,251
Loan from WBK (Globis Poznan)	483	455	546
Loan from WBK (GTC Korona)	450	375	450
Loan from EUROHYPO (GTC Alp)	373	-	-
Loan from EUROHYPO (GTC Neptune)	172
Loan from MKB (Centre Point I)	2,157		2,432
Loan from MKB (Riverside)	-	20,084	-
Loan from EBRD and Raiffeisen Bank (GTC Serbia)	2,859	-	361
Loan from EBRD and Raiffeisen Bank (GTC Romania)	34
Loan from OVAG (GTC Croatia)	4,897
Loans from minorities in subsidiaries	6,168	-	6,233
Deferred Issuance debt expenses	(76)	(52)	(86)
	30,797	32,040	22,135

	30 June 2005 (unaudited)	30 June 2004 (unaudited; restated)	31 December 2004 (restated)
Long term portion of long term loans:
Loan from BPH Bank (GTC Mars)	111,134	117,308	114,384
Loan from Aareal Bank (Rodamco CH1)	51,093	53,422	52,195
Loan from BPH (GTC Taurus)	18,430	19,476	18,971
Loan from Aareal Bank (GTC Galeria Kazimierz)	77,998	13,308	36,971
Loan from WBK (Globis Poznan)	8,814	8,940	10,230
Loan from WBK (GTC Korona)	8,213	8,064	8,438
Loan from EUROHYPO (GTC Alp)	7,401	-	6,421
Loan from EUROHYPO (GTC Neptune)*	1,307	-	-
Loan from Orbis S.A (Globis Poznan)		878	1,055
Loan from MKB (Centre Point I)	37,507	24,404	43,312
Loan from MKB (Centre Point II)	5,780	-	-
Loan from MKB (Riverloft)	3,377	-	3,961
Loan from GTC International	8,491	16,711	17,629
Loan from EBRD and Raiffeisen Bank (GTC Serbia)	9,496		6,410
Loan from EBRD and Raiffeisen Bank (GTC Romania)*	8,247		-
Loan from OVAG (GTC Croatia)			5,428
Loans from minorities in subsidiaries	10,534	12,794	12,979
Deferred Issuance debt expenses	(5,740)	(4,759)	(5,370)
	362,082	270,546	333,014

*The loans conditions are described in the consolidated financial statement prepared under IFRS for the year ended 31 December 2004. The first draw-dawns of these loans were done in the period ended 30 June 2005.

15. Capital and Reserves

As at 30 June 2005 the shareholder structure is as follows:

Number of Shares	Share series	Total Value In PLN	Total value in USD	Percentage
13,928,621	A	13,928,621	4,151,730	73.8%
115,224	B	115,224	26,660	0.4%
23,544	B1	23,544	5,849	0.1%
835,654	C	835,654	183,824	3.3%
996,162	D	996,162	247,469	4.4%
3,968,915	E	3,968,915	985,968	17.5%
96,721	F (*)	96,721	30,422	0.5%
19,964,841		19,964,841	5,631,922	100.0%

The shareholders of the Company as of the day that the Shareholders Meeting was conducted (14 April 2005) were as follows:

Name	Number of shares	Percentage
GTC International B.V	10,119,378	50.69%
Adria B.V.	1,000,072	5.01%
ING Nationale Nederlanden	1,448,957	7.26%
Commercial Union	1,400,000	7.01%
Others	5,996,434	30.03%
Total	19,964,841	100.00%

(*) On 2 February 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, the shareholder's meeting resolved to issue of 446,385 conditional shares with the nominal value of 1 PLN per share (seria F), to be subscribed for in tranches, until 31 December 2007, by the Chairman of the Supervisory Board, Mr. Eli Alroy as an incentive plan.

15. Capital and Reserves (continued)

On 10 January 2005, 148,795 Subscription Warrants were issued which were subscribed for by Mr. Eli Alroy.

Each of the Subscription Warrants authorises to subscribe for 1 Series F Share of the Company at PLN 1 or at the PLN equivalent of USD 13.44.

On 18 January 2005 Mr Eli Alroy exercised 89,001 Subscription Warrants at a price of PLN 1, and on 19 January 2005 7,720 Subscription Warrants at a price of PLN 41.71. The remaining 52,074 Subscription Warrants will not be exercised due to the execution of the 89,001 Subscription Warrants at a price of 1 PLN.

As of 30 June 2005 and 31 December 2004 117,768 shares B and B1 were designated to Members of the Board, out of which 67,840 shares have been already free held by employees.

Put/Call option

FIC Globe has signed a Put/Call agreement with the shareholders of GTC Hungary, GTC Serbia and GTC Romania.

On 12 April 2005, FIC Globe exercised the option to redeem/sell its shares in those companies, and to repay the loans granted to those subsidiaries by FIC Globe. If the shareholders or the subsidiary fail to purchase or redeem the shares of FIC Globe and its affiliates, all shareholders of such GTC subsidiary are obliged to offer their shares for sale in the subsidiary to a third party.

The Company does not have estimations of the fair value of the options as at 30 June 2005 and therefore accounted for them at cost. The cost of the option was 0.

