Titan Cement Company S.A. and its Subsidiaries Group Annual Financial Statements For the year ended 31 December 2006

Titan Cement Company S.A. Company's No 6013/06/Β/86/90 in the register of Societes Anonymes 22A Halkidos Str. - 111 43 Athens

ERNST & YOUNG (HELLAS) Telephone: +30 210 28 86 000 Certified Auditors Accountants S.A. Telefax : +30 210 28 86 905 11th klm National Road Athens-Lamia GR- 144 51 Metamorphosi, Greece

INDEPENDENT AUDITOR'S REPORT

To the Shareholders of TITAN CEMENT COMPANY S.A.

Report on the Financial Statements

We have audited the accompanying financial statements of TITAN CEMENT COMPANY S.A. (the "Company"), and the consolidated financial statements of the Company and its subsidiaries (the "Group"), which comprise the balance sheet as at 31 December 2006, and the income statement, statement of changes in shareholders' equity and cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory notes.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards. This responsibility includes designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Greek Auditing Standards, which are based on International Standards of Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the aforementioned financial statements present fairly, in all material respects, the financial position of TITAN CEMENT COMPANY S.A. and the Group as of 31 December 2006 and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards that have been adopted by the European Union.

Report on Other Legal and Regulatory Requirements

The Board of Directors' Report is consistent with the aforementioned financial statements.

Athens, 21 February 2007 THE CERTIFIED AUDITOR ACCOUNTANT

CHRISTOS GLAVANIS S.O.E.L. R.N. 10371 ERNST & YOUNG (HELLAS) CERTIFIED AUDITORS ACCOUNTANTS S.A.

Balance Sheet

(all amounts in Euro thousands)		Group		Company
		As at 31 December		As at 31 December
ASSETS	Notes	2006	2005	2006	2005
Property, plant & equipment	8	1,174,541	1,148,845	256,561	247,293
Intangible assets	9	145,181	94,990	-	-
Investment properties	10	-	-	7,248	7,226
Investments in subsidiaries	28	-	-	512,883	512,615
Investments in associates	32	3,880	-	-	-
Available-for-sale financial assets	11	1,607	4,277	107	107
Other non current receivables	13	14,024	8,146	3,016	1,603
Deferred income tax asset	19	779	746	-	-
Non-current assets		1,340,012	1,257,004	779,815	768,844
Inventories	14	203,137	175,954	68,404	64,685
Receivables and prepayments	15	293,425	272,418	131,760	131,475
Available-for-sale financial assets	11	2,011	2,346	61	942
Cash and cash equivalents	16	138,027	95,142	28	17
Current assets		636,600	545,860	200,253	197,119
TOTAL ASSETS		1,976,612	1,802,864	980,068	965,963
LIABILITIES
Long-term borrowings	18	326,040	425,025	16,320	62,203
Deferred income tax liability	19	133,583	143,509	29,876	30,458
Retirement benefit obligations	20	39,535	38,937	22,748	23,293
Provisions	21	37,977	13,136	17,178	2,418
Other non-current liabilities	12	11,182	9,601	7,063	7,450
Non-current liabilities		548,317	630,208	93,185	125,822
Short-term borrowings	18	139,045	64,538	25,340	48,996
Trade and other payables	17	151,991	136,259	51,806	51,805
Income tax payable		29,301	27,600	23,200	17,786
Provisions	21	7,313	4,477	4,400	-
Dividends payable		286	414	262	414
Current liabilities		327,936	233,288	105,008	119,001
Total liabilities (a)		876,253	863,496	198,193	244,823
Share Capital ( 84,485,204 shares of € 2.00)	24	168,970	168,660	168,970	168,660
Treasury shares	24	-502	-	-502	-
Share premium	24	22,724	22,133	22,724	22,133
Share options	24	3,519	731	3,519	731
		194,711	191,524	194,711	191,524
Reserves	25	373,923	389,923	503,366	458,573
Retained earnings		511,555	341,541	83,798	71,043
Share capital and reserves		1,080,189	922,988	781,875	721,140
Minority interests	29	20,170	16,380	-	-
Total equity (b)		1,100,359	939,368	781,875	721,140
TOTAL EQUITY AND LIABILITIES (a+b)		1,976,612	1,802,864	980,068	965,963

These financial statements have been approved for issue by the Board of Directors on 21 February, 2007.

Income Statement

(all amounts in Euro thousands)		Group		Company
		for the year ended 31 December		for the year ended 31 December
	Notes	2006	2005	2006	2005
Revenue	1	1,568,109	1,341,727	519,847	439,713
Cost of sales		-957,252	-852,579	-300,484	-265,067
Gross profit before depreciation		610,857	489,148	219,363	174,646
Other income		24,551	24,811	13,238	8,966
Share in profit of associates		3,400	-	-	-
Administrative expenses		-98,525	-79,974	-38,521	-32,378
Selling and marketing expenses		-22,286	-19,410	-3,852	-3,870
Other expenses		-37,326	-25,402	-17,095	-4,450
Profit before interest, taxes and depreciation		480,671	389,173	173,133	142,914
Depreciation and amortization related to cost of sales		-74,636	-66,638	-9,623	-9,667
Depreciation and amortization related to administrative and selling expenses		-6,095	-5,377	-987	-1,005
Profit before interest and taxes	2	399,940	317,158	162,523	132,242
Income from participations and investments		4,543	9,005	5,598	29,175
Finance revenue	3	12,706	23,836	6,518	1,278
Finance costs	3	-36,366	-56,931	-7,326	-17,678
Profit before taxes		380,823	293,068	167,313	145,017
Less: income tax expense	5	-118,513	-80,018	-62,195	-39,207
Profit after taxes		262,310	213,050	105,118	105,810
Attributable to:
Titan Cement S.A. shareholders		259,185	210,128	105,118	105,810
Minority interests		3,125	2,922	-	-
Basic earnings per issued share (in €)	6	3.07	2.50	1.25	1.26
Diluted earnings per issued share (in €)	6	3.06	2.49	1.24	1.25

Statement of Changes in Shareholders' Equity

Group (all amounts in Euro thousands)	Notes	Ordinary shares	Treasury shares	Share Premium	Preferred Ordinary shares	Share Options	Reserves	Retained earnings	Minority interests	Total
Year ended 31 December 2005
Balance at 1 January 2005 as previously reported		153,121	-	19,585	15,138	-	274,552	188,123	25,467	675,986
Dividend declared for fiscal year 2004		-	-	-	-	-	-	43,747	-	43,747
Balance at 1 January 2005 - as adjusted according to I.A.S. 10		153,121	-	19,585	15,138	-	274,552	231,870	25,467	719,733
Foreign currency translation		-	-	-	-	-	40,429	4,579	-2,113	42,895
Net gain on hedge of net investment	22	-	-	-	-	-	10,694	-	-	10,694
Dividends paid	7	-	-	-	-	-	-	-43,747	-1,011	-44,758
Profit for the year		-	-	-	-	-	-	210,128	2,922	213,050
Net gains on available for sale financial assets		-	-	-	-	-	2,959	-	914	3,873
Subsidiary's equity reduction portion to minority interest		-	-	-	-	-	-	-	-9,799	-9,799
Share Capital increase due to share options exercised	24	401	-	2,548	-	-	-	-	-	2,949
Provision for share options (IFRS 2)		-	-	-	-	731	-	-	-	731
Transfer to reserves	25	-	-	-	-	-	61,289	-61,289	-	-
Balance at 31 December 2005- as adjusted		153,522	-	22,133	15,138	731	389,923	341,541	16,380	939,368
Year ended 31 December 2006
Balance at 1 January 2006 as previously reported		153,522	-	22,133	15,138	731	389,923	290,943	16,380	888,770
Dividend declared for fiscal year 2005		-	-	-	-	-	-	50,598	-	50,598
Balance at 1 January 2006 - as adjusted according to I.A.S. 10		153,522	-	22,133	15,138	731	389,923	341,541	16,380	939,368
Foreign currency translation		-	-	-	-	-	-58,851	5,473	1,019	-52,359
Net gain on hedge of net investment	22	-	-	-	-	-	3,028	-	-	3,028
Dividends paid	7	-	-	-	-	-	-	-50,598	-315	-50,913
Profit for the year		-	-	-	-	-	-	259,185	3,125	262,310
Treasury shares purchased		-	-502	-	-	-	-	-	-	-502
Net losses on available for sale financial assets		-	-	-	-	-	-3,153	-	-147	-3,300
Additional consideration for subsidiary acquisition		-	-	-	-	-	-	-1,070	-	-1,070
Share Capital increase due to share options exercised	24	310	-	591	-	-	-	-	-	901
Provision for share options (IFRS 2)		-	-	-	-	2,788	-	-	-	2,788
Minority interest from new-established companies		-	-	-	-	-	-	-	108	108
Transfer to reserves	25	-	-	-	-	-	42,976	-42,976	-	-
Balance at 31 December 2006		153,832	-502	22,724	15,138	3,519	373,923	511,555	20,170	1,100,359

Statement of Changes in Shareholders' Equity

Company (all amounts in Euro thousands)	Notes	Ordinary shares	Treasury shares	Share Premium	Preferred Ordinary shares	Share Options	Reserves	Retained earnings	Total
Year ended 31 December 2005
Balance at 1 January 2005 as previously reported		153,121	-	19,585	15,138	-	392,667	20,445	600,956
Dividend declared for fiscal year 2004		-	-	-	-	-	-	43,747	43,747
Balance at 1 January 2005 - as adjusted according to I.A.S. 10		153,121	-	19,585	15,138	-	392,667	64,192	644,703
Net gain on hedge of net investment	22	-	-	-	-	-	10,694	-	10,694
Dividends paid	7	-	-	-	-	-	-	-43,747	-43,747
Profit for the year		-	-	-	-	-	-	105,810	105,810
Share Capital increase due to share options exercised	24	401	-	2,548	-	-	-	-	2,949
Provision for share options (IFRS 2)		-	-	-	-	731	-	-	731
Transfer to reserves	25	-	-	-	-	-	55,212	-55,212	-
Balance at 31 December 2005- adjusted		153,522	-	22,133	15,138	731	458,573	71,043	721,140
Year ended 31 December 2006
Balance at 1 January 2006 as previously reported		153,522	-	22,133	15,138	731	458,573	20,445	670,542
Dividend declared for fiscal year 2005		-	-	-	-	-	-	50,598	50,598
Balance at 1 January 2006 - as adjusted according to I.A.S. 10		153,522	-	22,133	15,138	731	458,573	71,043	721,140
Net gain on hedge of net investment	22	-	-	-	-	-	3,028	-	3,028
Dividends paid	7	-	-	-	-	-	-	-50,598	-50,598
Profit for the year		-	-	-	-	-	-	105,118	105,118
Treasury shares purchased		-	-502	-	-	-	-	-	-502
Share Capital increase due to share options exercised	24	310	-	591	-	-	-	-	901
Provision for share options (IFRS 2)		-	-	-	-	2,788	-	-	2,788
Transfer to reserves	25	-	-	-	-	-	41,765	-41,765	-
Balance at 31 December 2006		153,832	-502	22,724	15,138	3,519	503,366	83,798	781,875

Cash Flow Statement

		Group		Company
(all amounts in Euro thousands)	Notes	for the year ended December	31	for the year ended December	31
		2006	2005	2006	2005
Cash flows from operating activities
Cash generated from operations	26	457,638	318,874	168,596	101,293
Interest received		3,781	3,752	150	145
Income tax paid		-105,036	-28,818	-40,106	-22,631
Net cash generated from operating activities (a)		356,383	293,808	128,640	78,807
Cash flows from investing activities
Purchase of property, plant and equipment and intangible assets	8, 9	-160,135	-145,646	-21,552	-26,795
Proceeds from sale of property, plant and equipment	26	1,748	2,266	696	481
Proceeds from dividends		736	1,008	11,520	14,173
Acquisition of subsidiaries, net of cash acquired	30	-75,783	-1,708	-143	-
Acquisition of associates, net of cash acquired		-2,025	-	-	-
Proceeds from sale of available-for-sale financial assets		7,279	10,119	965	-
Purchase of available-for-sale financial assets		-3,248	-1,175	-82	-16
Increase in long-term receivables		-477	-5,096	-	-
Net cash flows from investing activities (b)		-231,905	-140,232	-8,596	-12,157
Net cash flows after investing activities (a)+(b)		124,478	153,576	120,044	66,650
Cash flows from financing activities
Proceeds from issuance of ordinary shares	24	901	2,949	901	2,949
Purchase of treasury shares		-502	-	-502	-
Proceeds from government grants		-	1,584	-	1,584
Interest paid		-31,828	-32,723	-5,996	-6,990
Dividends paid		-51,041	-44,718	-50,750	-43,707
Proceeds from borrowings		350,129	126,126	95,809	21,982
Payments of borrowings		-347,005	-194,616	-159,495	-42,472
Net cash flows from financing activities (c )		-79,346	-141,398	-120,033	-66,654
Net increase/(decrease) in cash and cash equivalents (a)+(b)+( c)		45,132	12,178	11	-4
Cash and cash equivalents at beginning of the year	16	95,142	78,408	17	21
Effects of exchange rate changes		-2,247	4,556	-	-
Cash and cash equivalents at end of the year	16	138,027	95,142	28	17

Notes to the Financial Statements

1.	General information and significant accounting policies	Page
A.	Basis of preparation	7
B.	Consolidation	10
C.	Foreign currency translation	11
D.	Property, plant and equipment	12
E.	Investment properties	13
F.	Intangible assets	13
G.	Impairment of long lived assets	14
H.	Leases	14
I.	Inventories	15
J.	Trade receivables	15
K. L.	Cash and cash equivalents Share capital	15 15
M.	Borrowings	16
N.	Current and Deferred income tax	16
O.	Employee benefits	16
P.	Government grants relating to purchase of property, plant and	18
	equipment
Q.	Provisions	18
R.	Environmental restoration costs	19
S.	Revenue recognition	19
T.	Dividends	19
U.	Segment reporting	19
V.	CO2 Emission rights	20
2.	Financial Risk Management
A. B.	Financial risk factors Accounting for derivative financial instruments and hedging	20 22
	activities
C.	Fair value estimation	23
3.	Significant accounting estimates and judgements
A. B. C. D.	Impairment of goodwill Income taxes Fair value and useful lives of Property, plant and equipment Reclassification	23 24 24 24

Notes to the Financial Statements

1. General information and summary of significant accounting policies

General information

TITAN CEMENT S.A. (the Company) and, its subsidiaries, joint ventures and associates (collectively the Group) are engaged in the production, trade and distribution of a wide range of construction materials, from aggregates, cement, concrete, cement blocks, dry mortars and fly ash, as well as porcelain ware. The Group operates primarily in Greece, the Balkans, Egypt and the United States of America.

The Company is a limited liability company incorporated and domiciled in Greece and is listed on the Athens Stock Exchange.

These interim condensed financial statements have been approved for issue by the Board of Directors on 21 February, 2007 and is expected to be ratified at the Annual General Meeting.

Summary of significant accounting policies

The principal accounting policies adopted in the preparation of these financial statements are set out below:

A. Basis of preparation

These financial statements have been prepared by management in accordance with International Financial Reporting Standards (I.F.R.S.), including the International Accounting Standards (IAS) and issued Interpretations by International Financial Reporting Interpretations Committee (IFRIC), as they have been adopted by the European Union, as well as the International Financial Reporting Standards (I.F.R.S.) issued by International Accounting Standards Board (IASB).

