Retail. is our business

A N N U A L R E P O R T 2 0 0 6 Retail is our business

Retail is our business Macintosh Retail Group is a large-scale non-food retailer specialising in the distribution of consumer products in the Benelux and surrounding countries. Our retail chains target a broad range of consumers in the Living, Fashion and Automotive & Telecom market sectors, where they are among the leaders. The customer is key to everything that more than 9,600 employees believe in and do. Our retail formats present an up-to-date and attractively-priced range of products and a constant flow of interesting special offers, thus ensuring complete customer satisfaction and encouraging customers to revisit our stores. Every year some 160 million consumers visit our stores, while approximately 40 million visit our websites. Moreover, Macintosh Retail Group s strength is to leverage its non-food retail expertise aimed at economies of scale, increasing profitability and cost leadership. This is partly facilitated by back-office facilities, including excellent systems, in a decentrally organised group of companies. At the beginning of 2007, Macintosh Retail Group operated 961 stores in the Netherlands, Belgium, France and Germany, with a total retail floor space of 525,000 m 2. The majority of the stores are located in town centres, with Kwantum and GP Décors, in particular, occupying 150 stores at shopping centres on the outskirts of towns. Through its subsidiary Macintosh Hong Kong, Macintosh Retail Group has direct purchasing facilities for supplies made from countries in the Far East. In the Living sector, Kwantum offers the best deals in home furnishings and home decoration with 98 stores in the Netherlands and Belgium. With 52 stores in France, GP Décors is a comprehensive supplier of home decoration at attractive prices. The Fashion sector comprises 447 Scapino, Dolcis, Manfield, Invito and PRO sport shoe stores in the Netherlands and Belgium, selling mainly shoes, but also shoe accessories, bags, clothing and sporting goods. The stores offer a range of products in every price category, matching any style, taste and age. In the Automotive & Telecom sector, BelCompany is the largest supplier of mobile telecom products and services in the Netherlands with 156 stores and one of the largest independent telecom retailers in Belgium with 56 stores. With 152 stores in the Netherlands and Belgium, Halfords is the specialist for bicycles, car and bicycle accessories, and mobile navigation equipment. In 2006, Macintosh Retail Group achieved consumer retail sales of more than 1.1 billion, of which approximately 90% was generated in the Netherlands and the remainder in Belgium, France and Germany. Macintosh Retail Group NV Parkweg 20, 6212 XN Maastricht - P.O.box 5770, 6202 MH Maastricht, The Netherlands Tel. +31 43-3280780 - Fax +31 43-3257030 - info@macintosh.nl - www.macintosh.nl

TABLE OF CONTENTS Key figures Key group data 2 Data per share 3 Report of the Managing Board From the Managing Board 4 Review of 2006 and outlook for 2007 2006: Record year for Macintosh Retail Group 5 Living 10 Fashion 14 Automotive & Telecom 18 Services 22 ebusiness 23 Personnel and organisation 24 Outlook for 2007 26 From the CEO 27 The company Shareholder information 28 Group organisation 31 Organisation chart 32 Objectives and strategy 33 Personnel and organisation 34 Risk profile and risk management 35 Social responsibility 39 Corporate governance 42 Report of the Supervisory Board 45 Financial statements 49 Group financial statements 52 Index to notes to the group financial statements 57 Notes to the group financial statements 58 Group companies 93 Company financial statements and notes of Macintosh Retail Group NV 97 Other information Events after the balance sheet date 107 Appropriation of profit 107 Macintosh Preference Shares Foundation 108 Auditor s report 109 Macintosh Retail Group five year summary 110 Information on Supervisory Board and Managing Board members 111 List of addresses 112 Forward-looking statements This annual report contains a number of forward-looking statements and expectations. These statements, which can be reflected in a number of different ways, refer to future events. They are based on current expectations, estimates and forecasts made by the management of Macintosh Retail Group, as well as on information currently available to the group. These expectations and forecasts are subject to change and Macintosh Retail Group s actual results may differ substantially from expectations as described in this annual report, due to potential risks, uncertainties and other significant factors which Macintosh Retail Group is not always able to control and which are neither manageable nor predictable. In the light of these risks, uncertainties and assumptions, there is even a possibility that the future events described in the annual report will not actually take place. Macintosh Retail Group cannot therefore guarantee that the expectations expressed in this annual report will be realised. These factors, risks and uncertainties include the following non-exhaustive list: Changes in economic and commercial circumstances, changing consumer preferences, introductions of new retail formats or concepts, products and services, government policy in general and amendments to legislation and regulations in particular, changing competition in the markets in which Macintosh Retail Group operates, financing of the business activities, efficiency and cost control, exchange rate changes, interest rate fluctuations, uncertain political situations, tax rates, acquisitions, joint ventures and disposals. For further details of risks, uncertainties and other factors which may affect the results, performance or success of Macintosh Retail Group, reference is made to pages 35 to 38 of this annual report. The statements made in this annual report reflect the situation as at March 13, 2007 and Macintosh Retail Group accepts no obligation to update the statements or publish any changes, due to new information becoming available, future events or any other factors, unless it is obliged to do so under imperative rules of governing law. For additional information on this matter, reference is made to the public announcements made by Macintosh Retail Group following the date of this annual report. 1

KEY FIGURES Key group data (Amounts in millions) 2006 2005 Turnover, result, cash flow and capital expenditure Consumer retail sales, incl. franchisees 1,174.9 979.6 Net turnover 983.8 817.6 Net turnover on continuing operations 1 914.5 713.0 EBITDA 89.1 63.3 EBITDA on continuing operations 1 85.2 55.1 Operating result (EBIT) 67.1 45.9 Operating result (EBIT) on continuing operations 1 64.7 39.1 Net profit 46.0 32.9 Net profit on continuing operations 1 42.2 28.2 Depreciation 22,0 17.4 Depreciation of continuing operations 1 20.5 15.9 Cash flow 68.0 50.3 Cash flow on continuing operations 1 62.7 44.1 Capital expenditure 70.4 22.6 Capital expenditure on continuing operations 1 22.6 21.9 Equity and liabilities Balance sheet total 464.8 269.3 Average net capital employed 313.1 177.6 Shareholders equity 169.2 139.7 Net cash flow - Continuing operations: From operating activities 74.0 48.6 Used in investing activities - 159.5-21.7 From/used in financing activities 70.0-9.5 - Total cash inflow from operations to be discontinued 2.3 12.7 Ratios Net turnover, % change on previous year + 20.3 + 1.5 Net turnover on continuing operations 1 % change on previous year + 28.3 + 5.0 Operating result as a % of turnover (EBIT margin) 6.8 5.6 Operating result on continuing operations as a % of turnover (EBIT margin) 7.1 5.5 Return on net capital employed (ROCE, %) 21.4 25.8 ROCE on continuing operations 1 22.3 24.6 Tax burden (%) 23.8 24.7 Net profit as a % of turnover 4.7 4.0 Shareholders equity as a % of balance sheet total 36.4 51.9 Interest Coverage ratio 10.0 16.9 Net debt/ebitda ratio 1.1 < 0 Employees The Netherlands 8,933 6,171 Other countries 694 435 Total 9,627 6,606 Average full-time equivalents 5,470 4,609 Store information Number of stores in the Netherlands 814 603 Number of stores in other countries 159 118 Total number of stores 973 721 Retail floor space (m 2 ) 600,500 442,000 1 All activities excluding the furniture activities in 2006 and 2005 and excluding Superconfex in 2005. 2

KEY FIGURES Data per share 1 (Amounts in millions) 2006 2005 Net profit 2 2.11 1.50 Cash flow 2 3.12 2.29 Dividend 0.83 0.60 Shareholders equity 7.60 6.27 Highest price 31.65 14.83 Lowest price 14.28 8.00 Year-end price 25.50 14.67 Year-end market value in millions 567.8 326.6 Ratios Dividend yield as a % of highest/lowest/year-end price 2.6/5.8/3.3 4.0/7.5/4.1 Pay-out as a % of net profit 40.2 40.7 Highest/lowest price to net profit 15.0/6.8 9.9/5.3 Highest/lowest price to cash flow 10.1/4.6 6.5/3.5 Stock exchange performance Number of shares outstanding at year-end 3 22,268,118 22,268,118 Issued and paid-up share capital (in ) 8,907,247 8,907,247 Weighted average number of shares outstanding 21,769,994 21,950,952 Number of shares annual trading volume 4 14,172,435 8,935,113 Shares annual trading volume in value terms ( millions) 4 338.5 99.16 Number of shares average daily trading volume 4 55,578 34,767 Shares average daily trading volume in value terms ( millions) 4 1.33 0.39 Number of transactions 4 34,319 4,469 1 Following the share split on May 10, 2006, with one existing share being converted into three new shares. 2 Calculated on the basis of the weighted average number of shares outstanding, excluding treasury shares repurchased. Earnings per share on a fully diluted basis amounted to 2.08 for 2006 and 1.47 for 2005. 3 Including 754,422 treasury shares repurchased (2005: 737,922). 4 Excluding possible transactions conducted off the Euronext stock exchange. x 2.25 2.00 2.75 1.50 1.25 1.00 0.75 0.50 0.25 0 2002 2003 2004 2005 2006 Net profit per share Cash dividend per share 36 32 28 24 20 16 12 8 4 0 2004 2005 2006 2007 Share prices from 2004 until februari 2007 x 9 8 7 6 5 4 3 2 1 0 2002 2003 2004 2005 2006 Shareholders equity per share Cash flow per share x 1000 2025 1800 1575 1350 1125 900 675 450 225 0 J F M A M J J A S O N D J F 2006 2007 Monthly share trading (x 1000) 3

REPORT OF THE MANAGING BOARD/DEVELOPMENTS From the Managing Board To our shareholders, We look back on 2006 with satisfaction, as we made significant steps in terms of growth and increased profitability. The continuing improvements in the non-food retail market resulted in an increase in turnover of 20.3% to 983.8 million. This was due to the acquisition of shoe discounter Scapino, higher turnover from existing stores and the addition of 36 new stores on balance. With Scapino, Macintosh Retail Group acquired early 2006 a retail format that had been successful for many years and offers further growth potential. The acquisition fits our growth strategy defined in 2003 and contributed considerably to the increase in operating result in 2006. The total operating result increased by 46.3% to 67.1 million. The existing activities reported an increase in profitability, too. These developments led to a net profit of 46.0 million, a 40.0% rise on last year. It will be proposed to distribute a dividend of 0.83 per share, representing a pay-out of 40.2% and a 38.3% increase compared with 2005. It goes without saying that we will continue to further strengthen our successful retail formats in the Netherlands in 2007, by investing in existing as well as new stores. In addition, much attention will be devoted to our retail chains in other countries, as well as to our active quest for suitable candidates for acquisition. We have confidence in 2007, but believe it is too early to make any forecast now about the development of operating result and net profit on continuing operations in 2007. Maastricht, the Netherlands, March 13, 2007 The performance of a retailer depends largely on the quality and commitment of the people it employs. The Managing Board would like to express its appreciation to all employees contributing to the excellent performance in 2006 and working very hard each day to ensure that consumers found their way to our stores once again in 2006. F.K. (Frank) De Moor (CEO) After Stoutenbeek/Pot s store in Axel had been sold in early 2006, agreement was reached at the end of that year on the sale of the furniture activities of Piet Klerkx and Stoutenbeek as at January 1, 2007. The sale has since been effected. We would like to thank the employees of these companies for their highly valued dedication and wish them every success with their new owners. The sale fulfilled our goal of refocusing on home decoration in particular in the Living sector. M.S.J.H. (Stef) Stevens (CFO) In order to enhance the marketability of the Macintosh Retail Group NV share, a share split in the ratio of three new shares for one existing share was effected on May 10, 2006. The share price rose from 14.67 at the end of 2005 to 25.50 at year-end 2006 (+ 74%). L.J.J.M. (Lambert) van de Wiel (COO) 4

REPORT OF THE MANAGING BOARD/DEVELOPMENTS 2006: Record year for Macintosh Retail Group Record year for Macintosh Retail Group, with a rise in net profit from 32.9 million to 46.0 million (+ 40.0%). Acquisition of shoe discounter Scapino (216 stores) on February 1, 2006. Opening of 57 new stores and closure of 20 stores engaged in continuing operations (year-end 2006 total: 961). Consumer confidence on the rise. Increase in non-food retail spending in the Netherlands of 6.3%. Total turnover of Macintosh Retail Group up by 20.3% to 983.8 million. Turnover on continuing operations up by 28.3% to 914.5 million. Rise in operating result from 45.9 million to 67.1 million (+ 46.3%). Operating result of continuing operations increased by 65.4% from 39.1 million to 64.7 million. Net profit up 40.0% from 32.9 million to 46.0 million; earnings per share up from 1.50 to 2.11. Cash dividend per share from 0.60 to 0.83 (+38.3%). ROCE of continuing operations from 24.6% to 22.3%. Cash flow up to 68.0 million (2005: 50.3 million). Sale of Piet Klerkx and Stoutenbeek furniture activities as at January 1, 2007. Favourable market developments Consumer confidence in the Netherlands showed a marked growth as from the last quarter of 2005 and - for the first time in years - the index was positive from June 2006. The upward trend in Belgium and France was more moderate than in the Netherlands in 2006. However, consumer confidence in these countries was already on a higher level in previous years. According to Statistics Netherlands (CBS), the non-food retail market in the Netherlands generated 6.3% higher turnover compared with 2005, mainly thanks to a 5.8% increase in the number of products sold. Based on information available, Belgium and France saw an increase in consumer spending of 3% and 4% respectively for the whole of 2006. Consumer confidence index 20 15 10 5 0-5 -10-15 -20-25 -30-35 -40 JFMAMJJASONDJFMAMJJASONDJF 2005 2006 2007 The Netherlands Willingness to buy NL Belgium France Acquisition of Scapino and sale of furniture activities Early 2006, agreement was reached on the acquisition of shoe discounter Scapino as at February 1, 2006. Scapino operated 216 stores in the Netherlands (184), Belgium (25) and Germany (7 outlet stores) at the time. Scapino is a long-term profitable company with growth potential, which made a substantial contribution to earnings per share of Macintosh Retail Group in 2006. Scapino s discount stores and the Dolcis, Manfield, Invito and PRO sport formats, which serve the mid and upper segments of the shoe market, jointly form the largest shoe retailer in the Netherlands, with a market share of approximately 13% in value terms and approximately 17% in volume terms. From the acquisition date, and net of financing charges, Scapino s contribution to the net profit of Macintosh Retail Group for 2006 amounted to 9.0 million. The furniture activities of the Stoutenbeek/Pot store in Axel, were sold as at April 1, 2006. At the end of 2006, agreement was reached on the sale of the Piet Klerkx and Stoutenbeek furniture formats as at January 1, 2007. Stores and visitors In 2006, the number of stores engaged in continuing operations increased on balance by 253 to 961. This increase was due to the acquisition of Scapino and the opening of 57 new stores of which the most at BelCompany as well as the closure of 20 stores. The retail floor space of continuing operations increased by 170,000 m 2 to 524,300 m 2, thanks mainly to the acquisition of Scapino. As in previous years, Macintosh Retail Group again invested in the websites of store formats in 2006, resulting in an increase in the number of visits to the websites of more than 30% to 5

REPORT OF THE MANAGING BOARD/DEVELOPMENTS some 40 million. This increase has had a positive effect on turnover generated by the stores, thanks to the websites providing information and service to customers, as well as promoting products. Turnover Turnover on continuing operations (including Scapino in 2006, but excluding Piet Klerkx and Stoutenbeek in 2005 and 2006) of Macintosh Retail Group rose by 28.3%, from 713.0 million to 914.5 million, of which 24.8 percentage point was due to the acquisition of Scapino. Turnover on continuing operations was higher in all sectors, thanks partly to higher sales at existing stores and partly to expansion. The rise in turnover in the first half of 2006 was higher compared with the second half, bearing in mind, however, that 2005 had witnessed a poor first half and an exceptionally good second half year. Total turnover of Macintosh Retail Group went up 20.3% in 2006, from 817.6 million to 983.8 million. Of total turnover, 89% was generated in the Netherlands (2005: 86%) and 11% in Belgium/France (2005: 14%). Turnover on continuing operations in the Living sector rose by 2.0%, from 260.9 million to 266.1 million, due mainly to a good performance from Kwantum Netherlands. Turnover on continuing operations in the Fashion sector went up from 141.8 million to 327.4 million as a result of higher sales at Hoogenbosch and the additional 177.0 million in turnover following the acquisition of Scapino on February 1, 2006. Turnover of the Automotive & Telecom sector rose by 3.5% to 321.0 million, compared with 310.3 million in 2005, thanks to increases at both BelCompany and Halfords. The furniture activities of Piet Klerkx and Stoutenbeek, which were sold as at January 1, 2007, generated turnover of 69.3 Turnover by sector x millions 900 800 700 600 500 400 300 200 100 0 2002 2003 2004 2005 2006 Living Fashion Turnover total / Turnover The Netherlands x millions 900 800 700 600 500 400 300 200 100 0 Automotive & Telecom Total 2002 2003 2004 2005 2006 Total The Netherlands million in 2006, a drop of 7.9 million on 2005, owing mainly to the sale of the Stoutenbeek/Pot store in Axel on April 1, 2006. Turnover by sector was as follows: (in millions) Total year First half Second half 2006 2005 % +/- 2006 2005 % +/- 2006 2005 % +/- Living 1 266.1 260.9 + 2.0 133.3 123.5 + 8.0 132.8 137.4-3.4 Fashion 2 327.4 141.8 +130.9 149.4 60.4 +147.1 178.0 81.4 +118.9 Automotive & Telecom 321.0 310.3 + 3.5 149.6 140.6 + 6.4 171.4 169.7 + 1.0 Continuing operations 914.5 713.0 + 28.3 432.3 324.5 + 33.2 482.2 388.5 + 24.1 Operations to be discontinued 3 69.3 104.6-37.7 59.5-31.6 45.1 - Total 983.8 817.6 + 20.3 470.0 384.0 + 22.4 513.8 433.6 + 18.5 1 Excluding furniture companies Piet Klerkx and Stoutenbeek in 2006 and 2005. 2 2006: including Scapino (11 months); 2005: excluding Superconfex. 3 Furniture companies Piet Klerkx and Stoutenbeek in 2006 and 2005, and Superconfex in 2005. 6

REPORT OF THE MANAGING BOARD/DEVELOPMENTS Total operating result x millions % The total operating result rose sharply by 46.3% to 67.1 million (2005: 45.9 million). 65 60 55 50 45 40 35 30 25 20 2002 2003 2004 2005 2006 Total operating result As a % of turnover Gross margin, expenses and operating result The percentual gross margin on continuing operations was up 0.6 percentage points to 42.0%, thanks mainly to the finetuning of the promotional and product range policies. At 42.1%, the total percentual gross margin was slightly up on 2005 (42.0%). Costs as a percentage of turnover on continuing operations were lower at 35.0% compared with 2005 (35.9%), due to strict cost savings at existing operations, as well as the acquisition of Scapino with its relatively low cost level. Total costs as a percentage of turnover were 35.3%, compared with 37.5% in 2005. Both selling expenses and general administrative expenses as a percentage of turnover were lower than in 2005. The operating result on continuing operations rose by 65.4%, from 39.1 million to 64.7 million, thanks mainly to Scapino s operating result being added, but also to a strong increase at existing operations, particularly at Kwantum Netherlands, Hoogenbosch and Halfords. The operating result on continuing operations as a percentage of turnover (EBIT margin) was 7.1% (2005: 5,5%). 9 8 7 6 5 4 3 2 1 0 Cash flow, capital expenditure, ROCE and EBITDA Capital expenditure on intangible assets and property, plant and equipment amounted to 70.4 million in 2006 (2005: 22.6 million). Of this increase, 47.5 million was of a temporary nature as a consequence of the repurchase of the real estate of the furniture activities in connection with the sale of Piet Klerkx and Stoutenbeek as at January 1, 2007. Excluding the repurchase, capital expenditure amounted to 22.9 million (2005: 22.6 million) of which 17.4 million was invested in the opening of new stores and the maintenance of existing stores and 4.9 million was invested in logistics and information systems. Total cash flow (net profit plus depreciation) was 68.0 million in 2006, compared with 50.3 million in 2005. The cash flow on continuing operations amounted to 62.7 million in 2006 (2005: 44.1 million). The average net capital employed rose from 177.6 million to 313.1 million, due mainly to the acquisition of Scapino and the related goodwill and trade name being capitalised as a result (total amount: 105.7 million). Despite the sharp increase in the operating result, the return on net capital employed (ROCE) on continuing operations fell from 24.6% to 22.3% as a result. Given the current interest rates, ROCE is well above the minimum requirements set by providers of loan and equity, thus adding value for shareholders. Total EBITDA (operating result plus depreciation) rose from 63.3 million to 89.1 million. EBITDA on continuing operations went up from 55.1 million to 85.2 million. Operating results by sector were as follows: (in millions) Total year First half Second half 2006 % 2005 % 2006 % 2005 % 2006 % 2005 % turnover turnover turnover turnover turnover turnover Living 1 15.3 5.7 11.6 4.4 5.9 4.4 2.9 2.3 9.4 7.1 8.7 6.3 Fashion 2 35.7 10.9 12.6 8.9 15.5 10.4 2.3 3.8 20.2 11.3 10.3 12.7 Automotive & Telecom 20.1 6.3 20.3 6.5 5.5 3.7 7.4 5.3 14.6 8.5 12.9 7.6 Other 3-6.4 - - 5.4 - - 3.3 - - 2.9 - - 3.1 - - 2.5 - Continuing operations 64.7 7.1 39.1 5.5 23.6 5.5 9.7 3.0 41.1 8.5 29.4 7.6 Operations to be disontinued 4 2.4-6.8-1.1-4.5-1.3-2.3 - Total 67.1 6.8 45.9 5.6 24.7 5.3 14.2 3.7 42.4 8.3 31.7 7.3 1 2006 as well as 2005 excluding the furniture companies Piet Klerkx and Stoutenbeek. 2 2006 including Scapino (11 months); 2005 excluding Superconfex. 3 The item Other represents all corporate expenses not directly attributable to sectors. 4 Furniture companies Piet Klerkx and Stoutenbeek in 2006 and 2005, and Superconfex in 2005. 7

REPORT OF THE MANAGING BOARD/DEVELOPMENTS Cash flow (in millions) 2006 2005 Continuing Continuing Total operations Total operations Net profit 46.0 42.2 32.9 28.2 Depreciation 22.0 20.5 17.4 15.9 Cash flow 68.0 62.7 50.3 44.1 EBITDA 89.1 85.2 63.3 55.1 Capital expenditure (in millions) 2006 2005 Continuing Continuing Total operations Total operations Renovating and fitting out new stores 6.4 6.4 8.6 8.3 Refitting/maintenance of existing stores 11.0 10.8 9.0 8.9 Logistics and information systems 4.9 4.8 3.8 3.6 Other 0.6 0.6 1.2 1.1 Repurchase of real estate of furniture activities 47.5 n.a. n.a. n.a. Total 70.4 22.6 22.6 21.9 Cash flow and capital expenditure x millions 72 64 56 48 40 32 24 16 8 0 1 2002 2003 2004 2005 2006 Cash flow Capital expenditure 1 Excluding the repurchase of real estate of furniture companies. Net profit and total dividend x millions 45 40 35 30 25 20 15 10 5 0 1 2002 2003 2004 2005 Net profit Total dividend 1 From ordinary activities 2006 Net profit Net finance costs rose by 4.6 million to 6.8 million, owing to the financing of the acquisition of Scapino. At 23.8%, the average effective tax burden was even lower than in 2005 (24.7%), when a one-off tax credit was recorded. The low tax burden in 2006 was mainly thanks to the lower corporate income tax rate in the Netherlands (29.6%, compared with 31.5% in 2005) and a non-recurring release of deferred tax liabilities following a further reduction in the tax rate to 25.5% as at January 1, 2007. Dividend With the approval of the Supervisory Board, the Managing Board has decided to add 27.5 million of the net profit of 46.0 million to reserves. It will be proposed to shareholders to distribute a cash dividend of 0.83 per share for 2006 (2005: 0.60). This represents a pay-out of 40.2% (2005: 40.7%). The dividend yield on Macintosh Retail Group NV shares is 2.6%, 5.8% and 3.3%, respectively, of the highest, lowest and year-end prices in 2006. 8 Total net profit amounted to 46.0 million, a 40.0% increase on 2005 ( 32.9 million). Earnings per share increased from 1.50 to 2.11. Net profit on continuing operations went up from 28.2 million to 42.2 million. Net Debt/EBITDA and Interest Coverage In 2006, the company took out a new committed credit facility of 210 million, with a remaining term of four years at this moment, to finance the acquisition of Scapino and refinance

REPORT OF THE MANAGING BOARD/DEVELOPMENTS the existing facilities. In connection with the sale of the furniture activities on January 1, 2007, the real estate of these companies, which had been financed by operating leases, was purchased. This purchase was financed under the terms of the new credit lines. As a result, interest-bearing debt rose by 146.7 million to 154.0 million at year-end 2006. Of this amount, 47.5 million was of a temporary nature relating to the aforementioned purchase of the real estate of the sold furniture activities. Net Debt/EBITDA (excluding the temporary financing of 47.5 million) was 1.1 at year-end 2006 (2005: below 0), well below the maximum ratio of 3 set by the lending banks. Interest Coverage ratio was 10.0 as against 16.9 in 2005 where the lending banks set a minimum requirement of 3. Shareholders equity x millions 180 160 140 120 100 80 60 40 20 0 2002 2003 2004 2005 2006 Shareholders equity As a % of balance sheet total % 90 80 70 60 50 40 30 20 10 0 Group balance sheet The balance sheet total at December 31, 2006 amounted to 464.8 million (2005: 269.3 million). The increase was mainly due to the acquisition of Scapino and the related goodwill ( 96.9 million) and trade name ( 8.8 million) being capitalised, as well as to the purchase of the real estate of the furniture companies ( 47.5 million) related to their sale. Shareholders equity increased by 29.5 million to 169.2 million, representing 36.4% of the balance sheet total (2005: 139.7 million or 51.9%). The acquisition of Scapino and the temporary financing of the real estate purchased by the furniture activities were the main causes of the rise in interest-bearing debt from 7.3 million at year-end 2005 to 154.0 million at year-end 2006. Cash flow statement Cash flow from operating activities The increase in cash flow from business operations of 25.0 million is chiefly due to the rise in profit. Cash flow from investing activities The net cash outflow used in investing activities of continuing operations was 138.0 million higher than last year, due entirely to the acquisition of Scapino. The net cash outflow used in investing activities on operations to be discontinued of 46.7 million for 2006 related almost in full to the furniture activities purchase of real estate. Cash flow from financing activities The company recorded a net cash inflow from financing activities of continuing operations of 69.7 million in 2006. This amount related mainly to the positive balance ( 94.3 million) of loans taken out (mainly to finance the acquisition of Scapino) and repayments, as well as to dividend payments (- 13.1 million), repurchasing own shares (- 7.4 million) and interest paid (- 5.1 million). The cash inflow from financing activities of operations to be discontinued of 48.6 million mainly related to a loan of 47.5 million for the temporary financing of the purchase of real estate by the furniture activities. Changes in cash flows were as follows: Cash flow statement (in millions) 2006 2005 Net cash and cash equivalents at January 1 17.1-13.0 Net cash flow from/(used in) of continuing operations: - Operating activities 74.0 48.6 - Investing activities - 159.2-21.2 - Financing activities 69.7-10.0 Total cash flow from operations to be discontinued 2.3 12.7 Change in cash and cash equivalents - 13.2 30.1 Net cash and cash equivalents at December 31 3.9 17.1 9

REPORT OF THE MANAGING BOARD/DEVELOPMENTS Increase of 7.7% in retail spending in Dutch home furnishing sector according to Statistics Netherlands (CBS) and 4.4% according to Dutch Central Bureau for Home Decoration (CBW). Total turnover of Kwantum and GP Décors up 2.0% from 260.9 million to 266.1 million, despite number of stores being down on balance by 8. Strong rise in operating result on continuing operations from 11.6 million to 15.3 million (+ 31.4%). ROCE on continuing operations up from 14.7% to 19.9%. Decrease in turnover of Piet Klerkx and Stoutenbeek from 77.2 million to 69.3 million, mainly owing to sale of Stoutenbeek/Pot store in Axel as at April 1, 2006. Agreement on sale of Piet Klerkx and Stoutenbeek as at January 1, 2007. www.kwantum.nl www.kwantum.be www.gpdecors.fr Living Living sector financial Turnover on continuing operations in the Living sector rose by 2.0%, from 260.9 million to 266.1 thanks to increases at both Kwantum and GP Décors in France. The operating result on continuing operations of the Living sector rose strongly from 11.6 million in 2005 to 15.3 million in 2006 (+ 31.4%), thanks to an excellent performance from Kwantum Netherlands. ROCE for the Living sector (excluding Piet Klerkx and Stoutenbeek) rose from 14.7% to 19.9%, mainly due to a higher operating result. Turnover on the furniture activities of the Klerkx Groep and Stoutenbeek, which were sold on January 1, 2007, amounted to 69.3 million in 2006 (2005: 77.2 million). 10

REPORT OF THE MANAGING BOARD/DEVELOPMENTS Kwantum Kwantum is the largest and most fairly priced discounter providing furnishing and decoration products for in and around the house in the Benelux. Kwantum s products and services are accessible to all consumers who require up-to-dateness and are not prepared to compromise on price and quality. Kwantum succeeds in doing so with its keen cost structure and very strong international purchasing position. In addition to providing a standard product range, Kwantum has one-off special offers and products matching regular theming, thus making home trends available to the widest possible public. In addition, remake services, as well as delivery and furnishing services are an integral part of the product range. Kwantum has been market leader in curtains, net curtains and wallpaper for many years. In addition, it is one of the top three retailers for carpet and vinyl floor coverings, carpets, lighting, household textiles and home decoration materials, and has a strong share of the market for laminate, cash-and-carry furniture, garden furniture, paint and blinds. These products are sold in the 98 stores in the Netherlands and Flanders, all of them inviting self-service stores with floor space of 1,900 m 2 to 2,500 m 2 in the Netherlands and 800 m 2 to 1,650 m 2 in Flanders with dominant positions in shopping centres on the outskirts of towns. All articles can also be viewed on Kwantum s websites and ordered on the website of Kwantum Netherlands. This latter option is increasingly being used. Kwantum s more than 1,750 employees do everything in their power to continue satisfying the millions of visitors each year. Kwantum in 2006 In 2006, the Dutch home furnishing market reported growth for the first time in years, even though CBS and CBW do not see eye to eye in this matter. According to CBS, retail trading sales in the Dutch market for home furnishing as a whole rose by 7.7% in 2006, whereas CBW indicates a 4.4% increase. Turnover of home department stores was up 5.3% according to CBW. Turnover of Kwantum Netherlands was higher in 2006, thanks to a rise in turnover at comparable stores and despite a fall in the number of stores by 2. Kwantum mainly concentrated on selling home decoration products generating a higher gross margin, instead of on non-branch related products which generate turnover but generally have a lower gross margin. As a result, Kwantum s principal anchor groups all gained market share. Turnover of Kwantum Belgium declined owing to the closure of 6 stores in Wallonia. The gross margin as a percentage of turnover was higher as a result of the fine-tuning of the promotional and product range policies, as well as a lower share of non-branch related products. Total expenses, including closure costs of the stores in Wallonia, fell, resulting in a substantial drop in costs as a percentage of turnover. As a result, Kwantum s operating result was substantially higher than in 2005. Owing to the delay in the completion of a number of projects, Kwantum opened only 1 new store, while closing 3 in 2006, bringing the total to 89. Two stores were relocated. Total retail floor space decreased from 210,900 m 2 to 207,100 m 2. The total number of stores in Belgium decreased by 6 to 9, with total retail floor space of 9,300 m 2. In 2006, Kwantum Netherlands and Belgium s websites were entirely restyled to make them even more user friendly. The number of visits to the websites rose substantially, with 11

