ORCO PROPERTY GROUP S.A. Société Anonyme FINANCIAL INFORMATION for the year ended 31 December 2013 ORCO PROPERTY GROUP S.A. 40, rue de la vallée, L2661 Luxembourg R.C.S. Luxembourg – B 44.996 WorldReginfo - 1f6b8737-ffb9-4894-a809-5ce05654f9a3 Management report Management Report as at 31 December 2013 1 Message from the management .................................................................................................................................... 1 2 2013 and post-closing key events ................................................................................................................................. 1 2.1 Facility agreement termination on Zlota project ............................................................................................................................................... 1 2.2 ORCO GERMANY S.A. capital increases ............................................................................................................................................................ 1 2.3 New CEO and Management Team for Orco Property Group ............................................................................................................................ 2 2.4 Orco’s Hungarian subsidiaries open insolvency proceedings........................................................................................................................ 2 2.5 Orco resumes international arbitration proceedings against Croatian Centre for Restructuring and Sales regarding Suncani Hvar .. 2 2.6 Changes in the Board of Directors...................................................................................................................................................................... 2 2.7 Implementation of reserved capital increase ..................................................................................................................................................... 3 2.8 EGM’s approval of the increase of the Company’s authorized share capital ................................................................................................ 3 2.9 Disposal of 19,900,000 Orco Germany shares ................................................................................................................................................... 3 2.10 Joint-venture with Unibail Rodamco .................................................................................................................................................................. 3 2.11 Launch of German development projects and new limited acquisitions contemplated .............................................................................. 3 2.12 Buy back of Hungarian liabilities ........................................................................................................................................................................ 3 2.13 Sale of units in Endurance Real Estate Fund .................................................................................................................................................... 4 2.14 Disposal of the land plot U Hranic ...................................................................................................................................................................... 4 3 Market environment ........................................................................................................................................................ 4 3.1 Global macro-economic conditions .................................................................................................................................................................... 4 3.2 European investment activity and lending market ............................................................................................................................................ 5 3.3 Foreign exchange rates movements .................................................................................................................................................................. 5 3.4 Selected market focus .......................................................................................................................................................................................... 6 4 Portfolio: Gross Asset Value and operational performance ...................................................................................... 9 4.1 Total portfolio evolution ....................................................................................................................................................................................... 9 4.2 Property Investments evolution ........................................................................................................................................................................ 11 4.3 Development evolution....................................................................................................................................................................................... 23 5 Liabilities and financial profile .................................................................................................................................... 29 5.1 Cash and cash equivalents ................................................................................................................................................................................ 29 5.2 Loan to value ....................................................................................................................................................................................................... 30 5.3 Financial liabilities .............................................................................................................................................................................................. 30 6 EPRA Net Asset Value .................................................................................................................................................. 31 7 Full Year 2013 audited Financial Results ................................................................................................................... 31 7.1 Consolidated income statement ........................................................................................................................................................................ 32 7.2 Revenue by Business line .................................................................................................................................................................................. 32 7.3 Balance sheet ...................................................................................................................................................................................................... 38 7.4 Cash flow statement ........................................................................................................................................................................................... 40 7.5 Annual statutory financial information ............................................................................................................................................................. 40 WorldReginfo - 1f6b8737-ffb9-4894-a809-5ce05654f9a3 Management report 8 Corporate governance ................................................................................................................................................. 41 8.1 Principles ............................................................................................................................................................................................................. 41 8.2 Board of Directors ............................................................................................................................................................................................... 41 8.3 Committees of the Board of Directors .............................................................................................................................................................. 43 8.4 Description of internal controls relative to financial information processing. ............................................................................................ 45 8.5 Remuneration and benefits ................................................................................................................................................................................ 45 8.6 Corporate Governance rules and regulations ................................................................................................................................................. 45 8.7 Additional information ........................................................................................................................................................................................ 47 8.8 External Auditors ................................................................................................................................................................................................ 49 9 Shareholding ................................................................................................................................................................. 49 9.1 Share capital and voting rights ......................................................................................................................................................................... 49 9.2 Shareholder