Raport.

GRIFFIN PREMIUM RE NV Raport okresowy roczny skonsolidowany za 2017 RS

WYBRANE DANE FINANSOWE w tys. z? w tys. EUR 2017 2016 2017 2016 Net Operating Income (NOI) 135,116 100,784 31,730 23,096 Profit before net financing costs 113,573 175,259 26,671 40,163 Profit before tax 181,365 78,154 42,591 17,910 Profit for the year 133,370 53,403 31,320 12,238 Cash flows from operating activities 100,921 82,871 23,700 18,991 Cash flows from investing activities (822,776) (172,139) (193,217) (39,448) Cash flows from financing activities 742,610 92,131 174,391 21,113 Total assets 20,755 2,863 4,874 656 Total assets 3,158,272 2,220,061 757,216 501,822 Total equity 1,020,915 160,312 244,771 36,237 Non-current liabilities 1,268,291 1,811,451 304,081 409,460 Current liabilities 869,065 248,298 208,364 56,125

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    CREATING THE
    LEADING OFFICE
    LANDLORD IN
    POLAND
    ANNUAL REPORT AND FINANCIAL STATEMENTS 2 0 17


    1
    Griffin Premium re .. AnnuAL rePOrT An D finAn CiAL STAT emenTS 2 017
    Financial Statement S Governance PortFolio o verview overview Strate Gic r eview
    Griffin Premium re .. AnnuAL rePOrT An D finAn CiAL STAT emenTS 2 017
    GRIFFIN PREMIUM RE..
    OWNS PRIME OFFICE AND MIXED-USE
    RETAIL AND OFFICE PROPERTIES IN
    THE LARGEST CITIES IN POLAND.
    these buildings generate stable income thanks to high
    occupancy rates and long-term leases with prominent tenants.
    Overview 1-7
    2017 Highlights 1
    At a Glance 2
    investment Proposition 4
    Key figures 6
    main indicators 7
     
    Strategic Review 8-39
    Our market 10
    Our Business model and Strategy 14
    Strategy in Action 16
    executive management Statement 20
    investment review 22
    Leasing review 24
    financial review 26
    risk report 28
    Viability Statement 33
    Board of Directors 34
    The Team 38
    Diversity 39
    Portfolio Overview 40-57
    Portfolio Overview 42
    Green Horizon 44
    CB Lubicz i/ii 45
    Tryton Business House 46
    A4 Business Park 47
    West Gate 48
    nordic Park 49
    Batory Building i 50
    Bliski Centrum 51
    Philips House 52
    renoma 53
    Supersam 54
    Hala Koszyki 55
    West Link 56
    Browary Warszawskie 57
    Beethovena (stage i&ii) 57
    Governance 58-77
    Corporate Governance report 60
    Directors’ report 67
    non-executive Directors’ report 68
    nomination and remuneration
    Committee report 69
    Audit Committee report 71
    investment Committee report 74
    Sustainability report 75
    Financial Statements 78-155
    Consolidated financial Statements 80
    Standalone financial Statements 133
    independent Auditor’s report 149
    Appendices 156 -164
    investing Policy 158
    Schedule of Properties 159
    financial Calendar 2018 160
    Glossary 161
    General information GPre 164
    Visit us online: www.en.griffin-premium.com
    ¡ Listed on the Warsaw Stock e xchange (GPW )
    since 13 April 2017, the Company raised net
    proceeds from the sale of new shares of
    eur 28 million (PL n 120 million), which have
    been invested in new projec ts.
    ¡ for ward purchase transac tion of West Link
    office building in Wroclaw with GL A of
    14,362 sqm was concluded. Additionally the
    Company committed to invest 25% stake in
    two Warsaw-based office schemes being
    developed by e cho investment S.A. (Browar y
    and Beethovena) and secured r ight Of first
    Offer (“ rO fO”) with respec t to the remaining
    a 75% stake. Both transac tions were funded
    from i PO proceeds.
    ¡ Tender offer, as a result of which Globalwor th
    became the majority shareholder.
    ¡ Acquisition of three high-quality office
    proper ties from e PP for an aggregate
    purchase price of c.a. eur 160 million.
    The office proper ties are West Gate in
    Wrocław, Tr y ton Business House in Gdansk
    and A4 Business Park in Katowice with total
    GL A of 71,217 sqm.
    ¡ Significant reduc tion in vacancies from
    15.6% to 7.6% over last 12 months (1.5%
    including rental guarantees in the office
    components).
    2017 HIGHLIGHTS
    ePr A n AV per share
    €1. 69
    Loan-to-Value ratio
    41% *
    ePr A nnn AV per share
    €1. 57
    ePr A e arnings per share
    € 0 .10
    ePr A nnn AV
    € 24 4 .771m
    ePrA e arnings
    €15 . 8 9 0 m
    nAV
    € 24 4 .771m
    Gain on the valuation
    of proper ty
    € 32 .94 6 m **
    nAV per share
    €1. 57
    net operating income
    € 31.73 0 m
    earnings before
    tax
    €4 2 . 591m
    e Pr A n AV
    € 2 6 4 .13 0 m
    Por tfolio open market value
    €680m
    * Loan from Globalwor th Finance Guernsey Limited in the amount of
    EUR 165 million for the purposes of ratio calculation treated as an
    equity
    ** Excluding impac t of FX movements