REPORT OF THE MANAGING BOARD/DEVELOPMENTS on-line sales increasing sharply, sales still being modest in absolute terms, however. Research shows that an increasing percentage of visitors to our physical stores first visited the Kwantum website and spend more in the stores than other customers. The fact that Kwantum communicates its brochures and other advertising via email marketing also has a favourable effect on this process. The future of Kwantum Kwantum expects to increase the number of stores in the Netherlands by at least 10, bringing the total to 100. Approximately 5 stores will be opened in 2007. Kwantum Belgium will close the remaining two stores in Wallonia in 2007. The Managing Board is convinced that Kwantum should be able to be profitable in the Dutch-speaking region of Belgium, based on a retail format used in the Netherlands, and using the knowledge and purchasing and other facilities of Kwantum Netherlands, which now controls all branches in Belgium. The aim is to open some 15 new stores in Flanders in the medium to long term, with 3 expected to be opened in 2007. GP Décors in 2006 Early 2006, it was decided to slow down the intended expansion of GP Décors and improve the quality of the existing retail network by closing stores whose contribution to turnover was insufficient. Five stores were closed as a result. Three new stores were opened, bringing the total number of stores of GP Décors to 52. Turnover of GP Décors in 2006 grew marginally as a result of higher turnover by comparable stores. The rise was due primarily to a revised communication 12 GP Décors GP Décors offers its French customers an extensive and profitably priced range of wallpaper, paint, floor covering, fabrics, as well as furniture, lighting and home accessories. GP Décors provides customised services and the consumer can choose from samples of collections from leading suppliers in addition to the range available in the shop. Customers are advised by expert and professional staff. Delivery and placement as well as furnishing form part of the service. GP Décors has a distinctive position in the French home furnishing market as comprehensive supplier. The stores have a retail floor space of between 850 m 2 and 1,200 m 2 and are located preferably in the vicinity of hypermarkets on the outskirts of small and medium-sized towns in the north and west of France. The stores are managed by independent entrepreneurs (concessionaires) or store managers employed by the organisation. GP Décors has some 150 employees. strategy including, among other things, a higher advertising frequency. Owing partly to a provision for surplus and obsolete inventories being formed, GP Décors operating result decreased and remained negative. The future of GP Décors A detailed customer survey at the end of 2006 revealed that a retail format such as GP Décors can be viable in France, provided that the positioning of the formula focuses more on consumers feelings about home decoration, and a clearer distinction is made between the GP Décors format and a DIY store. Based on the results of the survey, an existing store was converted to a new format. If the pilot proves successful, this offers opportunities to refit other stores. In the medium to

REPORT OF THE MANAGING BOARD/DEVELOPMENTS long term, the number of stores could be increased to achieve the required scale of operations which is necessary to ensure that GP Décors will be profitable in the French home decoration market. It is expected that some 60 to 70 stores will be required to achieve that goal. In 2007, attention will be focused primarily on increasing sales and reducing inventories of existing stores. A number of stores with insufficient future potential will be closed. Stoutenbeek had 5 stores, with total retail floor space of 19,600 m 2, employing 71 people. Following the sale of the Stoutenbeek/Pot store in Axel, agreement was reached at the end of 2006 on the sale of Furniture Holding BV (holding company of Piet Klerkx and Stoutenbeek) as at January 1, 2007. The sale of the furniture activities fits Macintosh Retail Group s strategy of concentrating on home decoration in the Living sector in the future. The gain on the sale of the furniture activities will have a Turnover, operating result and ROCE on continuing operations 1 (in millions) 2006 As a % of turnover 2005 As a % of turnover 1 Excluding furniture activities Turnover 266.1 260.9 Operating result 15.3 5.7 11.7 4.4 ROCE as a % 1 19.9 14.7 Store information Retail chain Kwantum GP Décors Living Countries NL B F Total Number of stores - December 31, 2006 89 9 52 150 - December 31, 2005 91 15 54 160 Retail floor space (m 2 ) - December 31, 2006 207,100 9,300 47,600 264,000 - December 31, 2005 210,900 15,700 50,000 276,600 Living Furniture activities in 2006 The furniture market in which the Klerkx Group (Piet Klerkx Meubelwereld, Woonexpress and Zitwereld) and Stoutenbeek operate showed a rise in spending in 2006 (4.1% according to CBW). Turnover of home department stores was up 5.3% according to CBW. In 2006, turnover of the furniture activities fell from 77.2 million to 69.3 million, mainly owing to the sale of the Stoutenbeek/Pot store in Axel (with annual turnover of some 7 million) on April 1, 2006. Despite lower turnover, the operating result of the furniture activities rose, thanks mainly to the favourable effect, on balance, of a number of nonrecurring items that partly related to the sale of these activities. At year-end 2006, Piet Klerkx operated 7 stores with 381 employees and total retail floor space of 56,600 m 2. non-recurring positive effect of more than 7 million on net profit for 2007. 13

REPORT OF THE MANAGING BOARD/DEVELOPMENTS Retail spending in shoe market in the Netherlands down 3.1% (according to the GfK Panel Services) and up 7.7% (according to CBS). Acquisition of shoe discounter Scapino as at February 1, 2006. Turnover of Hoogenbosch, Scapino and Nea International ( continuing operations ) up 185.6 million to 327.4 million, of which 177.0 million attributable to the acquisition of Scapino. Increase in operating result on continuing operations from 12.6 million to 35.7 million, mainly thanks to the acquisition of Scapino and a considerable rise at Hoogenbosch. ROCE from 54.9% to 22.7%. Number of stores of continuing operations up 226 to 447. www.scapino.nl www.scapino.be www.dolcis.nl www.manfield.com www.invito.com www.pro-sport.nl Fashion Fashion sector financial Turnover from continuing operations in the Fashion sector rose by 185.6 million to 327.4 million (2005: 141.8 million). This increase was due mainly to the additional turnover of 177.0 million following the acquisition of Scapino on February 1, 2006 and higher turnover at Hoogenbosch. The operating result on continuing operations in the Fashion sector grew from 12.6 million to 35.7 million, chiefly thanks to the acquisition of Scapino and a considerable increase at Hoogenbosch. ROCE on continuing operations in the Fashion sector was 22.7%, compared with 54.9% in 2005, this fall being attributable mainly to the goodwill paid in relation to the acquisition of Scapino. 14

REPORT OF THE MANAGING BOARD/DEVELOPMENTS Hoogenbosch Hoogenbosch focuses on the Dutch shoe market with its formats Dolcis, Manfield, Invito and PRO sport. Following the acquisition by Macintosh Retail Group in 1997, Hoogenbosch, first established in 1909, has grown into one of the largest shoe retailers in the Netherlands, operating 225 stores at A1 locations and employing some 2,060 people. With 96 stores having 150 m 2 average floor space, Dolcis is Hoogenbosch s largest shoe format. Dolcis offers a wide range of shoes for men, women and children under the motto of always fun and at competitive prices. Dolcis high-quality shoes allow consumers to dress fashionably for the occasion time and again. Manfield offers a collection of fashionable and elegant footwear characterised by high quality and comfort at an attractive price to highly demanding men and women who value appearance. Manfield operates 63 stores with some 120 m 2 floor space each. With its collection of hip, trendy and lavish shoes, bags and accessories, Invito focuses primarily on people with a mind of their own. Invito has 39 stores with some 100 m 2 floor space, which perfectly match the range of distinctive products. PRO sport is among the leading stores offering sneakers and fashionable sports shoes. PRO sport focuses primarily on customers who like to express themselves and value freedom. PRO sport operates 27 stores with average floor space of some 80 m 2. Hoogenbosch in 2006 According to GfK, the shoe market in the Netherlands recorded a 3.1% decrease in 2006 as a whole, after a 0.8% fall in the first half of the year. According to the CBS, however, the market rose by 7.7%. Market developments were affected by disappointing winter sales at the end of 2006, due to mild weather. Turnover of Hoogenbosch, with its Dolcis, Manfield, Invito and PRO sport shoe stores, was up on 2005, which had been an excellent year, mainly thanks to higher turnover by comparable stores, as well as an increase in the number of stores by 4. Hoogenbosch achieved higher turnover while maintaining a high percentual gross margin and reducing absolute costs, resulting in a considerable rise in operating result. Turnover of Dolcis rose compared with 2005, mainly as a result of organic growth. Dolcis opened 2 new stores at the end of 2006, bringing the total to 96. Manfield s turnover was higher due to organic growth and the opening of 1 store, bringing the total to 63. Invito likewise achieved higher turnover in 2006, thanks to a rise in sales at existing stores and the opening of 1 new store, bringing the total to 39. PRO sport s turnover was considerably higher in 2006 as a result of turnover growth at existing stores. The number of PRO sport stores remained unchanged at 27. The future of Hoogenbosch For Hoogenbosch, expectations are that the favourable fashion trend of expensive boots for women will play a more modest role in 2007, which can only be compensated by the sale of higher quantities. Over the next few years, the Hoogenbosch shoe formats will focus on turnover growth by enhancing the distinctive characteristics of the existing store formats. In due course, the number of stores will be expanded by 15 to 20, approximately 10 of which in 2007. Furthermore, the intention is to increase sourcing in the Far East through Macintosh Hong Kong. 15

REPORT OF THE MANAGING BOARD/DEVELOPMENTS Scapino With 189 self-service stores, Scapino is the leading contemporary shoe discounter in the Netherlands for the whole family, offering a product range that, in addition to shoes, consists of clothing and sports and leisure products (total approximately 35%). Scapino offers surprisingly attractively priced, up-to-date and quality products. The Scapino stores are mainly situated at A2 and B1 locations in town centres, with average retail floor space of 800 m 2. Scapino operates 27 stores on the outskirts of towns in Belgium and 6 outlet stores in Germany. Scapino employs more than 3,000 staff. Its stores have a contemporary layout, providing a fresh image. The product range is well laid out, with shoes being displayed by size, and special-price items occupying dominant positions in the stores. The customer is key to everything Scapino s employees believe in and do. These employees are being trained in accordance with a Klanthousiast (enthusiastic customer) concept setting out Scapino s core values. Customers consider Scapino to sell high-quality shoes at very attractive prices. This explains Scapino s slogan: Scapino. Worth the walk! month of January - which is usually not profitable for shoe retailers due to the clearance sale - has not been included in the 2006 consolidation. In 2006, Scapino opened 5 new stores in the Netherlands and 2 in Belgium. It also closed 1 store in Germany, bringing the total number of stores to 222, compared with 216 per the date of the acquisition. In 2006, Scapino converted 8 stores into the renewed format, bringing the total number of redesigned stores to 56. Scapino s webshop was successful, generating a 16 Scapino in 2006 Shoe discounter Scapino was acquired as at February 1, 2006. The shareholders of Macintosh Retail Group unanimously approved the acquisition. Scapino has been a consistently profitable company for many years. In the eleven months starting February 1, 2006, Scapino achieved turnover of 177.0 million. Scapino s sales were higher than in the same period of 2005, due to growth at comparable stores, thanks in part to successful investments in further strengthening the store format, as well as to the net increase in the number of stores by 6. Its performance in the last two months of the first half of 2006 was particularly excellent. However, disappointing sales were recorded in November and December 2006, due to mild weather. Scapino s operating result in the period from its acquisition to December 31, 2006 (11 months) also exceeded that of the same period in 2005, mainly due to a higher percentual gross margin and lower costs as a percentage of turnover. The substantial rise in the number of visits. The future of Scapino In 2007, Scapino will continue to invest in converting approximately 12 stores into the proven successful renewed format. In addition, the purchasing activities through Macintosh Hong Kong will be expanded further. Scapino expects to open some 10 new stores in the Netherlands in the next 3 years, some of which will replace existing stores. In that period, some 15 stores will be opened in Belgium, approximately 5 of which in 2007. In 2007, 3 stores will be closed in Germany. Nea International in 2006 Nea develops and manufactures medical and sports braces aimed at preventing and treating sports injuries and injured

REPORT OF THE MANAGING BOARD/DEVELOPMENTS limbs respectively. Nea s braces are leading in their markets. Nea has built up a strong position in a number of European countries in which it sells the braces under distribution agreements concluded with third parties. Following the increase in turnover in 2005, Nea International achieved higher sales once again in 2006. However, Nea International s share of total turnover of the Fashion sector is modest. The operating result was up again in 2006. Turnover, operating result and ROCE on continuing operations 1 (in millions) 2006 As a % of turnover 2005 As a % of turnover Turnover 327.4 141.8 Operating result 35.7 10.9 12.6 8.9 ROCE as a % 22.7 54.9 1 Including Scapino in 2006, excluding Superconfex in 2005 and including Nea International in 2006 and 2005. Store information Retail chain Dolcis Invito Manfield PRO sport Scapino Fashion Countries NL NL NL NL NL B G Total Number of stores - December 31, 2006 96 39 63 27 189 27 6 447 - December 31, 2005 2 94 38 62 27 184 25 7 437 Retail floor space (m 2 ) - December 31, 2006 13,400 3,300 6,900 1,900 153,900 21,600 4,400 205,400 - December 31, 2005 2 13,000 3,200 6,900 1,900 150,500 20,000 5,200 200,700 2 Scapino: February 1, 2006 Fashion 17

REPORT OF THE MANAGING BOARD/DEVELOPMENTS Dutch telecom market has become mature but remains a major replacement market. Fall in number of telephones sold of nearly 7%. Number of navigation systems sold up again (+ 72% in value terms). Turnover for sector up 10.7 million to 321.0 million. Operating result: 20.1 million (2005: 20.3 million). ROCE: 32.6% (2005: 34.1%). Number of BelCompany stores up by 34 to 212; number of Halfords stores up by 3 to 152. www.belcompany.nl www.belcompany.be www.halfords.nl www.halfords.be Automotive & Telecom Automotive & Telecom sector financial Turnover of the Automotive & Telecom sector rose by 10.7 million to 321.0 million (2005: 310.3 million). This increase was due to higher turnover at BelCompany as well as Halfords. The operating result for this sector in 2006 was 20.1 million, compared with 20.3 million in 2005. This was due, on balance, to a rise at Halfords and a fall at BelCompany Belgium. ROCE in this sector was down from 34.1% to 32.6%. BelCompany BelCompany is the largest retailer of mobile communications in the Netherlands and occupies second place as independent supplier in Belgium. At BelCompany, customers can obtain a wide product range, including all brands of mobile telephones, accessories, subscriptions, prepaid products, data products, prepaid telephone cards and internet services, such as ADSL and VoIP. BelCompany serves its customers independently of network operators and hardware suppliers. BelCompany s approximately 1,050 employees are trained and retrained at the own BelCompany School. As a result, BelCompany has specialised staff providing expert advice to customers. 18

REPORT OF THE MANAGING BOARD/DEVELOPMENTS BelCompany s more than 200 stores are mainly situated at A1 locations in large and medium-sized cities in the Netherlands and Belgium and have floor space of over 50 m 2. BelCompany Business Solutions provides services to business clients. BelCompany Netherlands full range of products is also available via the Internet, together with articles that are not customarily held in stock at its stores. BelCompany in 2006 After several years of considerable growth, the mobile telecom market in the Netherlands has reached maturity. The number of telephones sold fell by almost 7% in 2006 (GfK). All major retail chains, including those of telecom operators, nonetheless expanded significantly. Subsidies from telecom operators were reduced as from August 2006. According to GfK, the Belgian telecom market recorded a rise of 10% in the number of telephones sold. On balance, the number of BelCompany stores in the Netherlands increased by 18. BelCompany s turnover in the Netherlands matched that of 2005. BelCompany managed to maintain its position as the largest mobile telecom retailer in the Netherlands in terms of number of subscriptions sold. Its gross margin as a percentage of turnover improved due to a shift in the income mix. After a weak first half year of 2006, BelCompany Netherlands operating result for the full year 2006 equalled the exceptionally high level of 2005. BelCompany s own-brand qick mobile prepaid product that was launched in mid-2004, achieved similar turnover in 2006 as in 2005, but a higher and positive operating result. BelCompany Netherlands opened 20 stores and closed 2, bringing the total number of stores to 156 stores on balance. Six stores were opened in combination with a Halfords Superstore. BelCompany paid considerable attention to further developing its websites in 2006, as the significance of the Internet as a sales channel has risen sharply. However, online turnover is still modest in absolute terms, BelCompany increasingly uses its own customer databases. BelCompany further increased its market share in Belgium by opening 16 stores, bringing the total number of stores to 56 and boosting BelCompany s turnover in Belgium as a result. The major expansion partly ensued from the strategic necessity for BelCompany to obtain a presence in Wallonia and the Brussels area as well, to be able to offer telecom operators national coverage. BelCompany currently has 10 stores in Wallonia and 10 in the Brussels area. Due to costs and management attention in connection with the expansion, BelCompany s operating result in Belgium lagged behind 2005, leading to an operating loss for 2006. The future of BelCompany After a number of years of significant growth, the Dutch telecom market has now reached maturity, but continues to be a major replacement market in the future. Partly because of these changes the Dutch telecom operators have altered their market approach (lower bonuses). In combination with the expected further rise in the sale of combo subscriptions, with different subscriptions such as fixed telephone lines and mobile telecom, digital TV and broadband Internet being sold as package deals without the corresponding hardware, this is expected to depress BelCompany s turnover. However, the sale of these combo subscriptions will have a positive effect on the gross margin as a percentage of turnover. Moreover, 19

REPORT OF THE MANAGING BOARD/DEVELOPMENTS the advisory function of the retailer will become more important since an equal mobile phone will require a larger investment on the part of the consumer and the level of integration of mobile telecom, music, photography, video and TV keeps progressing. BelCompany Netherlands is perfectly equipped to continue to be successful in this changing market, thanks in part to its adequate cost structure and further future improvements of that structure. Given that a dense distribution network continues to be important to conclude good contracts with operators, BelCompany will open approximately 30 more stores in the Netherlands in the next few years, some 10 of which in 2007. In Belgium, where subsidised mobile phones are an unknown phenomenon, BelCompany expects to grow further towards nation-wide coverage over the next few years. Approximately 5 new stores will be opened in 2007. The focus will also be on getting the recently opened stores up to speed and improving their results. service ensure that Halfords provides proper assistance to customers at all times. Halfords has town centre stores situated at busy shopping locations with a floor space of some 280 m 2 and Superstores, usually located on the outskirts of towns, with a floor space of some 600 m 2. Superstores have a more extensive product range and special facilities for installing alarm and navigation systems, hands free car kits for mobile phones, audio and in-car entertainment systems. Halfords employs more than 1,000 people. 20 VAT issues in telecom sector As stated in previous annual reports, independent telecom retailers in the Netherlands were confronted at the beginning of 2004 with a decree published by the Ministry of Finance concerning the levying of VAT on mobile telephones supplied free of charge or below cost in combination with a telephone service subscription. Partly based on discussions initiated by the sector and industry associations, the Ministry has since announced its intention to reverse this decree from January 2004. Halfords With 143 stores in the Netherlands, Halfords is the largest retailer of products for people travelling by car or by bicycle. Halfords has 9 stores in Belgium. The range of products offered by Halfords allows mobile consumers to travel easily, pleasantly and safely. A-brands and own-brand products ensure manifest quality at attractive prices. Halfords is market leader in car and bicycle accessories, car audio and navigation systems. In addition, Halfords is one of the largest bicycle retailers in the Netherlands. Knowledgeable staff and excellent Halfords in 2006 In the Netherlands, 2006 once more saw a steep rise of the mobile navigation systems market (GfK: + 127%). The installed navigation systems market contracted by 39.1%, resulting in a net rise of the total navigation market of 72%. However, the increase was accompanied by price erosion and a substantial increase in the number of points of sale. The Dutch bicycle market grew by 10.2%, thanks to a warm summer, whereas the audio market deteriorated in terms of value yet again, this time by 12.7%. Developments in the Belgian navigation market were likewise favourable. Halfords turnover increased, owing to higher turnover at comparable stores and expansion. The success of the Union bike launched in 2006 and increased sales of mobile navigation systems were the main contributing factors. The launch of the

REPORT OF THE MANAGING BOARD/DEVELOPMENTS Union branded bike enabled Halfords to substantially improve its position in the mid-range of the bicycle market, which is dominated by traditional bicycle stores. Halfords successfully maintained its leading position in the navigation market. Halfords managed to boost sales of accessories by adequately responding to changes in the law regarding child car seats and the introduction of moped licence plates. Halfords restyled its website and introduced a webshop in mid-2006. Despite the relatively low gross margins on navigation The future of Halfords In the Netherlands, Halfords sees sufficient potential for expanding its chain of stores, especially in smaller towns. Rental and investment levels are generally lower there and space is freed up as small independent specialised stores leave. Halfords intends to gradually have franchisees operate the new stores because, as self-employed persons, they are better suited to key into the needs of local consumers in smaller towns. The challenge for Halfords Belgium is to enhance the Turnover, operating result and ROCE (in millions) 2006 As a % of turnover 2005 As a % of turnover Turnover 321.0 310.3 Operating result 20.1 6.3 20.3 6.5 ROCE as a % 32.6 34.1 Store information Retail chain BelCompany Halfords Automotive & Telecom Countries NL B NL B Total Number of stores - December 31, 2006 156 56 1 143 9 364 - December 31, 2005 138 40 1 140 9 327 Retail floor space (m 2 ) - December 31, 2006 9,500 2,900 1 39,700 2,700 54,800 - December 31, 2005 8,300 2,200 1 39,300 2,800 52,600 1 Including 25 franchisees in 2006 and 21 in 2005. Automotive & Telecom systems and bicycles, Halfords improved its gross margin as a percentage of turnover in 2006, which in combination with lower percentual costs led to a considerable rise in Halfords operating result. Halfords opened 5 stores, including 2 franchisees, in the Netherlands. Two stores were closed while 2 own stores were transferred to franchisees, bringing the total number of stores to 143. Due to the opening of 1 store and the closure of 1 other store, the number of Halfords stores in Belgium remained unchanged at 9. retail format profile among consumers and demonstrate that Halfords is an inviting, attractively-priced format providing good service. Halfords expects to further increase the number of stores in the Benelux in the next few years and will open approximately 5 new stores in 2007. 21

REPORT OF THE MANAGING BOARD/DEVELOPMENTS Services Macintosh Hong Kong Macintosh Hong Kong was incorporated in 1995 as a purchase office with the intention of achieving higher gross margins and a stronger competitive position as a result by eliminating intermediate trading and agents. The involvement of Macintosh Hong Kong enables store formats to realise higher margins, as well as to market new products in the Benelux and France over shorter periods of time. In addition, products are guaranteed to meet the quality standards set by the store formats. Macintosh Hong Kong is responsible for purchasing products for the Living, Fashion and Automotive & Telecom sectors covering an area mainly comprising China, Indonesia, Vietnam, India and Pakistan. The activities include sourcing, purchasing, order tracking and logistics and administrative services. In 2006, the volume of goods purchased via Macintosh Hong Kong declined compared with 2005, when the clothing activities had contributed to the turnover of Macintosh Hong Kong. In autumn 2006, Scapino began using the facilities of Macintosh Hong Kong on a modest scale. Approximately 6% of total purchase volume of Macintosh Retail Group was accounted for in this manner, with the home decoration sector being responsible for the largest share. This percentage is expected to grow further in the next few years, due mainly to the expansion of Scapino s purchase activities via Macintosh Hong Kong. Macintosh Hong Kong, whose operating result rose in the year under review, employed 22 people at year-end 2006. Macintosh Intragroup Services Macintosh Intragroup Services provides services to Macintosh Retail Group and its subsidiaries. These services comprise funding and implementing the treasury function for the Macintosh group companies, as well as providing mainly administrative services to group companies active in Belgium. Macintosh Intragroup Services employed 10 people at yearend 2006. 22

REPORT OF THE MANAGING BOARD/DEVELOPMENTS ebusiness Some 40 million visitors on websites (2006: 30 million). Growing impact of the Internet on visits to stores. Retail format websites are a logical extension to physical stores. Online retail sales on the rise. As in previous years, the number of visits to websites of Macintosh Retail Group formats increased further, from 20 million in 2004 and 30 million in 2005 to 40 million in 2006. A large number of consumers regard the websites as a logical extension of the stores of Macintosh Retail Group. They consult websites prior to, but also after, visiting the stores. Information on products and services is therefore essential. Special offers and promotional material are presented online, and websites contain extensive product information. The maximum possible range of products is offered online, including at least the standard range of products for most formats. In addition, other services helping customers choose between products are increasingly being launched. Their purpose is to assist customers during the purchasing process. These services will be expanded in the coming years, riding the waves of increasing broadband Internet facilities. Online sales are growing rapidly, but are still limited as a percentage of total turnover. However, increased acceptance of the Internet as a sales channel and the implementation of new means of payment is expected to result in a further rise in online sales in the next few years. By the same token, online marketing via third-party websites and emailmarketing are becoming increasingly important. Next to door-to-door brochures, the Internet is the most important client communication medium for Macintosh Retail Group s retail formats. The websites of Halfords and Kwantum, among others, were restyled in 2006. This process will be continued in 2007. The strengths of the group companies are combined as much as possible in implementing these applications. This also applies to the development of emailmarketing and online marketing. In addition to the use of the Internet directed at consumers (ecommerce), Macintosh Retail Group also deploys Internet technology to exchange information and manage processes between head offices, distribution centres and stores, as well as communicate with suppliers (eoperations). 23

REPORT OF THE MANAGING BOARD/DEVELOPMENTS Personnel and organisation Number of employees up from 6,606 to 9,627 (FTEs: 4,609 and 5,470 respectively). Further decline in absenteeism due to illness. Constructive dialogue with works councils. Number of employees In 2006, the number of employees at continuing retail trading operations of Macintosh Retail Group rose from 6,026 to 9,093 (FTEs: 3,900 and 5,035 respectively), due mainly to the acquisition of Scapino. The number of employees at continuing operations in the Living sector declined by 84, from 1,993 to 1,909, mainly owing to the closure of 8 Kwantum stores on balance, in particular in Wallonia. Macintosh welcomed more than 3,000 new employees in the Fashion sector following the acquisition of Scapino. The Automotive & Telecom sector recorded a rise in the number of employees of 132, bringing the total to 2,099. The other activities (Nea International, Macintosh Hong Kong and Macintosh Intragroup Services) saw the number of employees decline by 1, to 54. The number of staff of Macintosh Retail Group NV fell by 1, bringing the total to 25. Movements in the number of employees were as follows. Living Retail chain Kwantum GP Décors Living Deco Countries NL B F Total Total - December 31, 2006 1,708 51 150 1,909 - December 31, 2005 1,765 83 145 1,993 Average in FTEs - 2006 1,088 60 137 1,285-2005 1,115 75 132 1,322 Fashion Retail chain Dolcis 1 Manfield 1 Invito 1 PRO sport 1 Scapino Fashion Countries NL NL NL NL NL B G Total Total - December 31, 2006 884 573 378 225 2,788 192 45 5,085 - December 31, 2005 881 563 395 217 - - - 2,056 Average in FTEs - 2006 494 326 215 145 2 980 2 80 2 28 2,268-2005 488 320 212 132 - - - 1,152 Automotive & Telecom Retail chain BelCompany Halfords Automotive & Telecom Countries NL B NL B Total Total - December 31, 2006 865 179 1,010 45 2,099 - December 31, 2005 864 128 934 41 1,967 Average in FTEs - 2006 632 136 674 40 1,482-2006 588 99 703 36 1,426 24 1 Including employee numbers at the head office and distribution centre allocated to the retail formats. 2 Number of fte s based on 11 months.