All IFRS issued by the IASB, which apply to the preparation of these financial statements have been accepted by the European Council following an approval process undertaken by European Commission ("EC"), except for IAS 39 "Financial Instruments: Recognition and Measurement". Following this process and as a result of representations made by the Accounting Regulatory Committee of the European Council, the latter issued the Directives 2086/2004 and 1864/2005 that require the application of IAS 39 by all listed companies with effect from the 1st January 2005, except for specific sections that relate to hedging of deposit portfolios.

These financial statements have been prepared by management in accordance with International Financial Reporting Standards (I.F.R.S.), as issued by IASB and they have been adopted by the European Union. The Group is not affected by the sections relating to hedging of deposit portfolios, as stated in IAS 39.

These financial statements have been prepared under the historical cost convention, as modified by the revaluation of certain equity investments, investment property, and derivative instruments (comprising forward exchange

Notes to the Financial Statements

contracts) at fair value through profit or loss.

The preparation of financial statements, in conformity with IFRS, requires the use of critical accounting estimates. It also requires management to exercise its judgement in the process of applying the accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Significant accounting estimates and judgments on page 24.

New standards, interpretations and amendments to published standards

Certain new standards, interpretations and amendments to existing standards have been published that are mandatory for financial years beginning on or after 1 January 2007. Management's estimation of the impact of these new standards, interpretations and amendments is as follows:

– IFRS 7, Financial Instruments: Disclosures, and

a complementary amendment to IAS 1, Presentation of Financial Statements Capital Disclosures (effective for financial years beginning on or after 1 January 2007)

IFRS 7 introduces new disclosures to improve the information about financial instruments. It requires the disclosure of qualitative and quantitative information about exposure to risks arising from financial instruments,

including specified minimum disclosures about credit risk, liquidity risk and market risk, including sensitivity analysis to market risk. It replaces IAS 30, Disclosures in the Financial Statements of Banks and Similar Financial Institutions, and disclosure requirements in IAS 32, Financial Instruments: Disclosure and Presentation. It is applicable to all entities that report under IFRS. The amendment to IAS 1 introduces disclosures about the level of an entity's capital and how it manages capital.

- IFRS 8, Operating Segments (effective for financial years beginning on or after 1 January 2009)

IFRS 8 replaces IAS 14 Segment Reporting and adopts a management approach to segment reporting. The information reported would be that which management uses internally for evaluating the performance of operating segments and allocating resources to those segments. This information may be different from that reported in the balance sheet and income statement and entities will need to provide explanations and reconciliations of the differences. The Group is in the process of assessing the impact this new standard will have on its financial statements. This Standard has not yet been endorsed by the EU.

- IFRIC 7, Applying the Restatement Approach under IAS 29 Financial Reporting in Hyperinflationary Economies (effective for financial years beginning on or after 1 March 2006)

IFRIC 7 requires entities to apply IAS 29 Financial Reporting in Hyperinflationary Economies in the reporting period in which an entity first identifies the existence of hyperinflation in the economy of its functional currency, as if the economy had always been hyperinflationary.

Notes to the Financial Statements

IFRIC 7 is not relevant to the Group's operations.

IFRIC 8, Scope of IFRS 2(effective for financial years beginning on or after 1 May 2006).

IFRIC 8 clarifies that IFRS 2 Share-based payment will apply to any arrangement when equity instruments are granted or liabilities (based on the value of an entity's equity instrument) are incurred by an entity, when the identifiable consideration appears to be less that the fair value of the instruments given. IFRIC 8 is not relevant to the Group's operations.

- IFRIC 9, Reassessment of Embedded Derivatives (effective for financial years beginning on or after 1 June 2006)

IFRIC 9 requires an entity to assess whether a contract contains an embedded derivative at the date an entity first becomes a party to the contract and prohibits reassessment unless there is a change to the contract that significantly modifies the cash flows.

IFRIC 9 is not relevant to the Group's operations.

- IFRIC 10, Interim Financial Reporting and Impairment (effective for financial years beginning on or after 1 November 2006).

This Interpretation may have an impact on the financial statements should any impairment losses be recognised in the interim financial statements in relation to available for sale equity investments, unquoted equity instruments carried at cost and goodwill as these may not be reversed in later interim periods or when preparing the annual financial statements. This Interpretation has not yet been endorsed by the EU.

- IFRIC 11, IFRS 2-Group and Treasury Share Transactions (effective for financial years beginning on or after 1 March 2007)

This Interpretation requires arrangements whereby an employee is granted rights to an entity's equity instruments to be accounted for as an equity-settled scheme by an entity even if the entity chooses or is required to buy those equity instruments from another party, or the shareholders of the entity provide the equity instruments needed. The Interpretation also extends to the way in which subsidiaries, in their separate financial statements, account for schemes when their employees receive rights to equity instruments of the parent.

IFRIC 11 is not relevant to the Group's operations. This Interpretation has not yet been endorsed by the EU.

- IFRIC 12, Service Concession Arrangements (effective for financial years beginning on or after 1 January 2008)

The interpretation outlines an approach to account for contractual arrangements arising from entities providing public services. It provides for the operator should not account for the infrastructure as property, plant and equipment, but recognize a financial asset and / or an intangible asset.

IFRIC 12 is not relevant to the Group's operations. This Interpretation has not yet been endorsed by the EU.

Notes to the Financial Statements

B. Consolidation

(1) Subsidiaries

Subsidiaries, are entities (including special purpose entities) in which the Group has an interest of more than one half of the voting rights or otherwise has power to govern the financial and operating policies.

The existence and effect of potential voting rights that are presently exercisable or presently convertible are considered when assessing whether the Group controls another entity.

Subsidiaries are fully consolidated from the date on which control is transferred to the Group and are no longer consolidated from the date that control ceases. The purchase method of accounting is used to account for the acquisition of subsidiaries. The cost of an acquisition is measured as the sum of the fair values, at the date of exchange, of the assets given, liabilities incurred or assumed, and equity instruments issued by the Group, in exchange for control of the acquired plus any costs directly attributable to the acquisition. The acquired identifiable assets, liabilities and contingent liabilities are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interests. The excess of the cost of acquisition over the fair value of the net assets of the subsidiary acquired is recorded as goodwill. Where the cost of the acquisition is less than the fair value of the Group's share of the net assets of the subsidiary acquired, the difference is recognised directly in the income statement. Note F outlines the accounting policy on goodwill.

Inter-company transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated unless cost cannot be recovered.

Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

The financial statements of the subsidiaries are prepared for the same reporting date with the parent company.

Minority interest reflects the portion of profit or loss and net assets attributable to equity interests that are not owned to the Group .Minority interest is reported separately in the consolidated income statement as well as in the consolidated balance sheet separately from the Share capital and reserves. In case of purchase of minority interest, the difference between the value of acquisition and the book value of the share of net assets acquired is recognized as goodwill.

At the Company's balance sheet, investment in subsidiaries is stated at cost less provision for impairment, if any.

(2) Joint ventures (Jointly controlled entities)

A joint venture is an entity jointly controlled by the Group and one or more other ventures in terms of a contractual arrangement. The Group's interest in jointly controlled entities is accounted for by the proportional consolidation method of accounting, taking into consideration the percentage controlled by the Group as at the date of consolidation. The Group combines its share of the joint ventures' individual income and expenses, assets and liabilities and cash flows on a line-byline basis with similar items in the Group's financial statements. The Group recognises the portion of gains or losses on the sale of assets by the Group to the joint venture that is attributable to the other ventures.

The Group does not recognise its share of profits or losses from the joint venture that result from the purchase of assets by the Group from the joint venture until it resells the assets to an independent party. However, if a loss on the transaction provides evidence of a reduction in the net realisable value of current assets or an

Notes to the Financial Statements

impairment loss, the loss is recognised immediately. Accounting policies of joint ventures have been changed where necessary to ensure consistency with the policies adopted by the Group.

The financial statements of the joint ventures are prepared for the same reporting date with the parent company.

(3) Associates

Associates are entities over which the Group generally has between 20% and 50% of the voting rights, or over which the Group has significant influence, but which it does not control. Investments in associates are accounted for by the equity method of accounting and are initially recognised at cost. The Group's investment in associates includes goodwill (net of any cumulative impairments losses) identified in acquisition.

Under this method the Group's share of the post-acquisition profits or losses of associates is recognised in the income statement and its share of post-acquisition movements in reserves is recognised in reserves. The cumulative post-acquisition movements in balance sheet assets and liabilities are adjusted against the carrying amount of the investment.

Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group's interest in the associates; unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. The Group's investment in associates includes goodwill (net of accumulated amortisation) on acquisition. When the Group's share of losses in an associate equals or exceeds its interest in the associate, the Group does not recognise further losses, unless the Group has incurred obligations or made payments on behalf of the associates.

Accounting policies of associates have been changed where necessary to ensure consistency with the policies adopted by the Group.

The financial statements of the associates are prepared for the same reporting date with the parent company.

C. Foreign currency translation

(1) Functional and presentation currency

Items included in the financial statements of each entity in the Group are measured in the functional currency, which is the currency of the primary economic environment in which each Group entity operates. The consolidated financial statements are presented in Euros, which is the functional and presentation currency of the Company and of the Group.

(2) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates (i.e. spot rates) prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement, except when deferred in equity as qualifying net investment hedges.

Notes to the Financial Statements

Translation differences on non-monetary items, such as equity investments held at fair value are included as part of the fair value gain or loss in the income statement.

(3) Group companies

The operating results and financial position of all group entities (none of which operate in a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

Assets and liabilities for each balance sheet presented are translated at the closing rate at the date of the balance sheet.
Income and expenses for each income statement are translated at average exchange rates.
All resulting exchange differences are recognised as a separate component of equity.
On the disposal of a foreign operation, the cumulative exchange differences relating to that particular foreign operation, deferred in the separate component of equity, are recognised in the income statement as part of the gain or loss on sale.

On consolidation, exchange differences arising from the translation of the net investment in foreign entities, and of borrowings designated as hedges of such investments, are taken to shareholders' equity.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate.

D. Property, plant and equipment

Property, plant and equipment is stated at historical cost less subsequent depreciation and impairment, except for land (excluding quarries), which is shown at cost less impairment.

Cost includes expenditure that is directly attributable to the acquisition of the items and any environmental rehabilitation costs to the extent that they have been recognised as a provision (refer to note S – Environmental rehabilitation costs.) Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the entity and the cost of the item can be measured reliably. Subsequent costs are depreciated over the remaining useful life of the related asset or to the date of the net major subsequent cost whichever is the sooner.

Depreciation, with the exception of quarries, is calculated on the straight-line method to write off the assets to their residual values over their estimated useful lives as follows:

Buildings	Up to 50 years
Plant and machinery	Up to 40 years
Motor vehicles	5 to 15 years
Office equipment furniture and fittings*	3 to 10 years

Notes to the Financial Statements

Minor value assets Up to 2 years

* (incl. computer equipment and software)

Land on which quarries are located is depreciated on a depletion basis. This depletion is recorded as the material extraction process advances based on the unitof-production method. Other land is not depreciated.

Where an item of plant and machinery comprises major components with different useful lives, the components are accounted for as separate items of plant and machinery.

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written down immediately to its recoverable amount. (Refer to note G – Impairment of assets)

Gains and losses on disposals are determined by comparing proceeds with carrying amount and are included in operating profit.

Interest costs on borrowings specifically used to finance the construction of property, plant and equipment are capitalised during the construction period.

E. Investment properties

Investment properties are held to earn rental income and appreciate capital value. Owner-occupied properties are held for production and administrative purposes. This distinguishes owner-occupied properties from investment properties.

Investment properties are treated as long-term investments and carried at fair value, representing open market value determined internally on an annual basis, by management. Changes in fair values are recorded in net income and are included in other operating income.

F. Intangible assets

(1) Goodwill

Goodwill represents the excess of the cost of an acquisition over the fair value of the Group's share of the net assets of the acquired subsidiary, joint venture and associate at the date of acquisition. Goodwill on acquisitions of subsidiaries and joint ventures are included in intangible assets. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

Goodwill is allocated to cash-generating units for the purpose of impairment testing. Each of those cash-generating units represents the Group's investment.

Negative goodwill is recognised where the fair value of the Group's interest in the net assets of the acquired entity exceeds the cost of acquisition and is taken to income immediately.

Notes to the Financial Statements

(2) Computer software

Costs associated with developing or maintaining computer software programmes are recognised as an expense as incurred. Costs that are directly associated with identifiable and unique software products controlled by the Group and that will probably generate economic benefits exceeding costs beyond one year, are recognised as part of office equipment, in property, plant and equipment. Direct costs include staff costs of the software development team and an appropriate portion of relevant overheads.

(3) Other intangible assets

Patents, trademarks and licences are shown at historical cost. These intangible assets have a definite useful life, and their cost is amortised using the straight-line method over their useful lives, not exceeding 20 years.

G. Impairment of assets

Assets that have an indefinite useful life(land) are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised, as an expense immediately, for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. Assets are grouped at the lowest levels.

H. Leases – where a Group entity is the lessee

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

Leases of property, plant and equipment where the Group has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the inception of the lease at the lower of the fair value of the leased property or the present value of the minimum lease payments. Each lease payment is allocated between the liability and finance charges so as to achieve a constant rate on the finance balance outstanding. The corresponding rental obligations, net of finance charges, are included in liabilities. The interest element of the finance cost is charged to the income statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. Property, plant and equipment acquired under finance leases are depreciated over the useful life of the asset or the lease term.

Notes to the Financial Statements

I. Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted average method. The cost of finished goods and work in progress comprises raw materials, direct labour, other direct costs and related production overheads (based on normal operating capacity) but excludes borrowing costs. Net realisable value is the estimated selling price in the ordinary course of business, less the costs of completion and selling expenses.

Appropriate allowance is made for damaged, obsolete and slow moving items. Write-downs to net realisable value and inventory losses are expensed in the period in which the write-downs or losses occur.

J. Trade receivables

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for impairment of trade receivables is established when there is objective evidence that the Group will not be able to collect all of the amounts due according to the original terms of receivables. The amount of the provision is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate. The amount of the provision is recognised in the income statement.

K. Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are included within borrowings in current liabilities on the balance sheet.

L. Share capital

(1) Ordinary shares and non-redeemable non-voting preferred shares with minimum statutory non-discretionary dividend features are classified as equity. Share capital represents the value of company's shares in issue. Any excess of the fair value of the consideration received over the par value of the shares issued is recognized as "share premium" in shareholders equity.
(2) Incremental external costs directly attributable to the issue of new shares are shown as a deduction in equity, net of tax, from the proceeds.
(3) Where the Company or its subsidiaries purchases the Company's own equity share capital, the consideration paid including any attributable incremental external costs net of income taxes is deducted from total shareholders' equity as treasury shares until they are cancelled. Where such shares are subsequently sold or reissued, any consideration received is included in shareholders' equity.

M. Borrowings

Notes to the Financial Statements

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

Borrowings are classified as current liabilities unless the Group entity has an unconditional right to defer settlement for at least 12 months after the balance sheet date.

N. Current and Deferred income taxes

Current income tax is calculated using the financial statements of every company included in the consolidated financial statements, along with the applicable tax law in the respective countries. The charge from income tax consists in the current income tax calculated upon the results of the Group companies, as they have been reformed in their taxation return applying the applicable tax rate.

Deferred income tax is provided in full using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. However, if the deferred income tax arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit and loss, it is not accounted for.

Deferred income tax assets are recognised only to the extent that is it probable that taxable profits will be available against which deductible temporary differences can be utilised.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, joint ventures and associates, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred income taxation is determined using tax rates that have been enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the related deferred income tax liability is settled. Deferred tax is charged or credited in the income statement, except when it relates to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity.

