Cinema City

Cinema City’s strategic goal is to become the number 1 cinema operator in Europe.

The Company will continue to strengthen its position as the largest multiplex operator and film distributor in Central and Eastern Europe and to maintain its position as one of the leading operators in Israel. The Company plans on expanding its operations into other countries of the CEE region as well as it researches expansion into the markets very distant from CEE.

The Company’s current investment plan through 2012 call for developing over 40 new multiplexes with over 450 screens in all the countries in which in currently operates, with a particular focus on Romania, where in 2007 it opened first 2 multiplexes and so far has signed over 30 lease agreements to develop multiplex operations in most of the country’s major cities.

Cinema City growth will be sustained by strong demand for modern entertainment venues.

The Company’s key strategic objectives include:

• Strengthening its position in its existing markets. Cinema City intends to consolidate its position as the largest multiplex operator in Poland by expanding its activities in Poland while strengthening its position as a leading operator in Hungary, the Czech Republic, Bulgaria, Romania and Israel.

• Expanding into new markets in Central and Eastern Europe. Based on the same operating model as used in Central Europe, Cinema City plans to launch its activities in other countries of the region.

• Investigation of development opportunities in other regions. Cinema City researches opportunities to expand into the markets distant from the CEE region, both to the West and to the East.

• Realization of construction projects and real property trade. In connection with its cinema development plan, Cinema City intends to continue to pursue new real estate development projects by searching and executing the most advantageous projects selected to ensure a proper and stable base of leased and owned real property. The aim of this strategy is to allow the Company to selectively leverage the success of multiplexes into real estate and cinema related entertainment centers.

• Steadily expanding, acquiring and maintaining the customer base. The Company operates in markets that are characterized by relatively low per capita audiences; this is why Cinema City plans to promote a keener interest in developing a movie going culture (through the promotion of loyalty programs, Internet booking and using other marketing tools).

• Development of cinema advertising. The Company intends to offer cinema advertising services and sponsorship agreements in all countries of operation and to achieve, in line with its cinema chain development, a leading position in this sector of the CEE region advertising market.

• Development of film distribution. As its position in new markets is consolidated, Cinema City also plans to develop its film distribution activities, which is a natural extension of the Company’s movie exhibition business.