REPORT OF THE MANAGING BOARD/DEVELOPMENTS General Economic improvements have resulted in an increase in staff turnover. Although the increased labour market demand has not yet caused any problems for Macintosh Retail Group, it is expected that the shortage on the labour market will increase in 2007, with the additional salary costs this will entail. The year 2006 saw the implementation of the new healthcare system, new pension plans and the life-course savings scheme. With respect to the latter scheme, however, we would add that at Macintosh - just as at many other organisations - very few employees were interested in participating in this plan. The year under review was also characterised by the implementation of the Social Insurance Reduction of Administrative Burden and Simplification Act. As a result, the accounting departments of the various group companies have had to implement a number of issues, including first-day notification, in their systems to satisfy the new requirements of electronic reporting in particular. Macintosh Retail Group aims to provide staff with opportunities for further development in order to prepare them to perform their duties in the best possible manner. In 2006, the various group companies again paid a great deal of attention to training and education. In doing so, various group companies allow employees to attend Regional Training Centres providing secondary education leading to nationally acknowledged diplomas and certificates. In addition, a number of group companies initiated training programmes focusing on competencies at the National Consortium for combined business training also leading to nationally acknowledged secondary education diplomas. In addition to external courses, each group company provides internal training geared to the group company concerned, such as the BelCompany School and Halfords College. Here, store employees receive regular introductory, sales and product training tailored to the stage in their respective careers. Absenteeism due to illness The overall decline in absenteeism due to illness in 2005 continued in 2006. The average rate of absenteeism was 4.2% in 2006, compared with 4.7% in 2005. The decline was due in part to the acquisition of Scapino, which has reported relatively low absenteeism rates, and once again showed a decline in 2006. Dialogue Macintosh Retail Group has an open and constructive dialogue with the various works councils. The relationship between Managing Board and Supervisory Board members on the one hand and works councils on the other is not only created through formal issues for which consultation or approval is mandatory, but also through informal contacts and updates on the various topics. The underlying idea is the pro-active, reciprocal exchange of accurate and relevant information. This not only results in greater involvement, but also in more support for important decisions. In the past year, 6 formal meetings were held between the Managing Board and the Central Works Council. One of these meetings was attended by a delegation from the Supervisory Board. Early 2006, the Central Works Council issued its recommendation on the acquisition of Scapino in close collaboration with Scapino s works council. At the time of the sale of Klerkx Groep and Stoutenbeek to De MandemakersGroep on January, 1 2007, the relevant works councils were supported by the Central Works Council when issuing their recommendations. Following the sale, Mr Jacobs and Mr Hanssen stepped down from the Central Works Council. We would like to extend a special word of thanks to them for their long-term membership of the Central Works Council and their valuable contribution to employee participation at Macintosh Retail Group. 25

REPORT OF THE MANAGING BOARD/DEVELOPMENTS Outlook for 2007 No signs of impending reversal in consumer confidence and retail spending. Uncertain whether the growth in non-food retail spending will persist throughout 2007. Number of stores up on balance by some 35 to nearly 1,000. Capital expenditure amounting to approximately 25 million. Confidence in 2007, but too early to voice an opinion on the development of operating result and net profit on continuing operations. Non-recurring positive effect of over 7 million on net profit for 2007 due to sale of furniture activities. 2006 was characterised by a clear rise in consumer confidence and spending in the Netherlands, partly as a result of catchup demand on the part of the consumer after a number of years of lower non-food retail trade spending. Although we have not detected any signs of an impending reversal of this trend, the question remains whether non-food retail trade spending will continue to grow throughout 2007. Macintosh Retail Group sees growth opportunities for its store formats in existing markets. We expect to further expand our chain of stores by approximately 35 stores in 2007, the balance of the opening of some 45 new stores and closure of approximately 10 existing stores. The total number of stores will be approaching 1,000 as a result. Kwantum, Scapino Belgium and BelCompany Netherlands and Belgium will be responsible for the majority of openings. Total capital expenditure for 2007 is expected to be approximately 25 million, an increase compared with 2006 ( 22.9 million). Approximately 75% of this amount will be used to open new stores and maintain the appeal of existing stores. Macintosh Retail Group will also continue to actively look for suitable acquisition candidates. However, growth for the sole purpose of growth is not a target in itself, as it has never been, and the criteria set for acquisition candidates will be maintained. We have confidence in 2007, but believe it is too early to voice an opinion on the expected development of operating result (2006: 64.7 million) and net profit (2006: 42.2 million) on continuing operations in 2007. The gain on the sale of the furniture activities will have a non-recurring positive effect of over 7 million on net profit for 2007. Thanks to their leading position in the Dutch market and significant investments over the past few years, Macintosh Retail Group s retail chains are well-positioned to stay in the good graces of the consumers in 2007. Moreover, the cost structure is adequate in nearly all respects. Considerable attention will be paid to improving results at our retail chains in Belgium and France in 2007. 26

REPORT OF THE MANAGING BOARD/DEVELOPMENTS From the CEO On July 1, 2007, Mr M.S.J.H. Stevens (CFO) and Mr L.J.J.M. van de Wiel (COO) will retire from the Managing Board of Macintosh Retail Group on account of reaching the statutory retirement age. Although still in office, we would like to express our appreciation to both gentlemen who have spent a large portion of their working lives at Macintosh Retail Group. From 1969 onwards, Stef Stevens has held a variety of positions at Macintosh Retail Group s legal predecessors and its subsidiaries. In 1991, he was appointed Group Finance & Economy Director at Macintosh Retail Group. On January 1, 2000, he joined the Managing Board. Thanks to his many years of experience, his financial expertise and integrity, he successfully positioned Macintosh Retail Group as a company with a sound financial basis and a reliable market reputation. Lambert van de Wiel was appointed Managing Director of Kwantum Benelux in 1992 and subsequently became a member of the Managing Board of Macintosh Retail Group in early 2000. Lambert is a natural born retailer and a nononsense character who is not afraid to put his hands to the plough. Credit should go to Lambert van de Wiel in particular for the current success of the Macintosh Retail Group retail formats. The Supervisory Board intends to appoint Mr T.L. Strijbos to the Managing Board as from May 1, 2007, and as CFO with effect from July 1, 2007. It wishes to appoint Mr E.M.H. Coorens to the Managing Board as from June 1, 2007, and as COO with effect from July 1, 2007. Macintosh Retail Group has every confidence that these appointments will ensure continuity of management, as well as the desire to be at the forefront of retail developments. 27

REPORT OF THE MANAGING BOARD/THE COMPANY Shareholder information Shares Macintosh Retail Group s authorised share capital amounts to 36.0 million, divided into 45 million ordinary shares and 45 million preference shares of 0.40 nominal value each. There were 22,268,118 ordinary shares outstanding at December 31, 2006, the same number as at December 31, 2005. At year-end 2006, Macintosh Retail Group NV held 754,422 treasury shares (3.4%) to cover outstanding share options. Of these shares, the company had purchased 300,000 in June 2006. Macintosh Retail Group NV s ordinary shares are listed on the official market of Euronext Amsterdam NV. To increase the marketability of shares in Macintosh Retail Group NV, a share split in the ratio of three new shares for one existing share was effected on May 10, 2006. Macintosh Retail Group NV s shares were included in the Amsterdam Small Cap Index on March 1, 2007. The annual trading volume in Macintosh Retail Group NV shares was 14,172,435 in 2006, the total value being 338.5 million, an increase of over 26% on 2005 (8,935,113, total value of 99 million), representing an average daily trading volume of 55,578, or 1.33 million in value terms (2005: 34,767, or 0.39 million in value terms). These figures exclude possible transactions conducted off the Euronext stock exchange. The total number of transactions rose sharply from 4,469 in 2005 to 34,319 in 2006. The share price rose from 14.67 at the end of 2005 to 25.50 at year-end 2006, with a high of 31.65 on May 9, 2006 and a low of 14.28 on January 10, 2006. In 2006, Macintosh Retail Group NV s share price rose by almost 74%, compared with 13.4% for the AEX index, 30.2% for the AMX index and 31.7% for the AScX index. The trade in Macintosh Retail Group NV shares has been supported in part by liquidity provider ABN AMRO Bank NV. Preference shares are registered shares. On the acquisition of preference shares, at least 25% of the nominal value has to be paid up in cash on each share. If preference shares have been issued, part of the profit to be determined in accordance with the Articles of Association will first be distributed on these shares. No preference shares were issued in 2006. Disclosure of Major Holdings in Listed Companies Act Under the new Disclosure of Major Holdings in Listed Companies Act, the following shareholdings were reported to the Netherlands Authority for the Financial Markets (AFM) by the shareholders concerned in November 2006: Name of shareholder Percentage Breedinvest BV 17.64% Delta Deelnemingen Fonds NV 11.23% Aviva Plc 7.68% Kempen Capital Management NV 7.21% Navitas BV 6.06% Darlin NV 5.46% The Stichting Preferente Aandelen Macintosh NV (Macintosh Preference Shares Foundation) also notified the AFM of its potential interest in respect of the call option granted on a number of shares equalling, at a maximum, all outstanding Macintosh Retail Group NV shares minus one. It should be noted that the actual shareholdings of the shareholders listed above may differ from the percentages mentioned, due to the fact that disclosure is not necessary unless the shareholder exceeds or falls below the thresholds set out in the Disclosure of Major Holdings in Listed Companies Act. Under the new Disclosure of Major Holdings in Listed Companies Act, the members of the Managing Board have notified the AFM of their share options in Macintosh Retail Group NV. No member of the Managing Board holds shares in Macintosh Retail Group NV. Profit appropriation and dividend policy Macintosh Retail Group NV s profit appropriation and dividend policy was discussed and approved as a separate item at the General Meeting of Shareholders of April 21, 2004. This policy is aimed at establishing a healthy financial position for the purpose of continuity and expected strategic growth through acquisitions. The underlying idea is that shareholders must be able to rely on stability in dividend distribution and share in the profit growth. Barring unusual circumstances, Macintosh Retail Group s intention is to add some 60% of the net profit to reserves and distribute the remaining approximately 40% to shareholders in cash or in shares. The clauses governing the appropriation of profit are set out in Article 33 of the Articles of Association. In summary, these clauses are as follows: if preference shares have been issued, part of the profit - to be determined in accordance with the Articles of Association - will first be distributed on these shares. The part of the profit remaining that is to be set aside is then determined by the Managing Board, subject to the approval of the Supervisory Board. The balance then remaining will be at the free disposal of the General Meeting of Shareholders. 28

REPORT OF THE MANAGING BOARD/THE COMPANY Share options Macintosh Retail Group NV has a share option scheme for the Managing Board, directors and senior management of the group companies and the holding company. The objective is to increase their long-term commitment to the company. Granting options falls under the remit of the Supervisory Board. The underlying idea is that the total number of options to be granted in any one year may not exceed 2% of the issued share capital. A decision is taken every year on whether or not to grant options, and the number of options to be received by each participant is assessed individually, partly based on the position of the participant and the size of the company concerned. As part of the granting procedure, the Supervisory Board - or the Managing Board with the approval of the Supervisory Board - announces its intention to grant options every year in December. The granting itself follows on the day the full annual figures are published. The exercise price of the options granted to 2004 inclusive is equal to the closing price of the Macintosh Retail Group NV shares on the fifth day after being granted. The exercise price of the options granted as from 2005 is equal to the closing price of the Macintosh Retail Group NV shares on the day prior to the grant. Neither the exercise price nor any other conditions relating to the options granted will be adjusted during the term of the options, except in the event of structural changes, such as a share split. Option holders are expected not to exercise their options shortly after being granted, in order to encourage long-term commitment to the company. The option holders are informed of this, together with the possible sanction, in the event the request is not complied with, that the Supervisory Board or Managing Board may take this into account in a subsequent award. If, upon termination of employment, other than as a result of (early) pension or other situations described in the option plan, an option holder has realised a gain on options granted less than three years prior to the date of termination, the option holder shall forfeit an immediately payable penalty of 90% of the gain realised. The options are granted unconditionally and have a term of 5 years. Options may be exercised at any time during the year, with the exception of two fixed restricted periods before the publication of the annual and semi-annual figures and provided the option holder has no inside information at the time of exercise. The members of the Supervisory Board, Managing Board and managing directors of group companies must observe a longer fixed period before the publication of the full annual results. As a rule, options lapse upon termination of the employment of the option holder, except in a number of exceptional cases. A total of 807,000 options were outstanding at December 31, 2006, with various exercise prices and terms. This represents 3.6% of the issued share capital. The net decrease of 18,000 compared with December 31, 2005 is due to 319,500 options being granted in March 2006, 283,500 options being exercised in 2006 and 54,000 options lapsing during the year following the termination of the option holder s employment. The summary of details of numbers, terms and exercise prices can be found on page 87 of the financial statements. As a rule, if options are exercised, no new shares are issued, but own shares repurchased. For this purpose, Macintosh Retail Group held 754,422 treasury shares in deposit at yearend 2006. In 2007, Macintosh Retail Group intends to purchase 370,000 own shares as a maximum to cover new and outstanding share options. The price per share will not exceed the average closing price for the 5 trading days prior to the purchase date plus 10%. The purchase price will be charged to reserves. Protective measures An agreement has been concluded with Stichting Preferente Aandelen Macintosh NV (Macintosh Preference Shares Foundation) that gives the foundation the right - on its own initiative - to take preference shares and exercise the related voting rights if a hostile takeover bid is made or threatened. A hostile takeover bid is understood to mean: (i) a bid for the company s ordinary shares, with a view to transferring control to the party making the bid without the consent of the Supervisory Board, or without the Supervisory Board being notified in advance; or (ii) a concentration of shares acquired through a buy-up, on the stock exchange or otherwise. The maximum number of preference shares that can be acquired by the Foundation without the approval of the Annual General Meeting equals the number of shares outstanding minus one. The Board of the Foundation consists of the category A members with voting rights: J.C.M. Hovers (Chairman), H.G.K. Harbrink Numan and D. Sinninghe Damsté; and J.G.M. van Oijen as non-voting category B member. The Board of the Foundation is independent of the company, since none of the members with voting rights: (a) is a member or former member of the Managing Board, or a member or former member of the Supervisory Board of the company or any of its group companies; (b) is employed by the company or any of its group companies; or (c) is a permanent adviser to the company or any of its group companies. Insider information Macintosh Retail Group has applied the Regulations covering the ownership of and transactions in Macintosh Retail Group NV securities since October 1, 2005. These regulations are based on the Market Abuse Act which came into force on that date. The relevant persons have confirmed that they will abide by the orders and prohibitions laid down in the Regulation. The Regulation also applies to holders of options. Notwithstanding the prohibition on performing transactions in Macintosh Retail Group NV securities at any time when in possession of inside information, such transactions are in any case forbidden during the periods that run from January 1 of a given year to the date of publication of the full annual results at the beginning of March, and from July 1 to the date of publication of the full 29

REPORT OF THE MANAGING BOARD/THE COMPANY half-year results at the end of August/beginning of September. The members of the Supervisory Board, Managing Board and managing directors of group companies must observe a longer lock-up period before the publication of the full annual results. The Company Secretary has been appointed as the officer in charge of monitoring compliance with the Regulation and liaising with the Netherlands Authority for the Financial Markets. In addition to the Regulation, separate guidelines on securities transactions apply to members of the Supervisory Board and Managing Board. The key provision of these guidelines is the requirement on the part of the relevant Supervisory Board or Managing Board member to notify the compliance officer of transactions in securities held in listed companies with which Macintosh Retail Group has a significant relationship or regarding which it is likely that the relevant Supervisory Board or Managing Board member, given his position at Macintosh Retail Group, enables him to form a better assessment than one based on public information. Financial agenda General Meeting April 24, 2007, 2 p.m., of Shareholders: Maastricht Ex-dividend quotation: April 26, 2007 Dividend payment: May 2, 2007 Provisional half-year July 12, 2007, information for 2007: after close of business Publication of half-year August 30, 2007, results for 2007: before opening of business Analysts meeting on August 30, 2007, 9.30 a.m., half-year results for 2007: Amsterdam Press conference on August 30, 2007, half-year results for 2007: 11.30 a.m., Amsterdam Information Macintosh Retail Group attaches a great deal of importance to effective communication with everyone connected to the company inside and outside the Netherlands. The main aim is to actively provide accurate, up to date and relevant information to enable those interested to form a well-founded opinion of our company. The responsibility for Investor Relations and Corporate Communications lies with the CEO who develops and implements the strategy in this area in collaboration with the CFO and the Company Secretary. Price-sensitive information is communicated as soon as possible by Macintosh Retail Group in accordance with relevant guidelines issued by the AFM and Euronext Amsterdam. The underlying idea is that investors are granted access to relevant information simultaneously as much as possible, and investors where possible are being treated and informed equally. Macintosh Retail Group issues trading updates in the form of a press release within approximately three weeks after the end of a financial year or half-year. The full annual results are published in the form of a press release within four months after the end of a financial year, and the semi-annual results within three months after the end of a half-year. The annual report is published within five months after the end of a financial year, and the half-year report within four months after the end of the half-year concerned. Communication with interested parties takes place, among other information channels, via the website www.macintosh.nl. This website contains all press releases, annual reports and semi-annual reports, agendas and minutes of meetings of shareholders, as well as other information made available by Macintosh Retail Group in the context of corporate governance, but also other information, including, for example, the staff magazine Macinform. This website can also be used to subscribe to our emailservice mailing list for immediate notification by email of the appearance of press releases and other news on the company. There is also a website in English and there are links to the websites of the group companies. The above publications, as well as other relevant information, can also be obtained by phoning +31 43 3280728 or emailing info@macintosh.nl. In addition, presentations are given to analysts, journalists, investors and other interested parties. Macintosh Retail Group has drawn up a Disclosure Policy setting out the rules on handling and disclosing information to analysts, journalists, investors and other interested parties, which is published on the website. Only additional information on press releases will be issued to interested parties if this information serves to clarify or substantiate any public communications. Macintosh Retail Group observes restricted periods in which it does not allow meetings with analysts or investors to take place, or communicating with analysts or investors on matters other than questions with regard to previously published information. These restricted periods run from December 1 of a given year to the date of publication of the full annual results for the year concerned, and from June 1 to the date of publication of the half-year results for the half-year concerned. However, should any meetings with analysts or investors take place during these periods, issues under discussion should be limited to those available to the public domain. Macintosh Retail Group will assess draft and final analysts reports, but only to ensure that previously published information or information in the public domain is not reported incorrectly. 30

REPORT OF THE MANAGING BOARD/THE COMPANY Group organisation Supervisory Board 1 J.G.M. van Oijen (64) Chairman C.H. van Dalen (54) A. Nühn (53) A.N.A.M. Smits 2 (63) Deputy Chairman Managing Board 3 F.K. De Moor (44) CEO M.S.J.H. Stevens 4 (59) CFO L.J.J.M. van de Wiel 4 (59) COO P.T.A. Hünen (47) Company Secretary, Legal Affairs & Compliance Group Executives F.L.J. van der Plas (46) Marketing & ecommerce Central Works Council J.F.H. Tenney (58) Chairman E.F. Jacobs 5 (60) Secretary A.C. Eerens 6 (33) Secretary 1 Please see page 111 for further details on the Supervisory Board. 2 Up to and including the General Meeting of Shareholders on April 24, 2007. 3 Please see page 111 for further details on the Managing Board. 4 Until July 1, 2007. 5 Until February 1, 2007. 6 From February 1, 2007. 31

REPORT OF THE MANAGING BOARD/THE COMPANY Organisation chart 1 LIVING Executive in charge: Kwantum E.M.H. Coorens (42) GP Décors G. Stevens (41) FASHION Hoogenbosch R. de Lege (40) Scapino S. de Raat (49) Nea International R. Müller (43) AUTOMOTIVE & TELECOM Halfords P. Burger 2 (46) BelCompany G. Ellens (47) SERVICES Macintosh Intragroup Services M. Ramaekers (54) Macintosh Hong Kong H.J. Kuperus (45) 1 This organisation chart does not represent the group s legal structure. 2 Until June 1, 2007. 32

REPORT OF THE MANAGING BOARD/THE COMPANY Objectives and strategy Objectives Macintosh Retail Group aims to concentrate on those activities offering the best opportunities for growth and future added value without being dependent on the conditions in just one market sector. The company therefore opts for a spread of risks across a limited number of market sectors, together with a sound mix of activities with potential for growth and companies that make a stable and substantial contribution to cash flow. Macintosh Retail Group aims for a return on net capital employed (ROCE) above 12%, as this percentage, as a minimum, and at current rates of interest, satisfies the profitability requirements set by providers of loan and equity capital, while adding value for shareholders. At the same time, profitability must be such that, subject to a sound financial basis, a growing dividend can be distributed to shareholders in the form of cash and/or shares. Strategy Macintosh Retail Group is continually renewing and enhancing its range of products and services for customers, using its available non-food retail knowledge. In part, this is possible by investing in advanced systems that provide management information on markets, customers, staff deployment, goods and finances, as well as by using its strong potential for innovation to respond to changes in retailing. Insight is gained into markets and purchasing processes, boosting store performance by increasing the number of purchasers and transaction amounts. Macintosh Retail Group regularly appraises its portfolio against predetermined profitability standards and growth opportunities. Each subsidiary must meet individual ROCE standards that vary by sector, market conditions and stage of development. Activities that do not meet the standards set, or are not expected to do so within a reasonable period, are generally disposed of, the timing partly depending on market conditions. Growth and upscaling are achieved through the expansion of existing retail chains and through acquisitions. Acquisitions must have a substantial size and offer long-term profitability as well as sufficient growth potential. Price-based retail formats in the home decoration and shoe sectors are preferred. Smaller acquisitions will only be made if they fit in well with the existing organisation, as a way of obtaining locations. Acquisitions in new sectors are not excluded if they enable sufficient expertise to be obtained and provide access to an important position in a market that is suitably large with adequate growth potential. Collaboration with strategic partners is possible as well. Opportunities that make business sense will not be neglected. Another important element of Macintosh Retail Group s strategy is its policy geared to cost leadership, efficiency improvements and increased returns on net capital employed. The performance of the group companies is monitored and compared based on the indicators developed for that purpose. Arrangements are agreed with suppliers for quicker product development, reductions in lead times and increases in stock turnover, as well as for payment discounts and financial contributions. The purpose is to increase turnover and margins, control costs and reduce capital requirements. Investments are subject to strict criteria. 33

REPORT OF THE MANAGING BOARD/THE COMPANY Personnel and organisation Staff People form the basis for the implementation of Macintosh Retail Group s strategy. The performance of a retailer therefore depends largely on the commitment and quality of the people it employs. Macintosh Retail Group therefore sets high standards for its employees, who should also act in an entrepreneurial spirit at all levels of the organisation. Human resources policy at the various group companies is geared to retaining high quality staff and/or promoting them within the organisation. Training programmes, career and promotion opportunities form the basis to achieve these high standards. Macintosh Retail Group aims to be an attractive employer, offering its employees a challenging working environment and paying attention to personal development and initiative. Given the diversity of the store formats, each possessing its own, broad customer base, the aim is for employees to reflect this diversity. The selection and recruitment policy and training programme are geared to this end. Organisation Macintosh Retail Group is a decentrally managed organisation of companies, each having profit responsibility for its own operations and backed by a high degree of commitment from the Managing Board and the holding company. Our employees possess the spirit of entrepreneurs operating in an open corporate culture characterised by the exchange of knowledge. Each Macintosh Retail Group group company has an appropriate organisation operating at the lowest possible cost level and run by skilled management. The management of each group company focuses tightly on its own activities and is responsible for meeting the agreed profitability standards within an agreed framework. Regarding key issues such as formats and strategy, organisation and appointments, budgets and capital expenditure, as well as the quality of the support systems, the group company takes the lead, with the Managing Board having the deciding vote. The close involvement of the Managing Board is also reflected in its initiating, motivating, coordinating and supervisory role. The group has opted to have a small holding company with a limited number of staff, who support the group companies in specific areas. Group guidelines and procedures are followed for financial reporting, capital expenditure, organisation and appointments, ethical values, etc. Macintosh Retail Group demands that its group companies communicate openly to encourage transparency and to assess situations on their appropriate merits. There is active encouragement of group companies to pool their strengths and exchange knowledge, enabling the group to profit from the knowledge and experience available to it internally. To encourage such transfer of knowledge, key officers within Macintosh Retail Group have the opportunity to exchange positions. 34

REPORT OF THE MANAGING BOARD/THE COMPANY Risk profile and risk management Activities in 2006 Further to the development of risk information, risk management and risk control procedures over the past few years, these procedures were formalised in more detail in 2006, in particular regarding the collection of evidence and internal control thereof by the Group Department Administrative Organisation and Internal Audit. Each year, the Managing Board, Company Secretary, also acting as Compliance Officer, and the Group Department Administrative Organisation and Internal Audit review the risk survey, risk management and risk control procedures. During the 2006 review, it was decided, among other things, to discuss the issue of risk management more vigorously with directors and management of group companies in 2007 to raise their level of risk awareness. It was also decided not to take out any separate insurance policy covering risks of terrorism and fraud. In 2006, further progress was made in developing contingency facilities and recovery procedures following ICT and logistics systems failures in the event of a disaster. These provisions and procedures have since been implemented by virtually all group companies In-control statement The Managing Board undertakes to accept responsibility for the design and operation of internal risk management and control systems tailored to Macintosh Retail Group. During the year under review, the Managing Board conducted independent and systematic analyses and reviews of relevant significant risks and the internal control structure. The identified strategic, commercial, operational, financial, accounting and other risks were updated and, where necessary, additional measures were taken or systems designed to manage significant risks in the best possible way and to be able to report on them. In addition, the effective operation of existing risk management and control systems was reviewed. As part of this review, use was made of annual assessments carried out in consultation with the group companies, the reports issued by the external auditor and the Group Department Administrative Organisation and Internal Audit, and quarterly reports on this matter from group company management. Based on the above, the Managing Board is of the opinion that it can reasonably declare that Macintosh Retail Group has internal risk management and control systems in place which are in line with the company s character and which operated effectively in the 2006 financial year. The risk management and control systems in place significantly reduce the risk of incorrect decisions being made, control processes being deliberately avoided and laws and regulations not being complied with. However, it is virtually impossible to identify, or fully document and control, all risks at all times. As a consequence, the existing systems will never provide an absolute level of assurance against the failure to achieve targets, nor will they be able to prevent all instances of material misstatement, including loss, fraud or violations of laws and regulations. Also, taking well-considered risks is still part of doing business. Identifying new material risks and modifying systems where necessary is a continuous process which continues to be one of the Managing Board s priorities. The Managing Board discussed the activities relating to risk management with the external auditor, the Audit Committee and the Supervisory Board Basic organisation Macintosh Retail Group has implemented a number of measures in the areas of communication, information and authorisation, which are laid down in guidelines and procedures to ensure that material issues are addressed consistently, reports are drawn up in a transparent way and activities are accounted for and reported on within the group. The principal measures are set out below: Planning and control reports in accordance with the Macintosh Group Planning and Economics Manual (strategy memorandum, operational and financial long-term plans, budget, action plans, business analyses). Weekly reports on turnover, gross margin, inventories and bank balances. Regular (monthly, quarterly, annual) reports in accordance with the Macintosh Group Accounting Manual (income statement and balance sheet). Management rules and procedures issued by the group (Management Manual). Group-wide implementation of management information system SMART (commercial, financial and operational performance indicators). Regular meetings between the Managing Board and boards of group companies concerning strategy/long-term plans, budget, action plans and monthly reports, and changes in responsibilities. Regular checks to ensure the proper functioning of operational systems, the integrity of the data and data processing systems by means of local controls, including reports thereon to and reviews conducted by the Group Department Administrative Organisation and Internal Audit. Follow-up of management letters, ISAAS audits, etc. issued by external auditors. Code of Conduct. Annual meeting with the Managing Board, Company Secretary, also acting as Compliance Officer, and the Head of the Group Department Administrative Organisation and Internal Audit on the review, risk survey, risk management and risk control procedures. The underlying principles for risk management and control systems are set centrally. The various risks are discussed below. 35

REPORT OF THE MANAGING BOARD/THE COMPANY 36 Strategic risks There are of course a number of risks relating to the general economic situation in the countries and sectors in which Macintosh Retail Group operates. Although it cannot influence these risks, Macintosh Retail Group responds to such developments by gathering and interpreting information on them and by maintaining and continually refining effective management information systems to identify them at an early stage. In May of each year, all operating companies draw up substantiated strategy memorandums, including operational and financial implications for the next three years. Among other things, the strategy memorandum describes macro-economic developments, changes in markets and distribution structures, developments at competitors and product development and innovation. The strategy memorandums are discussed with the Managing Board, which approves them after any necessary changes have been made. A budget for the following year is drawn up in early November on the basis of the strategy memorandum, including expectations and action plans for targets, financial performance, capital expenditure and financial and other ratios, taking into account the agreed profitability standards within an agreed framework. This budget is also discussed with the Managing Board and approved after any necessary changes have been made. The strategy memorandum and the budget with the accompanying action plans point the way for the group companies in the following year. As far as performance in any year is concerned, Macintosh Retail Group analyses the actual results against those for the previous year and the budget, and, where necessary, the action plans are amended. A new forecast for the current year is made in May and October on the basis of developments known at that time, indicating progress on the achievement of budgetary targets based on altered circumstances. Commercial risks Macintosh Retail Group operates in the non-food retail trade. The sectors in which Macintosh Retail Group is active are sensitive to economic cycles. This is reflected mostly in consumer spending during periods in which the economy is slowing down. Macintosh Retail Group tries to reduce the impact of this sensitivity to economic cycles by clearly opting for a spread of activities to a limited number of market sectors, in that way avoiding excessive dependence on developments in only one sector. The group also aims for a broad base by opting for a balanced mix between activities with potential for growth and companies that generate a stable and substantial cash flow. As a result, Macintosh Retail Group will not be dependent on the success of new activities, which could constitute a risk in a poor economic climate in particular. In addition, our retail chains mainly target a broad range of consumers rather than a niche market. To monitor commercial trends and risks, among other things, Macintosh Retail Group designed the management information system SMART, enabling it to measure the different variables from different data files affecting the marketing mix. These variables relate to, among other things, trends in turnover, gross margins and inventory turnover rates, the level, up-to-dateness and quality of inventories, partly in connection with following up on and controlling open-to-buy positions, staffing levels, the response to advertisements partly in relation to costs, the conversion (number of transactions compared with the number of visits to the stores) and changes in the average transaction amount. Information is available both at an aggregate and detailed level. The Group Department Administrative Organisation and Internal Audit is responsible for the correct use of terms and definitions. The frequency of the SMART reports varies from once a day to once every four weeks. Each activity is monitored at group company level. Feedback is provided to the Managing Board during the regular meetings with the boards of the group companies and the monthly meetings on the results. The group companies report weekly on turnover and margins achieved, as well as on inventories and liquidity positions. An income statement and a balance sheet are drawn up every month and, together with the key figures reported on management variables, discussed by the Managing Board and the board of the operating company in question. In this way, the Managing Board obtains insight into developments of results, capital expenditure and financial and other ratios. Every year, an average of five or six regular meetings are held with each group company, at which the above and any other important matters, such as format development, marketing and procurement, personnel and organisation and the development of data processing systems, are discussed. Multi-factor comparisons are regularly made by the Managing Board between the results of the various group companies in the form of performance indicators, on the basis of which conclusions can be drawn as to any required changes to be implemented. Operational risks Within Macintosh Retail Group, the Group Department Administrative Organisation and Internal Audit checks whether business processes are efficient and whether operational risks resulting from inadequate or faulty operating processes, people or systems are adequately covered, based partly on the description of the internal control structure of each group company. Among other issues, attention is paid to the reconciliation of flows of cash and goods, the design and operation of the internal control structure, including data processing systems and internal controls. Reports on these matters are issued to the Managing Board. Back-up facilities are in place and regularly checked, and agreements concerning contingency facilities are made with third parties to ensure recovery of business processes following

REPORT OF THE MANAGING BOARD/THE COMPANY ICT and logistics system failures in the event of a disaster. Significant progress was again made in this respect in 2006, with further action to be implemented by the group companies concerned. In contrast to previous years, Ernst & Young EDP Audit conducted its own investigation into the operation and security of ICT systems. To follow up on this investigation, Macintosh s Group Department Administrative Organisation and Internal Audit will conduct a self-assessment to provide detailed insight into the risks concerned. The findings arising from these ICT audits are discussed by the Audit Committee and the Supervisory Board. As part of the audit of the financial statements, the external auditor reviews the design of the internal control structure every year. The findings are reported to the management, the Managing Board and the Supervisory Board. Financial risks Macintosh Retail Group s financing and treasury policy is set centrally. Macintosh Intragroup Services is responsible for internal funding and implementing the treasury function. The group companies are responsible themselves for managing working capital within the scope of plans approved by the Managing Board. The group is partly financed by means of interest-bearing loans. Any cash flows arising from long-term or structural loans with variable interest rates are hedged. In order to enhance price transparency and avoid foreign exchange risks, group companies must where possible use the euro as the purchase currency. If this is not possible or desirable, currency risks relating to incoming and outgoing funds flows are hedged. Macintosh Retail Group generally draws up 10% of its purchase orders in US dollars. A change in the US dollar exchange rate may therefore have a limited impact on developments in turnover and margins. The size and terms of all hedging instruments used are linked to the size and terms of the underlying positions and/or transactions. As payments are made in cash or by means of a debit card or electronic purse at the group s stores, there are no credit risks, except for amounts owed from telecom operators and franchisees. The risk of bad debts in these cases is estimated as low. Inventories are measured at the lower of cost plus related expenses and net realisable value. With the aid of supply chain management, efforts are being made to reduce risks inherent in keeping inventories and orders on hand by working with suppliers to reduce inventories and shorten the time between decision-making and purchasing by the consumer. Macintosh Retail Group aims for a healthy solvency, with a lower limit of some 25% being considered acceptable. This is taken into account in the implementation of plans. Solvency was 36.4% at December 31, 2006. Macintosh Retail Group has ample credit facilities. Committed credit lines total 210 million and have remaining terms of 4 years. No security has been provided for these credit lines. However, with regard to the committed credit lines, conditions have been set relating to the Interest Coverage (at least 3.0) and Net Debt/EBITDA (not exceeding 3). Macintosh Retail Group stands surety vis-à-vis Dutch banks for the direct use of bank facilities by the group companies. Foreign group companies are mainly funded by means of intercompany loans. Other risks Acquisitions Macintosh Retail Group intends to grow in part through acquisitions. Acquisitions must be substantial in size and offer longterm profitability as well as sufficient growth potential. Smaller acquisitions will only be made if they fit in well with the existing organisation, as a way of obtaining locations. There are financial and other risks associated with acquisitions that are limited as far as possible by careful orientation and examination. In addition to the usual investigations of the financial, tax and legal aspects, attention is paid to the extent to which the potential acquisition fits into Macintosh Retail Group and, in particular, to its management. When reviewing an acquisition project, consideration is also given to the risks for and the impact on Macintosh Retail Group as a whole, including factors such as the size of the acquisition and the group s familiarity with the market and the country. Contractual agreements are concluded with the seller concerning guarantees and compensation if the agreements are not fulfilled, and the securing of compensation claims. Macintosh Retail Group aims to obtain a majority interest in companies it intends to acquire. A minority interest is only considered if it is accompanied by strategic control. Constant monitoring by Macintosh Retail Group of financial, economic and operating aspects of the acquired company should be guaranteed. Pensions Most of Macintosh Retail Group s Dutch group companies have joined industrial pension funds. The risk for Macintosh Retail Group is limited to possible increases in contributions resulting from negotiations on collective labour agreements. Hoogenbosch Retail Group has insured its pension obligations with an independent company pension fund that re-insures the major risks with an insurance company. This pension fund will be dissolved in 2007, after which the pension plans, according to other group companies own top-up pension plans, will be directly insured, with the major risks being covered as well. Since 2002, new pension entitlements have been partly based on average salary and partly on current contribution rates. Although all plans are insured with insurance companies, Macintosh Retail Group must include a provision for defined benefit plans in the balance sheet in 37

REPORT OF THE MANAGING BOARD/THE COMPANY 38 accordance with IFRS for an amount equal to the balance of defined obligations and plan assets. Pre-pension plans were abolished or converted to retirement plans under new legislation effective as from 2006. Real estate It is vital for all Macintosh Retail Group s group companies to have access to good locations. Depending on the chain, this may mean locations in town centres or on the outskirts of towns or in shopping centres. All chains have their own selection criteria for the acquisition of locations and a white area plan for filling gaps in coverage. The property market is approached on the basis of this plan. Macintosh Retail Group s policy with regard to capital expenditure is geared to using the available resources as far as possible to achieve growth in retail operations. This means that, in principle, real estate is rented or leased, possibly with an option to buy, rather than bought. Commitments under rental and operating lease contracts are disclosed in the notes to the financial statements. The resulting rights (key money) can constitute an asset, since, in a market where demand exceeds supply, parties are prepared to pay relatively high prices for good locations. Continuity and insurance Macintosh Retail Group s risk and safety precaution policy is aimed at ensuring continuity of the company and the ability to insure risks at the best possible conditions. In recent years, a pro-active approach was taken to lowering the risk profile. This was reflected in, among other things, investments in physical security, such as installation of certified sprinkler systems in distribution centres and intruder alarm systems in stores. Certified sprinkler systems have been installed at all locations that are vital to the continuity of the group companies. A start will be made with installing a sprinkler system in Scapino s distribution centre in 2007. Macintosh Retail Group has a fire safety guideline in place containing procedures concerning fire safety policy and minimum safety precaution measures to be taken by group companies. In light of this, group companies focus on drawing up continuity plans for locations that are vital to the company s operations, such as distribution centres. In addition, back-up facilities are in place for information systems and data files to ensure recovery of business processes as soon as possible in the event of a disaster. Macintosh Retail Group has taken out standard insurance for the major risks to which it is exposed with a small deductible. Based on expert reports, among other things, for 2007 a loss limit has been set of 80 million, which is the maximum amount paid per event in the event of a disaster. The main types of insurance are taken out centrally. Product liability risks are covered by liability insurance, with risk insurance of 50 million per event, subject to an annual upper limit of 100 million. The risk of terrorism and terrorist sabotage was removed from all conventional insurance policies in 2001, such risk only being covered under very expensive specialist policies with huge costs. In 2006, Macintosh Retail Group considered whether it is exposed to considerable risk in this matter, subsequently concluding that it is not. As a result, Macintosh has not yet taken out a policy covering this risk, which means that any damage or loss arising from such risk is only covered if the general Nederlandse Herverzekeringsmaatschappij voor Terrorismeschaden (Dutch reinsurance company covering damage and loss resulting from terrorism) established by insurers in the Netherlands can be invoked. Belgian law covers the damage owing to terrorism, subject to set upper limits, while the situation in France is similar to that in the Netherlands. Third-party liability Macintosh Retail Group has filed Section 403 declarations for most of its active Dutch group companies at the relevant Chambers of Commerce. Based on these declarations, Macintosh Retail Group assumes joint and several liability for any liabilities arising from the legal acts of the group companies, with the latter being discharged from statutory publication. In addition, Macintosh Retail Group, as head of the fiscal unit for corporate income tax purposes in the Netherlands, is jointly and severally liable for any corporate income tax liabilities of the companies forming part of the fiscal unit.

