Pursuant to Article 11 of the Transparency Requirements Law 2007, we submit the Interim Management Statement for the period from the end of the first half of 2012 to date, which has not been audited by the external auditors of the Group.

Interim Management Statement

During period, the Group continued with the same activities as last year and the first half of 2012. The main events and developments that took place during the period and the impacts on the Group’s financial statements are stated below:

a) The Group’s turnover during the period showed a slight increase of 1% due the increase in prices.

b) The gross profit shows a slight improvement due to efforts to restore it to the 2010 levels. However, the margin continues to at 39.8% compared to 38.7% in the corresponding period of 2011 mostly due to increased energy costs, row material and packaging material.

c) The income from investments has dropped further compared to 2011while the other income fell since some of them were not recurrent.

d) The administrative expenses are lower by 4%, while the selling and distribution expenses have remained the same as in 2011.

e) Due to the ongoing financial crisis, the share prices in the CSE have been reduced dramatically with the CSE general index dropping 25% in the third quarter of 2012. In 2012, the Group has invested €256 thousand in shares.

f) The net finance cost is still lower due to the drop in the use of bank overdrafts compared to the corresponding period of 2010.

g) The net finance cost have increased due to interest rate increase and the more extended use of bank overdrafts compared to the corresponding period of 2011.

h) The pre-tax profit remains the same as that in 2011.

Unfortunately, the Cypriot economy is in a deteriorating economic environment and faces an extended uncertainty and problematic stalemates, while the country is still exposed to the ongoing hesitation and denial of the political leadership to consolidate our public finances.

The Group seems to have maintained its financial condition of 2011 despite the deterioration of the Cypriot economy, however, the Management believes that the results are not satisfactory since profitability remains lower than that of 2010.

It is with great concern and disappointment that we observe an inactiveness and indecisiveness to implement the necessary structural changes that could lead to the way out from the financial crisis.  It is also sad that, due to political expediencies, our politicians managed – through a plethora of “red lines” – to convert our economic miracle into an economic misery that unfortunately will ne inherited by the next generations.  Therefore, our optimism and business expectations for the future remain extremely low.