O. Employee benefits

(1) Pension and other retirement obligations

Certain Group companies have various pension and other retirement schemes in accordance with the local conditions and practices in the countries in which they operate. These schemes are both funded and unfunded. The funded scheme is funded through payments to a trustee-administered fund as determined by periodic actuarial calculations. A defined benefit plan is a pension or a similar retirement plan that defines an amount of pension or retirement benefit to be provided, usually as a function of one or more factors such as age, years of service or compensation.

Notes to the Financial Statements

A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity (a fund) and will have no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees benefits relating to employee service in the current and prior periods.

The liability in respect of defined benefit pension or retirement plans, including certain unfunded termination indemnity benefit plans, is the present value of the defined benefit obligation at the balance sheet date minus the fair value of plan assets (where funded) together with adjustments for actuarial gains/ losses and past service cost. The defined benefit obligation is calculated at periodic intervals by independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by the estimated future cash outflows using interest rates applicable to high quality corporate bonds or government securities which have terms to maturity approximating the terms of the related liability.

Actuarial gains and losses arising from experience adjustments, changes in actuarial assumptions and amendments to pension plans, which exceed 10% of the estimated benefit liability at the beginning of every period, are recognized over the remaining time of active duty and are included in net pension cost for the year, are charged or credited to income over the average remaining service lives of the related employees.

For defined contribution plans, the company will pay contributions into a separate fund on a mandatory, contractual or voluntary basis. Once the contributions have been paid, the company has no further payment obligations. The regular contributions constitute net periodic costs for the year in which they are due and as such are included in staff costs.

(2) Termination benefits

Termination benefits are payable whenever an employee's employment is terminated, before the normal retirement date or whenever an employee accepts voluntary redundancy in exchange for these benefits. Where the employee's employment is terminated at the normal retirement date, the entitlement to these benefits is usually based on the employee remaining in service up to retirement age and the completion of a minimum service period. The expected costs of these benefits are accrued over the period of employment, using an accounting methodology similar to that for defined benefit pension plans.

These obligations are valued every two years by independent qualified actuaries. As regards termination before the normal retirement date or voluntary redundancy, the Group recognises termination benefits when it is demonstrably committed to either terminate the employment of current employees according to a detailed formal plan without possibility of withdrawal or to provide termination benefits as a result of an offer made to encourage voluntary redundancy. Any such benefits falling due more than 12 months after balance sheet date are discounted to present value.

(3) Profit sharing and bonus plans

A liability for employee benefits in the form of profit sharing and bonus plans is recognised in other provisions when and at least one of the following conditions is met:

Notes to the Financial Statements

there is a formal plan and the amounts to be paid are determined before the time
of issuing the financial statements; or past practice has created a valid expectation by employees that they will receive a bonus/ profit sharing and the amount can be determined before the time of issuing the financial statements.

Liabilities for profit sharing and bonus plans are expected to be settled within 12 months and are measured at the amounts expected to be paid when they are settled.

(4) Equity compensation benefits

Share options are granted to certain members of senior management. at a discount to the market price of the shares at the time the scheme was put into force (in respect of the old scheme) and at par value (in respect of the new scheme) on the respective dates of the grants and are exercisable at those prices. Options are exercisable beginning six months from the date of grant, in respect of the old scheme, and as regards the new scheme each option must be exercised within twelve months of its respective vesting period. Both schemes have a contractual option term of three years.

The fair value of the employee services received in exchange for the grant of the options is recognised as an expense. The total amount to be expensed over the vesting period is determined by reference to the fair value of the options granted. At each balance sheet date, the Group revises its estimates of the number of options that are expected to become exercisable and recognises the impact of the revision of original estimates, if any, in the income statement, with a corresponding adjustment to equity. The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share premium reserve when the options are exercised.

P. Government grants relating to purchase of property, plant and equipment

Government grants are recognised at their fair value where there is a reasonable assurance that the grant will be received and the Group will comply with all attached conditions.

Government grants relating to costs are deferred and recognised in the income statement over the period necessary to match the grants to the costs they are intended to compensate.

Government grants relating to the purchase of property, plant and equipment are included in non-current liabilities and are credited to the income statement on a straight-line basis over the expected lives of the related assets.

Q. Provisions

Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be made. Where the Group expects a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain.

Notes to the Financial Statements

The Group recognises a provision for onerous contracts when the expected benefits to be derived from a contract are less than the unavoidable costs of meeting the obligations under the contract.

Restructuring provisions comprise lease termination penalties and employee termination payments, and are recognised in the period in which the Group becomes legally or constructively committed to payment. Costs related to the ongoing activities of the Group are not provided in advance.

Long-term provisions are determined by discounting the expected future cash flows and taking the risks specific to the liability into account.

R. Environmental restoration costs

Group companies are generally required to restore quarries at the end of their producing lives to a condition acceptable to the relevant authorities and consistent with the Group's environmental policies and standards.

In the USA, costs associated with such rehabilitation activities are measured at the present value of future cash outflows expected to be incurred and are recognised as a separate asset, within property, plant and equipment, and a corresponding liability. The capitalised cost is depreciated over the useful life of the asset and any change in the net present value of the expected liability is included in finance costs, unless they arise from changes in accounting estimates of valuation. In Greece, costs associated with the rehabilitation of quarries and mines are expensed on an annual basis with relevant effect in income statement.

S. Revenue recognition

Revenue comprises the fair value for the sale of goods and services net of valueadded tax, rebates and discounts, and after eliminating sales within the Group. Revenue from the sale of goods is recognised when significant risks and rewards of ownership of the goods are transferred to the buyer (usually upon delivery and customer acceptance) and the realization of the related receivable is reasonably assured.

Revenue arising from services is recognised on an accrual basis in accordance with the substance of the relevant agreements.

Interest income is recognised on a time proportion basis, taking account of the principal outstanding and the effective rate over the period to maturity, when it is determined that such income will accrue to the Group.

Dividend income is recognised when the right to receive the payment is established.

T. Dividends

Dividends are recorded in the financial statements when the Board of Directors' proposed dividend is ratified at the Shareholders' Annual General Meeting.

U. Segment reporting

Geographical segments provide products or services within a particular economic environment that is subject to risks and returns that are different from those of components operating in other economic environments. Business segments provide products or services that are subject to risks and returns that are different from those of other business segments.

Notes to the Financial Statements

V. CO2 Emission rights

Emission rights are accounted under the net liability method, based on which the Company recognizes a liability for emissions when the emissions are made and are in excess of the allowances allocated. Emission rights acquired in excess of those required to cover its shortages are recognized as an asset, at cost.

2. Financial Risk Management

A. Financial risk factors

The Group's activities expose it to a variety of financial risks, including the effects of changes in debt and equity market prices, foreign currency exchange rates and interest rates. The Group's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the Group as a whole.

Risk management is carried out by a central treasury department (The Corporate Treasury Department) which operates as a service department that provides services to all businesses within the Group, co-ordinates access to both domestic and international financial markets and manages the financial risks relating to the Group's operations. This includes identifying, evaluating and if necessary, hedging financial risks in close co-operation with the various entities within the Group. The Corporate Treasury Department does not undertake any transactions of a speculative nature or which are unrelated to the Group's trading activities.

The Group's financial instruments consist mainly of deposits with banks, bank overdrafts, money market instruments, trade accounts receivable and payable, loans to and from subsidiaries, associates, joint ventures, equity investments, dividends payable and lease obligations.

(1) Foreign exchange risk

The Group operates internationally and undertakes certain transactions denominated in foreign currencies, hence exposures to exchange rate fluctuations. Exchange rate exposures are managed within approved policy parameters utilising forward exchange contracts. The Group has potential currency exposures in respect of items denominated in foreign currencies comprising transactional exposure in terms of imports and exports incurred in currencies other than the Euro and in respect of investments in overseas operations.

Exposures are managed through the use of natural hedges as well as forward exchange contracts. It is the policy of the Group to use as natural hedges any material foreign currency loans against underlying investments in foreign subsidiaries whose net assets are exposed to currency translation risk, when possible. Hence currency exposure to the net assets of the Group's subsidiaries in the United States of America is managed primarily through borrowings denominated in US Dollars. In other markets where the Group operates, such as Egypt and certain Balkan countries the Group assesses the financing needs of the business and where possible matches the currency of financing with the underlying asset exposure.

Notes to the Financial Statements

The exception to this is Egypt where the Group has an asset exposure in Egyptian pounds and a financing obligation in Japanese Yen. The Group has determined that the cost of refinancing the Yen obligation to Egyptian pounds is prohibitive. For a more effective management of this exposure, the Yen obligation has been switched to US Dollars through forward exchange contracts.

(2) Interest rate risk

The Group's income and operating cash flows are substantially independent of changes in market interest rates. Exposure to interest rate risk on liabilities and investments is monitored on a proactive basis. In order to mitigate interest rate risk, the financing of the Group is structured on a pre-determined combination of fixed and floating interest rates. Interest rate derivatives may occasionally be used, if deemed necessary, to change the abovementioned combination.

It is the policy of the Group to continuously review interest rate trends and the tenure of financing needs. In this respect, decisions are made on an individual basis as to the term and fixed versus floating cost of a loan.

Consequently, all short term borrowings are entered into at floating rates. Medium and long-term facilities are normally entered into at fixed interest rates. This provides the Group the ability to avoid significant fluctuation in interest rate movements.

(3) Credit risk

The Group has no significant concentrations of credit risk. Trade accounts receivable consist mainly of a large, widespread customer base. All Group companies monitor the financial position of their debtors on an ongoing basis.

Where considered appropriate, credit guarantee insurance cover is purchased. The granting of credit is controlled by application and account limits. Appropriate provision for impairment losses is made for specific credit risks and at the year-end management did not consider the existence of any material credit risk exposure that was not already covered by credit guarantee insurance or a doubtful debt provision.

The Group also has potential risk exposure on cash and cash equivalents, investments and derivative contracts. The Group minimises its counterparty exposure arising from money market and derivative instruments by dealing only with well-established financial institutions of high credit standing. The Group has policies in place to limit the amount of credit exposure to any one financial institution.

(4) Liquidity risk

Prudent liquidity risk management implies the availability of funding through adequate amounts of committed credit facilities, cash and marketable securities and the ability to close out those positions as and when required by the business.

Notes to the Financial Statements

The Group manages liquidity risk by proper management of working capital and cash flows. This is done by monitoring forecast cash flows and ensuring that adequate banking facilities and reserve borrowing facilities are maintained. The Group has sufficient undrawn call/demand borrowing facilities that could be utilised to fund any potential shortfall in cash resources.

B. Accounting for derivative financial instruments and hedging activities

Derivative financial instruments are initially recognised in the balance sheet at cost and are subsequently measured at their fair value. The method of recognising the resulting gain or loss is dependent on the nature of the item being hedged. The Group designates certain derivatives as either (1) a hedge of the fair value of a recognised asset or liability (fair value hedge), or (2) a hedge of a forecast transaction or of a firm commitment (cash flow hedge), or (3) a hedge of a net investment in a foreign entity on the date a derivative contract is entered into. Certain derivative transactions, while providing effective economic hedges under the Group's risk management policies, do not qualify for hedge accounting under the specific rules in IFRS.

Gains and losses on subsequent measurement

Gains and losses on subsequent measurement are recognised as follows:

Gains and losses arising from a change in the fair value of financial instruments that are not part of a hedging relationship are included in the net profit or loss for the period in which they arise.

Gains and losses from measuring fair value hedging instruments, including fair value hedges for foreign currency denominated transactions, are recognised immediately in net profit or loss.

Gains and losses from measuring cash flow hedging instruments, including cash flow hedges for forecasted foreign currency denominated transactions and for interest rate swaps, are initially recognised directly in equity. Should the hedged firm commitment or forecasted transaction result in the recognition of an asset or a liability, then the cumulative amount recognised in equity is adjusted against the initial measurement of the asset or liability. For other cash flow hedges, the cumulative amount recognised in equity is included in net profit or loss in the period when the commitment or forecasted transaction affects profit or loss.

When a hedging instrument or hedge relationship is terminated but the hedged transaction is still expected to occur, the cumulative unrealised gain or loss at that point remains in equity and is recognised in accordance with the above policy when the transaction occurs. If the hedged transaction is no longer probable, the cumulative unrealised gain or loss is recognised immediately in the income statement. Hedges of net investments in foreign entities are accounted for similarly to cash flow hedges. Where the hedging instrument is a derivative, any gain or loss on the hedging instrument relating to the effective portion of the hedge is recognised in equity. Gain or loss relating to the ineffective portion is recognised immediately in the income statement. However, where the hedging instrument is not a derivative (for example, a foreign currency borrowing), all foreign exchange gains and losses arising on the translation of a borrowing that hedges such an investment (including any ineffective portion of the hedge) are recognised in equity.

Notes to the Financial Statements

The Group documents at the inception of the transaction the relationship between hedging instruments and hedged items, as well as its risk management objective strategy for undertaking various hedge transactions. This process includes linking all derivatives designated as hedges to specific assets and liabilities or to specific firm commitments or forecast transactions. The Group also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged items.

Offset

Where a legally enforceable right to offset recognised financial assets and financial liabilities exists, and there is an intention to settle the liability and realise the asset simultaneously, or to settle on a net basis, all related financial effects are offset.

C. Fair value estimation

The fair value of forward foreign exchange contracts is determined using forward exchange market rates at the balance sheet date. When use of interest rate swaps is made, the fair value is calculated as the present value of the estimated future cash flows.

In assessing the fair value of non-traded derivatives and other financial instruments, the Group uses a variety of methods and makes assumptions that are based on market conditions existing at each balance sheet date. Quoted market prices or dealer quotes for the specific or similar instruments are used for long-term debt. Other techniques, such as option pricing models and estimated discounted value of future cash flows, are used to determine fair value for the remaining financial instruments.

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

3. Significant accounting estimates and judgements

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

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

A. Estimated impairment of goodwill

Management tests annually whether goodwill has suffered any impairment, in accordance with the accounting policy stated in Note 1.F. The recoverable amounts of cash-generating units have been determined based on value-in-use calculations. These calculations require the use of estimates refered below.

If the actual gross margin had been higher or the pre-tax discounted rate lower than management's estimates, the Group would not be able to reverse any impairment losses that arose on goodwill.

Notes to the Financial Statements

B. Income taxes

Group entities are subject to income taxes in numerous jurisdictions. Significant judgment is required in determining the worldwide provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

C. Fair value and useful lives of Property, plant and equipment

In addition, management makes estimations in relation to useful lives of amortized assets. Further information is given in note 1.D

D. Reclassification

Certain prior year amounts have been reclassified for presentation purposes.

Notes to the financial statements

Index to the notes to the financial statements	Page
1 Segment information	26-28
2 Earnings before interest and taxes	29
3 Finance costs - net	30
4 Staff costs	30
5 Income tax expense	31
6 Earnings per share	32
7 Dividend per share	32
8 Property, plant and equipment	33-34
9 Intangible assets	35
10 Investment properties	36
11 Available-for-sale investments	36
12 Other non-current liabilities	37
13 Other non-current receivables	38
14 Inventories	38
15 Receivables and prepayments	39
16 Cash and cash equivalents	39
17 Trade and other payables	40
18 Borrowings	40-41
19 Deferred income taxes	42-44
20 Retirement and termination benefit obligations	45-46
21 Provisions	47
22 Financial instruments	48
23 Contigencies and commitments	49
24 Share capital	50
25 Fair value and other reserves	51
26 Cash generated from operations	52
27 Related party transactions	53
28 Principal Subsidiaries & Joint Ventures	54
29 Minority Interests	55
30 Acquisition and disposal of subsidiaries	55
31 Interest in joint ventures	56
32 Investment in Associates	57
33 Fiscal Years Unaudited by the Tax Authorities	58
34 Reclassifications	58
35 Post balance sheet events	58

1. Segment information

Primary geographical segments

Although the Group's three main business segments are managed on a wordwide basis, they operate in four main geographical areas

Eastern Mediterranean area consists exclusively of the Group's joint ventures The composition of these geographical areas is as follows: North America includes the United States of America as well as Canada, South East Europe includes the Balkan countries except Greece and Eastern Mediterranean includes Egypt.