REPORT OF THE MANAGING BOARD/THE COMPANY Social responsibility Code of Conduct Macintosh Retail Group attaches great importance to entrepreneurship with a view to achieving a healthy return on capital employed. We try to do business while fully respecting each other and the world around us. In our view, a successful sustainable future is only possible if sound entrepreneurship goes hand in hand with corporate social responsibility and good corporate governance. For Macintosh Retail Group, corporate social responsibility means making and implementing decisions while taking into account the community and environment in which the company operates. Good corporate governance means openly and transparently providing information on, among other things, the nature of Macintosh s activities, strategy and financial policy to stakeholders, as well as accounting for these activities and policies. Macintosh Retail Group s corporate governance structure is set out on pages 42 to 44 of this annual report. Macintosh Retail Group strives to carry out its activities so that there is a balance between its general responsibility towards society at large and the financial interests of its shareholders, employees, customers and business partners, who are also members of society. Employees of Macintosh Retail Group must ensure that no action be carried out that might compromise its integrity or position in society or bring discredit on the company. The values applicable to Macintosh Retail Group in connection with this are set out in a Code of Conduct that all employees, both in the Netherlands and elsewhere, must observe. Manifest non-compliance with this Code of Conduct will result in repercussions against the employee concerned. Compliance with this Code of Conduct is discussed regularly at meetings between the Managing Board and group company management. Each year, the group company management teams are requested to confirm compliance with the Code of Conduct. Macintosh Retail Group s companies are established in Western Europe, but make purchases throughout the world. However, Macintosh Retail Group has no desire to operate in countries where human rights are continuously violated. Macintosh Retail Group also aims not to conduct any activities that may be detrimental to economic and social development in the countries where Macintosh Retail Group operates. As a rule, Macintosh Retail Group does not become involved in, or pass any value judgments on, political systems, parties or opinions. When selecting a business partner, Macintosh Retail Group intends to consider the commercial as well as moral aspects by assessing whether the way in which the prospective partner conducts its business is consistent with its own set of social values. This means, among other things, that Macintosh refuses to give its support to transactions contravening legislation and regulations of the relevant countries or in general, or have relationships with persons or companies that behave unacceptably in social terms. Macintosh Retail Group has no desire to do business with persons or companies exploiting their employees, providing work environments that are unsafe or unhealthy, or using child labour, according to the rules applicable in the country concerned and taking into account the International Labour Organisation Convention on fixing the minimum age for admission of children to employment. Employees are not permitted to accept gifts or favours from potential and existing business partners of Macintosh Retail Group, or to offer, pay, request or accept bribes in whatever form. Group companies are required to take responsibility in observing the purchasing and production processes applied in respect of their own suppliers in particular. For example, Kwantum uses the Care & Fair quality mark, serving as a guarantee that no hand-knit carpets from India, Nepal or Pakistan have been manufactured involving child labour. Care & Fair is an independent organisation that seeks to improve the living conditions and prospects of carpet makers and their children and end illegal child labour. Care & Fair conducts inspections of manufacturers in India, Nepal and Pakistan. In addition, Care & Fair provides education, runs schools and provides basic health care services. To achieve its objectives, Care & Fair, in addition to charging mandatory annual membership fees, also charges a fee on the value of imports for each individual member. In addition, exporters contribute towards the costs by paying a percentage of the value of exports. Approximately 90% of this income reverts back to India, Nepal and Pakistan in the form of development aid for the purpose of financing the construction and ongoing costs of schools and hospitals. Another example is Scapino, which is a member of BSCI (Business Social Compliance Initiative), an initiative of a number of large European retailers whose objective is to collaborate with suppliers in improving the working conditions in countries and factories from which they buy their products, for example by monitoring compliance with the standards and values set by BSCI. Scapino imposes these standards and values on its suppliers, ensuring that the products it purchases are manufactured under acceptable working conditions by suppliers paying reasonable wages. 39

REPORT OF THE MANAGING BOARD/THE COMPANY 40 Charity The purchasing and production processes are only two examples of the group companies of Macintosh Retail Group assuming their social responsibility. In addition, they are taking a wide range of initiatives supporting charitable causes in some way or other. For example, Scapino, together with Edukans, an organisation setting up education projects in developing countries, are financially involved in Wereldsupporters, a campaign for education providing financial support to schools in Africa. Dolcis has concluded a two-year contract with Stichting KiKa, a foundation raising funds to finance new forms of research and other activities for children with cancer. For every pair of shoes sold from the special Dolcis KiKa range of children s shoes, a certain amount goes directly to KiKa. Halfords entered into a corporate partner agreement with Veilig Verkeer Nederland (Safe Traffic Netherlands) with a view to promoting safe traffic in the Netherlands. Environment A responsible and sustainable environmental policy and opting where possible for environmentally friendly processes and products is one of the objectives of Macintosh Retail Group. The implementation of measures aimed at avoiding or controlling adverse environmental impact is therefore part of normal operations of Macintosh Retail Group s group companies. Even after sales to consumers, Macintosh Retail Group continues to feel responsible for the products and services it puts on the market. This is why all group companies cooperate in, for example, taking back products which have reached the end of their lives and having them recycled, and using reprocessed materials whenever possible. All group companies selling batteries and any other products causing potential damage to the environment offer consumers the option to return them to the stores. This type of waste is collected centrally using various waste collection methods and stored in specially designed containers. The distribution centres are equipped with waste collection stations. Waste transportation and processing has been contracted out to specialised companies. In the case of retailers, environmental impact mainly represents inconvenience due to packaging. Except for transportation purposes, packaging is also necessary to protect products and to make them more attractive. To reduce environmental impact as much as possible, it is important that packaging, mainly consisting of paper and carton, is reduced to a minimum, without affecting functionality and commercial attractiveness. By continually paying attention to this, Macintosh Retail Group has succeeded in reducing the added packaging quantities between 2000 and 2005 by approximately 20% under the SVM Pact packaging covenant, to which Macintosh Retail Group was a party. Although final figures for 2006 are not yet available, it is expected that packaging quantities were further reduced in the year under review. On January 1, 2006, new legislation came into force requiring producers and importers of packaged goods to collect and process packaging waste. Companies can opt to take over the separate collection of waste or become a member of a group. Macintosh Retail Group became a member of Stichting Nedvang, a foundation that has made arrangements with the Association of Dutch Municipalities on collecting packaging in return for the payment of a fee. In this way, Macintosh aims to meet its legal obligations in a cost-effective way. In addition to the obligation to collect waste, the company is required to demonstrably reduce the environmental impact of packaging waste. Macintosh Retail Group had already made a commitment to actively reduce packaging waste, in particular by considering not only commercial and financial aspects, but also the possibilities of re-using materials and a lower environmental impact when choosing the type of packaging. Macintosh Retail Group will also move further ahead with its strategy of keeping packaging records with a view to setting up a comprehensive monitoring system for each group company in 2007. This is not easy to achieve, given the host of different products, the large number of foreign suppliers and the permanent changes in product ranges. Macintosh Retail Group s environmental working group plays a pioneering role in this process. Besides complying with government-imposed obligations, the group companies have launched their own initiatives. For example, Kwantum has made arrangements with suppliers on purchasing wooden garden furniture since the mid-nineties. These arrangements relate to the legality of wood used, as well as the engagement of personnel. Buying good wood has been on the agenda ever since. In 1999, Kwantum, being the only Dutch initiator, co-founded the Tropical Forest Trust (TFT) together with two Scandinavian furniture companies. Since then, nearly 50 leading producers and sellers of hardwood products have joined TFT. The explosive demand for hardwood furniture has led to a corresponding increase in the need for forest management. TFT is engaged in actively replanting and properly managing forests and plantations in South America and Asia, while aiming to ensure that as much tropical hardwood as possible is awarded the international protective FSC (Forest Stewardship Council) seal of approval. It also ensures good working conditions being provided to indigenous forest workers. Kwantum continues to sell only hardwood garden furniture bearing the FSC quality mark. For this, Kwantum received the World Wildlife Fund s Gift to the Earth Award. Also, in 2005 and 2006, environmental organisation Friends of the Earth Netherlands (Milieudefensie) rated Kwantum as the number one large-scale retailer striving to be ahead in the use of good wood.

REPORT OF THE MANAGING BOARD/THE COMPANY Own staff The safety and health of its own staff is of course also a serious issue for Macintosh Retail Group. Each operating company has a continuity plan in place which focuses on risks arising in the event of a disaster and the steps to be taken in such a situation. Drills are held regularly to test the existing plans, ensuring all employees are fully aware of the significance of complying with the safety procedures. No work-related accidents were recorded in 2006. Macintosh Retail Group has a whistleblowers regulation in place, enabling employees to report alleged irregularities without jeopardising their legal position. This regulation can be found on the website www.macintosh.nl. 41

REPORT OF THE MANAGING BOARD/THE COMPANY Corporate governance 42 Corporate Governance Code The Supervisory Board and the Managing Board of Macintosh Retail Group both agree with the spirit and general intent of the Corporate Governance Code ( the Code ). During the General Meeting of Shareholders on April 21, 2004, the approach to the Code chosen by Macintosh Retail Group was discussed and received unanimous support from the Meeting. As a result, Macintosh Retail Group complies with the Code. The practical implementation of corporate governance was discussed in great detail in the Annual Reports 2004 and 2005. Shareholders were entitled to comment on these provisions at the General Meeting of Shareholders held on April 28, 2005. Corporate governance was also on the agenda of the General Meeting of Shareholders of April 26, 2006. The Managing Board and the Supervisory Board shall remain responsible for the corporate governance structure at Macintosh Retail Group. All major changes to this structure and to compliance with the Code shall be submitted as separate agenda items for discussion by the General Meeting of Shareholders. No major change occurred in 2006. The Articles of Association include a provision stating that the approval of the General Meeting of Shareholders is required for a number of decisions of the Managing Board. These relate to decisions involving major changes in the identity or nature of the company as described in Section 107a of Book 2 of the Netherlands Civil Code. Macintosh Retail Group s acquisition of shoe discounter Scapino on February 1, 2006 was submitted for approval to an Extraordinary General Meeting of Shareholders and subsequently approved by that Meeting. There was no evidence of any significant transactions in 2006 involving conflicting interests between the members of the Supervisory Board and/or the members of the Managing Board of Macintosh Retail Group, nor were any material transactions conducted between Macintosh Retail Group and natural or legal persons holding at least 10% of the shares in Macintosh Retail Group. The manner in which Macintosh Retail Group complies with specific provisions of the Code, as well as the alternative approach opted for in the case of a very small number of principles and provisions can be found on the website www.macintosh.nl. Macintosh Retail Group is a two-tier company with a Managing Board and an independent Supervisory Board. The key features of the corporate governance structure are set out below. The Managing Board The Managing Board is responsible for the day-to-day management of the company, the company s strategy, portfolio policy and the deployment of people and resources. Each member is responsible for a number of specific areas based on a division of duties. The Managing Board keeps the Supervisory Board up to date on the performance of the company. It also discusses all important matters with the Supervisory Board and submits important decisions to it for approval. The Managing Board discusses decisions described in legislation or in the company s Articles of Association with the General Meeting of Shareholders, and requests the Meeting s prior approval for these decisions where necessary. The Managing Board promptly provides the Supervisory Board and the General Meeting of Shareholders with all the information required for the performance of their duties. Under the Articles of Association, the Managing Board consists of one or more members (currently three) who are appointed by the Supervisory Board. The Supervisory Board bases its recommendation in appointing a member of the Managing Board on the advice issued by the Remuneration & Appointment Committee. Information on the members of the Managing Board is given on page 111 of this annual report. Members of the Managing Board can only be suspended and dismissed by the Supervisory Board. The remuneration and other employment terms and conditions of members of the Managing Board are set by the Supervisory Board on the advice of the Remuneration & Appointment Committee, taking into account the remuneration policy adopted by the General Meeting of Shareholders of April 21, 2004. For the remuneration of individual members of the Managing Board, please refer to page 105 of this annual report and the remuneration report on the website. Each member of the Managing Board is authorised to represent the company independently. The Regulations of the Managing Board lay down the division of duties and the working practices of the Managing Board, as well as the procedures for dealings with the Supervisory Board, the General Meetings of Shareholders, the Central Works Council and the external auditor. These regulations can be found on the website www.macintosh.nl. The Supervisory Board The Supervisory Board, being the body bearing overall responsibility and accountability, is responsible for supervising the activities conducted by the Managing Board and the general affairs of the company and its related companies. The Supervisory Board advises the Managing Board. In discharging their duties, the members of the Supervisory Board act in accordance with the Regulations of the Supervisory Board and

REPORT OF THE MANAGING BOARD/THE COMPANY compliance with relevant laws ands regulations, the integrity and quality of the financial information, the development of results and relevant financial ratios, the tax planning policy, financing and related strategies, the application of information and communication technology, and the recommendation, qualifications and independence of the external auditor. The Remuneration & Appointment Committee consists of Mr J.G.M. van Oijen (Chairman) and Mr A. Nühn. The Remuneration & Appointment Committee has been set up to assist the Supervisory Board in, among other things, reviewing the remuneration policy as it applies to the Managing Board, the remuneration of the members of the Supervisory Board, reviewing share option plans, granting share options and drawing up the remuneration report. In addition, the Remuneration & Appointment Committee is responsible for reviewing the performance of individual members of the Managing Board and Supervisory Board, as well as making proposals for appointments and reappointments of members of the Supervisory Board and Managing Board. The General Meeting of Shareholders Macintosh Retail Group attaches a great deal of importance to effective communication with shareholders in the Netherlands and abroad. The main aim is to actively provide accurate, up to date and relevant information to enable them to form a well-founded opinion of our company. The underlying idea is that all shareholders and other parties in the financial market are provided with the same information simultaneously concerning issues that may affect the share price. A General Meeting of Shareholders is held at least once a year for discussions and resolutions on the Report of the Managing Board, the financial statements including notes and annexes, the Report of the Supervisory Board, endorsement of the conduct of affairs and supervision thereof, the appropriation of the profit remaining after the addition to reserves, and other matters that the Supervisory Board or the Managing Board have to present to shareholders according to law and/or the Articles of Association. The General Meeting of Shareholders is held in Maastricht, Stein, Amsterdam, Utrecht or Den Bosch no later than six months after the end of the financial year. A General Meeting is convened by means of an advertisement being placed and/or electronically, for example by being published on the website. If necessary, extraordinary general meetings can be convened by the Supervisory Board or the Managing Board. A General Meeting of Shareholders can also be held if requested by a group of shareholders who together represent at least 10% of the issued share capital. Subjects for discussion at the General Meeting of Shareholders are placed on the agenda by the Managing Board or the Supervisory Board. Requests from shareholders and holders of depositary receipts for shares who individually or jointly represent at least 1% of the issued capital of Macintosh Retail Group, or whose shares individualin the interests of Macintosh Retail Group and its related companies in general, taking into consideration the interests of the company s stakeholders. The members of the Supervisory Board are appointed by the General Meeting of Shareholders based on nominations of the Supervisory Board. The General Meeting of Shareholders and the Central Works Council can recommend candidates to the Supervisory Board for nomination as a Supervisory Board member. The Supervisory Board bases its recommendation on the advice issued by the Remuneration & Appointment Committee and the profile for appointments to the Supervisory Board. This profile includes assumptions on the desired composition and size of the Supervisory Board, as well as the desired knowledge and experience of individual Supervisory Board members. A Supervisory Board member retires by rotation no later than on the day of the first General Meeting of Shareholders held after the end of a four-year period following his appointment. In principle, a Supervisory Board member is appointed for at most three terms of four years, unless there are serious reasons for deviating from this rule. The profile and rotation schedule are published on Macintosh Retail Group s web site. The remuneration of the members of the Supervisory Board is determined by the General Meeting of Shareholders and is not dependent on the results of Macintosh Retail Group. The General Meeting of Shareholders held on April 26, 2006 decided to raise the remuneration of the members of the Supervisory Board from 20,000 to 25,000 and of its Chairman from 25,000 to 30,000. The Chairman and Deputy Chairman of the Supervisory Board are chosen from its members. The current Chairman is Mr J.G.M van Oijen, with Mr A.N.A.M. Smits acting as Deputy Chairman. The Secretary, not necessarily a member of the Supervisory Board, is currently the Company Secretary. The Supervisory Board has drawn up a set of regulations covering the duties and composition of the Board, its working practices and decision-making process, as well as its relationship with the Managing Board, shareholders, Works Council and the external auditor. The Supervisory Board has two permanent committees: the Audit Committee and the Remuneration & Appointment Committee. These committees operate according to regulations set for them (which can be found on Macintosh Retail Group s website) and advise the Supervisory Board in full session. The activities of the two Committees in no way relieve the Supervisory Board of its responsibilities or dilute any of its powers. The Audit Committee consists of Supervisory Board members Mr C.H. van Dalen (Chairman) and Mr A.N.A.M. Smits. The Audit Committee has been formed to supervise the operation of the internal risk management and control system, ensure 43

REPORT OF THE MANAGING BOARD/THE COMPANY ly or jointly represent a value of 50 million in the Official List, for items being placed on the agenda of the General Meeting of Shareholders are granted, provided that the requests are received no later than on the sixtieth day before the day of the meeting and their inclusion does not seriously compromise the interests of Macintosh Retail Group. If a right of approval is granted to the General Meeting of Shareholders by law or under the Articles of Association of Macintosh Retail Group, or if a delegation of powers or authorisation is requested, shareholders will be informed of all facts relevant to the approval, delegation or authorisation to be granted by means in the notes to the agenda for the meeting. These notes will be placed on Macintosh Retail Group s website from the date of notice convening the General Meeting of Shareholders in which the proposal concerned is discussed until after the meeting. Each shareholder is entitled to attend and address the General Meeting of Shareholders and exercise the right to vote, either in person or by written proxy, provided that the shareholder in question satisfies the requirements of the Articles of Association requiring the prior submission of documents evidencing his capacity as a shareholder. In its notice for convening a General Meeting of Shareholders, the Managing Board can state a date for establishing the shareholders right to attend and voting rights. At the General Meeting of Shareholders, each share carries the right to one vote. All resolutions of the General Meeting of Shareholders are passed by a simple majority of the valid votes cast, unless a larger majority is required by law or the Articles of Association. The main powers of the General Meeting of Shareholders are to appoint Supervisory Board members on the recommendation of the Supervisory Board, adopt the financial statements and appropriate the remaining portion of the net profit, endorse the Managing Board s conduct of the company s affairs and the Supervisory Board s supervision thereof, decide on amendments to the Articles of Association and proposals for the dissolution or liquidation of the company, issue shares or rights to shares, limit or withdraw pre-emption rights of shareholders, and repurchase and cancel shares. In addition, decisions of the Managing Board concerning a major change to the identity or nature of Macintosh Retail Group are subject to the approval of the General Meeting of Shareholders. External auditor During the General Meeting of Shareholders on April 21, 2004, the shareholders issued the engagement for the audit of the annual accounts to Ernst & Young Accountants for an unlimited period of time, on the understanding that the Supervisory Board or Managing Board can cancel the engagement if the performance of Ernst & Young Accountants or any other circumstances so dictate. The Managing Board and Audit Committee report annually to the Supervisory Board on the developments in the relationship with the external auditor, in particular the auditor s independence. A breakdown of the fees charged by Ernst & Young in 2006 is set out below: Fees (in ) 2006 2005 Audit of financial statements 490,000 406,000 Tax advice 123,000 233,000 Other services 1 359,000 32,000 Total 972,000 671,000 1 2006: mainly relating to tax and financial due diligence advisory related to the acquisition of Scapino. At least once every four years, but no later than at the General Meeting of Shareholders to be held in 2008, the main conclusions regarding the performance of the auditor will be communicated to the General Meeting of Shareholders. During the General Meetings of Shareholders, shareholders will be given the opportunity to question Ernst & Young Accountants in relation to its statement on the fair presentation of the financial statements. The external auditor attends the meetings of the Audit Committee and, at least once a year, the meeting of the Supervisory Board discussing the financial statements. In accordance with the applicable statutory requirements, the external auditor reports on the audit to the Managing Board and Supervisory Board, raising the matters relating to the audit that the external auditor wishes to bring to the attention of the boards. Maastricht, the Netherlands, March 13, 2007 44 The draft minutes of the General Meeting of Shareholders are made available to the shareholders by publishing them on the website no later than three months after the meeting. During the following three months, shareholders are entitled to comment on the minutes, after which the minutes are finalised by the Chairman and the Secretary of the General Meeting of Shareholders in accordance with the provisions of the Articles of Association. The final minutes are placed on the website www.macintosh.nl. The Managing Board F.K. De Moor, CEO M.S.J.H. Stevens, CFO L.J.J.M. van de Wiel, COO

REPORT OF THE SUPERVISORY BOARD Report of the Supervisory Board Macintosh Retail Group in 2006 The Supervisory Board is pleased to note that 2006 was a record year for Macintosh Retail Group, with net profit amounting to 46.0 million, a 40.0% rise on 2005. It is also gratifying to record that Macintosh Retail Group again made good progress on the implementation of its strategy, which is aimed at growth and increased profitability of existing activities and profitable growth through acquisitions. With the acquisition of shoe discounter Scapino, the company welcomed a consistently profitable company to its shoe sector. Scapino fits in with the corporate culture of Macintosh Retail Group, making it a welcome addition to the activities of Hoogenbosch. The decision to sell the furniture activities of Piet Klerkx and Stoutenbeek is in line with Macintosh Retail Group s strategy to focus on home decoration in the Living sector. On the back of the activities in 2006, the company can now focus on building on three pillars that form a solid foundation in terms of turnover, operating result and future potential. The Supervisory Board would like to thank the Managing Board and all employees for their contribution to an excellent 2006. Reporting on the 2006 financial year and dividend distribution The Report of the Managing Board on 2006 was drawn up by the Managing Board on March 13, 2007 and approved by the Supervisory Board on that same date. The Supervisory Board has concluded that the Report of the Managing Board for 2006 meets the standards of transparency and properly reflects the key developments of that year. The 2006 financial statements were drawn up by the Managing Board on March 13, 2007. Following discussions with the Audit Committee, the financial statements were submitted to the Supervisory Board. They were discussed extensively in the presence of Ernst & Young Accountants on March 13, 2007. The 2006 financial statements were audited by Ernst & Young Accountants, who issued an unqualified auditor s report on them. In the opinion of the Supervisory Board, the 2006 financial statements give a true and fair view of the financial position of the company as at December 31, 2006, and of the result for the year then ended. The 2006 financial statements have been signed by all members of the Supervisory Board and the Managing Board and will be presented to the General Meeting of Shareholders on April 24, 2007 with the proposal that they be adopted without amendments. In addition, the General Meeting of Shareholders will be asked to endorse the conduct of affairs in 2006 by the members of the Managing Board and the supervision exercised by the members of the Supervisory Board on the policy of the Managing Board. The Managing Board has decided, with the approval of the Supervisory Board, to add 27.5 million of the net profit of 46.0 million to reserves. Shareholders will be entitled to the remainder of the profit for the year. It will be proposed to shareholders that a cash dividend of 0.83 per share be distributed for 2006 (2005: 0.60). This represents a pay-out of 40.2% (2005: 40.7%) and corresponds to the profit appropriation and dividend policy approved by shareholders on April 21, 2004. Meetings of the Supervisory Board The Supervisory Board held five meetings with the Managing Board in 2006, in accordance with a set schedule. A separate meeting was held in January 2006 to discuss the acquisition of Scapino. At each of the regular meetings, the turnover and result were discussed in relation to the predefined objectives and the budgets and financial forecasts approved by the Supervisory Board. In addition, Macintosh Retail Group s operational and financial objectives, the strategy designed to achieve these objectives and the parameters underlying the strategy were submitted to the Supervisory Board for approval. The findings of the Audit Committee and the Remuneration & Appointment Committee relating to the various subjects discussed by these Committees were discussed extensively by the full Supervisory Board. Particular attention was also paid to market trends, investments and acquisition opportunities as well as the composition and size of the Supervisory Board and Managing Board. At the annual meeting with the external auditor, the Supervisory Board discussed the group s 2006 financial statements and financial reports. Regular interim consultations were held with the Managing Board on current issues and developments, including the sale of the store of Stoutenbeek/Pot in Axel on April 1, 2006, and the furniture activities of Piet Klerkx and Stoutenbeek on January 1, 2007. The Supervisory Board also held meetings in 2006 that were not attended by the Managing Board to discuss, among other things, the joint performance of the Supervisory Board partly in relation to the profile, the performance of its individual members, as well as the relationship between the two Boards. It was concluded that the members of the Supervisory Board work independently and critically with regard to one another and with regard to the Managing Board. There was no evidence of underperformance, inherent differences of opinion or conflicting interests. None of the Supervisory Board members was absent frequently in the year under review. At the meetings not attended by the Managing Board, the performance of the Managing Board and its individual members also received considerable attention. It was conclud- 45

REPORT OF THE SUPERVISORY BOARD 46 ed that the members of the Managing Board work in harmony to act in the interests of Macintosh Retail Group, there being no evidence whatsoever of underperformance, inherent differences of opinion or conflicting interests. It was also established that all meetings and contacts with the Managing Board took place in an open and business-like atmosphere based on timely, clear and accurate information. Meetings of Committees The Audit Committee, consisting of Supervisory Board members van Dalen (Chairman) and Smits, held three meetings with the Managing Board in 2006, two of which, on the half-year and annual figures, in the presence of Ernst & Young Accountants. At the latter meetings, the income statement, the balance sheet and the statement of changes in equity, commitments and contingencies, the cash flow statement and capital expenditure were discussed extensively. Other topics for discussion included the company s risk exposure and the design of internal systems for managing and monitoring those risks, the operation and risk management of ICT systems, insurance, as well as the financial reporting process and compliance with legislation and regulations. The Remuneration & Appointment Committee, consisting of Mr van Oijen (Chairman) and Mr Nühn discussed, among other things, the remuneration policy with regard to the Managing Board, the remuneration of individual members of the Managing Board, the remuneration of the Supervisory Board, the granting of options to officers of Macintosh Retail Group, the content of the Remuneration report and the appointment and reappointment of members of the Supervisory Board in 2006 and 2007, and of the Managing Board in 2007. General Meeting of Shareholders and meetings with the Central Works Council All members of the Supervisory Board attended the General Meeting of Shareholders in Maastricht on April 26, 2006. At that meeting, which was also attended by Ernst & Young Accountants, the 2005 financial statements were adopted and the conduct of affairs by the members of the Managing Board and the supervision exercised by the members of the Supervisory Board on the policy of the Managing Board was endorsed. In addition, the shareholders approved the renewal of the authority to issue ordinary shares and the purchase of own shares. The General Meeting of Shareholders also approved a proposal to amend the Articles of Association in connection with the intended Macintosh Retail Group share split. Furthermore an Extraordinary General Meeting of Shareholders relating to the acquisition of Scapino was held. Two members of the Supervisory Board attended the consultation meetings between the Managing Board and the Central Works Council, during which the matters discussed included the financial statements. In the opinion of the Supervisory Board, the contact between the Managing Board and the Central Works Council is open and constructive and creates added value for the company. Independence The current composition of the Supervisory Board meets the criteria concerning the independence of the supervision of management boards set out in the Corporate Governance Code. All Supervisory Board members are deemed to be independent within the meaning of the Code. Mr Smits was a member of the Managing Board of Macintosh Retail Group until 1982. A number of members of the Supervisory Board are also members of Supervisory Boards of other Dutch listed and unlisted companies. Information on individual members of the Supervisory Board is given on page 111 of this annual report. The CEO of the Managing Board is a member, but not the Chairman, of the Supervisory Board of a Dutch listed company. No other member of the Managing Board is a member of the Supervisory Board of any listed company. Acceptance by a member of the Managing Board of the membership of the Supervisory Board of a listed or other large company requires the approval of the Supervisory Board. The Regulations of the Managing Board stipulate that any other important positions held by members of the Managing Board shall be notified to the Supervisory Board and no other paid positions shall be accepted without prior permission of the Chairman of the Supervisory Board. For information on the individual members of the Managing Board, reference is made to page 111 of this annual report. Remuneration of members of the Supervisory Board and Managing Board The remuneration of the members of the Supervisory Board is determined by the General Meeting of Shareholders and is not dependent on the results of Macintosh Retail Group. The General Meeting of Shareholders held on April 26, 2006 decided to raise the remuneration of the members of the Supervisory Board from 20,000 to 25,000 and of its Chairman from 25,000 to 30,000. No shares or rights to shares shall be granted by way of remuneration to members of the Supervisory Board. Macintosh Retail Group does not grant any personal loans, guarantees or similar benefits to members of the Supervisory Board. The remuneration and other employment terms and conditions of members of the Managing Board are set by the Supervisory Board on the advice of the Remuneration & Appointment Committee, taking into account the remuneration and share option policies adopted and approved, respectively, by the General Meeting of Shareholders of April 21, 2004. The assumption underlying the remuneration policy is that it should be possible to recruit and retain qualified directors on the basis of current market conditions. To safeguard the short-term and long-term interests of the

