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ADHP Holdings: Interim Management Statement

At the meeting held on November 18, 2009, the Board of Directors of AD Shopping Galleries Plc, former ADHP Holdings Public Company Limited, examined and approved the unaudited Interim Management Statement of the Company and its subsidiaries, pursuant to the Transparency Requirements Law 2007.

In order to fully inform the investing public, this statement must be read in connection with the annual consolidated financial statements for the year ended December 31, 2008 as well as the six-month results for the period ended June 30, 2009.

Activities

The main activities of the Company remained the same during the period.

Specifically, the Company is actively involved in the purchase and lease of properties via its subsidiaries Simien Enterprises Ltd and AD Madison Ltd (former G.N Gallery Nicosia Ltd), which signed long-term lease agreements for the development and exploitation of those properties.

The properties are situated in Limassol and they are a single development space under the name International Merchandising Center (IMC). The Company’s aim is to construct a shopping center.

The design of the building started in mid 2008 with the appointment of JHP Design Consultants, which is experienced in the design of successful shopping centers.

The indoor spaces will be completed soon and according to the scheduled timetables the operation will start in due time.

The building has modern and spacious rooms. It will be a modern shopping center, with many shops, restaurants and cafes. Part of those spaces will be exploited by the Company itself.

Following the expression of great interest by companies, all spaces will be granted via franchises. The shopping center will have a wide variety products as well as restaurants and leisure means.

As mentioned beforehand, part of the centre will be exploited by the Company itself within the framework of the expansion of its activities in the sector of trade and leisure. In this context, several subsidiaries have been established fore the conduct of activities in those sectors. For the management, security and maintenance of the centre, the Company will offer management services via a subsidiary.

Overall, 7 new subsidiaries have been introduced:

AD Management Services Ltd
AD Promotional Outlet Ltd
AD Apparel & Footwear Ltd
AD Toys Ltd
AD Cosmetics Ltd
AD Gourmet Food Ltd
AD Entertainment Ltd

The financial results of the Group during the period are affected by the following:

- The interests on the lease of IMC property, which has been recognized as finance lease adopting the provisions of IAS 17.

- The amortization in accordance with the stable method on the goodwill of the lease of land, which is classified as operating lease.

- The changes in the value of IMC property, which based on IAS 40 are transferred in the Total Income Statement.

- The operating expenses, which due to the increased activity, have increased such as the salaries, the rents of operating lease, the building insurance, the professional rights and services etc.

As a result of the above, the financial results of the Group for the period have been affected negatively.

Other facts during the period were:

- The decision of the Board of Directors on October 6, 2009 to issue a Bond of up to €3,000,000. The Bond is of 3-year duration and will bear a stable interest rate of 10% per annum. DDC Consultants Limited has been appointed as commissioner of the issue.

- The resignations of Messrs. Charalambos Christodoulou and Yiannos Cassoulides from their position as Board members on July and July 10, 2009 respectively.

- The change of the Company’s name from ADHP Holdings Public Company Ltd to AD Shopping Galleries Plc on August 4, 2009.

There are no other facts affecting the Group’s condition during the period.

Prospects and risks

The exploitation and running of IMC as Shopping Center will add significant liquidity and profitability to the Group, which will boost other future investments and activities of the Group.

Also, the expansion of the Group’s activities in the sector of trade and leisure will add profitability too.

Among the risk and uncertainties that the Group is exposed to are the changes in the current property prices. The Group tries to minimize this risk with the exploitation of property as well as the lower purchasing power as a result of the global economic crisis.
Thursday, 19 November, 2009 - 09:20