Greece is the home country of the parent company which is also the main operating company. The Group's business segments are principally cement, ready mix and aggregates, blocks and porcelain activities.

The Group's investments in joint ventures and associates are analyzed in notes 31 and 32, respectively.

For the year ended 31 December 2006

(all amounts in Euro thousands)	Greece and the European Union	North America	South East Europe	Eastern Mediterranean	Total
ASSETS
Non-current assets	324,220	736,360	178,162	101,270	1,340,012
Current assets	256,526	170,605	168,593	40,876	636,600
TOTAL ASSETS	580,746	906,965	346,755	142,146	1,976,612
LIABILITIES
Non-current liabilities	109,805	388,613	8,086	41,813	548,317
Current liabilities	131,876	141,094	26,674	28,292	327,936
TOTAL LIABILITIES	241,681	529,707	34,760	70,105	876,253

For the year ended 31 December 2005

(all amounts in Euro thousands)	Greece and the European Union	North America	South East Europe	Eastern Mediterranean	Total
ASSETS
Non-current assets	304,758	681,308	153,686	117,252	1,257,004
Current assets	246,405	150,382	112,498	36,574	545,860
TOTAL ASSETS	551,163	831,690	266,184	153,826	1,802,864
LIABILITIES
Non-current liabilities	137,363	427,212	3,691	61,942	630,208
Current liabilities	147,339	43,532	18,506	23,911	233,288
TOTAL LIABILITIES	284,702	470,744	22,197	85,853	863,496

1. Segment information (continued)

For the year ended 31 December 2006

Primary Geographical segments

(all amounts in Euro thousands)	Greece and the European Union	North America	South Eastern Europe	Eastern Mediterranean	Total
Gross revenue	644,909	712,500	186,836	61,944	1,606,189
Inter-segment revenue	-37,877	-203	-	-	-38,080
Revenue	607,032	712,297	186,836	61,944	1,568,109
Share in profit of associates	-	-	3,400	-	3,400
Profit before interest, taxes and depreciation	190,902	183,741	72,991	33,037	480,671
Depreciation & amortization	-14,391	-48,215	-9,504	-8,621	-80,731
Profit before interest and taxes	176,511	135,526	63,487	24,416	399,940
Income from participations	50	-	4,493	-	4,543
Finance costs - net	-275	-20,441	740	-3,684	-23,660
Profit before taxes	176,286	115,085	68,720	20,732	380,823
Less: income tax expense	-71,704	-39,812	-7,140	143	-118,513
Profit after taxes	104,582	75,273	61,580	20,875	262,310
Attributable to:
Titan Cement S.A. shareholders	104,566	75,273	58,515	20,831	259,185
Minority interests	16	-	3,065	44	3,125

	Greece and the European Union	North America	South Eastern Europe	Eastern Mediterranean	Total
Capital expenditure	36,061	88,052	32,530	3,070	159,713
Impairment of property, plant and equipment	1,700	-	-	-	1,700
Impairment of goodwill	2,211	-	-	-	2,211
Provision for doubtful debtors	-2,022	92	-138	-5	-2,073

104,582 75,273 61,580 20,875 262,310

Impairment charges are included in "other expenses".

Secondary business segments

Ready mix,
aggregates and blocks	Other	Total
652,152	18,661	1,568,109
117,537	-73,010	480,671
90,254	-75,128	399,940
403,229	19,766	1,976,612
14,826	308	159,713
	897,296 436,144 384,814 1,553,617 144,579

The cement activity includes cement and cementitious materials.

Other operations of the Group mainly comprise of porcelain, shipping and transport activities, neither of which are of a sufficient size to be reported separately.

Revenue is reported in the country in which the customer is located and comprises of the sale of goods and services. There are sales between geographical segments. Total assets and capital expenditure are presented at the geographical segment of the company owning such assets.

1. Segment information (continued)

For the year ended 31 December 2005

Primary Geographical segments

(all amounts in Euro thousands)	Greece and the European Union	North America	South Eastern Europe	Eastern Mediterranean	Total
Gross revenue	546,077	605,127	157,996	52,448	1,361,648
Inter-segment revenue	-19,672	-200	-49	-	-19,921
Revenue	526,405	604,927	157,947	52,448	1,341,727
Profit before interest, taxes and depreciation	165,715	139,477	56,311	27,670	389,173
Depreciation & amortization	-13,770	-40,806	-8,708	-8,731	-72,015
Profit before interest and taxes	151,945	98,671	47,603	18,939	317,158
Income from participations	-	-	1,866	7,139	9,005
Finance costs - net	-14,573	-17,622	-286	-614	-33,095
Profit before taxes	137,372	81,049	49,183	25,464	293,068
Less: income tax expense	-44,409	-30,216	-5,871	478	-80,018
Profit after taxes	92,963	50,833	43,312	25,942	213,050
Attributable to:
Titan Cement S.A. shareholders	92,958	50,833	40,418	25,919	210,128
Minority interests	5	-	2,894	23	2,922
	92,963	50,833	43,312	25,942	213,050

	Greece and the European Union	North America	South Eastern Europe	Eastern Mediterranean	Total
Capital expenditure	39,473	89,941	14,118	2,203	145,735
Impairment/write off of Goodwill	3,928	-	4,000	-	7,928
Provision for doubtful debtors	1,728	294	-32	-36	1,954

Secondary business segments

	Ready mix,
	Cement	aggregates and blocks	Other	Total
Revenue	773,051	551,121	17,555	1,341,727
Profit before interest, taxes and depreciation	349,772	95,014	-55,613	389,173
Profit before interest and taxes	300,641	74,383	-57,866	317,158
Total assets	1,421,085	368,658	13,121	1,802,864
Capital expenditure	96,253	47,241	2,241	145,735

2.Profit before interest and taxes

The following items have been included in arriving at profit from operations:

(all amounts in Euro thousands)	Group		Company
	2006	2005	2006	2005
Depreciation on property, plant and equipment (Note 8):
Owned assets	75,981	69,320	10,997	11,016
Leased assets under finance leases	333	340	-	-
	76,314	69,660	10,997	11,016
Amortisation of government grants received	-513	-430	-387	-344
	75,801	69,230	10,610	10,672

Stripping amortisation	1,370	1,347	-	-
Impairment charge for property, plant and equipment (Note 8)	1,700	-	1,700	-
Profit / (loss) on disposal of property, plant and equipment	-622	376	142	-69
Amortisation of intangibles (Note 9)	3,560	1,438	-	-
Repairs and maintenance expenditure on property, plant and equipment	87,046	80,092	16,352	16,961
Costs of inventories recognized as an expense in Cost of Sales:
Raw materials	142,809	126,826	86,361	76,564
Maintenance stores	67,098	69,757	14,851	14,626
Finished goods	221,419	196,456	4,222	3,815
	431,326	393,039	105,434	95,005
Trade receivables - provision doubtful debtors (Note 15)	-6,040	1,954	-2,727	-612

Staff costs (Note 4)	259,741	232,146	71,113	66,421

3. Finance costs - net

(all amounts in Euro thousands)		Group
	2006	2005	2006	2005

Interest income	3,782	3,752	150	146
Exchange differences gains	8,246	18,923	5,750	54
Gains on financial instruments	4	708	4	708
Tax discount	674	453	614	370
	12,706	23,836	6,518	1,278

Exchange differences losses	-4,588	-14,533	-1,320	-9,740
Interest expense	-31,560	-32,396	-5,996	-6,990
Losses on financial instruments	-558	-10,236	-10	-948
Finance lease interest	-269	-304	-	-
	-36,975	-57,469	-7,326	-17,678
Capitalized interest expense (note 8)	609	538	-	-
Finance costs - net	-36,366	-56,931	-7,326	-17,678

During 2006, the Group capitalized interest expense (note 8) of € 609 thousands (2005: € 538 thousands) generated from the U.S operations. The amounts capitalized were calculated on an weighted average borrowing rate basis. At the end of 2006 the average weighted interest was 6.47% (2005: 6.63%). The capitalization of interest relates to the modernization of the cement import terminal, located in New Jersey, USA, which was completed in June 2006.

4. Staff costs

	Group		Company
(all amounts in Euro thousands)	2006	2005	2006	2005
Wages and salaries	219,045	195,322	50,994	49,474
Social security costs	26,937	25,754	9,414	9,317
Termination benefits	1,623	2,755	853	314
Share options granted to directors and employees	2,787	731	1,893	516
Profit sharing bonus	3,300	2,950	3,300	2,950
Pension costs - defined benefit plans, (see note 20)	1,255	942	-	-
Other post retirement and termination benefits - defined benefit plans, (see note 20).	4,794	3,692	4,659	3,850
Total staff costs	259,741	232,146	71,113	66,421
	Group		Company
The employees in the Group are employed on a full-time basis.	2006	2005	2006	2005
Greece	1,844	1,834	1,121	1,135
Overseas	4,047	3,847	-	-
	5,891	5,681	1,121	1,135

5. Income tax expense

		Group				Company
(all amounts in Euro thousands)	2006		2005		2006		2005
Current tax	101,659	26.69%	54,504	18.60%	46,134	27.57%	34,908	24.07%
Deferred tax (Note 19)	554	0.15%	25,514	8.71%	1,661	0.99%	4,299	2.96%
Tax provision for reserve L.3220/2004	16,300	4.28%	-		14,400	8.61%	-
	118,513	31.12%	80,018	27.30%	62,195	37.17%	39,207	27.04%

The tax on the Group's profit differs from the amount that would arise had the Group used the tax rate of the home country of the parent Company as follows:

	Group				Company
(all amounts in Euro thousands)	2006		2005		2006		2005
Profit before tax	380,823		293,068		167,313		145,017
Tax calculated at the statutory tax rate of
29% (2005: 32%)	110,439	29.00%	93,782	32.00%	48,521	29.00%	46,405	32.00%
Income not subject to tax	-25,908	-6.80%	-45,680	-15.59%	-3,165	-1.89%	-12,118	-8.36%
Expenses not deductible for tax purposes	17,449	4.58%	28,161	9.61%	318	0.19%	298	0.21%
Estimated losses and utilization of previously unrecognized tax losses	-4,954	-1.30%	-1,946	-0.66%	-		-
Other taxes	6,674	1.75%	8,940	3.05%	2,121	1.27%	4,622	3.19%
Tax provision for reserve L.3220/2004	16,300	4.28%	-		14,400	8.61%	-
Effect of different tax rates in other countries	-2,105	-0.55%	-5,081	-1.73%	-		-
Withholding tax on dividends	1,276	0.34%	-		-		-
Under provision prior years	-658	-0.17%	1,842	0.63%	-		-
Effective tax charge	118,513	31.12%	80,018	27.30%	62,195	37.17%	39,207	27.04%

Included in the tax exempt reserves are reserves that have been created by the Company and certain of its Greek subsidiaries following the application of paragraph 2 of L.3220/2004. The European Commission, following its recent Announcement 2006/C20/05 stated that these tax exempt reserves have the form of a government subsidy and has requested the Greek Government to comment. The European Commission finally concluded that the relevant reserves are a form of government subsidy and companies should be required to submit to the taxation authorities the applicable income tax. As a result the Group has decided to account for the income tax expense related to the above tax free reserves using the rates in effect at the date such reserves were created. However, the Group intends to challenge any tax that maybe assesed in this respect, as the reserves were created according to existing legislation at the time.

6. Earnings per share

Basic earnings per share are calculated by dividing net profit for the year attributable to shareholders by the weighted average number of ordinary and preference shares in issue during the year, excluding ordinary shares purchased by the Company and held as treasury shares (see Note 24).

		Group		Company
(all amounts in Euro thousands unless otherwise stated)	2006	2005	2006	2005
Net profit for the year attributable to Titan S.A. shareholders	259,185	210,128	105,118	105,810
Weighted average number of ordinary shares in issue	76,761,209	76,568,635	76,761,209	76,568,635
Weighted average number of preferred shares in issue	7,568,960	7,568,960	7,568,960	7,568,960
Total weighted average number of shares in issue for basic earnings per share	84,330,169	84,137,595	84,330,169	84,137,595
Basic earnings per ordinary and preferred share (in € )	3.07	2.50	1.25	1.26

The diluted earnings per share are calculated adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. The Company has one category of dilutive potential ordinary shares: share options. For the share options a calculation is done to determine the number of shares that could have been acquired at fair value (determined as the average annual market share price of the Company's shares) based on the monetary value of the subscription rights attached to outstanding share options. The number of shares calculated as above is compared with the number of shares that would have been issued assuming the exercise of the share options. The difference is added to the denominator as an issue of ordinary shares for no consideration. No adjustment is made to net profit (numerator).

	Group		Company
(all amounts in Euro thousands unless otherwise stated)	2006	2005	2006	2005
Net profit for the year attributable to Titan S.A. shareholders for diluted earnings per share	259,185	210,128	105,118	105,810
Weighted average number of ordinary shares for diluted earnings per share	76,761,209	76,568,635	76,761,209	76,568,635
Share options	267,897	264,686	267,897	264,686
Weighted average number of preferred shares in issue	7,568,960	7,568,960	7,568,960	7,568,960
Total weighted average number of shares in issue for diluted earnings per share	84,598,066	84,402,281	84,598,066	84,402,281
Diluted earnings per ordinary and preferred share (in € )	3.06	2.49	1.24	1.25

7. Dividend per share

The Board of Directors will propose a dividend in respect of € 0.75 per share (2005: € 0.60 per share), amounting to a total dividend of € 63,353,403.00 ( 2005: € 50,598,074.40). This is expected to be ratified at the Annual General Meeting to be held in May 2007.