REPORT OF THE SUPERVISORY BOARD company as much as possible, the remuneration package for members of the Managing Board comprises fixed and variable components, as well as share options and a pension plan. The variable remuneration does not exceed 40% of the gross annual salary applicable in the year for which the variable remuneration is set. The amount of the variable component is related to the development of the group result and working capital, as well as to specific targets set each year. Of the total variable remuneration, 75% depends on the development of the group result and working capital and 25% on specific targets. For breakdowns of fixed and variable remuneration, pension charges and share options of the Managing Board in 2006, reference is made to the Remuneration report on the website www.macintosh.nl, and to pages 105 and 106 of this annual report. In December 2006, following a recommendation from the Remuneration & Appointment Committee, the Supervisory Board reviewed the remuneration of the members of the Managing Board again, resulting in a decision on December 12, 2006, to increase, with effect from January 1, 2007, Mr De Moor s fixed salary from 380,000 to 389,500, and Mr Stevens en Mr van de Wiel s fixed salaries from 301,000 to 308,750. On March 15, 2007, the Supervisory Board granted 42,000 options on shares in Macintosh Retail Group to Mr De Moor and 39,000 options to Mr Stevens and Mr van de Wiel each. The exercise period for these unconditional options is five years, with the exercise price being equal to the closing price of the Macintosh Retail Group shares on March 14, 2007. Corporate governance The Supervisory Board and the Managing Board of Macintosh Retail Group both agree with the spirit and general intent of the Corporate Governance Code. During the General Meeting of Shareholders on April 21, 2004, the approach to the Code chosen by Macintosh Retail Group received unanimous support from the Meeting. As a result, Macintosh Retail Group complies the Code. The practical implementation of corporate governance was discussed in great detail in the Annual Reports 2004 and 2005. The Annual Report 2006 also discusses this subject in more detail. The manner in which Macintosh Retail Group complies with specific provisions of the Code, as well as the alternative approach opted for in the case of a very small number of principles and provisions can be found on the website www.macintosh.nl. The Supervisory Board and the Managing Board will remain responsible for the corporate governance structure at Macintosh Retail Group. All major changes to this structure and to compliance with the Code shall be submitted as separate agenda items for discussion by the General Meeting of Shareholders. No major change occurred in 2006. Changes in the Supervisory Board Mr Nühn retired by rotation as a member of the Supervisory Board in 2006. The General Meeting of Shareholders of April 26, 2006 reappointed Mr Nühn to the Supervisory Board for a period of four years, which means that he started a second term of four years as Supervisory Board member. According to the retirement schedule, Mr Smits is due to retire as Supervisory Board member on April 24, 2007. Mr Smits is not available for a new term as Supervisory Board member, because the maximum number of terms has lapsed. Partly on the recommendation of the Remuneration & Appointment Committee, the Supervisory Board has given careful thought to filling the expected vacancy. The profile drawn up by the Supervisory Board for the desired composition and size of the Board, as well as the desired knowledge and experience of individual Supervisory Board members, was a key factor in these deliberations. The process resulted in the Supervisory Board recommending Mr W. Dekker to the General Meeting of Shareholders for appointment to the Supervisory Board of Macintosh Retail Group for a term of four years as from April 24, 2007. The recommendation for appointment of Mr Dekker is based on the fact that he perfectly meets the relevant selection criteria laid down by the Remuneration & Appointment Committee. Mr Dekker is operationally active as CEO of Nutreco Holding NV and has wide-ranging senior management experience in an internationally operating company listed on Euronext Amsterdam, as well as many years of knowledge of marketing products designated for consumers. For information on Mr Dekker, reference is made to the notes to the agenda of the General Meeting of Shareholders. The General Meeting of Shareholders will be given the opportunity to recommend candidates for appointment to the Supervisory Board to fill the vacancy left by the retirement of Mr Smits. The Central Works Council has stated that it recommends Mr Dekker for appointment to the Supervisory Board. The Supervisory Board wishes to express its appreciation to Mr Smits, who has been a Supervisory Board member since August 1, 1982, after having been a member of the Managing Board of former Macintosh Confectie NV for more than five years. During his long career with Macintosh, Mr Smits witnessed the conversion from Europe s largest clothing manufacturer to non-food retailer and the latter s further expansion. Thanks to his extensive financial and business expertise, as well as his typical understanding of human relationships, he has been an unending pillar of support, both as a member of the Managing Board and of the Supervisory Board of Macintosh Retail Group, for the past 30 years. 47

REPORT OF THE SUPERVISORY BOARD Changes in the Managing Board On July 1, 2007, Mr M.S.J.H. Stevens (CFO) and Mr L.J.J.M. van de Wiel (COO) will retire from the Managing Board on account of reaching the statutory retirement age. Also on the recommendation of the Remuneration & Appointment Committee, the Supervisory Board has given careful thought to filling the expected vacancies. In doing so, it considered the desired composition and size of the Managing Board, as well as the desired knowledge and experience of individual Board members. A key factor in these deliberations was the fact that the Supervisory Board and Managing Board preferred to appoint at least one new member from Macintosh Retail Group s own ranks. Following these deliberations, the Supervisory Board intends to appoint Mr T.L. Strijbos to the Managing Board as from May 1, 2007, and as CFO with effect from July 1, 2007. It wishes to appoint Mr E.M.H. Coorens to the Managing Board as from June 1, 2007, and as COO with effect from July 1, 2007. The General Meeting of Shareholders will be informed of the intended appointments on April 24, 2007. Both new members will be given a mandate for an indefinite period of time. The notes on the application of the Corporate Governance Code state that new members of the Managing Board will be appointed under a mandate for a maximum period of four years at a time, unless there are exceptional reasons for deviating from this rule. The reason for doing so in the case of Mr Coorens is to ensure that the existing employment contract (for an indefinite period of time) of Mr Coorens, currently Managing Director of subsidiary Kwantum Nederland BV, is respected. Partly given the small size of the Managing Board, the Supervisory Board considers it advisable that comparable contractual conditions apply to Managing Board members with comparable positions. An employment contract for an indefinite period of time is therefore also concluded with Mr Strijbos. Partly in connection with the appointment of two new members to the Managing Board, Hay Group conducted a survey to obtain greater insight into the terms of employment of members of management boards of comparable companies. The Supervisory Board partly based its decision on the remuneration of Mr Strijbos and Mr Coorens on the results of the survey concerned. The Supervisory Board has set the fixed starter salaries of the new members of the Managing Board for 2007 at 250,000 each. The other terms of employment of the new members of the Managing Board will be published in the 2006/2007 remuneration report and in the notes to the agenda for the General Meeting of Shareholders. The Supervisory Board wishes to take this opportunity to express its appreciation to both departing members of the Managing Board, who have spent a large portion of their working lives at Macintosh Retail Group. From 1969 onwards, Mr Stevens has held a variety of positions at Macintosh Retail Group s legal predecessors and its subsidiaries. He has been CFO of Macintosh Retail Group NV since January 1, 2000. Mr Van de Wiel was appointed Managing Director of Kwantum Benelux in 1992 and subsequently became COO of Macintosh Retail Group in early 2000. Both gentlemen, each from their own discipline, have left their mark on the company s development over the past years and contributed to making Macintosh Retail Group a company with a sound financial basis that, thanks to a number of well-positioned retail formats, is ready to face the future. Maastricht, the Netherlands, March 13, 2007 The Supervisory Board J.G.M. van Oijen, Chairman C.H. van Dalen A. Nühn A.N.A.M. Smits 48

FINANCIAL STATEMENTS Financial statement 49

50 FINANCIAL STATEMENTS

FINANCIAL STATEMENTS Preliminary comments: The following significant events that took place in 2006 and early 2007 have had an impact on (the presentation of) the figures. This should be taken into account when evaluating the figures: As at February 1, 2006, Macintosh acquired all the shares in Scapino BV, obtaining full control of the company as a result. Scapino BV focuses on selling shoes in the discount sector in the Netherlands and Belgium. On May 10, 2006, a share split was effected, with one existing share in Macintosh Retail Group NV being converted into three new shares. The comparative figures have been restated accordingly. At the end of 2006, an agreement was concluded on the sale of the furniture companies Piet Klerkx and Stoutenbeek as at January 1, 2007. The results of the furniture activities for 2006 and 2005 are included under operations to be discontinued. Accordingly, at year-end 2006, the assets of the companies concerned were classified under assets classified as held for sale, with the corresponding liabilities being classified under liabilities for assets classified as held for sale. In the context of the sale of the furniture activities in early 2007, the real estate of these companies, which had been financed by operating leases, was purchased in December 2006. The real estate in question is included in the balance sheet under assets classified as held for sale and will be sold, together with the other assets and liabilities of the furniture companies, at the beginning of 2007. The purchase has led to a temporary increase in the total assets of some 50 million. 51

FINANCIAL STATEMENTS Consolidated balance sheet at December 31 x 1 000 ASSETS Note* 2006 2005 Non-current assets Intangible assets 5 12 236 1 697 Goodwill 5 96 870 - Property, plant and equipment 6 77 787 64 625 Financial assets 7 5 259 7 293 Derivative financial instruments 17 424-192 576 73 615 Current assets Inventories 8 152 545 135 867 Income taxes receivable 27 162 - Trade and other receivables 9 35 078 38 246 Derivative financial instruments 17 230 107 Cash and cash equivalents 10 8 422 21 507 196 437 195 727 Assets classified as held for sale 11/20 75 754-272 191 195 727 464 767 269 342 * The numbers refer to the notes on page 58 and further. 52

FINANCIAL STATEMENTS Consolidated balance sheet at December 31 x 1 000 EQUITY AND LIABILITIES Note* 2006 2005 Equity Issued capital 12 8 907 8 907 Share premium 12 4 361 4 361 Other reserves 12-94 - 2 353 Retained earnings 12 156 009 128 743 Equity attributable to shareholders of the company 169 183 139 658 Non-current liabilities Provisions for employee benefits 13/22 7 805 8 767 Other provisions 13 2 383 2 201 Deferred tax liabilities 27 11 118 14 354 Long-term borrowings 14 94 500 - Other non-current liabilities 15 2 472 5 914 Derivative financial instruments 17-2 872 118 278 34 108 Current liabilities Income taxes payable 27 8 008 920 Other provisions 13 3 518 4 558 Trade and other payables 16 94 841 89 408 Derivative financial instruments 17 619 690 106 986 95 576 Liabilities for assets classified as held for sale 11/20 70 320-177 306 95 576 464 767 269 342 Total interest-bearing debts 154.0 million 7.3 million 53

FINANCIAL STATEMENTS Consolidated income statement for the year ended December 31 1 x 1 000 2006 2005 Continu- Opera- Continu- Operaing tions to ing tions to opera- be dis- opera- be dis- Note* tions continued Total tions continued Total Net turnover 19/21 914 513 69 325 983 838 712 943 104 636 817 579 Cost of sales - 529 971-39 335-569 306-417 829-56 136-473 965 Gross profit 384 542 29 990 414 532 295 114 48 500 343 614 As a percentage of net turnover 42.0% 42.1% 41.4% 42.0% Selling expenses - 243 449-18 876-262 325-192 903-35 309-228 212 General administrative expenses - 76 317-8 758-85 075-63 053-15 014-78 067 Total expenses 22/23/24/25-319 766-27 634-347 400-255 956-50 323-306 279 As a percentage of net turnover - 35.0% - 35.3% - 35.9% - 37.5% Operating result before profit on discontinuation 19 64 776 2 356 67 132 39 158-1 823 37 335 As a percentage of net turnover 7.1% 6.8% 5.5% 4.6% Profit on discontinuation 20 - - - - 8 544 8 544 Operating result 19 64 776 2 356 67 132 39 158 6 721 45 879 As a percentage of net turnover 7.1% 6.8% 5.5% 5.6% Finance revenue 239 103 342 258 22 280 Finance costs - 7 376 262-7 114-2 299-194 - 2 493 Net finance revenue/costs 26-7 137 365-6 772-2 041-172 - 2 213 Profit before taxes 57 639 2 721 60 360 37 117 6 549 43 666 Income tax expense 27-15 430 1 074-14 356-8 877-1 919-10 796 Net profit for the year 42 209 3 795 46 004 28 240 4 630 32 870 Attributable to holders of ordinary shares Macintosh Retail Group NV 42 209 3 795 46 004 28 240 4 630 32 870 Per share ( ) 2 Basic earnings 28 1.94 0.17 2.11 1.29 0.21 1.50 Diluted earnings 28 1.91 0.17 2.08 1.26 0.21 1.47 * The numbers refer to the notes on page 58 and further. 1 For the presentation of the income statement, Macintosh has opted to present the analysis of results on operations to be discontinued in the income statement itself. The Continuing operations column represents the IFRS-based figures for the income statement items, on the understanding that the net profit according to IFRS equals the amount stated in the Total column. 2 The 2005 figures have been restated to reflect the number of shares after the share split. 54

FINANCIAL STATEMENTS Consolidated cash flow statement for the year ended December 31 x 1 000 Note* 2006 2005 Profit before taxes on continuing operations 57 639 37 119 Adjusted for: - depreciation 20 576 15 902 - gains/losses on fixed assets sold - 220 - - change in provisions - 891 793 - staff options granted 438 226 - net finance cost 7 139 2 041 Changes in working capital: - change in inventories - 296-1 557 - change in trade receivables 313-4 650 - change in trade payables - 671-10 - change in other receivables and payables - 1 501 4 170-2 155-2 047 Cash flow from ordinary activities 82 526 54 034 Income taxes paid - 8 490-5 385 Cash flow from operating activities: - continuing operations 74 036 48 649 - operations to be discontinued 20 380 777 Net cash flow from operating activities 29a 74 416 49 426 Purchases of intangible assets - 1 395-556 Purchases of property, plant and equipment - 21 225-21 319 Proceeds from disposal of property, plant and equipment 354 467 Acquisitions - 137 089 - Interest received 199 181 Cash flow from investing activities: - continuing operations - 159 156-21 227 - operations to be discontinued 20-46 733 13 787 Net cash flow used in investing activities 29b - 205 889-7 440 Loans taken out 161 000 - Repayment of loans - 66 747-215 Dividends paid - 13 077-7 588 Purchase of own shares 12-7 368-2 859 Staff options exercised 940 2 801 Interest paid - 5 080-2 181 Cash flow from financing activities: - continuing operations 69 668-10 042 - operations to be discontinued 48 620-1 886 Net cash flow from/(used in) financing activities 29c 118 288-11 928 Net increase/(decrease) in cash and cash equivalents - 13 185 30 058 Net cash and cash equivalents at January 1 10 17 076-12 982 Net cash and cash equivalents at December 31 10 3 891 17 076 * The numbers refer to the notes on page 58 and further. 55

FINANCIAL STATEMENTS Consolidated statement of changes in equity for the year ended December 31 x 1 000 Unrealised Unrealised hedge Issued Share exchange gains and Retained Note* Total Capital premium differences 1 losses 2 earnings At January 1, 2005 113 417 8 907 4 361-196 - 2 948 103 293 Changes in 2005: Results on derivative financial instruments 858 - - - 858 - Exchange gains and losses on investments in associates 234 - - 234 - - Release of deferred tax liability on derivatives - 301 - - - - 301 - Income and expense recognised directly in equity 791 0 0 234 557 0 Profit for the year 32 870 - - - - 32 870 Total income and expense 33 661 0 0 234 557 32 870 Sale of shares in connection with staff options 2 801 - - - - 2 801 Costs of staff options granted 226 - - - - 226 Purchases of own shares - 2 859 - - - - - 2 859 Dividend distribution for 2004-7 588 - - - - - 7 588 At December 31, 2005 139 658 8 907 4 361 38-2 391 128 743 Changes in 2006: Results on derivative financial instruments 3 080 - - - 3 285-205 Exchange gains and losses on investments in associates - 152 - - - 152 - - Release of deferred tax liability on derivatives - 813 - - - - 874 61 Income and expense recognised directly in equity 2 115 0 0-152 2 411-144 Profit for the year 46 004 - - - - 46 004 Total income and expense 48 119 0 0-152 2 411 45 860 Sale of shares in connection with staff options 940 - - - - 940 Costs of staff options granted 911 - - - - 911 Purchases of own shares 12-7 368 - - - - - 7 368 Dividend distribution for 2005-13 077 - - - - - 13 077 At December 31, 2006 12 169 183 8 907 4 361-114 20 156 009 * The numbers refer to the notes on page 58 and further. 1 Concerns unrealised exchange gains and losses on the translation of the equity of associates outside the Eurozone. 2 Unrealised profit / losses on cash flow hedges. 56

FINANCIAL STATEMENTS Index to notes to the consolidated financial statements 1 General 58 2 Basis of preparation 58 3 Summary of significant accounting policies 58 4 Information on acquisitions 64 5 Intangible assets and goodwill 65 6 Property, plant and equipment 66 7 Financial assets (non-current) 67 8 Inventories 67 9 Trade and other receivables 68 10 Cash and cash equivalents 68 11 Assets classified as held for sale 69 12 Equity 69 13 Provisions 70 14 Long-term borrowings 71 15 Other non-current liabilities 71 16 Trade and other payables 72 17 Financial risk management objectives and policies, and financial instruments 72 18 Commitments and contingencies 74 19 Segment information 75 19a Information on segments 75 19b Balance sheet and income statement 76 19c Capital employed, ROCE, capital expenditure, disposals and depreciation 78 20 Operations to be discontinued 79 21 Net turnover 80 22 Employee benefits 80 22a Pension plans 81 22b Jubilee benefits 86 22c Staff share option plan 86 23 Classification of expenses 88 24 Costs of research and development 88 25 Grants 88 26 Finance revenue and costs 89 27 Income tax 89 27a Consolidated income statement tax components 89 27b Deferred tax liabilities resulting from changes in equity 89 27c Tax burden 90 27d. Deferred tax liabilities 90 28 Earnings per share 91 29 Notes to the cash flow statement 92 29a Cash flow from operating activities 92 29b Cash flow from investing activities 92 29c Cash flow from financing activities 92 30 Related party disclosures 93 30a List of group companies 93 30b Remuneration of board members 94 30c Company pension plan 94 30d Other related party disclosures 94 31 Events after the balance sheet date 95 31a Sale of furniture companies 95 31b Liquidation of company pension fund 95 57

FINANCIAL STATEMENTS Notes to the 2006 consolidated financial statement 1 GENERAL Corporate information The 2006 financial statements of Macintosh Retail Group NV have been drawn up as at December 31, 2006 by the management of the company. These financial statements will be tabled for adoption at the General Meeting of Shareholders to be held on April 24, 2007. The registered office of Macintosh Retail Group NV is in Maastricht, the Netherlands. The company s principal activities are described in the report of the Managing Board. Financial year The financial year coincides with the calendar year. 2 BASIS OF PREPARATION Assumptions in preparing the financial statements The consolidated financial statements of Macintosh Retail Group NV have been drawn up in accordance with the EU endorsed International Financial Reporting Standards (IFRS). All amounts are in thousands of euros, unless stated otherwise. Basis of consolidation The financial statements of Macintosh Retail Group NV and of all the companies which it controls, either directly or indirectly, are consolidated in full. Newly acquired group companies are consolidated from the time control is acquired. Deconsolidation coincides with the time that control can no longer be exercised. Intercompany balances and intercompany profits are eliminated on consolidation. A list of consolidated group companies is set out on page 93. 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Change in accounting policies The following new and/or amended standards and IFRIC interpretations whose application is mandatory for financial years commencing on or after January 1, 2006, have been applied by Macintosh Retail Group since that date: IAS 19 Amendment Employee benefits IAS 39 Amendment Financial instruments: Recognition and Measurement: Fair value option IFRIC 4 New Determining whether an Arrangement contains a Lease. Application of the above standards and interpretation had no impact on the figures of Macintosh Retail Group, with the exception of a number of additional disclosures. Other new or amended standards whose application is mandatory as from the 2006 financial year do not apply to Macintosh Retail Group. If this were the case in the future, Macintosh Retail Group would apply the standards and interpretations in force accordingly. IAS 19 Employee benefits The main amendment to IAS 19 is an option to recognise actuarial gains and losses arising on defined benefit plans outside the income statement and take them directly to equity. Macintosh has not opted for this. IAS 39 Financial instruments: Recognition and Measurement Option to measure financial instruments at fair value This amendment to IAS 39 limits the possibility of measuring a financial asset or financial liability at fair value, with changes in value taken to profit or loss. So far, the group has not used this option, with no impact on the figures as a result. 58

FINANCIAL STATEMENTS Accounting policies The financial statements have been prepared on the basis of the historical cost convention, except for derivative financial instruments, which are recognised at fair value. Foreign currency translation Cash and cash equivalents, accounts receivable and accounts payable in foreign currency are recognised at the exchange rates ruling on the balance sheet date. Translation gains and losses are recognised in the income statement. Income statement items are translated at the rate ruling at the time of the transaction. The assets and liabilities of group companies outside the Eurozone are translated at the rates ruling on the balance sheet date, while income statement items are translated at the average exchange rates for the year. The resultant exchange gains and losses are recognised in the unrealised exchange differences reserve. Derivative financial instruments The group uses derivative financial instruments to hedge the risks of foreign currency fluctuations and interest rate risks. These derivative financial instruments are recognised at fair value. In the context of hedge accounting, these financial instruments are treated as cash flow hedges. Changes in the fair value of hedging instruments are recognised in equity insofar as a hedge is effective. Changes in the fair value of ineffective hedges are taken directly to the income statement. Intangible assets Intangible assets are initially measured at cost, with the cost of intangible assets obtained through an acquisition equalling the fair value at the time of acquisition. They are subsequently measured at cost less accumulated amortisation and impairments. The group only has intangible assets with limited useful lives, notably licences for the use of software, development costs and the Scapino trade name it acquired on acquisition. Development costs are capitalised from the time the dicision is taken that a newly developed product will be marketed, and it is likely to yield economic benefits. Intangible assets are depreciated straight-line based on their estimated useful lives. The following depreciation rates apply: Concessions and licences 20% - 33 1 /3% Development costs 20% Scapino trade name 3 1 /3% Intangible assets are tested for impairment. Their useful lives are reviewed annually and adjusted as required based on new insight. Acquisitions and goodwill On the acquisition of a company, its identifiable assets, liabilities and contingent liabilities are carried at fair value on the date of acquisition. Goodwill arising on the acquisition is initially measured at the difference between the acquisition price and the group s share of the fair value of the identifiable assets, liabilities and contingent liabilities of the acquired company. It is subsequently measured at cost less impairment losses, which are charged to the income statement. Goodwill is reviewed for impairment annually and during the year if events or changes in circumstances indicate that the carrying value may be impaired. For the purposes of impairment testing, goodwill is allocated to the cash-generating units that are expected to benefit from the synergies of the acquisition. Property, plant and equipment Property, plant and equipment are recognised at cost net of cumulative straight-line depreciation and impairment. Depreciation is based on expected useful economic life. Where buildings are made up of parts with differing useful lives, these parts are depreciated individually (component method). The following depreciation rates apply: Land 0% Machinery and installations 6 2 /3%-10% Buildings: ICT systems 20%-33 1 /3% - Structure 4% Office equipment 15% - Other (according to component method) 4%-20% Store and other furniture, Building alterations to Macintosh owned property 10% fittings and equipment 15% Building alterations to rented premises 10% Motor vehicles 14 1 /3%-20% 59

FINANCIAL STATEMENTS If facts and circumstances were to occur indicating that the recoverable amount of an asset decreased below its carrying amount, the impairment would be charged to the income statement. The useful life of assets is reviewed annually, and adjusted as required based on new insight. Financial assets (non-current) Investments in participating interests forming part of other financial assets refer to participations in which the group cannot exercise either control or significant influence and are carried at fair value, except for investments whose fair value cannot be reliably measured, which are carried at cost. Interest-bearing loans forming part of other financial assets are held until maturity and are carried at amortised cost using the effective interest method. Deferred tax assets Deferred tax assets include loss carry-forwards and deferred tax recoverable resulting from temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax assets are carried at face value. Deferred tax assets arising from loss carry-forwards are recognised in the balance sheet only if sufficient future profits for tax purposes are likely to be earned in the future to enable set-off. Deferred tax assets are calculated using the tax rates ruling at the balance sheet date in the countries concerned, taking account of rates becoming applicable in future years if enacted. Inventories Inventories are carried at the lower of cost and net realisable value. Cost is made up of the purchase price plus additional direct costs. Net realisable value consists of the estimated selling price in the ordinary course of business less the estimated costs to be incurred in concluding the sale. Unrealised intercompany profits are eliminated. Non interest-bearing receivables These are recognised at face value net of a provision for doubtful debts. Cash and cash equivalents Cash and cash equivalents consist of the total of cash on hand (mainly in the stores), current account balances with banks and short-term deposits with banks with an original maturity of three months or less. Cash and cash equivalents are carried at their face value. Assets classified as held for sale Assets relating to the sale of business units, are classified under assets classified as held for sale provided these assets are available for immediate sale and their sale is highly probable. The corresponding liabilities are classified under liabilities for assets classified as held for sale. Assets and liabilities for assets classified as held for sale are carried at the lower of cost and fair value less costs to sell. Impairment losses, if any, are charged to the income statement. Shareholders s equity Purchase of own shares The purchase of own shares to cover expected obligations in respect of staff options outstanding, and the sale of these shares on exercising the options, are recognised directly in equity under retained earnings. Neither gains nor losses are recognised in the income statement on the purchase, sale or cancellation of shares. Provisions Provisions are recognised for all legally enforceable or actual obligations assumed prior to the balance sheet date and whose amount or the time of settlement, while uncertain, can be reasonably estimated. Provisions are recognised at face value, and at their discounted value when the effect of the time value of money is material. In that event, the increase in the provision attributable to the passage of time is recognised as a finance cost. Provision for employee benefits The provision for employee benefits consists of a provision for pension obligations and for jubilee benefits. Pension provisions This provision is established for future obligations assumed under the Macintosh Retail Group defined benefit pension plans, using the Projected Unit Credit method and recognising plan assets at their market value on the balance sheet date. Actuarial gains and losses are recognised per pension plan when the amount of cumulative unrealised gains or losses at the end of the previous financial year is greater than 10% of the higher of the amount of pension obligations and of the pension plan assets held as of that date. These gains or losses are allocated to the expected average remaining period of service of the employees who are members of the plan concerned. 60

FINANCIAL STATEMENTS Provision for jubilee benefits This provision is calculated using the Projected Unit Credit method. Other provisions The following are recognised as other provisions: - provision for guarantee / service obligations of the furniture companies; - other provisions for specific obligations. The other provisions are carried at face value. Deferred tax liabilities Deferred income tax includes the deferred tax liabilities resulting from temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax liabilities are carried at face value. Deferred tax liabilities are calculated using the tax rates ruling at the balance sheet date in the countries concerned, taking account of rates becoming applicable in future years if enacted. Lease obligations Where the economic risks of ownership are borne by the lessee (finance leases), the assets are recognised in the balance sheet at the commencement of the lease term at the lower of fair value (being the price that would have to be paid in cash) and the present value of the minimum future lease instalments, using the interest rate implicit in the lease for discounting purposes. The minimum future lease instalments are split into interest and repayment constituents, with the outstanding debt bearing a constant rate of interest. The short-term portion of the finance lease obligation is included under current liabilities. Depreciation is based on estimated useful economic life in accordance with the rates stated on page 59. Leases not qualifying as finance leases are recognised as operating leases. Operating lease instalments charged are recognised as costs. Non interest-bearing debts These are carried at face value. Interest-bearing debts These are carried at amortised cost using the effective interest method. Liabilities for assets classified as held for sale This item relates to liabilities directly associated with assets that are classified as held for sale. Assets and liabilities for assets classified as held for sale are carried of the lower of cost and fair value less costs to sell. Impairment losses, if any, are charged to the income statement Revenue recognition Revenue is recognised when the economic risk is transferred to a third party, it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. The result is based on the historical cost convention, unless expressly stated otherwise. The matching principle is applied to revenue and costs. Intercompany profits and losses are eliminated. Net turnover Sale of goods The net turnover achieved from the sale of goods represents the amounts charged to third parties for the supply of goods net of VAT, and net of prompt payment and other discounts granted. Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer and the revenue can be reliably measured. Rendering of services The net turnover achieved from the rendering of services represents the amounts charged to third parties for services rendered net of VAT, and net of prompt payment and other discounts granted. Net turnover from services rendered is recognised the moment the service is rendered. The rendering of services relates to revenue received on the sale of subscriptions (in particular to intermediary and air-time commission on the sale of telephone subscriptions) and insurance commission received. 61

FINANCIAL STATEMENTS Cost of sales Cost of sales includes the purchase costs or additional manufacturing costs, as the case may be, of the goods and services forming part of net turnover, less prompt payment and other discounts received, and plus the directly attributable external purchasing and delivery costs, such as transport, insurance and customs. Discounts and bonuses received from suppliers are deducted from cost of sales. Cost of sales also includes the impairment of inventories where their carrying amount is less than their net realisable value. Selling expenses These are expenses directly associated with selling, sales promotion and advertising activities. General administrative expenses These include all operating expenses that cannot be allocated to cost of sales or selling expenses, and which cannot be classified as finance revenue and costs. Employee benefits Employee benefits are recognised in the period in which the employees render their contractual services. If the company grants long-term service benefits to employees, the costs are allocated to the related period of contractual services rendered. Long-term benefits Pension costs of defined benefit plans are calculated using the Projected Unit Credit method. For actuarial gains and losses, the corridor approach is used. If the cumulative amount of actuarial gains and losses is greater than the corridor amount, this excess is recognised in the income statement over a period equal to the average remaining period of service of the members of the pension plan concerned. The costs of the defined contribution plans consist of the pension contributions owing for the year in question. Deferred employee benefits These include jubilee benefits for which the Projected Unit Credit method is used to determine the annual charge. Staff share options Macintosh Retail Group NV has a share option plan for members of the Managing Board, and the directors and management of the group companies and holding company. The object of the option plan is to foster involvement in the long-term development of the company. The granting of the options is the prerogative of the Supervisory Board and takes place annually based on individual appraisals of the eligible persons. The options have a term of five years and may not be exercised for three years after they have been granted. The options are equity settled. The fair value of staff options is allocated to the three-year period to which they relate and are recognised via the income statement. (Government) grants (Government) grants are recognised where there is reasonable assurance that the grant will be received. Subsidies for expenses are recognised as income over the period necessary to match the grants on a systematic basis to the costs that they are intended to compensate. Where the subsidies relate to an asset, they are directly deducted from its cost. Finance revenue and costs Interest, including bank interest, bank charges and the like, exchange differences on financial instruments in foreign currency (save for effective hedges), and receipts and payments in connection with interest rate instruments, are recognised as finance revenue and costs. Income tax Income tax is calculated at the rates applicable in the various countries taking account of special tax facilities and carry-over losses. Deferred tax liabilities relating to items directly taken to equity are likewise taken to equity, and are therefore not recognised in the income statement. 62