16. Earnings per share

Basic and diluted earnings per share were calculated as follows:

	Six-month period ended 30 June		Three-month period ended 30 June		Year ended
	2005 (unaudited)	2004 (unaudited)	2005 (unaudited)	2004 (unaudited)	31 December 2004
Net profit after tax (USD)	41,513,000	6,260,000	5,439,000	4,142,000	36,909,000
Weighted average number of shares for calculating basic earnings per share	18,319,402	16,588,308	18,324,746	18,278,340	18,228,025
Basic earnings per share (USD)	2.27	0.38	0.30	0.23	1.98
Weighted average number of shares for calculating diluted earnings per share	18,625,213	16,741,214	18,622,336	18,582,470	18,527,654
Diluted earnings per share (USD)	2.23	0.37	0.29	0.22	1.94

	Six-month period ended 30 June		Three-month period ended 30 June		Year ended 31 December
	2005	2004	2005	2004	2004
	(unaudited)	(unaudited; restated)	(unaudited)	(unaudited; restated)	(restated)
Weighted average number of shares for calculating basic earnings per share	18,319,402	16,588,308	18,324,746	18,278,340	18,228,025
Number of share options (seria F ) which were not converted Part of the period	297,590 1.00	446,385 1.00	297,590 1.00	446,385 1.00	446,385 0.67
Dilution effect	297,590	446,385	297,590	446,385	299,628
Number of share options (seria F) which were converted	148,795 (*)	-	-	-	-
Part of the period	0.055	-	-		-
Dilution effect	8,221	-	-	-	-
Weighted average number of shares for calculating diluted earnings per share	18,625,213	16,741,214	18,622,336	18,582,470	18,527,654

(*) See note 15

17. Proportionate consolidation

The Company proportionally consolidated assets and liabilities of Rodamco CH1.

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

	30 June 2005 (unaudited)	30 June 2004 (unaudited; restated)	31 December 2004 (restated)
Cash	2,106	2,059	3,583
Blocked deposits	760	494	788
Non current assets	100,106	90,618	100,109
Current assets (other than cash and blocked deposits)	408	338	375
Long term liabilities	(55,437)	(55,589)	(56,698)
Current liabilities	(3,311)	(3,000)	(3,129)
Net Assets	44,632	34,920	45,028

(*) Total share in income of Rodamco CH1 for the six months period ended 30 June 2005 and 2004 was income of USD 14.2 and 6.9 million, and total share in expenses was USD 8.7 and 4.6 million respectively.

18. 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.

	Six-month period ended Six-month period ended
	30 June 2005 30 June 2004
	(unaudited)	(unaudited; restated)
	thousand	thousand
	PLN	PLN
Profit/(Loss) for the period under Polish accounting
regulations in thousands of Polish zloty	22,076	3,482
	thousand	thousand
	USD	USD
Profit/(Loss) for the period under Polish accounting
regulations translated to US Dollars at average rate for
the period	6,955	912
Adjustments to IFRS translated to US Dollars at
average rate for the period:
Revaluation of investment property	42,621	-
Interest capitalised	(1,374)	129
Investment in marketable securities	3,202	2,637
Contract margin recognition	-	41
Depreciation and amortisation charge	49	25
Deferred tax	(13,204)	(4,631)
Effect of translation differences (*)	3,986	5,271
Profit for the period under International Financial
Reporting Standards in US Dollars	42,235	4,384

(*) 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.

18. 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.

	As of 30 June	As of 31 December
	2005	2004
	(unaudited)	(restated)
	thousand	Thousand
	PLN	PLN
Net assets at the end of the year under Polish
accounting regulations in thousand of Polish zloty	1,455,738	1,219,616
	thousand	Thousand
	USD	USD
Net assets as at the end of the year under Polish accounting regulations translated to US Dollars at rate
for the year end	435,055	407,844
Adjustments to IFRS translated to US Dollars:
Interest capitalised	6,858	8,232
Deferred tax	14,678	19,566
Minority	7,624	11,131
Costs capitalised	821	821
Depreciation and amortisation charge	(248)	(297)
Effect of translation differences (*)	(14,553)	(20,963)
Net assets at the end of the year under International Financial Reporting Standards	450,235	426,334

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

19. Selected financial information translated into Euro

According to the statutory reporting requirements selected financial information of the company that were translated into Euro comprises the following:

in thousand Euro	30 June 2005	30 June 2004	31 December 2004
	(unaudited)	(unaudited; restated)	(restated)
Revenues from operations	35,417	21,728	45,426
Gross margin from operations	22,039	14,655	28,446
Profit from continuing operations before tax and
finance costs	50,591	11,687	39,916
Profit for the period	32,293	6,094	32,995
Assets	1,247,748	1,184,466	934,684
Liabilities	874,852	868,356	622,122
Total equity	372,896	316,110	312,562
Current assets	139,602	147,592	124,764
Current liabilities	61,073	42,374	49,240

The NBP USD/Euro rates used for translation the above information, were as follows:

	30 June 2005	30 June 2004	31 December 2004
Average rate for the period	1.29	1.23	1.24
Rate at the end of period	1.21	1.21	1.36

20. Subsequent events

On 21 July 2005, Euroconstructor D O.O a 57.8 % subsidiary of GTC Croatia, a 82.5 % subsidiary of the Company signed the a loan agreement with Magyar Kulkereskedelmi Bank RT. ("MKB") as facility agent and lender and with Zagrabecka Bank as a lender and paying agent.

The loan will finance the construction of the shopping center and office area in Zagreb and refinance the existing loan.

The total amount of the loan is Euro 48 million. The facility is granted in 3 transhes. The annual interest will be related to Euribor 3 months increased by the bank's margin.

The final repayment of the facility shall take place not later than on 30 September 2022.

In July 2005, International Shopping Center SRL subsidiary of GTC Romania, signed a sale and purchase agreement for the purchase of 10,500 sq.m. of land in Bucharest, Romania. According to the agreement the land will be used for a residential project. The land will be purchased in three phases. The total purchase price for the land amounts to approximately EUR 7 million, which will be paid in instalments.

21. Other

The financial statements were authorised for issue by the Management Board on 8 August 2005.