8. Property, plant and equipment

Group (all amounts in Euro thousands)	Quarries	Land	Buildings	Plant & equipment	Motor vehicles	Office furniture, fixtures and equipment	Assets under construction	Total
Year ended 31 December 2005
Opening balance	91,280	81,786	136,423	528,677	60,343	12,605	53,508	964,622
Additions	450	1,187	7,576	18,323	4,350	2,243	111,606	145,735
Disposals (NBV)	-	-11	-79	-417	-684	21	-83	-1,253
Reclassification of assets to other categories	166	4,466	8,462	24,411	17,384	1,189	-56,078	-
Transfers from/(to) inventories (Note 14)	-	-	-	-341	-	-	-	-341
Revaluations	152	82	1,741	1,018	66	10	150	3,219
Interest capitalized (note 3)	-	-	-	-	-	-	538	538
Write-offs	-275	-26	-91	-182	-23	-39	-	-636
Depreciation charge (Note 2, 26)	-2,542	-844	-8,111	-43,693	-12,341	-1,789	-	-69,320
Exchange differences	12,814	10,567	10,645	59,466	5,615	-3,522	3,255	98,840
Ending balance	102,045	97,207	156,566	587,262	74,710	10,718	112,896	1,141,404
Leased assets under finance leases
Opening balance	-	-	-	6,753	-	-	-	6,753
Exchange differences	-	-	-	1,028	-	-	-	1,028
Depreciation charge (Note 2, 26)	-	-	-	-340	-	-	-	-340
Ending balance	-	-	-	7,441	-	-	-	7,441

At 31 December 2005
Cost	116,696	101,207	266,483	928,277	151,016	29,358	112,896	1,705,933
Accumulated depreciation	-14,651	-4,000	-109,917	-332,574	-76,306	-18,640	-	-556,088
Provision for impairment of PPE	-	-	-	-1,000	-	-	-	-1,000
Net book value	102,045	97,207	156,566	594,703	74,710	10,718	112,896	1,148,845
Year ended 31 December 2006
Opening balance	102,045	97,207	156,566	587,262	74,710	10,718	112,896	1,141,404
Additions	1,743	4,969	4,802	17,621	5,597	4,293	120,688	159,713
Disposals (NBV)	-	-457	-149	-366	-757	-60	-2	-1,791
Additions due to acquisitions	-	6,909	627	3,696	7,118	243	2,215	20,808
Reclassification of assets to other categories	-	8,373	4,582	61,119	28,853	1,349	-104,276	-
Transfers from/(to) inventories (Note 14)	-	8	44	746	114	77	-	989
Revaluations	-	-	181	91	-	14	-	286
Interest capitalized (note 3)	-	-	-	-	-	-	609	609
Write-offs	-	-	-249	-3,075	-39	-16	-9	-3,388
Depreciation charge (Note 2, 26)	-2,799	-1,327	-8,704	-45,114	-15,409	-2,628	-	-75,981
Impairment of PPE	-	-	-	-1,700	-	-	-	-1,700
Exchange differences	-9,684	-8,376	-5,540	-35,939	-5,488	-247	-7,480	-72,754
Ending balance	91,305	107,306	152,160	584,341	94,699	13,743	124,641	1,168,195
Leased assets under finance leases
Opening balance	-	-	-	7,441	-	-	-	7,441
Exchange differences	-	-	-	-762	-	-	-	-762
Depreciation charge (Note 2, 26)	-	-	-	-333	-	-	-	-333
Ending balance	-	-	-	6,346	-	-	-	6,346

At 31 December 2006
Cost	107,315	112,194	268,359	955,579	177,700	36,310	124,641	1,782,098
Accumulated depreciation	-16,010	-4,888	-116,199	-362,192	-83,001	-22,567	-	-604,857
Provision for impairment of PPE	-	-	-	-2,700	-	-	-	-2,700
Net book value	91,305	107,306	152,160	590,687	94,699	13,743	124,641	1,174,541

The Group has no assets that are pledged.

Impairment charges are included in "other expenses".

8. Property, plant and equipment (continued)

Company (all amounts in Euro thousands)	Quarries	Land	Buildings	Plant & equipment	Motor vehicles	Office furniture, fixtures and equipment	Assets under construction	Total
Year ended 31 December 2005
Opening balance	870	5,204	50,060	155,783	1,244	8,529	10,781	232,471
Additions	265	394	3,052	12,366	114	1,417	9,187	26,795
Disposals (NBV)	-274	-26	-92	-5	-103	-51	-	-551
Reclassification of assets to other categories	-	-	-49	-	-	-16	-	-65
Transfers from/(to) inventories (Note 14)	-	-	-	-341	-	-	-	-341
Depreciation charge (Note 2, 26)	-46	-	-1,598	-8,002	-283	-1,087	-	-11,016
Ending balance	815	5,572	51,373	159,801	972	8,792	19,968	247,293
At 31 December 2005
Cost	1,087	5,572	82,115	252,982	5,989	19,880	19,968	387,593
Accumulated depreciation	-272	-	-30,742	-92,181	-5,017	-11,088	-	-139,300
Provision for impairment of PPE	-	-	-	-1,000	-	-	-	-1,000
Net book value	815	5,572	51,373	159,801	972	8,792	19,968	247,293
Year ended 31 December 2006
Opening balance	815	5,572	51,373	159,801	972	8,792	19,968	247,293
Additions	71	193	3,503	11,384	210	3,620	2,571	21,552
Disposals (NBV)	-	-	-	-165	-51	-338	-	-554
Reclassification of assets to other categories	-	-	-22	-	-	-	-	-22
Transfers from/(to) inventories (Note 14)	-	-	-	989	-	-	-	989
Depreciation charge (Note 2, 26) Provision for impairment of PPE	-49 -	- -	-1,501 -	-8,100 -1,700	-188 -	-1,159 -	- -	-10,997 -1,700
Ending balance	837	5,765	53,353	162,209	943	10,915	22,539	256,561
At 31 December 2006
Cost	1,158	5,765	85,589	264,533	5,391	22,576	22,539	407,551
Accumulated depreciation	-321	-	-32,236	-99,624	-4,448	-11,661	-	-148,290
Provision for impairment of PPE	-	-	-	-2,700	-	-	-	-2,700
Net book value	837	5,765	53,353	162,209	943	10,915	22,539	256,561

9. Intangible assets

Group (all amounts in Euro thousands)	Initial goodwill	Goodwill impairment	Total goodwill	Other intangible	Total
				assets
Year ended 31 December 2005
Opening balance	102,035	-5,000	97,035	5,178	102,213
Additions	-	-	-	89	89
Subsidiaries acquired - increase of investment	2,180	-	2,180	-	2,180
Write-offs	-	-3,928	-3,928	-223	-4,151
Goodwill impairment	-	-4,000	-4,000	-	-4,000
Reclassifications	-3,074	-	-3,074	3,074	-
Amortization charge (Note 2,26)	-	-	-	-1,438	-1,438
Exchange differences	-1,115	-	-1,115	1,212	97
Ending balance	100,026	-12,928	87,098	7,892	94,990
Year ended 31 December 2006
Opening balance	100,026	-12,928	87,098	7,892	94,990
Additions	-	-	-	422	422
Subsidiaries acquired (note 30)	39,314	-	39,314	18,884	58,198
Write-offs	-	-2,211	-2,211	-	-2,211
Impairment of intagibles assets	-	-	-	-880	-880
Amortization charge (Note 2,26)	-	-	-	-3,560	-3,560
Exchange differences	-1,836	-	-1,836	58	-1,778
Ending balance	137,504	-15,139	122,365	22,816	145,181

Impairment charges are included in "other expenses".

Impairment testing of goodwill

Goodwill acquired through business combinations has been allocated to the following cash-generating units ("CGU's") per region of operation and busines segment:

Carrying amount of goodwill (by geographical segment):

	2006	2005
Greece and the European Union	6,889	6,889
North America	48,634	13,118
South Eastern Europe	55,242	54,273
Eastern Mediterranean	11,600	12,818
	122,365	87,098

Carrying amount of goodwill (by business segment):

Cement	112,349	77,082
Blocks, ready mix and aggregates	9,012	9,012
Porcelain, shipping and transport activities	1,004	1,004
	122,365	87,098

The recoverable amount of a CGU is determined based on value-in-use calculations. These calculations use cash flow projections based on financial budgets approved by management covering a three-year period.

The following describes each key assumption on which management has based its cash flow projections to undertake impairment testing of goodwill pertaining to those CGU's to which management expects an impairment to occur.

Budgeted gross margins - the basis used to determine the value assigned to the budgeted gross margins is the average gross margins achieved in the year immediately before the budgeted year increased for expected efficiency improvements.

Key assumptions used for value in use calculations:

Discount rate:	9%-18%
Sales growth:	6% - 12%
Gross margin:	40% - 50%
Perpetuity growth:	3%

10. Investment properties

For Group purposes, there are no investment properties as the Company leases out such qualifying assets to certain of its subsidiary companies and therefore such properties are reclassified as property, plant and equipment on consolidation. Investment properties are measured at fair values based on management's estimations.

Company

(all amounts in Euro thousands)

	2006	2005
Opening balance	7,226	7,161
Reclassification of assets from / to other categories	22	65
Ending balance	7,248	7,226

The estimation of the fair value of investment properties that are located in urban areas, was made in accordance with the current market values of similar properties. The estimation of fair value for land located in rural areas as well as quarries, was made taking into consideration local valuations.

11. Available-for-sale financial assets

	Group		Company
(all amounts in Euro thousands)	2006	2005	2006	2005
Opening balance	6,623	4,801	1,049	1,248
Additions	3,248	1,175	81	299
Disposals	-7,280	-2,122	-962	-498
Revaluations	1,396	2,960	-	-
Exchange differences	-369	-191	-	-
Ending balance	3,618	6,623	168	1,049
Analysis of available-for-sale financial assets:
Non-current portion	1,607	4,277	107	107
Current portion	2,011	2,346	61	942
	3,618	6,623	168	1,049
Available-for-sale financial assets include the following:
Listed securities	1,701	4,120	-	-
Non listed securities	1,917	2,503	168	1,049
	3,618	6,623	168	1,049

Trading and other investments, comprising marketable equity securities, are fair valued annually at the close of business on 31 December. For investments traded in an active market, fair value is determined by reference to Stock Exchange quoted bid prices. For other investments, fair value is estimated by reference to the current market value of similar instruments or by reference to the discounted cash flows of the underlying net assets.

12. Other-non current liabilities

(all amounts in Euro thousands)	Group		Company
	2006	2005	2006	2005
Government grants	7,328	7,841	7,063	7,450
Other-non current liabilities	3,854	1,760	-	-
	11,182	9,601	7,063	7,450

Analysis of Government grants:

(all amounts in Euro thousands)	Group		Company
	2006	2005	2006	2005
Opening balance	7,841	6,781	7,450	6,210
Additions due to acquisitions	-	232	-	-
Additions	-	1,584	-	1,584
Write-offs	-	-326	-	-
Depreciation	-513	-430	-387	-344
Ending balance	7,328	7,841	7,063	7,450

Government grants are recognised at fair value when there is a certainty that the grant will be received and also when the Group complies with the terms and conditions of the grant.

Government grants relating to capital expenses are reflected as long term liabilities and are amortised on a straight line basis that reflects the estimated useful life of the asset for which the grant was received.

Government grants received in respect of expenses are reflected in the income statement when the related expense is incurred so that the expense is matched to the income received.

13. Other non-current receivables

		Group		Company
(all amounts in Euro thousands)	2006	2005	2006	2005
Utility deposits	3,494	1,831	3,016	1,603
Stripping amortization expense	4,783	3,049	-	-
Other non-current assets	5,747	3,266	-	-
	14,024	8,146	3,016	1,603

14. Inventories

	Group		Company
(all amounts in Euro thousands)	2006	2005	2006	2005
Inventories
Raw materials	31,813	24,715	22,243	17,787
Maintenance stores	101,800	95,919	33,262	32,981
Finished goods	79,419	64,950	16,584	15,708
	213,032	185,584	72,089	66,476
Provision for obsolete inventory	-8,906	-9,971	-2,696	-2,132
	204,126	175,613	69,393	64,344
Transfer of major spare parts to property, plant and equipment (Note 8)	-989	341	-989	341
	203,137	175,954	68,404	64,685

The Group has not pledged its inventories as collateral.

15. Receivables and prepayments

(all amounts in Euro thousands)	Group		Company
	2006	2005	2006	2005
Trade receivables	141,512	137,706	26,879	21,194
Cheques receivables	119,155	113,355	69,105	72,219
Provision for doubtful debtors	-7,160	-10,739	-2,849	-5,751
	253,507	240,322	93,135	87,662
Prepayments and other receivables	44,024	39,724	4,080	4,365
Provision for other doubtful receivables	-4,112	-7,643	-	-
	39,912	32,081	4,080	4,365
Trade receivables from related parties (Note 27)	6	15	34,545	39,448
	293,425	272,418	131,760	131,475

Analysis of provisions for doubtful debtors

	2006	2005	2006	2005
Balance at 1 January	10,739	9,800	5,751	6,545
Additions	974	2,294	69	-
Amount not utilized	-3,047	-340	-2,796	-612
Utilized during the year	-1,589	-1,247	-	-182
Additions due to acquisitions	245	-		-
Exchange differences	-162	232	-	-
Balance at 31 December	7,160	10,739	2,849	5,751

Analysis of provisions for other doubtful receivables

	2006	2005
Balance at 1 January	7,643	8,716
Additions	113	-
Amount not utilized	-4,080	-
Utilized during the year	-	-1,073
Exchange differences	436	-
Balance at 31 December	4,112	7,643

16. Cash and cash equivalents

	Group		Company
(all amounts in Euro thousands)	2006	2005	2006	2005
Cash at bank and in hand	592	334	23	12
Short-term bank deposits	137,435	94,808	5	5
	138,027	95,142	28	17

Short-term bank deposits comprise primarily of time deposits and REPOS. The effective interest rates on these short-term bank deposits are based on Euribor rates, are negotiated on a case by case basis and have an average maturity period of seven days.

17. Trade and other payables

(all amounts in Euro thousands)	Group		Company
	2006	2005	2006	2005
Trade payables	86,445	79,107	24,637	25,892
Amounts due to related parties (Note 27)	504	450	5,039	7,073
Other payables	24,212	16,054	11,178	10,183
Accrued expenses	22,281	19,798	4,493	3,241
Social security	4,790	4,493	2,819	2,751
Customer down payments/advances	4,827	4,657	980	934
Forward foreign exchange contracts (Note 22)	989	3,722	-	-
Other taxes	7,943	7,978	2,660	1,731
	151,991	136,259	51,806	51,805

Other payables comprise mainly of insurance and employee benefit payables.

18. Borrowings

Group		Company
(all amounts in Euro thousands)	2006	2005	2006	2005
Current
Loans in local currency - (€ denominated)	28,911	23,973	8,258	13,483
Loans in foreign currency	109,569	39,966	17,082	35,513
Finance lease liabilities	565	599	-	-
	139,045	64,538	25,340	48,996
Non-current
Bank borrowings (Loans in foreign currency)	321,877	419,747	16,320	62,203
Finance lease liabilities	4,163	5,278	-	-
	326,040	425,025	16,320	62,203
Total borrowings	465,085	489,563	41,660	111,199

The bank borrowings are unsecured. The fair values of the borrowings closely approximate their carrying amounts.

Maturity of non-current bank borrowings (excluding finance lease liabilities):

(all amounts in Euro thousands)		Group		Company
	2006	2005	2006	2005
Up to 2 years	33,935	48,832	4,218	-
Between 2 and 5 years	115,928	90,437	12,102	62,203
Over 5 years	172,014	280,478	-	-
	321,877	419,747	16,320	62,203

18. Borrowings (continued)

The effective interest rates that affect the Income Statement are as follows:

		Group		Company
	2006	2005	2006	2005
Bank borrowings (foreign currency - USD)	6.13%	5.95%	6.11%	4.26%
Bank borrowings (foreign currency - JPY)	2.70%	3.32%	-	-
Bank borrowings (foreign currency - EGP)	10.53%	11.03%	-	-
Bank borrowings (foreign currency - GBP)	6.45%	6.45%	6.45%	6.45%
Bank borrowings (foreign currency - BGN)	5.54%	5.86%	5.67%	5.97%
Bank borrowings (local currency - €)	3.95%	3.15%	3.85%	3.11%
Finance lease liabilities	5.14%	5.14%	-	-

Bank borrowings in foreign currencies:	Group	Company
(all amounts in Local Currency thousands)	2006	2005	2006	2005
USD	502,210	446,249	43,990	84,965
JPY	2,250,846	2,060,488	-	-
EGP	210,980	114,290	-	-
GBP	-	92	-	92
BGN	10,196	50,000	-	50,000
CAN	4,600	-	-	-

The present value of the finance lease liabilities may be analyzed as follows:

(all amounts in Euro thousands)

	Group
Finance lease liabilities - minimum lease payments	2006	2005
Not later than 1 year	795	887
Later than 1 year and not later than 5 years	3,179	3,549
Later than 5 years	1,682	2,765
	5,656	7,201
Future finance charges on finance leases	-928	-1,324
Present value of finance lease liabilities	4,728	5,877
Present value of finance lease liabilities is as follows:
Not later than 1 year	565	724
Later than 1 year and not later than 5 years	2,260	2,896
Later than 5 years	1,903	2,257
	4,728	5,877

Lease liabilities are effectively secured as the rights to the leased assets revert to the lessors in the event of default. The Group has adequate undrawn committed and uncommitted borrowing facilities to meet future business requirements.