FINANCIAL STATEMENTS Segmentation The following business segments are identified: Living, Fashion and Automotive & Telecom. The products and services of these segments have different risk profiles. As the countries in which Macintosh Retail Group operates have comparable risk profiles, no geographic segmentation is applied. Accounting judgements and estimates For the preparation of the financial statements the group needs to make certain estimates and assumptions that have an impact on the figures in the financial statements. Changes in the assumptions can affect the financial statements, particularly as regards the following assumptions: Reviewing the level of obsolescence of inventories and its impact on the expected recoverable amount, relevant costs to sell and, consequently, the measurement of inventories. Estimates and assumptions for measuring intangible assets at time of acquisition, as well as estimates of their useful lives. The assumptions and estimates used in calculating the pension provision. Actuarial results are initially arrived at using the corridor approach. The effect of this approach is that these actuarial results will only affect the income statement insofar as their cumulative amount exceeds this corridor. This excess is then recognised in the income statement over a number of years. Calculations made to determine the fair value of a cash-generating unit to which goodwill is allocated. The calculation of the fair value is based on the estimated future cash flows and an acceptable discount rate has to be determined in order to calculate the present value. Impact of new International Financial Reporting Standards Macintosh decided against early adoption of new standards, amendments to standards or new IFRIC interpretations whose application will be mandatory for financial years commencing on or after January 1, 2007. The following new standards, interpretations and amendments may apply to Macintosh Retail Group: IFRS 7 Financial Instruments: Disclosures IAS 1 Amendment Capital disclosures IFRIC 8 Scope of IFRS 2 IFRIC 9 Reassessment of embedded derivatives The application of these new standards, amendments to standards and new IFRIC interpretations will most likely result in more detailed disclosure for a number of items in future financial statements. 63

FINANCIAL STATEMENTS 4 INFORMATION ON ACQUISITIONS As at February 1, 2006, Macintosh Retail Group NV acquired all the shares in Scapino BV, obtaining full control of the company as a result. Scapino BV focuses on selling shoes in the discount sector. The acquisition price of 118.3 million includes acquisition costs of 1.3 million. The acquisition was paid for entirely in cash. Effect of the acquisition on the balance sheet at the acquisition date: Fair value recognised on acquisition Carrying amount prior to acquisition Intangible assets 9 518 - Property, plant and equipment 18 136 17 836 Inventories 36 799 35 093 Receivables 1 172 1 172 Cash and cash equivalents 2 106 2 106 Total assets 67 731 56 207 Provisions - 1 503-1 503 Deferred tax liabilities - 6 145-2 852 Current account overdrafts with credit institutions - 20 930-20 930 Other current liabilities - 17 759-17 359 Fair value of net assets acquired 21 394 13 563 Goodwill 96 870 Acquisition price 118 264 No intangible assets have been identified that were not recognised in the acquisition balance sheet. Effect of acquisition on turnover and result: Scapino s contribution to turnover of Macintosh Retail Group NV is 177.0 million and to net profit 9.0 million since the acquisition date. If the acquisition had been effected as at January 1, 2006, Macintosh Retail Group s consolidated turnover would have amounted to 995.4 million and net group profit for 2006 to 44.9 million. 64

FINANCIAL STATEMENTS 5 INTANGIBLE ASSETS AND GOODWILL Total Trade name Concessions Development Goodwill intangible and licences costs assets At January 1, 2005 Cost 4 205-3 772 433 - Depreciation - 2 405 - - 2 280-125 - Carrying amount 1 800 0 1 492 308 0 Changes in carrying amount in 2005 Additions 556-428 128 - Depreciation - 659 - - 575-84 - Total changes - 103 0-147 44 0 At December 31, 2005 Cost 4 761-4 200 561 - Depreciation - 3 064 - - 2 855-209 - Carrying amount 1 697 0 1 345 352 0 Changes in carrying amount in 2006 Acquisitions 9 518 9 059 459-96 870 Additions 1 400-1 239 161 - Depreciation - 1 339-277 - 949-113 - Other changes 960-960 - - Total changes 10 539 8 782 1 709 48 96 870 At December 31, 2006 Cost 15 647 9 059 5 866 722 96 870 Depreciation - 3 411-277 - 2 812-322 - Carrying amount 12 236 8 782 3 054 400 96 870 Intangible assets The item acquisitions relates to assets obtained on the acquisition of Scapino as at February 1, 2006, with the trade name being the Scapino trade name acquired. The trade name is carried at fair value based on the royalty method, less accumulated depreciation. Concessions and licences largely relate to ICT systems software user rights. Operating system software is not included in this; it is capitalised as part of property, plant and equipment under ICT. The other changes relate to reclassification of software from tangible fixed assets. Development costs relate to new products developed by Nea International BV, a subsidiary company. The costs incurred in the research phase were charged to the income statement. Development costs are capitalised. They are made up mainly of the payroll costs of own employees and costs of materials. Goodwill Goodwill fully relates to the acquisition of all the shares in Scapino BV as at February 1, 2006, being allocated in full to this cashgenerating unit. At December 31, 2006, goodwill was subject to impairment testing based on the following assumptions: The recoverable amount is based on fair value less costs to sell, with the fair value based on business plans for three years, and forecasts for two years; The gross margins used are based on margins realised in the past, adjusted for synergies arising from group purchases; The growth rate is 2%; The discount rate used is 8.7%, which is based on Macintosh Retail Group NV s WACC, plus a small cap premium. Based on the impairment test, it was concluded that the recoverable amount comfortably exceeded the carrying amount of the company, being the sum of net asset value and capitalised goodwill. Realistic changes to the assumptions did not result in the recoverable amount being lower than the carrying amount. As a result, no impairment of the goodwill was recognised. 65

FINANCIAL STATEMENTS 6 PROPERTY, PLANT AND EQUIPMENT Store and other furniture, Alterations fittings Land and to rented and Other Total buildings premises ICT Installations equipment equipment At January 1, 2005 Cost 256 420 28 272 77 791 29 926 19 364 100 203 864 Depreciation - 190 995-16 896-54 937-25 514-16 311-76 529-808 Carrying amount 65 425 11 376 22 854 4 412 3 053 23 674 56 Changes in carrying amount in 2005 Additions 22 024-5 494 3 183 434 12 898 15 Disposals - 6 249-5 372-518 - - 189-170 - Depreciation - 16 711-526 - 3 654-3 260-933 - 8 292-46 Other changes 136-15 - 753 127-10 780 7 Total changes - 800-5 913 569 50-698 5 216-24 At December 31, 2005 Cost 230 134 8 013 65 420 30 109 17 858 107 850 884 Depreciation - 165 509-2 550-41 997-25 647-15 503-78 960-852 Carrying amount 64 625 5 463 23 423 4 462 2 355 28 890 32 Changes in carrying amount in 2006 Acquisitions 18 136-7 616 1 015-9 505 - Additions 69 014 47 036 5 289 3 227 659 12 800 3 Reclassification to assets classified as held for sale - 51 866-47 419-2 172-220 - 507-1 544-4 Disposals - 443 - - 116-3 - 25-298 - 1 Depreciation - 20 645-324 - 6 033-2 698-945 - 10 624-21 Other changes - 1 034-13 48-951 3-112 - 9 Total changes 13 162-720 4 632 370-815 9 727-32 At December 31, 2006 Cost 231 482 8 113 76 211 29 865 9 740 107 084 469 Depreciation - 153 695-3 370-48 156-25 033-8 200-68 467-469 Carrying amount 77 787 4 743 28 055 4 832 1 540 38 617 0 Carrying amount of capitalised lease 2005 2 855 2 096 - - 685 74 - Carrying amount of capitalised lease 2006 2 533 1 983 - - 550 - - 66 The fair value of land and buildings amounted to some 8 million at the end of 2006 (2005: 8 million). Alterations to rented premises relate to all substantial changes made to them. ICT is made up of computer and cash till systems and the related operating software and peripheral equipment. Installations in buildings include all individual facilities installed in buildings as well as permanent fixtures, such as sprinkler installations. The store and other furniture, fittings and equipment include store and office furniture and equipment. Other equipment refers to lorries in particular. The leased assets serve as security for the finance lease obligations. The item acquisitions relates to property, plant and equipment obtained on the acquisition of Scapino as at February 1, 2006 (see note 4). Other changes mainly relate to the reclassification of software as intangible assets (see note 5).

FINANCIAL STATEMENTS 7 FINANCIAL ASSETS (NON-CURRENT) Loans to Participating participating Other 2005 Total interests interests Prepaid rents receivables At January 1, 2005 6 621 986 2 233 2 885 517 Changes during the year 672 - - 545 127 At December 31, 2005 7 293 986 2 233 3 430 644 Loans to Participating participating Other 2006 Total interests interests Prepaid rents receivables At January 1, 2006 7 293 986 2 233 3 430 644 Changes during the year - 2 034-689 - 787-642 84 At December 31, 2006 5 259 297 1 446 2 788 728 The item participating interests relates to interests in limited partnerships under Dutch Law (Commanditaire Vennootschappen) whose object is the renting out of real estate and in which Macintosh Retail Group, sometimes together with a third party, acts as limited partner without control. Participating interests are recognised at cost. Loans to participating interests are loans to the limited partnerships as mentioned above. They have an average term to maturity of 1.0 year. The interest receivable on the loans is largely based on 3-month Euribor and is in line with market rates. Changes in participating interests and loans to participating interests in 2006 relate to the dissolution of three limited partnerships in 2006, in connection with the intended sale of the furniture activities in 2007 (see note 20). The capital contributions and loans were recovered in full at the time of the dissolution. The group had interests in two limited partnerships at year-end 2006. Prepaid rents are lump sum rentals paid on the takeover of leases covering the period to the next rental renewal date. The short-term portion is included in current assets. Other receivables refer to various guarantee deposits. 8 INVENTORIES Virtually the full amount of 152 545 (2005: 135 867) refers to goods for retail trade. The net increase in inventories compared with 2005 is mainly due to higher inventories following the acquisition of Scapino and a decline as a result of reclassifying inventories of the furniture companies to assets classified as held for sale. 67

FINANCIAL STATEMENTS 9 TRADE AND OTHER RECEIVABLES December 31, 2006 December 31, 2005 Trade receivables 21 700 22 194 Other receivables 3 278 4 446 Prepayments and accrued income 10 100 11 606 35 078 38 246 Trade receivables Sales in the group s own stores are settled in cash, so that there is no exposure to credit risks. Trade receivables are made up chiefly of amounts due by telecom operators and franchisees. The related credit risk is estimated to be low. Prepayments and accrued income December 31, 2006 December 31, 2005 Prepaid rents 1 163 2 298 Prepaid expenses 6 977 5 602 Accrued income 1 960 3 706 10 100 11 606 10 CASH AND CASH EQUIVALENTS Cash in hand and at banks recognised under this heading is at the free disposal of the group. December 31, 2006 December 31, 2005 Bank deposit accounts 346 - Current account balances with credit institutions 5 757 19 986 Cash 2 319 1 521 Cash and cash equivalents according to balance sheet 8 422 21 507 Current account overdrafts with credit institutions - 6 136-4 431 Net cash and cash equivalents according to balance sheet 2 286 17 076 Cash and cash equivalents included under assets classified as held for sale 4 870 - Current account overdrafts with credit institutions included under liabilities for assets classified as held for sale - 3 265-1 605 0 Net cash and cash equivalents according to cash flow statement 3 891 17 076 The cash flow statement is based on net cash and cash equivalents, which is made up of cash, current account balances and short-term deposits with banks, less current account overdrafts with banks. In the balance sheet, these current account overdrafts with banks are presented under current liabilities. Current account bank balances and overdrafts are closely linked to the amount of working capital. For the purpose of determining the group s net cash and cash equivalents, these current account positions are accordingly netted off in the statement of cash flows. 68

FINANCIAL STATEMENTS 11 ASSETS AND LIABILITIES FOR ASSETS CLASSIFIED AS HELD FOR SALE This item includes all assets and liabilities of the furniture companies sold as at January 1, 2007 (see note 20). They are carried at the lower of their carrying amount and fair value, less costs to sell. 12 EQUITY Equity consists of the following: December 31, 2006 December 31, 2005 Issued capital 8 907 8 907 Share premium 4 361 4 361 Unrealised exchange differences - 114 38 Unrealised hedge gains and losses 20-2 391 Retained earnings 156 009 128 743 169 183 139 658 On May 10, 2006, a share split was effected, with one existing share in Macintosh Retail Group NV being converted into three new shares. The comparative numbers for 2005 have been restated based on the number of shares after the share split. The authorised capital amounts to 36.0 million, consisting of 45 million ordinary shares and 45 million cumulative preference shares, each share having a nominal value of 0,40. The issued share capital amounts to 8 907 and consists entirely of 22 268 118 ordinary shares. No preference shares were issued in 2006. The ordinary shares in circulation at year-end and the changes in treasury shares are set out in the table below: December 31, 2006 December 31, 2005 Number of ordinary shares in circulation (x 1 000) 22 268 22 268 Number Value Number Value Of which purchased for staff options: Number of treasury shares at January 1 738 4 644 1 011 3 358 Sold during the year - 284-3 804-474 - 1 573 Purchased during the year 300 7 368 201 2 859 Number of treasury shares at December 31 754 8 208 738 4 644 The unrealised exchange differences relate to the translation of the equity of associates outside the Eurozone. The unrealised hedge gains and losses relate to the cumulative change in the fair value of the cash flow hedge instruments insofar as these were effective. It will be proposed to shareholders to distribute a cash dividend of 18 483, equivalent to 0.83 per share (2005: 13 361 or 0.60 per share). 69

FINANCIAL STATEMENTS 13 PROVISIONS 13 a Provision for employee benefits Of the provision for employee benefits, 6 565 (2005: 7 705) relates to pension obligations and 1 240 (2005: 1 062) to jubilee benefits. Changes in the provision were as follows: December 31, 2006 December 31, 2005 At January 1 8 767 8 800 Addition charged to the income statement 2 716 3 324 Charged to the provision - 2 563-3 357 Reclassification to liabilities for assets classified as held for sale - 1 104 - Other changes - 11 - At December 31 7 805 8 767 The provision for employee benefits is mainly non-current. For further details of the provision for employee benefits, please refer to note 22. 13 b Other provisions Changes in other provisions were as follows: Total Reorganisations Guarantee Other At January 1, 2005 3 820 1 489 705 1 626 Addition charged to the income statement 5 196 2 952 292 1 952 Charged to the provisions - 2 281-949 - 393-939 Other changes 24 - - 24 At December 31, 2005 6 759 3 492 604 2 663 Non-current portion 2005 2 201 992 229 980 Current portion 2005 4 558 2 500 375 1 683 At January 1, 2006 6 759 3 492 604 2 663 Addition charged to the income statement 703-795 282 1 216 Charged to the provisions - 2 207-960 - 375-872 Reclassification to liabilities for assets classified as held for sale - 814 - - 511-303 Other changes 1 460 - - 1 460 At December 31, 2006 5 901 1 737 0 4 164 Non-current portion 2006 2 383 743-1 640 Current portion 2006 3 518 994-2 524 The current portion of the provisions is included under current liabilities. The restructuring provision fully relates to prior-year restructuring. The guarantee provision is for the resolution of the current and future customer service or complaints at furniture companies. In view of the intended sale of the furniture companies, this provision was recognised under liabilities for assets classified as held for sale at December 31, 2006. Other provisions at December 31, 2006 serve to cover costs still to be incurred on stores closed and redundancy payments ( 1 993), expected costs for the settlement of the sale and closure of Superconfex ( 1 027), and various other obligations and claims ( 1 145). 70 Other changes relate to the acquisition of Scapino.

FINANCIAL STATEMENTS 14 LONG-TERM BORROWINGS The acquisition of Scapino in early 2006, which was fully financed with loan capital, resulted in the refinancing of the total borrowing requirements of Macintosh Retail Group at variable market rates. The new committed credit facility, with a term to March 20, 2011, amounts to 210 million. Of this amount, up to 60 million can take the form of a current account overdraft, and up to 150 million can be taken out as roll-over loans. The roll-over loans are recognised under long-term loans, with the exception of the loan of 47.5 million taken out for the temporary financing of the purchase of real estate in connection with the sale of the furniture companies. The latter loan is classified under liabilities for assets classified as held for sale. The use of the current account overdraft facility is recognised under current liabilities. At December 31, 2006, roll-over loans of 142 million with a remaining term of one month had been taken out. These loans can be renewed up to an amount of 150 million, falling due on March 20, 2011 at the latest. 15 OTHER NON-CURRENT LIABILITIES Other non-current liabilities are made up of the following items: December 31, 2006 December 31, 2005 Finance lease obligations 2 172 2 442 Other non-current liabilities and accruals 300 3 472 2 472 5 914 Finance lease obligations Macintosh Retail Group has a number of store premises and other equipment (mainly means of transportation) under finance leases. The future lease obligations are summarised below: December 31, 2006 December 31, 2005 Minimum Present value Minimum Present value lease of lease lease of lease Term of liabilities obligation obligation obligation obligation Less than one year 399 387 433 419 From one to five years 1 277 1 079 1 379 1 168 More than five years 1 730 1 093 2 064 1 274 Total minimum lease instalments 3 406 3 876 Financing component - 847-1 015 Present value of the finance lease instalments 2 559 2 559 2 861 2 861 Non-current portion 2 172 2 442 Current portion 387 419 There is no sub-lease revenue. The present value of the lease obligations with a term of less than one year is included under current liabilities. The leased assets serve as security for the finance lease obligations. The principal finance lease contracts refer to the following assets: Average remaining Average rate Present value of term (in months) of interest lease instalments Land and buildings 91 5.1% 1 927 Means of transportation 71 6.8% 632 2 559 For the land and buildings, purchase options are available on maturity. 71

FINANCIAL STATEMENTS 16 TRADE AND OTHER PAYABLES December 31, 2006 December 31, 2005 Current account overdrafts with credit institutions 6 136 4 431 Trade payables 37 462 33 987 Other taxes and social security contributions 12 330 9 738 Lease obligations 387 419 Other liabilities 6 948 12 065 Accruals and deferred income 31 578 28 768 94 841 89 408 Current account overdrafts with credit institutions The current account overdrafts form part of the new committed credit facility totalling 210 million (see note 14). The current account overdrafts to be allocated to the furniture companies amount to 3 265, which is included under liabilities for assets classified as held for sale. Other liabilities The decline in other liabilities on 2005 is mainly thanks to the reclassification of down payments received by the furniture companies as liabilities for assets classified as held for sale. The other liabilities relate to pension premiums amounting to 768 (2005: 1 122) and other expenses payable amounting to 6 180 (2005: 10 943). Accruals and deferred income These are made up of amounts payable regarding employee benefits, holiday allowances and entitlements, including social security charges, totalling 17 197 (2005: 16 162), rents of 980 (2005: 1 175) and other accrued expenses, as well as income received in advance of 13 401 (2005: 11 431). 17 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES, AND FINANCIAL INSTRUMENTS Foreign currency risk and foreign currency instruments Some 10% of the group s purchases is in a currency other than the euro (mainly USD). The group has no revenue from sales in foreign currencies. The group s foreign currency risk management policy requires that cash flows related to purchase obligations in foreign currencies be fully hedged using forward exchange contracts and/or currency options, the contracted amount and term of these instruments being linked to the amount and term of the underlying transactions. At the end of the year under review, USD 36.5 million in purchase obligations were hedged by means of 87 forward exchange contracts. The weighted average term of the contracts was 126 days and the weighted average hedge rate was 1.00 = USD 1.29. There were no currency options at the end of the financial year. The forward exchange contracts are carried at fair value, which amounted to - 619 at the end of 2005 (2005: 107). Fair value is based on the forward rates at the balance sheet date of similar contracts with corresponding terms to maturity. Cash flow hedges of future goods purchases are highly effective. The unrealised gains and losses are accordingly recognised in equity, allowing for deferred taxes. The fair value of forward exchange contracts is added to the cost of the goods concerned. Interest rate risks and interest rate instruments Macintosh Retail Group s policy is that the interest rate paid on loans and debts be based on a variable market rate as much as possible. A market-related, variable rate of interest is paid on all interest-bearing debts shown in the balance sheet, unless they are hedged as referred to below. Macintosh Retail Group NV uses interest rate swaps and/or caps to manage the cash flow risks on non-current obligations subject to a variable rate of interest. The amount and term to maturity of these derivatives are linked to the amount and term to maturity of the hedged positions. Interest rate instruments are carried at fair value, which is based on their market value. At December 31, 2006, there were 8 interest rate swaps/interest rate caps with a total fair value of 654 (2005: - 3 562) and a weighted average term to maturity of 3 years. In 2006, five interest rate contracts were settled following the settlement of lease contracts hedged by these interest rate swaps. These settlements relate to the sale of the furniture activities as at January 1, 2007 (see note 20). An amount of 1 608 relating to the settlement was taken to the income statement. The interest rate swaps/caps serve to hedge the cash flow risk on rent and lease obligations subject to a variable interest rate component, as well as short-term credits with financial institutions insofar as these are of a continuous nature. 72

FINANCIAL STATEMENTS The following interest rate instruments were outstanding at the end of the year under review: Total Average re- Average Value at average maining term rate of December Number amount to maturity interest % 31, 2006 Interest rate swaps to hedge rent and lease obligations 1 1 513 4.5 jaar 5.34-92 Interest rate swaps to hedge continuous credit 6 110 000 3.0 jaar 3.72 746 Interest rate cap to hedge continuous credit 1 1 815 0.5 jaar 5.00 0 Macintosh Retail Group NV and/or its subsidiary companies pay a fixed and receive a variable rate of interest in respect of these interest rate swaps, making the interest rate on the hedged obligations fixed. Cash flow hedges in respect of fluctuations in variable interest rates are highly effective. The unrealised gains and losses are accordingly recognised in equity, allowing for deferred taxes. The amount relating to the settlement of interest rate contracts was taken to the income statement. Credit risk Sales in the group s stores are settled in cash, so that there is no exposure to credit risk. Exposure to credit risk exists mostly in respect of receivables owed by franchisees and telecom operators ( 20 311 at 2006 year-end). This risk exposure is estimated to be low, however. Liquidity risk The acquisition of Scapino resulted in the refinancing in early 2006 of the total borrowing requirements of Macintosh Retail Group. The total committed credit facility, with a term to March 20, 2011, amounts to 210 million. No security has been provided for the facility. However, Macintosh Retail Group has to meet the following ratios at the consolidated level: Net Debt*/EBITDA ratio < 3.0 (realisation 2006: 1.1) Interest Coverage ratio > 3.0 (realisation 2006: 10.0) * Excluding temporary loan of 47 500 relating to the purchase of real estate by the furniture companies. Moreover, group companies have undertaken not to encumber their assets. Other risks / VAT issues in telecom sector Partly in the context of new VAT legislation effective from January 1, 2007, the Ministry of Finance decided to withdraw its decree of January 5, 2004. The decree related to the levying of VAT on mobile phones supplied free of charge or below cost in combination with a telephone service subscription. Interest-bearing loans The table below provides a summary of the carrying amounts of the interest-bearing loans, divided into terms to contractual repricing. December 31, 2006 Total < 1 year 1-2 years 2-3 years 3-4 years 4-5 years > 5 years Loans due by limited partnerships 1 446 1 446 Bank loans 1-142 000-142 000 Loans due to lease institutions - 2 559-2 559 2 December 31, 2005 Total < 1 jaar 1-2 jaar 2-3 jaar 3-4 jaar 4-5 jaar > 5 jaar Loans due by limited partnerships 2 233 481 1 446 306 Loans due to lease institutions - 2 861 2-2 861 1 Of which recognised under liabilities for assets classified as held for sale : 47 500. 2 Relates mainly to a large number of loans for means of transportation, with an average term to maturity of 4-5 years. 73

FINANCIAL STATEMENTS Interest rate swaps and interest rate caps have been entered into to manage the cash flow risks on loans subject to a variable rate of interest. The interest rate swaps/caps represent a total average amount of 113 million over the remaining terms to settlement. Fair value of financial instruments The financial instruments of Macintosh Retail Group consist of non interest-bearing trade and other receivables, non interestbearing trade and other payables, cash and cash equivalents, interest bearing loans, current account overdrafts with credit institutions, participating interests in and long-term loans to limited partnerships, finance lease obligations, and financial derivatives. The financial instruments held by the furniture companies sold are carried at the lower of their carrying amount and fair value less costs to sell, and are classified under assets classified as held for sale (see note 20). No other financial instruments are classified as held for sale. Participating interests are carried at cost. Their fair value cannot be reliably estimated, but exceeds their carrying amounts. Loans due by limited partnerships, interest-bearing loans from banks and finance lease obligations have variable market rates. All items are carried at either face value, which is substantially equal to fair value, or amortised cost, save for the derivatives that are carried at fair value at the balance sheet date. The fair value of the other financial instruments is substantially equal to their carrying amount. 18 COMMITMENTS AND CONTINGENCIES Rental and operating lease commitments The value of existing rental and operating lease commitments concerning property, plant and equipment divided by term, is as follows: Rental commitments December 31, 2006 December 31, 2005 Face value Present value Face value Present value Less than one year 67 222 63 978 58 902 56 550 From one to five years 187 789 160 103 159 424 139 952 Longer than five years 50 590 35 218 46 900 34 918 305 601 259 299 265 226 231 420 Operating lease commitments December 31, 2006 December 31, 2005 Face value Present value Face value Present value Less than one year 1 433 1 364 5 721 5 492 From one to five years 2 677 2 320 20 801 18 112 Longer than five years 137 97 18 459 13 365 4 247 3 781 44 981 36 969 The face value of revenue expected from property rentals amounts to 6 490 (2005: 9 211). The present value of these expected revenues amounts to 5 210 ( 2005: 8 225). The sale of the Stoutenbeek/Pot store in 2006 and of the furniture companies as at January 1, 2007 resulted in the termination, in 2006, of a number of real estate operating leases and the subsequent purchase of the real estate concerned. Hence the decline in lease obligations compared with 2005. The amounts relating to the termination of the contracts were recognised in the income statement in 2006. Other commitments and contingencies At the end of 2006, bank guarantees and group guarantees issued for rental commitments totalled 3 655 (2005: 2 432) and 2 477 (2005: 2 409) respectively. 74

FINANCIAL STATEMENTS 19 SEGMENT INFORMATION 19 a Information on segments Preliminary comment: The segmentation by activity shows the ROCE ratios for the Living, Fashion and Automotive & Telecom sectors. Total ROCE also includes the effect of the other unallocated items/activities. Segmentation by activity The internal organisation and management structure of Macintosh Retail Group and its system of internal financial reporting focuses on the various identifiable market sectors, namely Living, Fashion and Automotive & Telecom. The sector Living comprises a number of retail chains in the fields of home furnishings and decoration and furniture. The sector Fashion consists of shoe stores partly in combination with clothing. The sector Automotive & Telecom caters for consumers on the move. Operating liabilities The operating liabilities consist of the total of current liabilities less current account overdrafts with credit institutions, the current portion of finance lease obligations, the current portion of provisions, and derivative financial instruments. The operating liabilities reconcile with the balance sheet as follows: 2006 2005 Total operating liabilities according to segment information 96 326 85 631 Current interest-bearing debt 6 523 4 697 Derivative financial instruments 619 690 Current provisions 3 518 4 558 Total according to balance sheet 106 986 95 576 The operating liabilities for 2006 only relate to liabilities of continuing operations. The operating liabilities of operations to be discontinued are included in liabilities for assets classified as held for sale. ROCE The fall in ROCE in the Fashion sector is mainly owing to the rise in net capital employed due to the goodwill arising from the acquisition of Scapino and the trade name being capitalised. 75

FINANCIAL STATEMENTS 19 b Balance sheet and income statement 2006 Continuing operations Operations Automotive to be dis- Balance sheet Note* Total Living Fashion & Telecom continued Total Operating assets 387 783 91 455 204 594 91 734 75 754 463 537 Non-allocated 1 230 1 230 Total according to balance sheet 389 013 464 767 Operating liabilities 87 132 20 452 33 486 33 194 9 379 96 511 Non-allocated 9 194 9 194 Total operating liabilities 19a 96 326 105 705 Net capital employed 292 687 71 003 171 108 58 540 66 375 359 062 As a percentage of total 100% 24% 58% 20% Result Net turnover 914 513 266 074 327 423 321 016 69 325 983 838 As a percentage of total 100% 29% 36% 35% Operating result 71 145 15 355 35 739 20 051 1 503 72 648 Non-allocated - 6 369 853-5 516 Operating result according to income statement 64 776 2 356 67 132 Net financial revenue/costs - 7 137 365-6 772 Profit before taxes 57 639 2 721 60 360 Income tax expense -15 430 1 074-14 356 Net profit according to income statement 42 209 3 795 46 004 * The numbers refer to the notes on page 58 and further. 76

FINANCIAL STATEMENTS 2005 Continuing operations Operations Automotive to be dis- Balance sheet Note* Total Living Fashion & Telecom continued Total Operating assets 237 127 104 535 36 492 96 100 32 683 269 810 Non-allocated - 468-468 Total according to balance sheet 236 659 269 342 Operating liabilities 65 752 20 850 13 115 31 787 16 736 82 488 Non-allocated 3 143 3 143 Total operating liabilities 19a 68 895 85 631 Net capital employed 167 764 83 685 23 377 64 313 15 947 183 711 As a percentage of total 100% 50% 14% 38% Result Net turnover 712 943 260 903 141 800 310 240 104 636 817 579 As a percentage of total 100% 36% 20% 44% Operating result 44 560 11 684 12 617 20 259 6 721 51 281 Non-allocated - 5 402-5 402 Operating result according to income statement 39 158 6 721 45 879 Net financial revenue/costs - 2 041-172 - 2 213 Profit before taxes 37 117 6 549 43 666 Income tax expense - 8 877-1 919-10 796 Net profit according to income statement 28 240 4 630 32 870 * The numbers refer to the notes on page 58 and further. 77

FINANCIAL STATEMENTS 19 c Capital employed, ROCE, capital expenditure, disposals and depreciation 2006 Continuing operations Operations Automotive to be Total Living Fashion & Telecom discontinued Total Average net capital employed 290 720 77 344 157 737 61 427 22 337 313 057 As a percentage of total 100% 27% 54% 21% ROCE 22.3% 19.9% 22.7% 32.6% 21.4% Capital expenditure 22 575 4 041 11 513 7 021 47 770 70 345 Non-allocated 69 69 Total 22 644 70 414 Disposals - 164 - - - 164-279 - 443 Non-allocated - - Total - 164-443 Depreciation 20 406 7 574 7 661 5 171 1 527 21 933 Non-allocated 51 51 Total 20 457 21 984 2005 Continuing operations Operations Automotive to be Total Living Fashion & Telecom discontinued Total Average net capital employed 159 145 79 484 22 968 59 479 18 480 177 625 As a percentage of total 100% 50% 14% 37% ROCE 24.6% 14.7% 54.9% 34.1% 25.8% Capital expenditure 21 870 9 167 4 819 7 884 705 22 575 Non-allocated 5 5 Total 21 875 22 580 Disposals - 66-19 - - 47-5 816-5 882 Non-allocated - 367-367 Total - 433-6 249 Depreciation 15 790 7 039 3 840 4 911 1 468 17 258 Non-allocated 112 112 Total 15 902 17 370 78

