1. the company's negative pre tax income for 3 consecutive fiscal years (2002-2004)
2. the negative pre tax income in the latest fiscal year (2004) greater in absolute number than pre tax income of the previous year and greater in absolute number than 20% of the company’s turnover value,
decided to enrol the company's share under Supervision Regime since Friday March 4, 2005, in application of Article 110 / Element A of the Athens Exchange Regulation in force.

Since June 2005, the Company, along with the rest of the Group's textile companies, has jointly submitted for approval and financing the five year business plan, which will give the company the ability to deal with the liquidity problems for the realization of the required restructuring and reorganization actions. Hence on 03.17.2006, the Group of companies of the parent Naoussa Spinning Mills S.A. and the creditor Banks National, Emporiki, Agricultural, Alpha Bank and EFG Eurobank, reached an agreement regarding the financing of the Group's restructuring plan. The financing of the Group’s restructuring plan is completed.

The company's Board of Directors, in application of the terms provided by the agreement of the group with the main creditor banks, decided on 3/17/2006 to propose to the Shareholders’ General Meeting the merger through absorption of the company from its parent NAOUSSA SPINNING MILLS S.A. based on the balance sheet of 3/31/2006. Already the General Meetings of the merged companies on 09/12/2006 approved the above merger, the notary deed of the merger was signed, while all the required documents for the approval of the merger by the supervising authorities have been submitted (Ministry of Development, Societes Anonyme and Credit Directory). Approval of the merger is expected along with approval of the prospectus by the Capital Market Committee.

The viability of the Group depends on the successful and immediate realization of the business plan, immediate and smooth financing, debt restructuring, and settlement of remaining liabilities, successful completion of the merger and share capital increase of the absorbing.

We remain at your disposal for any further clarification.