19. Deferred income taxes

Deferred income taxes are calculated in full on temporary differences under the liability method using the principal tax rates that apply to the countries where the companies of the group operate.

The movement on the deferred income tax account after set-offs is as follows:

(all amounts in Euro thousands)	Group			Company
	2006	2005	2006	2005
Opening balance	142,763	117,708	30,458	42,405
Income statement charge (Note 5)	554	25,514	1,661	4,299
Exchange differences	-12,002	15,787	-	-
Additions due to acquisitions	3,732	-	-	-
Tax charged to equity	-2,243	-16,246	-2,243	-16,246
Ending balance	132,804	142,763	29,876	30,458

The deferred tax charged to equity during the year refers to the hedging of investments.

Analysis of deferred tax liabilities (before set - offs)

	Group	Company
(all amounts in Euro thousands)	2006	2005	2006	2005
Property, plant and equipment	149,778	159,383	27,902	27,967
Provisions	5,950	3,253	4,743	3,350
Receivables and prepayments	1,421	913	-	-
Currency translation differences on derivative hedged position	-	2,902	-	2,902
	157,149	166,451	32,645	34,219
Analysis of deferred tax assets
(all amounts in Euro thousands)
Intangible assets	-2,206	-1,445	-	-
Tax losses	-2,659	-2,637	-	-
Inventories	-799	-812	-	-
Post-employment and termination benefits	-1,380	-1,885	-	-
Receivables and prepayments	-2,214	-2,630	-867	-1,376
Other	-15	-18	-	-
Government grants	-2,708	-2,667	-1,331	-1,422
Provisions	-7,321	-6,155	-571	-304
Trade and other payables	-5,043	-4,780	`	-
Currency translation differences on derivative hedged position	-	-659	-	-659
	-24,345	-23,688	-2,769	-3,761
Net deferred tax liability	132,804	142,763	29,876	30,458

19. Deferred income taxes (continued)

The movement in deferred tax assets and liabilities (prior to offsetting balances within the same tax jurisdiction) during the year is as follows:

Group (all amounts in Euro thousands)	1 January 2006	Debit/ (Credited) charged to net profit	Debit/ (Credited) charged to equity	Exchange differences	Additions due to acquisitions	31 December 2006
Deferred tax liabilities
Property, plant and equipment	159,383	449	-	-13,786	3,732	149,778
Provisions	3,253	2,600	-	97	-	5,950
Receivables and prepayments	913	618	-	-110	-	1,421
Currency translation differences on derivative hedged
position	2,902	-	-2,902	-	-	-
	166,451	3,667	-2,902	-13,799	3,732	157,149
Deferred tax assets
Intangible assets	-1,445	-1,025	-	264	-	-2,206
Tax losses	-2,637	21	-	-43	-	-2,659
Inventories	-812	-71	-	84	-	-799
Post-employment and termination benefits	-1,885	310	-	195	-	-1,380
Receivables and prepayments	-2,919	596	-	109	-	-2,214
Other	-18	-	-	3	-	-15
Government grants	-2,667	-165	-	124	-	-2,708
Provisions	-5,866	-2,018	-	563	-	-7,321
Trade and other payables	-4,780	-761	-	498	-	-5,043
Currency translation differences on derivative hedged
position	-659	-	659	-	-	-
	-23,688	-3,113	659	1,797	-	-24,345
Net deferred tax liability	142,763	554	-2,243	-12,002	3,732	132,804

Company (all amounts in Euro thousands)	1 January 2006	Debit/ (Credited) charged to net profit	Debit/ (Credited) charged to equity	Exchange differences	31 December 2006
Deferred tax liabilities
Property, plant and equipment	27,967	-65	-	-	27,902
Provisions	3,350	1,393	-	-	4,743
Currency translation differences on derivative hedged position	2,902	-	-2,902	-	-
	34,219	1,328	-2,902	-	32,645
Deferred tax assets
Receivables and prepayments	-1,376	509	-	-	-867
Government grants	-1,422	91	-	-	-1,331
Provisions	-304	-267	-	-	-571
Currency translation differences on derivative hedged
position	-659	-	659	-	-
	-3,761	333	659	-	-2,769
Net deferred tax liability	30,458	1,661	-2,243	-	29,876

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

19. Deferred income taxes (continued)

The movement in deferred tax assets and liabilities (prior to offsetting balances within the same tax jurisdiction) during the year is as follows:

Group (all amounts in Euro thousands)	1 January 2005	Debit/ (Credited) charged to net profit	Debit/ (Credited) charged to equity	Exchange differences	31 December 2005
Deferred tax liabilities
Property, plant and equipment	134,294	7,788	-	17,301	159,383
Provisions	-929	2,114	-	2,068	3,253
Receivables and prepayments	790	1	-	122	913
Currency translation differences on derivative hedged position	19,806	-	-16,904	-	2,902
	153,961	9,903	-16,904	19,491	166,451
Deferred tax assets
Intangible assets	-517	-892	-	-36	-1,445
Tax losses	-20,482	20,421	-	-2,576	-2,637
Inventories	-2,074	1,582	-	-320	-812
Post-employment and termination benefits	-1,698	75	-	-262	-1,885
Receivables and prepayments	-911	-1,597	-	-122	-2,630
Other	-797	-16	-	795	-18
Government grants	-1,903	-586	-	-178	-2,667
Provisions	-2,617	-3,141	-	-397	-6,155
Trade and other payables	-3,937	-235	-	-608	-4,780
Currency translation differences on derivative hedged position	-1,317	-	658	-	-659
	-36,253	15,611	658	-3,704	-23,688
Net deferred tax liability	117,708	25,514	-16,246	15,787	142,763

1 January 2005	Debit/ (Credited) charged to net profit	Debit/ (Credited) charged to equity	Exchange differences	31 December 2005

23,368	4,599	-	-	27,967
1,236	2,114	-	-	3,350
19,806	-	-16,904	-	2,902
44,410	6,713	-16,904	-	34,219

-	-1,376	-	-	-1,376
-688	-734	-	-	-1,422
-	-304	-	-	-304
-1,317	-	658	-	-659
-2,005	-2,414	658	-	-3,761
42,405	4,299	-16,246	-	30,458

20. Retirement and termination benefit obligations

Greece

Greek labor legislation requires that the payment of retirement and termination indemnities be based on the number of years of service to the Company by the employees and taking into consideration their final remuneration. The Group grants retirement indemnities which exceed the legal requirements. These retirement indemnities are unfunded and the liabilities arising from such obligations are actuarially valued by an independent firm of actuaries. The last actuarial valuation was undertaken in December 2006. The principal actuarial assumptions used were a discount rate of 4.5%, future salary increases of between 5% and 6% and future pension increases of 3% per annum.

USA

The Group's U.S. subsidiaries operate defined benefit plans and other post-retirement benefit plans. The method of accounting for the latter, as well as the valuation assumptions and the frequency of valuations are similar to those used for defined benefit plans.

Multi-employer plan

Certain employees participate in a union sponsored, defined benefit multi-employer pension plan. This plan is not administered by the Group's U.S. subsidiary and contributions are determined in accordance with the provisions of the negotiated labor contract. These contributions are affected by the funded status of the plan.

Excess benefit plan

This plan is intended to constitute an unfunded plan of deferred compensation for a selected group of highly compensated employees under the Employee Income Security Act of 1974 ("ERISA"). For this purpose the Group's U.S. subsidiary created an irrevocable trust to facilitate the payment of deferred compensation to participants under this plan. Under this plan, the participants are eligible to defer a certain percentage of eligible compensation for the applicable plan year. The Company matches 50% of the participants' contributions to the plan. Again, the Company's contributions are affected by the funded status of the plan.

All of the Group's U.S. subsidiary's defined benefit pension plans and all but one of its other post-retirement plans have been frozen as to new participants and credited service. These plans do not materially impact the Group. One post-retirement benefit plan exists (for certain active and former employees) whereby eligible retirees receive benefits consisting primarily of assistance with medical insurance costs between the dates of early retirement and medicare eligibility. The Company operates a defined contibution plan for it's employees.

20. Retirement and termination benefit obligations (continued)

The amounts recognized in the income statement relating to defined benefit pension plans and other post retirement and termination benefits (defined benefit plans) are as follows:

	Group		Company
	2006	2005	2006	2005
(all amounts in Euro thousands)
Current service cost	3,071	2,395	1,497	1,590
Interest cost	2,502	2,317	1,465	1,389
Past service cost	-	-	-	-
Actuarial loss / (gain)	1,148	672	1,697	871
	6,721	5,384	4,659	3,850
Expected return on plan assets	-672	-750	-	-
Net periodic cost	6,049	4,634	4,659	3,850
Additional provision required	770	2,435	-	-
Additional post retirement and termination benefits paid out, not provided for	853	320	853	314
Amounts recognised in the income statement	7,672	7,389	5,512	4,164
Actual return on plan assets	-	712	-	-
Present value of the liability recognised in the balance sheet	58,798	45,339	38,137	33,035
Movement in the liability recognized in the balance sheet:
(all amounts in Euro thousands)
Opening balance	38,937	39,642	23,293	24,114
Total expense - as shown above	6,049	4,634	4,659	3,850
Additional provision required	770	2,435	-	-
Exchange differences	-686	-694	-	-
Benefits paid during the year	-5,535	-7,080	-5,204	-4,671
Ending balance	39,535	38,937	22,748	23,293

21. Provisions

Group (all amounts in Euro thousands)		1 January 2006	Additions	Used during year	Exchange differences	Additions due to acquisitions	31 December 2006
Provisions for restoration of quarries	a	7,639	4,582	-10	-491	-	11,720
Provisions for other taxes	b	2,699	239	35	-89	-	2,884
Litigation provisions	c	3,200	1,655	-2,271	-87	137	2,634
Tax provision for reserve L.3220/2004 (note 5)	d	-	16,300	-	-	-	16,300
Other provisions	e	4,075	7,954	-	-277	-	11,752
		17,613	30,730	-2,246	-944	137	45,290

(all amounts in Euro thousands)	2006	2005
Non current provisions	37,977	13,136
Current provisions	7,313	4,477
	45,290	17,613

Company (all amounts in Euro thousands)		1 January 2006	Additions	Used during year	Exchange differences	31 December 2006
Provisions for restoration of quarries	a	-	2,778	-	-	2,778
Tax provision for reserve L.3220/2004 (note 5)	d	-	14,400	-	-	14,400
Other provisions	e	2,418	4,400	-2,418	-	4,400
		2,418	21,578	-2,418	-	21,578

(all amounts in Euro thousands)	2006	2005
Non current provisions	17,178	2,418
Current provisions	4,400	-
	21,578	2,418

a. This provision represents the present value of the estimated costs to reclaim quarry sites and other similar post-closure obligations. It is expected that this amount will be used over the next 2 to 50 years.

b. This provision relates to future obligations that may result from tax audits. It is expected that this amount will be fully utilized in the next five years.

c. This provision has been established with respect to claims made against certain companies in the Group by third parties. It is expected that this amount will be utilized in the next two years.

d. This provision relates to future tax obligation in respect of Tax exempt reserves L3220/2004.

e. Comprises other provisions relating to other risks none of which are individually material to the Group. Ιt is expected that this amount will be used over the next 2 to 50 years.

22. Financial instruments

Derivative financial instruments	Group		Company
(all amounts in Euro thousands)	2006	2005	2006	2005
Liabilities
Forward foreign exchange contracts at fair value (Note 17)	989	3,722	-	-

All forward exchange contracts are valued at fair value. The resultant gain or loss is included in finance costs on the income statement.

Commitments to buy and sell foreign currencies:

The amounts below represent the net Yen and Dollar equivalents to purchase and sell foreign currencies. The contracts will be utilized during the next twelve months.

	Foreign Amount		Average Rate to the Yen/\$
(all amounts in local currency thousands)	2006	2005	2006	2005
Subsidiaries
Japanese Yen (Bought)	4,575,386	12,201,000	113.96	110.77
Japanese Yen (Sold)	2,324,540	8,075,000	119.16	113.96

Hedging of net investment in foreign subsidiary

At 30.6.2006 the loan in foreign currency which has been designated as a hedge of the Group's net investment in Titan America was fully repaid. As at 31.12.2005 the remaining balance was \$20,000,000. The fair value of the borrowing at 31 December 2005 was € 16,953,463. The foreign exchange gain of € 785,059 (2005: loss of € 5,551,242) on translation of the borrowing to Euro at the repayment date was recognised in shareholders' equity. The cumulative exchange gain at 31 December 2006 recognized in shareholders' equity amounted to € 48,346,632 (2005: € 45,318,420).

23. Contingencies and Commitments

Contingent liabilities	Group Company
(all amounts in Euro thousands)	2006	2005	2006	2005

Guarantees to third parties on behalf of subsidiaries Bank guarantee letters	96,793 29,058	74,026 33,052	396,443 18,192	358,418 31,871
Other	2,062	6,891	6,226	5,353
	127,913	113,969	420,861	395,642

On March 22, 2006, the United States District Court Judge Hoeveler of the Southern District of Florida ruled that the mining permits for the Lake Belt region of Florida had been improperly issued. The Judge remanded the permitting process to the U.S. Army Corps of Engineers for further review and consideration.The Judge's ruling affects most of the twelve mining permits issued for Florida's Lake Belt region. We hold three of the twelve permits and the quarries are one of the sources of supply of limestone for our Pennsuco plant and aggregates operation. We believe that the permits issued by the Corps of Engineers were properly issued and therefore we are seeking re-issuance of the permits.

To date mining has been unaffected pending the outcome of a hearing which began in June, 2006 and ended January 2007, on a claim seeking the temporary mining shutdown in the region pending the outcome of the reassessment of the environmental impact being prepared by the Army Corps of Engineers. The Judge has not issued as yet, any rulings as to the remedy he intends to order at the conclusion of these proceedings. The impact of this ruling on our operations and future results is largely dependent on whether mining will be allowed to continue pending reconsideration of the permit by the Corps of Engineers.We are developing contingency plans in the event of a temporary or permanent mining shutdown ruling of the Judge, which we intend to appeal. However, it should be noted that either a temporary or permanent mining shutdown in the region could have a significant adverse affect on the buildings materials industry and economy in Southern Florida and the Group's financial results."

As part of the Kyoto Protocol, the European Union has committed itself to reduce greenhouse gas emissions. Within this context a Community Directive was issued that foresees the commercialisation of CO2 emission licences. The directive has been transposed to Greek Legislation, impacting amongst other industries the cement industry. The Company has been made aware of its allocation, from 1 January 2005 through 31 December 2007, in terms of the National Allocation Plan for CO2 emissions. In the event that the allocated amount will be lower than the Company's present emissions, the Company will incur costs for either having to acquire emmision rights or via an investment in equipment that reduces the emission of the gas. Presently the Company believes that it will not incur such an obligation.

The Company has not been tax audited for the years 2002 to 2006. In addition, the Group's subsidiaries have not been audited for the financial years mentioned in note 34, therefore their tax obligations have not been finalized. In potential future tax audit, the tax authorities may reject certain expenses, increasing in this way the Company's and the Group's subsidiaries taxable income, by imposing additional taxes, fines and accessions. At the present time it is not possible to define with accuracy the level of the additional taxes and fines which may possibly be imposed, as it depends to the findings of the tax audit.