FINANCIAL STATEMENTS 20 OPERATIONS TO BE DISCONTINUED Operations to be discontinued (2006 and 2005) include the activities of the furniture companies Piet Klerkx and Stoutenbeek that were sold as at January 1, 2007. The activities of Superconfex are recognised in 2005 and partly in 2006. The results, cash flow and balance sheet relating to operations to be discontinued are set out below: Results 2006 2005 Net turnover 69 325 104 636 Total expense - 66 969-106 459 Operating result (before result on discontinuation) 2 356-1 823 Result on discontinuation - 8 544 Operating result 2 356 6 721 Finance revenue and costs 365-172 Profit before taxes 2 721 6 549 Income tax: - on operating result 1 074 1 259 - on result on discontinuation - - 3 178 Net result on operations to be discontinued 3 795 4 630 Earnings per share 0.17 0.21 The 2006 figures of the furniture companies include a number of non-recurring net gains relating to the preparation for the sale as at January 1, 2007. Net cash flows 2006 2005 Net cash flows from operating activities 380 777 Net cash flows used in investing activities - 46 733-722 Net cash flows from/(used in) financing activities 48 620-1 886 Net cash flows from sale/discontinuation - 14 509 Net cash flows 2 267 12 678 Net cash flows from operating activities consist of a cash inflow from ordinary activities of 1 699 and a cash outflow of 1 319 for profit tax (2005: cash outflow of 344 and cash inflow of 1 121, respectively). The 2006 cash flow from financing activities mainly relates to loans taken out for the temporary financing of the purchase of real estate of 47 500. Net cash flows from sale/discontinuation in 2005 relates to the discontinuation of the activities of Superconfex in the year concerned. Balance sheet December 31, 2006 December 31, 2005 Property, plant and equipment 51 866 5 863 Financial assets (non current) - 1 476 Inventories 17 154 20 457 Other current assets 1 864 3 240 Cash and cash equivalents 4 870 6 055 Total assets 75 754 37 091 Provisions 1 950 1 647 Long-term borrowings 47 500 - Other non-current liabilities 8 226 12 377 Current liabilities 12 644 15 582 Total liabilities 70 320 29 606 79

FINANCIAL STATEMENTS In the context of the intended sale of the furniture activities in early 2007, the real estate of these companies, which had been financed by operating leases, was purchased in December 2006. The real estate in question was sold, together with the other assets and liabilities of the furniture companies, at the beginning of 2007. The fair value of the real estate equals the carrying amount at December 31, 2006. Loans totalling 47 500 were taken out to finance the purchase of the real estate. The assets and liabilities of operations to be discontinued were classified under assets classified as held for sale and liabilities for assets classified as held for sale, respectively, and carried at cost, which is below the fair value at the balance sheet date less costs to sell. These assets or liabilities were therefore not impaired. 21 NET TURNOVER The analysis of net turnover is as follows: 2006 2005 Continuing operations: Net turnover from goods sold 892 133 695 573 Net turnover from services rendered 22 380 17 370 914 513 712 943 Net turnover from goods sold by operations to be discontinued 69 325 104 636 Total 983 838 817 579 The net turnover from services rendered relates to revenue received on the sale of subscriptions (mainly intermediary and airtime fees on the sale of telephone subscriptions), and the insurance commission received. Turnover on operations to be discontinued for 2006 fully relates to the furniture activities sold as at January 1, 2007. In 2005, this item also included the turnover of Superconfex. 22 EMPLOYEE BENEFITS The analysis of employee benefits is as follows: 2006 2005 Short-term benefits - Wages and salaries 122 033 109 300 - Voluntary and compulsory social security charges 25 738 25 043 Long-term benefits 8 054 8 445 Termination benefits 1 503 6 336 Share option plans 438 226 157 766 149 350 Employee benefits relate to the following FTEs: 2006 2005 1 Number of FTE s Scapino based on 11 months. Living 1 644 1 727 Fashion 1 2 289 1 398 Automotive & Telecom 1 482 1 426 Holding and Intragroup Services 55 58 5 470 4 609 Long-term benefits include pension charges of 7 570 (2005: 8 523) and jubilee benefit charges of 484 (2005: - 78). 80

FINANCIAL STATEMENTS 22 a Pension plans Defined benefit plans The defined benefit plans include industry pension plans (multi-employer plans), a company pension plan and a plan underwritten by an insurance company. Industry pension plans For the majority of personnel working for the Dutch companies, pension plans and, to a limited extend pre-pension plans are in place which are administered by the various retail trade industry pension funds. These plans are based on index-linked average salary pay. Since the funds concerned are unable to provide the required information, and because Macintosh does not have an adequate insight into the obligations and assets of the funds concerned, Macintosh Retail Group NV is not in a position to make the required calculations to determine the amount of the net provision. The pension plans are accordingly recognised as defined contribution plans. There are no contractual agreements with industry pension funds stipulating that any surpluses and deficits will be credited or charged, respectively, to the participating companies. In 2006, 3 772 (2005: 3 535) was charged to the income statement for contributions to industry pension funds. Company pension plan and other insured plans In addition to Macintosh Retail Group s membership of industry pension plans, it has two other pension plans that are based on the salary pay / years of service system and therefore qualify as defined benefit plans. Plan 1 is a defined benefit plan based on index-linked average salary pay and applies to virtually all personnel at Hoogenbosch Retail Group (1 408 active Dutch employees). This plan is a company pension plan and is reinsured with an insurance company. Plan 2 has 62 active members comprising some personnel of Macintosh Retail Group NV and some of the directors and management of the other Dutch group companies (except for Hoogenbosch). The pension rights are partly based on final salary pay and partly on index-linked average salary pay. The group obligations concerned are directly insured with an insurance company, with separate plan assets being held to cover the pension obligations. Both plans provide for pension and pre-pension benefits. Provisions for the above plans, of which the obligations and costs are calculated separately, are included in the balance sheet. For the two individual, defined benefit plans, all calculations of their obligations, assets, costs, revenue, actuarial differences and extent of the corridor are made separately. The defined benefit plan obligations are calculated using the Projected Unit Credit method. Plan assets are carried at their market value at the balance sheet date. Plan assets consist of shares, fixed income securities and cash and cash equivalents and do not include any shares or other financial instruments of Macintosh Retail Group NV or of one of its group companies. Any actuarial differences are recognised in accordance with the corridor method and taken to the corridor, provided they do not exceed the higher of 10% of the fair value of the plan assets and the present value of the obligations at the balance sheet date of the previous financial year. Any corridor excess is recognised in the income statement over a period that corresponds with the expected average number of remaining years of service of the members concerned. 81

FINANCIAL STATEMENTS The pension provision was arrived at as follows: Dec. 31, 2006 Dec. 31, 2005 Dec. 31, 2004 Pension plan 1 (Hoogenbosch) Present value of the fully or partially funded obligations 44 956 45 747 36 932 Fair value of plan assets - 37 499-36 203-30 685 Balance (unfunded) 7 457 9 544 6 247 Unrecognised net actuarial gains / (losses) - 2 777-4 500-1 893 Net provision according to balance sheet 4 680 5 044 4 354 Pension plan 2 (holding company, management and directors) Present value of the fully or partially funded obligations 50 743 57 254 54 979 Fair value of the plan assets - 50 715-49 646-45 083 Balance (unfunded) 28 7 608 9 896 Unrecognised net actuarial gains / (losses) 2 667-4 947-6 584 Net provision 2 695 2 661 3 312 Less: reclassified to liabilities for assets classified as held for sale - 810 - - Net provision according to balance sheet 1 885 2 661 3 312 Total net provision according to balance sheet 6 565 7 705 7 666 The following amounts are included in the balance sheet: Dec. 31, 2006 Dec. 31, 2005 Pension plan 1 (Hoogenbosch) Obligations 39 209 37 458 Assets - 34 529-32 414 Net provision according to balance sheet 4 680 5 044 Pension plan 2 (holding company, management and directors) Obligations 53 763 51 534 Assets - 51 068-48 873 Net provision 2 695 2 661 Less: reclassified to liabilities for assets classified as held for sale - 810 - Net provision according to balance sheet 1 885 2 661 Total net provision according to balance sheet 6 565 7 705 82

FINANCIAL STATEMENTS The changes in the net provision were as follows: 2006 2005 Pension plan 1 (Hoogenbosch) Net provision at January 1 5 044 4 354 Net (revenue) / expense recognised in income statement 1 116 1 972 Contributions paid - 1 480-1 282 Net provision according to balance sheet 4 680 5 044 Pension plan 2 (holding company, management and directors) Net provision at January 1 2 661 3 312 Net (revenue) / expense recognised in income statement 1 117 1 555 Contributions paid - 1 083-2 206 Net provision 2 695 2 661 Less: reclassified to liabilities for assets classified as held for sale - 810 - Net provision according to balance sheet 1 885 2 661 Total net provision according to balance sheet 6 565 7 705 The changes in the present value of the obligations were as follows: 2006 2005 Pension plan 1 (Hoogenbosch) Obligations at January 1 45 747 36 932 Current service cost 1 105 1 260 Past service cost - 648 Interest cost 1 906 1 743 Benefits paid (incl. transfers) - 1 260-916 Actuarial (gains)/losses - 2 542 6 080 Obligations at December 31 44 956 45 747 Pension plan 2 (holding company, management and directors) Obligations at January 1 57 254 54 979 Current service cost 1 214 1 779 Interest cost 2 405 2 323 Benefits paid - 1 389-1 220 Actuarial (gains)/losses - 8 741-278 Consequences of curtailments and settlements - - 329 Obligations at December 31 50 743 57 254 Total obligations at December 31 95 699 103 001 83

FINANCIAL STATEMENTS The changes in the fair value of plan assets were as follows: 2006 2005 Pension plan 1 (Hoogenbosch) Fair value of plan assets at January 1 36 203 30 685 Expected return on plan assets 1 796 1 679 Contributions 1 480 1 282 Benefits paid - 1 260-916 Actuarial gains/(losses) - 720 3 473 Fair value of plan assets at December 31 37 499 36 203 Pension plan 2 (holding company, management and directors) Fair value of plan assets at January 1 49 646 45 083 Expected return on plan assets 2 384 2 304 Contributions 1 201 2 206 Benefits paid - 1 389-1 220 Actuarial gains/(losses) - 1 127 1 273 Fair value of plan assets at December 31 50 715 49 646 Total fair value of plan assets at December 31 88 214 85 849 The major categories of plan assets are as follows: 2006 2005 Pension plan 1 (Hoogenbosch) Fixed interest rate investments 75.2% 74.5% Equity instruments 18.8% 18.5% Other, including cash and cash equivalents 6.0% 7.0% 100.0% 100.0% 2006 2005 Pension plan 2 (holding company, management and directors) Fixed interest rate investments 73.0% 77.3% Equity instruments 24.0% 23.5% Other, including cash and cash equivalents 3.0% - 0.8% 100.0% 100.0% No investments are made in shares of Macintosh Retail Group NV. 84

FINANCIAL STATEMENTS The following items are recognised in the income statement: 2006 2005 Pension plan 1 (Hoogenbosch) Current service cost 1 105 1 260 Interest cost 1 905 1 743 Expected return on plan assets - 1 796-1 679 Recognition of net actuarial (gains) / losses - - Past service cost 1-648 (Revenue) / expense recognised in income statement 1 214 1 972 Expected administration and other costs 222 171 Expected employee contributions - 320-300 Total borne by the company 1 116 1 843 Pension plan 2 (holding company, management and directors) Current service cost 1 214 1 779 Interest cost 2 406 2 323 Expected return on plan assets - 2 384-2 304 Recognition of net actuarial (gains) / losses - 51 Consequences of curtailments and settlements 2 - - 294 (Revenue) / expense recognised in income statement 1 236 1 555 Expected administration and other costs 66 135 Expected employee contributions - 185-298 Total borne by the company 1 117 1 392 Total costs recognised in the income statement 2 233 3 235 1 2005: Refers to the surrender of a transitional plan relating to pre-pension rights for a number of qualifying employees. 2 2005: Refers to the consequences of the transition of Nea International BV to the industry pension plan at January 1, 2005, and the redundancy of Superconfex BV personnel in 2005. The actual return on plan assets is as follows: 2006 2005 Pension plan 1 (Hoogenbosch) - 975-5 186 Pension plan 2 (holding company, management and directors) - 1 257-3 577 Total - 2 232-8 763 The following basic principles and assumptions underlie the calculation of pension obligations / provisions and pension costs: Actuarial assumptions 2006 2005 Pension plan 1 (Hoogenbosch) Discount rate at December 31 4.40% 4.20% Expected return on plan assets for the year 4.76% 5.29% Future salary pay increases 3.00% 3.00% Indexation of active members pensions 2.50% 2.50% Indexation of inactive members pensions and of pensions payables 1.50% 1.50% Inflation rate 2.00% 2.00% Pension plan 2 (holding company, management and directors) Discount rate at December 31 4.36% 4.25% Expected return on plan assets for the year 4.75% 4.81% Future salary pay increases 3.00% 3.00% Indexation of active members pensions 2.00% 2.50% Indexation of inactive members pensions and of pensions payables 1.00% 2.00% Inflation rate 2.00% 2.00% 85

FINANCIAL STATEMENTS The expected return on plan assets is determined taking into account the proposed allocation of plan assets by category, with the expected return on fixed-interest rate investments being related to the expected long-term market rates, and the return on equity instruments estimated at approximately 3% higher. The expected contributions for the following year are 1 510 for pension plan 1 and 1 200 for pension plan 2. Defined contribution plans The defined contribution plans of Macintosh Retail Group mostly concern the pension plans of companies abroad and top-up pension plans for Dutch employees. An amount of 1 565 (2005: 1 753) was charged to the income statement in respect of defined contribution plans during the financial year. Total pension charges can be broken down by cost category as follows: 2006 2005 Included under - cost of sales 23 37 - selling expenses 4 031 4 251 - general administrative expenses 3 516 4 330 - profit on operations to be discontinued - - 95 7 570 8 523 22 b Jubilee benefits The group has a number of plans for jubilee benefits which vary from company to company. The provision for these payments is based on the various arrangements in force and is calculated using the Projected Unit Credit method. 22 c Staff share option plan Macintosh Retail Group NV has a share option plan for the members of its Managing Board, and the directors and management of group companies and the holding company. The object of the plan is to foster involvement in the long-term development of the business. Some fourty persons participate in the plan. The granting of options is linked to the position of the participant and the size of the company he works for. Options are not granted to members of the Supervisory Board. The granting of the options is the prerogative of the Supervisory Board and takes place yearly based on individual appraisals. One of the basic principles is that the total number of options granted in one year may not exceed 2% of the issued share capital. Each option granted entitels the holder to one ordinary Macintosh Retail Group NV share. There are no cash settlement alternatives in place. The options have a term of five years and may not be exercised within three years of being granted. The exercise price is equal to the closing price of the Macintosh Retail Group NV share on the day prior to the granting of the option. Neither the exercise price, nor any other condition governing the options granted, is modified during their term, except in the event of structural changes requiring an adjustment, such as a share split. On May 10, 2006, a share split was effected, with one existing share in Macintosh Retail Group NV being converted into three new shares. The numbers and exercise prices of outstanding options granted prior to the date of the share split have been restated accordingly. In the information below, numbers, exercise prices, fair values and share prices have been restated based on the number and prices of shares after the share split. 86

FINANCIAL STATEMENTS At the end of 2006, there were option rights outstanding entitling their holders to take out a total of 807 000 ordinary shares in the capital of Macintosh Retail Group NV. Changes in the option rights were as follows: Number at Number at Exercise December 31, Granted Exercised in Lapsed 1 December 31, price 2005 in 2006 in 2006 in 2006 2006 per share Expiry date 24 000 - - 24 000-0 4.90 March 2007 265 500 - - 259 500-6 000 3.17 March 2008 265 500 - - - 18 000 247 500 6.17 March 2009 270 000 - - - 18 000 252 000 10.90 March 2010 0 319 500 - - 18 000 301 500 23.40 March 2011 825 000 319 500-283 500-54 000 807 000 1 Options lapsed due to expiry of term and/or due to termination of employment. The table below shows the changes in options outstanding and their weighted average exercise prices. 2006 2005 Number WAEP 1 Number WAEP 1 Outstanding at January 1 825 000 6.71 1 291 500 6.80 Granted 319 500 23.40 295 500 10.90 Exercised 2-283 500 3.31-475 500 5.89 Lapsed due to termination of service - 54 000 13.49-39 000 7.48 Lapsed due to end of term - - - 247 500 13.63 Outstanding at December 31 807 000 14.06 825 000 6.71 Exercisable at December 31 6 000 3.17 24 000 4.90 1 WAEP = Weighted Average Exercise Price. 2 The weighted average market price at the time of exercising the options in 2006 was 24.93 (2005: 10.89). The average remaining term of the options outstanding at December 31, 2006 was 3.3 years (December 31, 2005: 3.2 years). The fair value of the options granted in 2006 amounted to 2.84 (2005: 1.17).This amount is charged to the income statement over a period of three years. In 2006 438 (2005: 226) was charged to the income statement in respect of employee benefits in the form of staff options. The fair value of the options was measured at the time they were granted, taking account of the conditions in the option rules. The Black and Scholes option model was used, and the basic principles and variables set out below applied, to measure the fair value of the options. The fair value was determined for all the options granted after 7 November 2002. 2006 2005 Expected dividend yield: 5-year historical average (%) 4.69 5.02 Expected volatility: 1-year historical average (%) 27.84 26.70 Risk-free interest rate: Dutch state loans with a term of 4 years (%) 3.40 2.90 Expected average term before options are exercised (years) 4.00 4.00 Expected annual staff turnover (%) 10.00 10.00 Average share price ( ) 23.40 10.90 To cover the share options outstanding the following own shares were purchased: Number of Treasury shares as shares purchased at December 31 Average price January 2003 1 011 000 252 000 3.32 December 2005 202 422 202 422 14.12 June 2006 300 000 300 000 24.56 For a more detailed explanation on the recognition of purchased own shares and the movements in these shares reference is made to note 12 of this report. 87

FINANCIAL STATEMENTS 23 CLASSIFICATION OF EXPENSES 2006 2005 Personnel costs Included in: - cost of sales 300 290 - selling expenses 110 054 98 807 - general administrative expenses 47 412 44 965 - profit on operations to be discontinued - 5 288 157 766 149 350 Depreciation Included in: - cost of sales 40 38 - selling expenses 16 488 11 877 - general administrative expenses 5 456 5 182 - profit on operations to be discontinued - 273 21 984 17 370 Rental charges Included in: - selling expenses 76 612 61 488 - general administrative expenses 2 927 2 053 79 539 63 541 Operating lease charges Included in: - selling expenses 514 1 001 - general administrative expenses 2 315 1 772 2 829 2 773 The fall in operating lease charges included in selling expenses is mainly due to the termination of a lease contract as at April 1, 2006 following the sale of the Stoutenbeek/Pot store. The rise in operating lease charges included in general administrative expenses is owing to the settlement of four lease contracts at the end of 2006 in connection with the expected sale of the furniture companies as at January 1, 2007 (see notes 18 and 20). 24 COSTS OF RESEARCH AND DEVELOPMENT The costs of research and development that were recognised directly in the income statement amounted to 22 (2005: 37). Depreciation of capitalised development costs charged to the income statement amounted to 113 (2005: 84). 25 GRANTS The following grants were recognised during the year: 2006 2005 Received Credited to the Received Credited to the income statement income statement Wages 260 267 269 347 Training 626 626 1 021 1 021 Other - 49-49 49 49 837 844 1 339 1 417 88 The grants received are recognised in the expenses categories to which they relate. No capital expenditure grants were received in 2006 and 2005.

FINANCIAL STATEMENTS 26 FINANCE REVENUE AND COSTS Finance revenue 2006 2005 Bank interest income 154 68 Interest income from loans receivable 178 166 Other 10 46 Total 342 280 Finance costs 2006 2005 Interest charges on bank overdrafts and loans 5 472 1 384 Other interest charges 1 284 807 Other 358 302 Total 7 114 2 493 The item other finance costs mainly relates to bank charges. The increase in interest expense in 2006 is mainly due to financing of the acquisition of Scapino. 27 INCOME TA X 27 a Consolidated income statement tax components The tax item in the income statement is made up as follows: 2006 2005 Tax for the current period: Tax for the current year 16 123 7 763 Prior year adjustment in current period - 346 73 Deferred tax liability: On temporary differences 473 3 648 Released as a result of changes in tax rates - 1 894-688 Total taxes in income statement 14 356 10 796 The change in deferred tax liabilities arising from temporary differences mainly concerns deferred tax liabilities relating to noncurrent assets and inventories. 27 b Deferred tax liabilities resulting from changes in equity The negative effect on equity of tax relating to income statement items recognised directly in equity is 813 (2005: 301). These items are gains and losses on cash flow hedges. 89

FINANCIAL STATEMENTS 27 c Tax burden Set out below is the relationship between the standard tax rate in the Netherlands and the effective tax burden on the result of the group. 2006 2005 Result of continuing operations 57 639 37 117 Result of operations to be discontinued 2 721 6 549 Result before taxes 60 360 43 666 Standard tax burden in the Netherlands (29.6% / 31.5%) - 17 868-13 755 Non-standard tax rates 328 360 Untaxed profits / losses not available for set-off 385-422 Untaxed revenue 1 048 291 Impact of change in tax rates on deferred taxes 1 894 548 Settlement of loss on liquidation of foreign associates - 2 182 Prior-year taxes - 143 - Effective tax burden - 14 356-10 796 Untaxed revenue for 2006 mainly relates to tax-deductible items for foreign companies, and the participation exemption. 27 d Deferred tax liabilities The deferred tax liabilities relate to future tax owing resulting from taxable temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes involving the following items: December 31, 2006 December 31, 2005 Property, plant and equipment 11 388 8 602 Inventories 6 464 4 789 Employee benefits - 1 212-2 079 Derivate financial instruments 9-1 037 Other 2 104 4 079 18 753 14 354 Less: reclassification to liabilities for assets classified as held for sale - 7 635-11 118 14 354 The item other at year-end 2006 concerns, among other things, deferred tax liabilities relating to a number of provisions formed for specific risks. No deferred tax assets have been recognised in the financial statements. The total tax losses that can be set off against future taxable profits amount to 27.0 million at the end of 2006, as it did at the end of 2005. These carry-forward tax losses arose in several financial years and relate to several companies. The potential tax set off has not been recognised in the financial statements since the availability of profits for set-off in the future is unlikely based on current assessments. 90

FINANCIAL STATEMENTS 28 EARNINGS PER SHARE The basic earnings per ordinary share have been calculated by dividing the net profit for the year by the weighted average number of ordinary shares in circulation (excluding treasury shares) during the year. The diluted earnings per share have been calculated by dividing the net profit for the year by the weighted average number of shares in circulation during the year plus the average number of ordinary shares that would have been issued had all in-the-money options been exercised. Since only ordinary Macintosh Retail Group NV shares have been issued, the profit for the year is fully available to holders of ordinary shares. In the information below, the number of shares and earnings per share for 2005 have been restated to reflect the number of shares after the share split (see note 12). The weighted average number of shares was calculated as follows: 2006 2005 Weighted average number of ordinary shares in circulation 21 582 107 21 601 458 Dilution effect due to staff share options exercised 187 887 349 494 Weighted average number of shares used for basic earnings per share calculation purposes 21 769 994 21 950 952 Dilution effect of share options outstanding 383 431 407 667 Diluted weighted average number of shares 22 153 425 22 358 619 Earnings per share are made up of the following: 2006 2005 Continuing operations - basic earnings 1.94 1.29 - diluted earnings 1.91 1.26 Total - basic earnings 2.11 1.50 - diluted earnings 2.08 1.47 No transactions in ordinary shares took place between the reporting date and the moment the financial statements were drawn up. During the financial year, 283 500 shares which had been purchased to cover staff share options were resold as a result of options being exercised. In addition, 300 000 new shares were purchased in June, 2006. By the end of the financial year, 754 422 own shares had been purchased to cover staff share options outstanding. A dividend of 13 361 was paid in the financial year, being 0.60 per share in cash (2005: 7 794 or 0.35 per share), of which 284 (2005: 207) on treasury shares. The General Meeting of Shareholders will be invited to approve a cash dividend proposal for 2006 of 18 483, or 0.83 per share (2005: 0.60 per share). 91

FINANCIAL STATEMENTS 29 NOTES TO THE CASH FLOW STATEMENT The cash flow statement has been drawn up using the indirect method. For purposes of comparison, the cash flows of operations to be discontinued are stated separately for each type of cash flow. Operations to be discontinued in 2006 relate to the furniture activities sold as at January 1, 2007. Operations to be discontinued in 2005 include the furniture activities, as well as the activities of the clothing store chain Superconfex, discontinued in 2005. Changes in capital employed following acquisitions or sale of consolidated associates are recognised under cash flows used in investing activities, with the net cash and cash equivalents included in the acquisition or sale being deducted from the acquisition price or disposal proceedings, respectively. 29 a Cash flow from operating activities Continuing operations The increase of 25 387 in the cash flow from operating activities is mainly thanks to higher profit, partly due to Scapino, the shoe retailer acquired as at February 1, 2006, and partly because of improved results on continuing operations. Operations to be discontinued Cash flow from operating activities of operations to be discontinued is made up of the following main components: 2006 2005 Cash flow from ordinary activities 1 699-344 Recovery/(payment) of income tax - 1 319 1 121 29 b Cash flow from investing activities Net cash flow 380 777 Continuing operations Capital expenditure was up 137 929 compared with 2005, almost entirely relating to the acquisition of Scapino: - acquisition price paid 118 264 - balance of current account overdrafts with credit institutions and cash and cash equivalent included in the acquisition price 18 825 Total investment 137 089 Operations to be discontinued In connection with the sale of the furniture activities as at January 1, 2007, the real estate of these companies, which had been financed by operating leases, was purchased. This explains the capital expenditure for 2006. The real estate in question was sold, together with the other assets and liabilities of the furniture companies, as at January 1, 2007. The cash flows from investing activities for 2005 relates to cash flows arising from the discontinued clothing activities. 29 c Cash flow from financing activities Continuing operations To finance the acquisition of Scapino, as well as refinance its total borrowing requirements, Macintosh Retail Group took out a roll-over loan of 161 000 in early 2006. Of this loan, 66 500 has since been repaid, resulting in a net cash inflow of 94 500. Mainly because of a higher dividend distribution ( 5 489), higher amounts paid for repurchasing own shares ( 4 509), lower income from staff options being exercised ( 1 861) and an increase in interest charges ( 2 899), the total net cash flow from financing activities was 79 710 higher compared with 2005. Operations to be discontinued To finance the purchase of the real estate at year-end 2006 (see investing activities above), the furniture activities took out loans of 47 500, explaining the cash inflow from financing activities for 2006. The loans will be repaid in early 2007. 92

FINANCIAL STATEMENTS 30 RELATED PARTY DISCLOSURES 30 a List of group companies The consolidated financial statements of Macintosh Retail Group NV include the following entities: % equity interest % equity interest Name Country at December 31, 2006 at December 31, 2005 Alfa Retail BV Netherlands 100 100 BelCompany België (VI) Belgium 100 100 BelCompany BV Netherlands 100 100 BelCompany GmbH & Co KG 1 Germany - 100 BelCompany Verwaltung GmbH 1 Germany - 100 Camtex BV Netherlands 100 100 CV Oube 2 Netherlands - - CV de Locht 2 Netherlands - - Deco Holding BV Netherlands 100 100 Dolcis BV Netherlands 100 100 Furniture Holding BV Netherlands 100 100 GP Décors BV Netherlands 100 100 GP Décors SNC France 100 100 Halfords Nederland BV Netherlands 100 100 Halfords België NV Belgium 100 100 Hoogenbosch Retail Group BV Netherlands 100 100 Huf Schoenen BV Netherlands 100 100 Invito BV Netherlands 100 100 Klerkx Groep BV Netherlands 100 100 Kwantum België BV Netherlands 100 100 Kwantum België VI Belgium 100 100 Kwantum Nederland BV Netherlands 100 100 Maasven SARL Luxembourg 100 100 Macintosh Hong Kong Ltd. China 100 100 Macintosh International BV Netherlands 100 100 Macintosh Intragroup Services NV Belgium 100 100 Manfield BV Netherlands 100 100 MCFLA BV Netherlands 100 100 MRGQ BV Netherlands 100 100 MRG Retail BV 3 Netherlands 100 - Nea International BV Netherlands 100 100 Okapi Waalwijk BV Netherlands 100 100 Perla NV Belgium 100 100 Piet Klerkx BV Netherlands 100 100 Pro sport BV Netherlands 100 100 SA Service BV Netherlands 100 100 Scapino BV 4 Netherlands 100 - SCI de l'avenue de Canadiens France 100 100 SC Retail NV 5 Belgium 100 100 Stoutenbeek Groep BV Netherlands 100 100 Sumi NV Belgium 100 100 Superconfex BV Netherlands 100 100 Superconfex France SA France 100 100 Woninginrichting BH Pot BV 6 Netherlands - 100 Woonexpress BV Netherlands 100 100 Woonwereld Onroerend Goed BV Netherlands 100 100 1 Liquidated in 2006. 2 Refers to a participating interest as a limited partner. 3 Established in 2006. 4 Acquired in 2006. 5 Formerly Superconfex NV. 6 Sold in 2006. 93

FINANCIAL STATEMENTS 30 b Remuneration of board members Supervisory Board The members of the Supervisory Board receive a fixed fee. By resolution of the General Meeting of Shareholders of April 26, 2006 the fixed fee was raised from an annual 25 000 to 30 000 for the chairman and from 20 000 to 25 000 for the other members. The fee for the members of the Remuneration and Appointment Committee remained unchanged at 1 500 per year and for the members of the Audit Committee at 3 000 per year. The total fees for 2006 paid to members of the Supervisory Board amounted to 114 000 (2005: 99 667). Members of the Supervisory Board do not receive any other remuneration. None of the members of the Supervisory Board owns Macintosh Retail Group NV shares or option rights to such shares. There are no other relationships with the members of the Supervisory Board other than those mentioned above. Managing Board Remuneration The Managing Board s remuneration is made up as follows: 2006 2005 Short-term benefits Fixed remuneration 982 933 Variable remuneration 394 419 Social security charges 15 11 Long-term benefits 165 83 Post-employment benefits 366 293 1 922 1 739 Share options Changes in Macintosh Retail Group NV share option rights in 2006 were as follows (numbers and share prices have been restated based on the number of shares and prices after the share split): Number at Exercised/ Number at December 31, granted in Lapsed 1 December 31, Exercise price 2005 2006 in 2006 2006 per share Expiry date 15 000-15 000-0 4.90 March 2007 111 000-111 000-0 3.17 March 2008 111 000 - - 111 000 6.17 March 2009 111 000 - - 111 000 10.90 March 2010 120 000-120 000 23.40 March 2011 348 000-6 000 0 342 000 1 Options lapsed due to expiry of term. In 2006, 126 000 option rights were exercised at an average price of 3.37, for which the group received a total amount of 425 in cash. There are no other business relationships with the members of the Managing Board other than those concerned with their executive tasks, no transactions have been concluded with them and there are no amounts receivable from or payable to them. 30 c Company pension plan The company pension plan, Stichting Pensioenfonds Hoogenbosch Beheer is responsible for the implementation of the old-age and pre-pension plans of Hoogenbosch Retail Group employees. These plans must be at least equal to the retail trade (sub-sector shoes) industry pension fund, and are based on the index-linked average pay system (see also note 22a). 30 d Other related party disclosures There are no related parties other than those disclosed under notes 30a to 30c. 94

FINANCIAL STATEMENTS 31 EVENTS AFTER THE BALANCE SHEET DATE 31 a Sale of furniture companies At the end of 2006, an agreement was concluded concerning for the sale of the furniture companies Piet Klerkx and Stoutenbeek as at January 1, 2007. Macintosh Retail Group NV will realise a net gain on the sale of more than 7 million. 31 b Liquidation of company pension fund At the end of 2006, a decision was made to liquidate the company pension fund Stichting Pensioenfonds Hoogenbosch Beheer and to transfer the accrued pension entitlements of Hoogenbosch s employees directly to the same insurance company that has reinsured the entitlements concerned. The liquidation is scheduled for 2007. Based on the current understanding, there will be no financial consequences. 95