Other than the items referred to in the preceding paragraph, it is not anticipated that any material contingent liabilities will arise.

Contingent assets	Group		Company
(all amounts in Euro thousands)	2006	2005	2006	2005
Bank guarantee letters	11,355	12,037	11,355	12,037
	11,355	12,037	11,355	12,037

Litigation between our subsidiary INTERTITAN S.A and the French state is pending before the competent French administrative court of appeal in regard to a claim of our subsidiary against the French state for damages, which at first instance had been accepted for € 2,663,375.40 plus interest. The ruling was overturned in the Court of Appeal and will be heard by a higher court.

Commitments

Capital commitments

Capital expenditure contracted for at the balance sheet date but not recognized in the financial statements is as follows:

	Group		Company
(all amounts in Euro thousands)	2006	2005	2006	2005
Property, plant and equipment	19,751	29,503	13,605	18,101
Total	19,751	29,503	13,605	18,101

Purchase commitments

The Group's US subsidiary has contracted to purchase raw materials and manufacturing supplies as part of its ongoing operations in Florida. This includes a contract to buy construction aggregates through a multi-year agreement at prevailing market prices.

Operating lease commitments - where a Group Company is the lessee

The Group leases motor vehicles, properties and other equipment under non-cancelable operating lease agreements. The leases have varying terms, escalation clauses and renewal rights.

(all amounts in Euro thousands)	Group
	2006	2005
Not later than 2 years	6,208	6,510
Later than 2 years and not later than 5 years	3,256	3,063
Later than 5 years	3,275	3,728
	12,739	13,301

24. Share capital

(all amounts are shown in Euro thousands unless otherwise stated)

	Numbers of ordinary shares	Ordinary shares	Number of treasury shares	Treasury shares	Share premium	Share options	Number of preferred ordinary shares	Preferred ordinary shares	Total number of shares	Total

At 1 January 2005	76,560,264	153,121	-	-	19,585	-	7,568,960	15,138	84,129,224	187,844
Share options (IFRS 2)	-	-	-	-	-	731	-	-	-	731
Issue of shares - share option scheme	200,900	401	-	-	2,548	-	-	-	200,900	2,949
At 31 December 2005	76,761,164	153,522	-	-	22,133	731	7,568,960	15,138	84,330,124	191,524
Share options (IFRS 2)	-	-	-	-	-	2,788	-	-	-	2,788
Treasury shares purchased	-	-	-14,000	-502	-	-	-	-	-14,000	-502
Issue of shares - share option scheme	155,080	310	-	-	591	-	-	-	155,080	901
At 31 December 2006	76,916,244	153,832	-14,000	-502	22,724	3,519	7,568,960	15,138	84,471,204	194,711

The total number of the authorised ordinary shares is:	2006	2005
Ordinary shares of € 2.00 each	76,916,244	76,761,164
Preferred ordinary shares of € 2.00 each	7,568,960	7,568,960
	84,485,204	84,330,124

All issued shares are fully paid.

Τhe trading price of the Titan Cement ordinary shares were € 41.30 and € 34.50 at December 31, 2006 and 2005, respectively.

Share options are granted to members of senior management. Movements in the number of share options outstanding are as follows:

		2006			2005
	Old scheme	New scheme	Total	Old scheme	New scheme	Total
At 1 January	82,700	244,590	327,290	283,600	111,480	395,080
Granted	-	142,440	142,440	-	133,110	133,110
Exercised	-46,600	-108,480	-155,080	-200,900	-	-200,900
Written off	-29,500	-3,000	-32,500	-	-
At 31 December	6,600	275,550	282,150	82,700	244,590	327,290

Share options outstanding at the end of the year have the following terms:

			2006			2005
Expiration date	Exercise price	Old scheme	New scheme	Total	Old scheme	New scheme	Total
2007	€ 14.68	6,600	-	6,600	82,700	-	82,700
2007	€ 2.00	-	-	-	-	111,480	111,480
2008	€ 2.00	-	133,110	133,110	-	133,110	133,110
2009	€ 2.00	-	142,440	142,440	-	-	-
		6,600	275,550	282,150	82,700	244,590	327,290

Old scheme

At the annual general meeting of 5 July 2000, the shareholders approved the distribution of up to 400,000 ordinary voting shares by granting share options at an initial offer price of €29.35 per share (now € 14.68 after split).

With a decision taken at the general meeting on 19 June 2002 and in accordance with the provisions of Law 2919/2001, the implementation of the program was extended to senior executives of subsidiaries of the Group. The options granted each year have a vesting period of three years and can be exercised either partially by one-third within the year of granting and the next two years or cumulatively at the end of the three-year period.

As a result of the decision taken at the Annual General Meeting on May 24, 2004 to reduce the nominal value per share (share split), it was decided at the Shareholders' General Meeting held on June 8, 2004 to modify this share option scheme by doubling the number of shares to 480,000 new shares instead of 240,000 old ones and to reduce the exercise price from € 29.35 to €14.68 per share. During the year 12 (2005: 41) executives exercised options for 46,600 (2005: 200,900) shares. The remaining options for 6,600 (2005: 82,700) shares have not yet been exercised. During the 2006 financial year, no members of the board exercised their rights (2005: 30,800 shares).

New scheme

On June 8, 2004 the Company approved a new share incentive scheme for the distribution of up to 400,000 ordinary voting shares by granting share options for the three year period 2004 to 2006 to certain executives of the Company and its subsidiaries. The exercise price was set at the nominal price of the share. Under this scheme, the options granted each year have a maturity period of three years and can be exercised after the completion of the three year period. Each option must be exercised within twelve months from its respective vesting period. If the deadline is exceeded then those particular options will irrevocably lapse. All vesting is conditional on the employee's continued employment throughout the vesting period. The number of options to be granted each year will depend on a number of market based performance features such as the performance of Titan shares compared to the performance of the Athens Securities Exchange and the share performance of other international cement producing companies. The number of options to be granted each year will be determined as follows:

1) One-third of options granted vest based on an individuals performance at the completion of the three year period

2) One-third of options granted vest based on the Titan Cement's stock performance relative to three Athens Stock Exchange indices during the three year period

3) One-third of options granted vest based on the Titan Cement's stock performance relative to that of twelve predefined cement producing companies during the three year period.

The options granted under the new scheme have been accounted for in terms of the requirements of IFRS 2 "Share based payments". The options granted under the old scheme are not subject to IFRS 2 as they were granted prior to the effective date of IFRS 2.

The fair value of the options granted under the new scheme, determined using the Black-Scholes valuation model, was €37.27 (2005: €30.76) per option. The significant inputs into the valuation model were share price at grant date of €40.74 (2005: €34.50), expected volatility of share price 22.03% (2005: 21.6%), dividend yield of 1.56% (2005: 1.9%) and an annual risk free rate of 3.67% (2005: 2.8%).

During 2006, 54 executives exercised options for 155,080 shares (2005: nil).The remaining options for 275,550 (2005: 244,590) shares have not yet been exercised. During the 2006 financialyear, members of the board exercised their rights for 10,200 (2005: nil) shares. The weighted average share price at the exercise date of rights was € 38.73.

25. Fair value and other reserves

Group (all amounts in Euro thousands)	Legal reserve	Special reserve	Contingency reserve	Tax exempt reserves under special laws	Revaluatio n reserve	Currency translation differences on derivative hedging position	Translation Reserve	Total
Balance at 1 January 2005	64,463	3,693	166,629	153,896	-	34,624	-148,753	274,552
Foreign currency translation	-	-	-	-	-	-	40,429	40,429
Net gains on available for sale financial assets	-	-	-	-	2,959	-	-	2,959
Net gain on hedge of net investment	-	-	-	-	-	10,694	-	10,694
Transfer from retained earnings	-11,874	-56	76,055	-8,050	-	-	5,214	61,289
Balance at 31 December 2005	52,589	3,637	242,684	145,846	2,959	45,318	-103,110	389,923
Foreign currency translation	-	-	-	-	-	-	-58,851	-58,851
Net losses on available for sale financial assets	-	-	-	-	-3,153	-	-	-3,153
Net gain on hedge of net investment	-	-	-	-	-	3,028	-	3,028
Transfer from retained earnings	4,960	-	28,105	8,429	3,485	-	-2,003	42,976
Balance at 31 December 2006	57,549	3,637	270,789	154,275	3,291	48,346	-163,964	373,923

Company (all amounts in Euro thousands)	Legal reserve	Special reserve	Contingency reserve	Tax exempt reserves under special laws	Revaluatio n reserve	Currency translation differences on derivative hedging position	Total
Balance at 1 January 2005	40,019	1,769	192,957	123,298	-	34,624	392,667
Net gain on hedge of net investment	-	-	-	-	-	10,694	10,694
Transfer from retained earnings	5,273	-	39,141	10,798	-	-	55,212
Balance at 31 December 2005	45,292	1,769	232,098	134,096	-	45,318	458,573
Net gain on hedge of net investment	-	-	-	-	-	3,028	3,028
Transfer from retained earnings	5,226	-	28,136	8,403	-	-	41,765
Balance at 31 December 2006	50,518	1,769	260,234	142,499	-	48,346	503,366

Certain Group companies are obliged according to the applicable commercial law to form as legal reserve a percentage their annual net profits. This reserve can not be distributed during the operational life of the company.

Based on existing Greek tax law, tax exempt reserves under special laws are exempt from income tax, provided that they are not distributed to shareholders. The Group does not intend to distribute these reserves and has thus not provided for the tax liability that would arise in the event that these reserves were to be distributed. Any distribution from these reserves can only occur following the approval of shareholders in a general meeting and after the applicable taxation is paid by the Company.

Included in the tax exempt reserves are reserves that have been created by the Company and certain of its Greek subsidiaries following the application of paragraph 2 of L.3220/2004. The European Commission, following its recent Directive 2006/C20/05 that these tax exempt reserves have the form of a government subsidy, has requested the Greek Government to comment. The European Commission finally concluded that the relevant reserves are a form of government subsidy and the affected Group companies should be required to submit to the taxation authorities the applicable income tax. As a result the Group has decided to account for the tax applicable. However the Group intends to challenge any tax assesed in this respect as the reserves were created according to existing legislation at the time.

26. Cash generated from operations

(all amounts in Euro thousands)			Group Company
	2006	2005	2006	2005
Net Profit for the year as per income statement	262,310	213,050	105,118	105,810
Adjustments for:
Tax (Note 5)	118,513	80,018	62,195	39,207
Depreciation (Note 8)	76,314	69,660	10,997	11,016
Amortization of intangibles (Note 9)	3,560	1,438	-	-
Amortization of government grants received (note 12)	-513	-430	-387	-344
Stripping amortization	1,370	1,347	-	-
Provision for impairment of goodwill - write offs	7,600	8,152	-	-
Loss / (profit) on sale of property, plant and equipment	622	-376	-142	69
Provision for impairment of debtors charged to income statement (Note 15)	-6,040	1,954	-2,727	-612
Provision for inventory obsolescence	525	-429	564	-
Provision for restoration of quaries	4,582	-	2,778	-
Provision for litigation	1,655	-	-	-
Other provisions	7,954	3,570	4,451	-2
Provision for retirement and termination benefit obligations	6,819	7,069	4,659	3,850
Interest income and net foreign exchange transaction gains	-12,028	-22,675	-5,900	-200
Dividend income	-4,543	-9,005	-5,598	-29,175
Interest expense and net foreign exchange transaction losses	36,417	47,233	7,316	16,730
Loss/ (Gains) on financial instruments	554	9,528	6	240
Interest capitalized to fixed assets	-609	-538	-	-
Tax discount due to one off payment	-674	-453	-614	-370
Share stock options	2,787	731	1,893	516
Share in profit/(loss) of associates	-3,400	-	-	-
Changes in working capital:
Increase in inventories	-37,739	-39,310	-5,271	-6,752
Increase in trade and other receivables	-11,434	-41,625	-4,126	-30,679
(Increase)/decrease in operating long-term receivables	-3,397	987	-1,412	817
Increase / (decrease) / in trade and other payables	6,433	-11,022	-5,204	-8,828
Cash generated from operations	457,638	318,874	168,596	101,293

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

Net book amount (Note 8)	2,370	1,890	554	550
(Loss)/Profit on sale of property, plant and equipment	-622	376	142	-69
Proceeds from the sale of property, plant and equipment	1,748	2,266	696	481

27. Related party transactions

The Group is controlled by Titan Cement S.A. ("The Company") which owns 100% of the Group's ordinary shares. Group directors own 17.3% (2005: 17.3%) of the Company's shares.

Various transactions are entered into by the Company and its subsidiaries during the year with related parties. Outstanding balances at year-end are unsecured and settlement occurs in cash. For the years ended 31 December 2006 and 31 December 2005, the Group has not raised any provision for doubtful debtors relating to amounts owed by related parties as the payment history has been excellent. Intra-group transactions are eliminated on consolidation. Related party transactions exclusively reflect transactions between the companies of the group.

The following is a summary of transactions that were carried out with related parties during the year:

		Company
(all amounts in Euro thousands)	2006	2005
i) Sales of goods and services
Sale of goods to subsidiaries	127,470	97,721
Sale of services to subsidiaries and joint ventures	909	981
Rental income	120	52
	128,499	98,754

ii) Purchases of goods and services

	Group			Company
	2006	2005	2006	2005
Purchase of goods from subsidiaries	-	-	8,212	8,036
Purchase of services from subsidiaries	-	-	18,279	20,105
Purchase of goods and services from related parties	896	985	896	985
	896	985	27,387	29,126

iii) Year-end balances arising from purchases of goods and services

	Group			Company
	2006	2005	2006	2005
Payables to related parties	-	-	4,535	6,623
Payables to associates	127	113	127	113
Payables to executives and member of the Board	377	337	377	337
Total (note 17)	504	450	5,039	7,073
Receivables from related parties	-	-	34,539	39,433
Receivables from executives and member of the Board	6	15	6	15

Total (note 15) 6 15 34,545 39,448

iv) Key management compensation

	Group		Company
	2006	2005	2006	2005
Salaries and other short-term employee benefits	4,937	4,436	4,560	4,121
Post-employment benefits	107	80	107	80
Other long term benefits	472	364	472	364
Termination benefits	348	-	348	-
Share based payments	686	194	686	194
	6,550	5,074	6,173 -	4,759
v) Directors

Executive members on the Board of Directors 6 6 Non-executive members on the Board of Directors 9 9

vi) Contingencies and commitments (see Note 23)

28. Principal subsidiaries and joint ventures

Shareholding in subsidiaries and joint ventures

Subsidiary and joint venture name	Country of incorporation	Nature of business	% of direct investment	% of indirect investment

Full consolidation method
Τitan Cement S.A	Greece	Cement Producer		Parent company
Aeolian Maritime Company Albacem S.A.	Greece Greece	Shipping Import & Distribution of Cement	100.000 99.996	- 0.004
Achaiki Maritime Company	Greece	Shipping	100.000	-
Interbeton Construction Materials S.A.	Greece	Ready Mix & Aggregates	99.679	0.321
Intercement S.A.	Greece	Trading Company	99.950	0.050
Intertitan Trading International S.A.	Greece	Trading Company	99.995	0.005
Ionia S.A.	Greece	Porcelain	100.000	-
Lakmos S.A.	Greece	Trading Company	99.950	0.050
Quarries Gournon S.A. Tagarades Community Quarries S.A.	Greece Greece	Quarries & Aggregates Quarries & Aggregates	54.930 -	45.070 79.928
Quarries Corinthias S.A.	Greece	Quarries & Aggregates	-	100.000
Dodekanesos Quarries S.A	Greece	Quarries & Aggregates	-	100.000
Leros Quarries S.A	Greece	Quarries & Aggregates	-	100.000
Leesem S.A.	Greece	Trading Company	3.193	96.807
Loukas Tsogkas Beta S.A.	Greece	Ready Mix	-	100.000
Naftitan S.A.	Greece	Shipping	99.900	0.100
Polikos Maritime Company	Greece	Shipping	100.000	-
Titan Cement International Trading S.A.	Greece	Trading Company	99.800	0.200
Titan Atlantic Cement Industrial and Commercial S.A. Granitoid AD	Greece Bulgaria	Investment Holding Company Trading Company	99.817 -	0.183 99.669
Gravel and Sand PIT AD	Bulgaria	Quarries & Aggregates	-	99.989
Zlatna Panega Beton EOOD	Bulgaria	Ready Mix	-	99.989
Zlatna Panega Cement AD	Bulgaria	Cement Producer	-	99.989
Fintitan SRL	Italy	Import & Distribution of Cement	100.000	-
Separation Technologies Canada Ltd	Canada	Converter of waste material into fly ash	-	100.000
Aemos Cement Ltd	Cyprus	Investment Holding Company	100.000	-
Alvacim Ltd	Cyprus	Investment Holding Company	-	100.000
Balkcem Ltd Iapetos Ltd	Cyprus Cyprus	Investment Holding Company Investment Holding Company	- 100.000	100.000 -
Rea Cement Ltd	Cyprus	Investment Holding Company	-	100.000
Themis Holdings Ltd	Cyprus	Investment Holding Company	-	51.006
Tithys Ltd	Cyprus	Investment Holding Company	-	100.000
Separation Technologies U.K. Ltd	U.K	Converter of waste material into fly ash	-	100.000
Titan Cement U.K. Ltd	U.K	Import & Distribution of Cement	100.000	-
Cetral Concrete Supermix Inc.	U.S.A.	Ready Mix	-	100.000
Essex Cement Co. LLC	U.S.A.	Trading Company	-	100.000
Markfield America LLC Metro Redi-Mix LLC	U.S.A. U.S.A.	Insurance Company Ready Mix	- -	100.000 100.000
Miami Valley Ready Mix of Florida LLC	U.S.A.	Ready Mix	-	100.000
Pennsuco Cement Co LLC	U.S.A.	Cement Producer	-	100.000
Roanoke Cement Co. LLC	U.S.A.	Cement Producer	-	100.000
Separation Technologies LLC	U.S.A.	Converter of waste material into fly ash	-	100.000
Standard Concrete LLC	U.S.A.	Trading Company	-	100.000
Summit Ready Mix LLC	U.S.A.	Ready Mix	-	100.000
Tarmac America LLC	U.S.A.	Cement Producer	-	100.000
Τitan Αmerica LLC Titan Virginia Ready Mix LLC	U.S.A. U.S.A.	Investment Holding Company Ready Mix	- -	100.000 100.000
Cementara Kosjeric AD	Serbia & Montenegro	Cement Producer	-	74.280
Cement Plus Ltd	F.Y.R.O.M	Import & Distribution of Cement	-	61.643
Usje Cementarnica AD	F.Y.R.O.M	Cement Producer	-	94.835
Titan Cement Netherlands BV	Holland	Investment Holding Company	-	100.000
Antea Cement SHA	Albania	Cement Producer	-	100.000
Proportional method
Alexandria Portland Cement Co. S.A.E	Egypt	Cement Producer	-	48.640
Beni Suef Cement Co.S.A.E.	Egypt	Cement Producer	-	49.932
Blue Circle Cement Egypt S.A.E.	Egypt	Cement Producer	-	48.490
Four M Titan Silo Co. LLC	Egypt	Cement Silo Operations	-	49.322
Misrieen Titan Trade & Distribution	Egypt	Cement Silo Operations	-	49.470
East Cement Trade Ltd Βalkan Cement Enterprises Ltd	Cyprus Cyprus	Investment Holding Company Investment Holding Company	- -	50.000 51.006
Alexandria Development Co.Ltd	U.K. (Channel Islands)	Investment Holding Company	-	50.000
Lafarge Titan Egyptian Inv. Ltd	U.K. (Channel Islands)	Investment Holding Company	-	50.000
Equity method
Karieri AD	Bulgaria	Quarries & Aggregates	-	48.711
Karierni Materiali AD	Bulgaria	Quarries & Aggregates	-	48.764
Mechanicsville Concrete Inc.	U.S.A.	Ready Mix	-	25.000

29. Minority Interests

(all amounts in Euro thousands)	2006	2005
Opening balance	16,380	25,467
Minority interest from new-established companies	108	-
Share of net profit of subsidiaries (per income statement)	3,125	2,922
Dividends	-315	-1,011
Subsidiary's equity reduction portion to minority interest	-	-9,799
Fair value gains/(losses) from available for sale financial assets	-147	914
Exchange differences	1,019	-2,113
Ending balance	20,170	16,380

30. Acquisition and disposal of subsidiaries

During the year the Group had not disposed of any subsidiaries.

At 1.4.2005 the Group acquired 86.32% of PAVLIDES BROS. READY MIX ABEE and at 28.12.2005 the balance of the minorities of 13.68% and the company was subsequently merged with INTERBETON CONSTRUCTION MATERIALS S.A.. The balance sheets of the company at the successive acquisition dates are presented below.

At 30.3.2006 the Group announced the acquisition of the 100% of Metro Ready-Mix LLC and Summit Ready Mix LLC (or Elbrecht Concrete Inc.), which were fully incorporated in the consolidated financial statements as of 1.4.2006. At 28.4.2006, the Group acquired 100% of Miami Valley Ready Mix of Florida LLC, which was fully incorporated at the same date in the consolidated financial statements. At 28.6.2006 the Group acquired 100% of Leros Quarries S.A. and 100% of Dodekanesos Quarries S.A., at 28.7.2006 100% of Central Concrete Surermix Inc., at 26.10.2006 100% of Loukas Tsogas Beton S.A. and finally at 15.12.2006 100% of Titan Netherlands BV. The assets and liabilities of the above mentioned companies, as they were preliminary formed at the date of acquisition, are as follows:

(all amounts in Euro thousands)

	2006	2005
Assets
Current assets	39,699	2,084
Inventory	820	2,123
Receivables and prepayments	8,069	1,652
Cash and cash equivalents	2,365	281
Total assets	50,953	6,140
Liabilities
Long term borrowings	-	123
Other liabilities and taxes payable	12,119	3,101
Total liabilities	12,119	3,224
Fair value of net assets	38,834	2,916
Fair value of net assets purchased	-	802
Goodwill arising on acquisition	39,314	1,187
Total	39,314	1,989
Composed of:
Net cash outflow for acquisition of subsidiary	78,148	1,989
Cash and cash equivalents of acquired subsidiary	-2,365	-281
Total cash outflow for subsidiary acquisition	75,783	1,708

From the date of acquisition the above mentioned companies have contributed €2,213 thousands to the Group's profitabilty.

The goodwill resulted from the acquisition of the above companies of € 39,314 thousands, includes also the fair value of expected synergies arising from their incorporation to the Group (note 9).

31. Interest in joint ventures

The Group has a 50% interest in a joint venture, Lafarge Titan Egyptian Investments Limited ("LTEIL"), a company incorporated in Jersey and the principal activity of which is investment holding. LTEIL in turn has controlling interests in other entities. The following amounts represent the Group's share of the assets and liabilities and profit after tax of the joint ventures and are included in the consolidated balance sheet and consolidated income statement:

(all amounts in Euro thousands)	2006	2005
Property, plant and equipment	87,284	102,618
Intangibles and long-term receivables	13,696	14,804
Current assets	39,775	30,278
	140,755	147,700
Non-current interest bearing borrowings	35,964	58,973
Other long-term liabilities	737	918
Provisions	5,206	4,757
Minority interests	169	142
Current non-interest bearing borrowings	5,675	4,453
Other short-term liabilities	22,523	11,049
	70,274	80,292
Net assets	70,481	67,408
Revenues	61,944	52,448
Profit after tax	21,397	36,024

The average number of employees in the joint venture in 2006 was 819 (2005: 809).

32. Investment in associates

At 2006, the Group acquired the 48.8% of Karierni Materiali A.D. as well as the 48.7% of Karieri A.D. (consolidated since 1.8.2006), companies located in Bulgaria, specializing in quarring. Also the Group acquired the 50.00% of Mechanicsville Concrete Inc. (consolidated since 27.7.2006), a company located in U.S.A., specializing in the production and distribution of ready mix (note 28). The above mentioned companies are not listed.

(all amounts in Euro thousands)

Share of the associates' balance sheet

	2006
Property, plant and equipment	4,930
Intangibles and long-term receivables	110
Current assets	1,363
	6,403
Non-current interest bearing borrowings	1,066
Other long-term liabilities	1,457
	2,523
Net assets	3,880
Revenues	3,304
Profit after tax	1,397

33. Fiscal years unaudited by the tax authorities

Τitan Cement S.A	2002-2006	Rea Cement Ltd	2004-2006
Albacem S.A.	2003-2006	Themis Holdings Ltd	2004-2006
Interbeton Construction Materials S.A.	2002-2006	Tithys Ltd	2003-2006
Intercement S.A.	2003-2006	Separation Technologies U.K. Ltd	(a)
Intertitan Trading International S.A.	2000-2006	Titan Cement U.K. Ltd	(a)
Ionia S.A.	2006	Central Concrete Supermix Inc.	2006
Lakmos S.A.	2003-2006	Essex Cement Co. LLC	2003-2006
Quarries Gournon S.A.	2000-2006	Markfield America LLC	2003-2006
Tagarades Community Quarries S.A.	2003-2006	Mechanicsville Concrete Inc.	0
Quarries Corinthias S.A.	2005-2006	Metro Redi-Mix LLC	2006
Dodekanesos Quarries S.A	2006	Miami Valley Ready Mix of Florida LLC	2006
Leros Quarries S.A	2006	Pennsuco Cement Co LLC	2003-2006
Leesem S.A.	2003-2006	Roanoke Cement Co. LLC	2003-2006
Titan Cement International Trading S.A.	2001-2006	Separation Technologies LLC	2003-2006
Titan Atlantic Cement Industrial and Commercial S.A.	2001-2006	Standard Concrete LLC	2003-2006
Aeolian Maritime Company	2000-2006	Summit Ready-Mix LLC	2006
Achaiki Maritime Company	2000-2006	Tarmac America LLC	2003-2006
Loukas Tsogas Beton S.A.	2006	Titan Virginia Ready Mix LLC	2003-2006
Naftitan S.A.	2003-2006	Τitan Αmerica LLC	2003-2006
Polikos Maritime Company	2001-2006	Cementara Kosjeric AD	2001-2006
Granitoid AD	2005-2006	Usje Cementarnica AD	2006
Gravel and Sand Pit AD	2002-2006	Cement Plus LLC	2006
Karieri AD	-	Alexandria Portland Cement Co. S.A.E	2004-2006
Karierni Materiali AD	-	Beni Suef Cement Co.S.A.E.	2004-2006
Zlatna Panega Beton EOOD	2002-2006	Blue Circle Cement Egypt S.A.E.	(a)
Zlatna Panega Cement AD	2005-2006	Four M Titan Silo Co. LLC	2001-2006
Fintitan SRL	(a)	Misrieen Titan Trade & Distribution	2005-2006
Separation Technologies Canada Ltd	2004-2006	East Cement Trade Ltd	2003-2006
Aemos Cement Ltd	2002-2006	Βalkan Cement Enterprises Ltd	2003-2006
Alvacim Ltd	2006	Alexandria Development Co.Ltd	(a)
Balkcem Ltd	2002-2006	Lafarge Titan Egyptian Inv. Ltd	(a)
Iapetos Ltd	2002-2006	Titan Cement Netherlands BV	2006
		Antea Cement S.H.A.	2006

(α) Under special tax status

34. Reclassifications

Comparative figures have been reclassified in order to be comparable for presentation purposes, are as follows: a) an amount of € 3,761 thousand has been transferred from deferred tax assets to deferred tax liabilities at the Company's balance sheet as of 31.12.05, b) an amount of € 1,000 thousands transfered from "Provisions" to "Property, plant and equipment" decreasing property, plant and equipment by the relevant amount, both the Group's and Company's balance sheet as of 31.12.2005 and c) an amount of € 7,997 thousands has been transferred from net finance costs to income from participations and investments in the consolidated income statement as of 31.12.2005.

35. Post balance sheet events

There are no events after 31 December 2006 considered to be material to the financial position of both the Group and the Company.

AI Terminal

Titan S.A.

4014_10-k_2015-09-29_832d9269-cb7e-41f3-94fb-cd1fd09886cf.pdf

INDEPENDENT AUDITOR'S REPORT

Report on the Financial Statements

Management's Responsibility for the Financial Statements

Auditor's Responsibility

Opinion

Report on Other Legal and Regulatory Requirements

Balance Sheet

Income Statement

Statement of Changes in Shareholders' Equity

Statement of Changes in Shareholders' Equity

Cash Flow Statement

Notes to the Financial Statements

Notes to the Financial Statements

1. General information and summary of significant accounting policies

General information

Summary of significant accounting policies

A. Basis of preparation

Notes to the Financial Statements

New standards, interpretations and amendments to published standards

– IFRS 7, Financial Instruments: Disclosures, and

- IFRS 8, Operating Segments (effective for financial years beginning on or after 1 January 2009)

- IFRIC 7, Applying the Restatement Approach under IAS 29 Financial Reporting in Hyperinflationary Economies (effective for financial years beginning on or after 1 March 2006)

Notes to the Financial Statements

- IFRIC 9, Reassessment of Embedded Derivatives (effective for financial years beginning on or after 1 June 2006)

- IFRIC 10, Interim Financial Reporting and Impairment (effective for financial years beginning on or after 1 November 2006).

- IFRIC 11, IFRS 2-Group and Treasury Share Transactions (effective for financial years beginning on or after 1 March 2007)

- IFRIC 12, Service Concession Arrangements (effective for financial years beginning on or after 1 January 2008)

Notes to the Financial Statements

B. Consolidation

Notes to the Financial Statements

(3) Associates

C. Foreign currency translation

(1) Functional and presentation currency

(2) Transactions and balances

Notes to the Financial Statements

(3) Group companies

D. Property, plant and equipment

Notes to the Financial Statements

E. Investment properties

F. Intangible assets

(1) Goodwill

Notes to the Financial Statements

(3) Other intangible assets

G. Impairment of assets

H. Leases – where a Group entity is the lessee

Notes to the Financial Statements

I. Inventories

J. Trade receivables

K. Cash and cash equivalents

L. Share capital

M. Borrowings

Notes to the Financial Statements

N. Current and Deferred income taxes

O. Employee benefits

Notes to the Financial Statements

(2) Termination benefits

(3) Profit sharing and bonus plans

Notes to the Financial Statements

(4) Equity compensation benefits

P. Government grants relating to purchase of property, plant and equipment

Q. Provisions

Notes to the Financial Statements

R. Environmental restoration costs

S. Revenue recognition

T. Dividends

U. Segment reporting

Notes to the Financial Statements

V. CO2 Emission rights

2. Financial Risk Management

A. Financial risk factors

(1) Foreign exchange risk

Notes to the Financial Statements

(2) Interest rate risk

(3) Credit risk

(4) Liquidity risk

Notes to the Financial Statements

B. Accounting for derivative financial instruments and hedging activities