96 FINANCIAL STATEMENTS

FINANCIAL STATEMENTS Macintosh Retail Group NV company balance sheet at December 31 x 1000 (after profit appropriation) ASSETS 2006 2005 Non-current assets Intangible assets 96 870 - Property, plant and equipment 84 84 Financial assets 301 065 254 045 398 019 254 129 Current assets Trade and other receivables 55 371 32 324 Derivative financial instruments 1 273 107 Cash and cash equivalents 21 27 222 56 665 59 653 454 684 313 782 x 1000 (after profit appropriation) EQUITY AND LIABILITIES 2006 2005 Equity Issued capital 8 907 8 907 Share premium 4 361 4 361 Revaluation reserve 20-2 391 Other statutory reserves - 114 38 Other reserves 137 526 115 382 Dividend for the year 18 483 13 361 169 183 139 658 Provisions 4 243 8 391 Long-term borrowings 107 000 0 Current liabilities 173 639 162 064 Derivative financial instruments 619 3 669 454 684 313 782 97

FINANCIAL STATEMENTS Macintosh Retail Group NV company income statement x 1000 2006 2005 Profit of associates (after income tax) 55 806 35 211 Other results* (after income tax) - 9 802-2 341 Net profit for the year 46 004 32 870 * Other results include finance revenue and costs relating to loans to and from group companies for amounts of 1 231 and 3 006 respectively (2005: 2 133 and 3 111 respectively). Accounting policies The company financial statements of Macintosh Retail Group NV are prepared in accordance with part 9 of Book 2 of the Netherlands Civil Code and other Dutch Annual Reporting guidelines. As permitted under section 362(8), Book 2 of the Netherlands Civil Code, the accounting policies used are the same as those used in preparing the consolidated financial statements, except for investments in subsidiairies which are measured using the equity method. As permitted under section 402, Book 2 of the Netherlands Civil Code, the company financial statements include an abridged income statement. For more information on the accounting policies applied in prepairing the consolidated financial statements, please refer to note 3 of the consolidated financial statements. 98

FINANCIAL STATEMENTS Notes to the company balance sheet and company income statement of Macintosh Retail Group NV GENERAL All amounts are in thousands of euros, unless stated otherwise. Notes to the company balance sheet are given only if they disclose additional information. For any further information, reference is made to the basis for consolidation, the accounting policies and the notes to the consolidated balance sheet, consolidated income statement, consolidated cash flow statement and consolidated statement of changes in equity. INTANGIBLE ASSETS This item relates in full to the goodwill arising on the acquisition of all the shares in Scapino BV as at February 1, 2006. For further details, please refer to note 4 of the consolidated financial statements PROPERTY, PLANT AND EQUIPMENT Property, and alterations Total to rented premises ITC Other At January 1, 2005 Cost 9 993 8 847 1 051 95 Depreciation 9 437 8 418 966 53 Carrying amount 556 429 85 42 Changes in the carrying amount in 2005 Additions 8-8 - Disposals - 369-369 - - Depreciation - 111-24 - 71-16 Total changes - 472-393 - 63-16 At December 31, 2005 Cost 1 523 368 1 060 95 Depreciation - 1 439-332 - 1 038-69 Carrying amount 84 36 22 26 Changes in the carrying amount in 2006 Additions 45-45 - Disposals - Depreciation - 45-13 - 19-13 Total changes 0-13 26-13 At December 31, 2006 Cost 1 568 368 1 105 95 Depreciation 1 484 345 1 057 82 Carrying amount 84 23 48 13 99

FINANCIAL STATEMENTS FINANCIAL ASSETS (NON-CURRENT) This item can be broken down as follows: 2006 2005 Investments in group companies 283 065 254 045 Loans to group companies 18 000-301 065 254 045 Changes in these investments were as follows: 2006 2005 Net asset value at January 1 242 430 209 659 Changes: Result for the financial year 55 806 35 211 Acquisitions 21 394 - Capital contributions 818 - Dividend distributions - 46 630-2 500 Unrealised exchange differences - 156 234 Unrealised hedge results - 740 146 Other changes 4-320 Net asset value at December 31 272 926 242 430 Add: Adjustment to zero of the carrying amount of group companies with a negative net asset value 10 139 11 615 At December 31 283 065 254 045 Group companies with a negative net asset value are carried at not less than zero. Insofar as the value is negative, a provision for doubtful debts is recognised for this amount in respect of the loans to the group companies in question. In the event that the negative value exceeds the loans concerned, a provision for group companies is formed for the excess. In this context, a provision for doubtful debts amounting to 9 679 (2005: 6 029) was recognised for loans to group companies and a provision for group companies was recognised amounting to 460 (2005: 5 586). 100

FINANCIAL STATEMENTS TRADE AND OTHER RECEIVABLES December 31, 2006 December 31, 2005 Loans to group companies 54 945 32 121 Other taxes and social security contributions 252 79 Other receivables and prepayments 174 124 55 371 32 324 The increase in loans to group companies is mainly due to a short-term loan granted to the furniture companies for the temporary financing of the purchase of real estate at year-end 2006. DERIVATIVE FINANCIAL INSTRUMENTS Derivative financial instruments consist of interest rate swaps ( 654) contracted with banks to hedge cash flow risks resulting from group obligations with a variable rate of interest, and internal forward exchange contracts ( 619) which the various group companies have concluded with Macintosh Retail Group NV. For these internal contracts, Macintosh Retail Group NV has entered into counter-contracts with external banks (see note 17 to the consolidated financial statements). The contracts are recognised at their fair value at the balance sheet date. The unrealised gains and losses are recognised in the revaluation reserve, allowing for deferred tax liabilities. CASH AND CASH EQUIVALENTS The cash resources and bank balances included under this heading are at the free disposal of the company. EQUITY 2006 2005 Re- Other Dividend Issued Share valuation statutory Other for the Total capital premium reserve reserves reserves year Total At January 1 139 658 8 907 4 361-2 391 38 115 382 13 361 113 417 Changes for the year: Profit for the year 46 004 - - - - 27 521 18 483 32 870 Change in hedging results 2 267 - - 2 411 - - 144-557 Dividend distribution - 13 077 - - - - 284-13 361-7 588 Purchase of own shares - 7 368 - - - - -7 368 - -2 859 Options exercised 940 - - - - 940-2 801 Costs of granting options 911 - - - - 911-226 Exchange differences - 152 - - - - 152 - - 234 At December 31 169 183 8 907 4 361 20-114 137 526 18 483 139 658 On May 10, 2006, a share split was effected, with one existing share in Macintosh Retail Group NV being converted into three new shares. In the information below, the comparative numbers for 2005 have been restated to reflect the number of shares after the share split. The authorised share capital amounts to 36.0 million, consisting of 45 million ordinary shares and 45 million preference shares, all shares having a nominal value of 0.40 each. The entire issued share capital consists of 22 268 118 ordinary shares. No preference shares were issued in 2006. 101

FINANCIAL STATEMENTS Macintosh Retail Group NV has a share option plan for the members of its Managing Board, and for the directors and management of its operating companies and holding company. The object of the plan is to foster involvement in the long-term development of the company. The granting of options is linked to the position of the participants and to the size of the company they work for. The granting of options is the prerogative of the Supervisory Board. One of the basic principles is for the total number of options to be granted in one year not to exceed 2% of the issued share capital. The options have a term of five years, and they may not be exercised within three years. Options are not granted to members of the Supervisory Board. At the end of 2006, there were option rights outstanding entitling the holders to take up a total of 807 000 ordinary shares in the capital of Macintosh Retail Group NV. For detailed information on the changes in option rights in 2006 please refer to note 22c of the consolidated financial statements In order to cover the share options outstanding, 300 000 own shares were purchased in June 2006 at an average price of 24.56. For further details on the total number of own shares purchased, as well as movements in the item concerned, please refer to note 22c to the consolidated financial statements. A total of 319 500 new option rights were granted in 2006, of which 120 000 to the Managing Board. The exercise price is equal to the closing price of the Macintosh Retail Group NV share on the day prior to the granting of the options. Neither the exercise price, nor any other condition governing the options granted, is modified during their term, except in the event of structural changes requiring adjustment, such as a share split. At the end of 2006, the Managing Board had option rights entitling them to acquire 342 000 ordinary shares in Macintosh Retail Group NV. More detailed information on the remuneration of board members will be found on page 105 and further of this report. The revaluation reserve relates to deferred results on derivative financial instruments classified as cash flow hedges, less deferred taxation. This reserve is formed on a group basis. Other statutory reserves relate to a reserve for translation differences on investments in associates. Of other reserves of 137 526, an amount of 114 is not available for dividend distribution, as it serves to hedge negative reserves on unrealised exchange losses arising on investments in associates. PROVISIONS Changes in provisions were as follows: Total Employee Group Deferred benefits companies tax liabilities At January 1, 2005 8 181 1 744 4 762 1 675 Addition charged to the income statement 1 332 515 824-7 Addition charged to equity 344 - - 344 Charged to the provisions - 1 179-1 179 - - Other changes - 287-438 - 151 At December 31, 2005 8 391 642 5 586 2 163 Addition charged to the income statement 115 515 - - 400 Addition charged to equity 1 188 - - 1 188 Charged to the provisions - 325-858 - 533 Other changes - 5 126 - - 5 126 - At December 31, 2006 4 243 299 460 3 484 The provisions are mostly long-term. The provision for group companies relates to associates with a negative net asset value. Of the change in this provision, 1 476 relates to a lower equity deficit at the group companies, and 3 650 to a release countereffecting the higher provisions for doubtful debts formed for receivables from group companies. Of the provision for deferred taxation, 1 711 relates to a reinvestment reserve. 102

FINANCIAL STATEMENTS LONG-TERM BORROWINGS The aquisition of Scapino in early 2006, which was fully financed with loan capital, resulted in the refinancing of the total borrowing requirements of Macintosh Retail Group at variable market rates. The new committed credit facility, with a term to March 20, 2011, amounts to 210 million. Of this amount, up to 60 million can take the form of an aggregate group company and Macintosh Retail Group current account overdraft, and up to 150 million can be taken out as roll-over loans by Macintosh Retail Group NV, taking into account the funds borrowed by Macintosh Intragroup Services NV. The roll-over loans are recognised under long-term loans. The use of the current account overdraft facility is recognised under current liabilities. At December 31, 2006, roll-over loans of 107.0 million with a remaining term of one month had been taken out. These loans can be renewed as part of the roll-over facilities of 150 million referred to above, falling due on March 20, 2011 at the latest. CURRENT LIABILITIES December 31, 2006 December 31, 2005 Current account overdrafts with credit institutions 28 328 10 441 Loans from group companies 135 964 148 292 Income tax 3 766 757 Other taxes and social security contributions 76 158 Pension liabilities 41 79 Other liabilities and accruals 5 464 2 337 173 639 162 064 The current account overdrafts with credit institutions relate to the new committed credit facility totalling 210 million. Loans from group companies relate virtually in full to intra-group financing. Other liabilities and accruals are set out below: December 31, 2006 December 31, 2005 Interest expense payable 2 663 85 Employee benefits payable 819 721 Other expenses payable 1 982 1 531 5 464 2 337 The increase in interest expense relates to the acquisition of Scapino. DERIVATIVE FINANCIAL INSTRUMENTS Derivative financial instruments refer to forward exchange contracts which Macintosh Retail Group NV entered into with banks to hedge the risk to which the various group companies are exposed regarding their foreign currency positions. The contracts are recognised at their fair value at the balance sheet date. The unrealised gains and losses are recognised in the revaluation reserve, allowing for deferred tax liabilities. 103

FINANCIAL STATEMENTS COMMITMENTS AND CONTINGENCIES Macintosh Retail Group NV stands surety for the direct use by group companies of credit facilities with Dutch banks, and for the interest rate derivates contracted by the group companies. To this end, guarantee commitments amounting to 28.2 million (2005: 28.3 million) were in place at the end of 2006. Moreover Macintosh Retail Group NV stands surety for the commitments resulting from the real estate lease contracts entered into by its Dutch subsidiary companies. In addition, group guarantees amounting to 2.5 million (2005: 2.4 million) have been issued for the rental commitments of group companies. For the Dutch legal entities mentioned on page 93, liability undertakings have been issued under Section 403 of Book 2 of the Netherlands Civil Code with the exception of GP Décors BV and Kwantum België BV. Almost all the Dutch group companies and permanent establishments, with the exception of Scapino, form part of a fiscal unit for income tax purposes headed by Macintosh Retail Group NV. As a consequence, the company is jointly and severally liable for all the tax obligations of the fiscal unit. REMUNERATION OF BOARD MEMBERS Supervisory Board Fees The members of the Supervisory Board are paid a fixed annual fee which was set by resolution of the General Meeting of Shareholder of April 26, 2006 at an annual 30 000 for the chairman and 25 000 for the other members. In addition, by the same resolution, the fee for the members of the Remuneration and Appointment Committee remainded unchanged at 1 500 per year and that for the members of the Audit Committee at 3 000 per year. No other remuneration is paid to the members of the Supervisory Board. The fees of the members of the Supervisory Board are analysed below: Fees 2006 2005 J.G.M. van Oijen (chairman) 31 500 26 500 C.H. van Dalen 28 000 23 000 A. Nühn 26 500 20 000 A.N.A.M. Smits 28 000 23 000 J.G. Andreae (to April 29, 2005) - 7 167 Total 114 000 99 667 None of the members of the Supervisory Board holds any shares or options rights to shares in Macintosh Retail Group NV. 104

FINANCIAL STATEMENTS Managing Board At the end of 2006, the Managing Board was made up of the following members: F.K. De Moor (CEO) M.S.J.H. Stevens (CFO) L.J.J.M. van de Wiel (COO) Remuneration The remuneration of the Managing Board, which is set by the Supervisory Board, is periodically tested for conformity with the market. The remuneration consists of a fixed and a variable part. The fixed salary, which is adjusted to the index every year, is determined taking into account, among other things, the size and development of the company. The variable part amounts to at most 40% of the fixed part and is related to the development of the group result and working capital, as well as specifically defined annual targets. These targets, as well as the performance for the financial year, are set by the Supervisory Board annually. The Supervisory Board has discretionary powers to set the amount of the variable remuneration. The contracts of service with the members of the Managing Board include a pension plan which in the case of Mr De Moor provides for retirement at age 65 and in the case of Mr Stevens and Mr van de Wiel at age 60. All three are final pay plans with own contributions by the board members to the pension plan. In addition, the Managing Board members receive option rights to take up ordinary shares in Macintosh Retail Group NV. These option rights are likewise granted by the Supervisory Board. Only in the event of a change in control at Macintosh Retail Group NV, as a result of which the Managing Board in office effectively loses the control required to determine policy under the supervision of the Supervisory Board, the individual contracts of service provide that, on termination of employment within a year of this situation occurring, Mr De Moor would receive compensation amounting to three times his fixed annual remuneration, and Mr Stevens (59) and Mr van de Wiel (59) would receive compensation amounting to a part of the loss of income until the effective date of their pre-pension at age 60. Board members remuneration, including social security charges, charged to Macintosh Retail Group NV in 2006 totalled 1.9 million (2005: 1.7 million), of which 0.4 million (2005: 0.3 million) was related to pension costs. The Managing Board s remuneration is analysed below: 2006 Total F.K. De Moor M.S.J.H. Stevens L.J.J.M. van de Wiel Short-term benefits Fixed remuneration 982 380 301 301 Variable remuneration 394 152 121 121 Social security charges 15 7 4 4 Long-term benefits 165 59 53 53 Post-employment benefits 366 58 159 149 Total 1 922 656 638 628 2005 Total F.K. De Moor M.S.J.H. Stevens L.J.J.M. van de Wiel Short-term benefits Fixed remuneration 933 345 294 294 Variable remuneration 419 153 133 133 Social security charges 11 5 3 3 Long-term benefits 83 29 27 27 Post-employment benefits 293 17 143 133 Total 1 739 549 600 590 In 2006 option rights to take out 120 000 (2005: 111 000) Macintosh Retail Group NV ordinary shares were granted to board members in 2006. 105

FINANCIAL STATEMENTS Below is a summary of the Managing Board members options granted, exercised, lapsed and outstanding in 2006. Number Number Exercise at at price per December Granted Exercised Lapsed December share Expiry 31, 2005 in 2006 in 2006 in 2006 31, 2006 in date F.K. De Moor 39 000-39 000-0 3.17 March 08 39 000 - - 39 000 6.17 March 09 39 000 - - 39 000 10.90 March 10 0 42 000 - - 42 000 23.40 March 11 117 000 42 000-39 000 0 120 000 M.S.J.H. Stevens 15 000 - - 15 000-0 4.90 March 07 36 000 - - 36 000-0 3.17 March 08 36 000 - - - 36 000 6.17 March 09 36 000 - - - 36 000 10.90 March 10 0 39 000 - - 39 000 23.40 March 11 123 000 39 000-51 000 0 111 000 L.J.J.M. van de Wiel 36 000-36 000-0 3.17 March 08 36 000 - - 36 000 6.17 March 09 36 000 - - 36 000 10.90 March 10 0 39 000 - - 39 000 23.40 March 11 108 000 39 000-36 000 0 111 000 Maastricht, March 13, 2007 Supervisory Board Managing Board J.G.M. van Oijen (chairman) F.K. De Moor (CEO) C.H. van Dalen M.S.J.H. Stevens CFO) A. Nühn L.J.J.M. van de Wiel (COO) A.N.A.M. Smits 106

OTHER INFORMATION Events after the balance sheet date Sale of furniture companies At the end of 2006, an agreement was concluded concerning the sale of the furniture companies Piet Klerkx and Stoutenbeek as at January 1, 2007. Macintosh Retail Group NV will realise a net gain on the sale of more than 7 million. Liquidation of company pension fund of Hoogenbosch At the end of 2006, a decision was made to liquidate the company pension fund Stichting Pensioenfonds Hoogenbosch Beheer and to transfer the accrued pension entitlements of Hoogenbosch s employees directly to the insurance company where the entitlements concerned are insured. The liquidation is scheduled for 2007. Based on the current understanding, there will be no financial consequences. Articles of association provisions governing appropriation of profit and distribution from reserves The provisions governing the appropriation of profit and distributions chargeable to the reserves are laid down in articles 33 and 34 respectively of the Articles of Association of Macintosh Retail Group NV. The main stipulations included in these articles are set out below. Where preference shares are in issue, a dividend, stipulated in the Articles of Association, is first of all paid on these shares. The part of the profit remaining that is to be set aside is then determined by the Managing Board, subject to the approval of the Supervisory Board. The balance of the profit is at the disposal of the General Meeting. Upon a motion of the Managing Board approved by the Supervisory Board, the General Meeting of Shareholders may decide that the dividend is to be distributed in whole or in part in the form of shares in the company. Likewise upon a motion of the Managing Board approved by the Supervisory Board, the General Meeting may resolve that a distribution be made to holders of ordinary shares chargeable to the freely distributable part of equity. Profit appropriation It has been resolved that 27 521 of the profit for the year of 46 004 is to be added to the reserves. The profit for the year will therefore be appropriated as follows: Net profit for the year 46 004 Addition to the reserves 27 521 Proposed dividend distribution 18 483 The shareholders will be invited to declare a dividend of 0.83 (2005: 0.60) per share of 0.40 nominal value each. The dividend to be distributed is recognised as a separate component of equity. 107

OTHER INFORMATION Foundation Stichting Preferente Aandelen Macintosh NV Under an agreement concluded between The Foundation Stichting Preferente Aandelen Macintosh NV and Macintosh Retail Group NV, the Foundation is entitled in the event of a hostile takeover, impending or otherwise, at its own initiative to take out preference shares to a (cumulative) maximum equal to the nominal capital issued in the form of ordinary shares, less one. At December 31, 2006, this issued capital amounted to 8 907 247. These rights were not exercised in 2006. The Board of Governors of the Foundation consists of three A members with the right to vote and one B member without the right to vote. As referred to in the regulations of Annexe X of the Listing and Issuing Rules of Euronext Amsterdam NV applicable to Macintosh Retail Group NV, the joint opinion of Macintosh Retail Group NV and the Foundation s Board of Governors is that the Foundation is independent of Macintosh Retail Group NV. The Board of Governors of the Foundation is made up of: J.C.M. Hovers (chairman) H.G.K. Harbrink Numan D. Sinninghe Damsté J.G.M. van Oijen (B member) 108

OTHER INFORMATION Auditor s Report To: General Meeting of Shareholders AUDITOR S REPORT Report on the financial statements We have audited the financial statements 2006 of Macintosh Retail Group NV, Maastricht. The financial statements consist of the consolidated financial statements and the company financial statements. The consolidated financial statements comprise the consolidated balance sheet as at December 31, 2006, the profit and loss account, statement of changes in equity and cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory notes. The company financial statements comprise the company balance sheet as at December 31, 2006, the company profit and loss account for the year then ended and the notes. Board s responsibility The Board is responsible for the preparation and fair presentation of the financial statements in accordance with International Financial Reporting Standards as adopted by the European Union and with Part 9 of Book 2 of the Netherlands Civil Code, and for the preparation of the board report in accordance with Part 9 of Book 2 of the Netherlands Civil Code. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of the 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 the financial statements based on our audit. We conducted our audit in accordance with Dutch law. This law requires 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 the Board, 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 with respect to the consolidated financial statements In our opinion, the consolidated financial statements give a true and fair view of the financial position of Macintosh Retail Group NV as at December 31, 2006, and of its result and its cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union and with Part 9 of Book 2 of the Netherlands Civil Code. Opinion with respect to the company financial statements In our opinion, the company financial statements give a true and fair view of the financial position of Macintosh Retail Group NV as at December 31, 2006, and of its result for the year then ended in accordance with Part 9 of Book 2 of the Netherlands Civil Code. Report on other legal and regulatory requirements Pursuant to the legal requirement under 2:393 sub 5 part e of the Netherlands Civil Code, we report, to the extent of our competence, that the board report is consistent with the financial statements as required by 2:391 sub 4 of the Netherlands Civil Code. Eindhoven, March 13, 2007 for Ernst & Young Accountants was signed by W.J. Spijker 109

OTHER INFORMATION Five-year summary of Macintosh Retail Group NV Dutch GAAP IFRS x 1 000 (unless stated otherwise) 2002 2003 2004 2004 2005 2006 Total consumer sales 919 963 936 102 965 191 964 765 979 633 1 174 943 Total net turnover 766 545 781 181 805 453 805 107 817 579 983 838 Total operating result 22 564 22 738 27 372 29 952 45 879 67 132 Finance revenue and costs - 5 081-2 733-2 238-2 576-2 213-6 772 Profit before taxes 17 483 4 20 005 25 134 27 376 43 666 60 360 Income tax expence - 5 293-7 350-6 884-7 768-10 796-14 356 Net profit 26 365 5 12 655 18 250 19 608 32 870 46 004 Depreciation 21 857 19 393 19 467 20 233 17 370 21 984 Cash flow 64 016 5 32 048 37 717 39 841 50 240 67 988 Capital expenditure 16 172 13 334 14 323 14 968 22 560 70 414 Dividend 4 825 5 344 7 794 7 794 13 361 18 483 Equity 1 108 789 113 371 126 420 116 365 139 658 69 183 Equity as a percentage of balance sheet total 1 40 46 51 46 52 36 Share capital 8 907 8 907 8 907 8 907 8 907 8 907 Number of shares in circulation 2 (x 1 000) 22 268 22 268 6 22 268 22 268 7 22 268 8 22 268 Data per share in euros Net profit 3 1.17 0.58 0.84 0.91 1.50 2.11 Cash flow 3 1.50 1.48 1.75 1.84 2.29 3.12 Dividend 0.22 0.24 0.35 0.35 0.60 0.83 Equity 1 4.89 5.09 5.68 5.23 6.27 7.60 10 9 Profit distribution as a percentage of net profit 40 42 43 43 41 40 Number of stores at year-end - own stores 675 678 683 683 674 927 - franchisees / dépositaires 42 42 47 47 47 46 - total 717 720 730 730 721 973 Retail floor space at year-end (m 2 ) 458 400 460 200 467 000 467 000 442 000 601 000 Number of employees at year-end 7 513 7 300 6 945 6 945 6 606 9 627 Average number of FTEs 4 987 4 863 4 745 4 745 4 609 5 470 1 Figures are before profit appropriation. 2 Number of shares restated to reflect the number after share split. 3 The earnings per share have been calculated based on the weighted average number of shares in circulation, allowing for the effects of dilution. Comparatives have been restated accordingly. The own shares purchased are not included in the average number of shares in circulation. 4 Refers to profit on ordinary activities. 5 Including extraordinary result of 14 175. 6 Includes 1 011 000 treasury shares. 7 Includes 737 922 treasury shares. 8 Includes 754 422 treasury shares. 9 Not recalculated on IFRS-principles. 10 Includes purchase of real estate of 47 500 in connection with sale of furniture companies. 110

OTHER INFORMATION Information concerning Board members Supervisory Board J.G.M. van Oijen (Chairman) was first appointed in 2001. His current term of office ends in mid-2009. He is Chairman of the Remuneration & Appointment Committee, has the Dutch nationality and is aged 64. Mr Van Oijen is a company adviser and was formerly Chairman of the Managing Board of Gamma Holding NV. He is a member of the Supervisory Board of Allers Holding BV, Industriebank Liof NV, Rabobank Venlo e.o. and Solvay Pharmaceuticals BV. C.H. van Dalen was first appointed in 2003. His current term of office ends in mid-2008. He is Chairman of the Audit Committee, has the Dutch nationality and is aged 54. Mr Van Dalen is a member of the Managing Board (CFO) of TNT NV. He is Supervisory Board member of NIBC Bank. He is also Board member of the National Comittee 4 and 5 May and is Member of the Advisory Board of Arthur D. Little Netherlands. A. Nühn was first appointed in 2002. His current term of office ends in mid-2010. He has the Dutch nationality and is aged 53. Mr Nühn is CEO of Sara Lee International BV and is a Supervisory Board member of Alpinvest Partners NV and Leaf International BV. A.N.A.M. Smits was first appointed in 1982. His current term of office ends on April 24, 2007. He is member of the Audit Committee, has the Dutch nationality and is aged 63. Mr Smits is a company adviser and a Supervisory Board member of Ballast Nedam NV, CZ-groep OVM, Faber Halbertsma Groep BV, Maas International NV, Sofinim NV and Vebego Holding BV. Managing Board: F.K. De Moor (CEO) was appointed a member of the Managing Board of Macintosh Retail Group NV on October 1, 2002 and CEO on February 1, 2003. Mr De Moor is aged 44 and has the Belgian nationality. He has worked at Macintosh Retail Group since 1994 in the positions of Head of Management Services at Tonton Tapis NV, Belgium (1994-1995), Director of GP Décors SNC, France (1995-2000), and until 2002, Managing Director of Kwantum Deco Group (Netherlands, Belgium and France). He is a Supervisory Board member of Sligro Food Group NV, member of the Managing Committee of Raad Nederlandse Detailhandel, member Managing Board ECP NL and Board member Foundation Retail Marketing. M.S.J.H. Stevens (CFO) was appointed a member of the Managing Board of Macintosh Retail Group NV on January 1, 2000. Mr Stevens is aged 59 and has the Dutch nationality. He has held various positions at Macintosh Retail Group since 1969. 1969-1975: Analyst/management scientist at Macintosh Confectie (international clothing manufacturing); 1975-1982: Distribution Manager at Superconfex Benelux (clothing retailer); 1982-1985: Logistics & Control Manager at Superconfex Benelux; 1985-1990: Management Services Director at Superconfex Benelux (also responsible for Human Resources); 1989-1990: Interim Management Services Director at Kwantum; 1991-2000: Group Finance & Economy Director at Macintosh Retail Group NV. L.J.J.M. van de Wiel (COO) was appointed a member of the Managing Board of Macintosh Retail Group NV on January 1, 2000. Mr Van de Wiel is aged 59 and has the Dutch nationality. Between 1992 and 2000, he held positions in Macintosh Retail Group as Managing Director of Kwantum Nederland and Coordinator of Deco-groep Macintosh Retail Group. He is a Supervisory Board member of ASV-Beheer BV (Seacon Logistics) and NLW Groep NV and a member of the general management of the Zuid-Limburg Chamber of Commerce. 111

OTHER INFORMATION List of addresses BelCompany Netherlands Wageningselaan 2, 3903 LA Veenendaal Tel.: # 31 # 318-56 98 98 Fax: # 31 # 318-56 98 99 Internet: www.belcompany.nl email: info@belcompany.com BelCompany Belgium Satenrozen 20, 2550 Kontich, België Tel.: # 32 # 3 287 34 34 Fax: # 32 # 3 287 34 35 Internet: www.belcompany.be email: info@belcompany.be GP Décors 27, bis Rue du Général Leclerc, 80110 Moreuil, Frankrijk Tel.: # 33 # 32 235 36 37 Fax: # 33 # 32 209 82 33 Internet: www.gpdecors.fr email: gstevens@gpdecors.fr Halfords Netherlands Accustraat 2-4, 3903 LX Veenendaal Tel.: # 31 # 318-55 91 11 Fax: # 31 # 318-54 13 11 Internet: www.halfords.nl email: info@halfords.nl Halfords Belgium Boomsesteenweg 936, 2610 Antwerpen/Wilrijk, België Tel.: # 32 # 387 733 94 Fax: # 32 # 387 734 69 Internet: www.halfords.be email: hoofdkantoor@halfords.be Hoogenbosch Retail Group Larenweg 70, 5234 KC Den Bosch Tel.: # 31 # 73-648 34 83 Fax: # 31 # 73-642 55 15 Internet: www.dolcis.nl www.manfield.com www.invito.com www.pro-sport.nl email: receptie@hoogenbosch.nl Kwantum Netherlands Belle van Zuylenstraat 10, 5032 MA Tilburg Tel.: # 31 # 13-462 66 26 Fax: # 31 # 13-463 79 79 Internet: www.kwantum.nl email: info@kwantum.nl Kwantum Belgium Rijksweg 376, 3630 Maasmechelen, België Tel.: # 32 # 897 701 68 Fax: # 32 # 897 701 52 Internet: www.kwantum.be email: info@kwantum.be Macintosh Hong Kong Unit 712, 7/Floor Houston Centre, 63 Mody Road, Tsim Sha Tsui East Kowloon, Hong Kong Tel.: # 852 # 273 579 39 Fax: # 852 # 273 578 70 email: jeffry@macintoshretail.com Macintosh Intragroup Services Rijksweg 376, 3630 Maasmechelen, België Tel.: # 32 # 897 701 50 Fax: # 32 # 897 701 69 email: treasury@mrg.isabel.be mrmk@misgroup.be Nea International St. Gerardusweg 50, 6224 LV Maastricht Tel.: # 31 # 43-407 92 20 Fax: # 31 # 43-407 92 21 Internet: www.push-brace.com email: nea-international@push-brace.com Scapino Industrieweg 28, 9403 AB Assen Tel.: # 31 # 592-34 00 42 Fax: # 31 # 592-34 49 04 Internet: www.scapino.nl email: scapino@scapino.nl SC Retail (Scapino Belgium) Rijksweg 376, 3630 Maasmechelen, België Telefoon: # 32 # 89 770 167 Fax: # 32 # 89 770 169 Internet: www.scapino.com email: scretailnv@scretailnv.be 112

A Dutch language version of this Annual Report is available. Van dit Jaarverslag is een Nederlandstalige versie beschikbaar. Should different interpretations arise between the Dutch and the English language version of this Annual Report, the Dutch language version prevails. This Annual Report is printed on environmentally friendly paper (E.C.F./T.C.F.). Realisation: Caris & Sak, Heerlen. The Netherlands

Macintosh Retail Group NV - Parkweg 20, 6212 XN Maastricht - P.O.box 5770, 6202 MH Maastricht, The Netherlands Tel. +31 43-3280780 - Fax +31 43-3257030 - info@macintosh.nl - www.macintosh.nl