    Governance
    23
    Griffin Premium re .. AnnuAL rePOrT An D finAn CiAL STAT emenTS 2 017 Griffin Premium re.. AnnuAL rePOrT An D finAn CiAL STAT emenTS 2 017
    overview
    AT A GLANCE
    Griffin Premium RE.. N.V. is a Netherlands-
    incorporated company operating in a
    REIT-like structure, with a focus on
    Poland’s growing office property market
    Griffin Premium re .. n.v . was established in December 2016 by
    spinning off nine attractive properties from a portfolio created
    and managed by Griffin r eal estate group, a leading investor in
    cee commercial real estate. Since a pril 2017, Griffin Premium
    re .. n .v . has been listed on the w arsaw Stock exchange, and
    Globalworth became a majority shareholder in December 2017.
    WHAT WE DO
    Portfolio by asset type Portfolio by location
    w e have a diversified portfolio of twelve office and mixed-
    use assets in prime locations in six of Poland’s largest cities.
    OUR INVESTMENTS
    12
    pure office and mixed-use
    high-street properties
    242,558
    square meters of GLA
    €680m
    property portfolio valuation
    OUR HISTORY
    2014• Purchase of the Bliski Centrum,
    Lubicz Office Centre projects. 2016• Opening of the Hala Koszyki, following its successful
    development.
    • Opening of the office part in Supersam.
    2015• Purchase of the Green Horizon
    project and the opening of the
    Supersam project, excluding the
    office component.
    2012• Purchase of Hala Koszyki and
    renoma projects
    2017• Spin-off Griffin real estate’s
    yielding properties and creation
    of Griffin Premium re.. n.V.
    • Griffin Premium re.. n.V.
    successfully debuts on Warsaw
    Stock exchange.
    • Securing new projects through
    forward purchase / funding and
    rOfO.
    • Acquisition of Westgate, A4
    Business Park and Tryton
    Business House.
    • Globalworth became the
    largest shareholder through
    settlement of the tender offer. 2013• Purchase of the Batory building,
    Philips House, Supersam, and
    nordic Park projects.
    OUR ASSETS
    Present in Poland’s
    largest cities
    5 /2
    1
    2 /1
    2
    1
    warsaw
    Krakow
    Katowice Lodz
    w roclaw
    1
    Gdansk
    Standing assets
    contracted assets
    Batory I
    64%
    14% 22%
    Pure offceHigh-street offceHigh-street retail
    23%
    23%
    20%
    14% 10%
    10%
    WroclawKatowiceWarsawLodzKrakowGdansk
    * Based on GL A
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    overview
    INVESTMENT PROPOSITION
    Going from
    strength to strength
    DIVERSIFIED
    PORTFOLIO
    HIGHLY VISIBLE EARNINGS
    AND CASH FLOWS
    ATTRACTIVE ACCESS TO
    PROPRIETARY GROWTH
    OPPORTUNITIES
    HIGHLY EXPERIENCED
    MANAGEMENT TEAM
    OUTSTANDING
    BLUE-CHIP TENANT BASE
    § Prime locations in top
    Polish cities.
    § Office: Gri of Top 5 tenants
    accounts for 24.1% of total
    portfolio Gri.
    § retail: Gri of Top 5 tenants
    accounts fo 6.0% of total
    portfolio Gri.
    § Occupancy rate of around
    98.5%.
    § Long-term contracts with
    prominent tenants (WAuLT
    at 4.6 years
    1).
    § fX hedge through eur –
    dominated rents.
    § inflation hedge by nearly
    100% index-linked rents.
    § retail component is covered
    by a 5 year nOi Guarantee
    until 12 April 2022.
    § unleased office space as of
    13 April 2017 is subject to a
    5 years rental Guarantee at
    market rental terms.
    OUTSTANDING
    FUNDAMENTALS AS
    LEADING CEE ECONOMY
    § Continued GDP growth
    since 1992.
    § Significant eu funding
    available until 2020
    supporting investments
    and further infrastructure
    developments.
    § Highly skilled workforce
    sustaining growth and
    attracting multinational
    corporates to Poland.
    § Strict and healthy banking
    system.
    § Low public debt in relation
    to GDP.
    SUSTAINABLE
    DIVIDEND PAYOUT
    c. 65%
    of funds from operations to be paid in
    the form of dividends, 90% since 2018.
    Our high-quality tenant base represents a wide array of sectors
    Griffin Premium re.. n.V.’s key
    managers are professionals
    with significant property
    industry experience,
    including in the acquisition,
    management, modernization
    and financing of property. They
    have a deep understanding of
    the projects in the company’s
    real estate portfolio, having
    been responsible for the
    successful revitalisation and
    construction of key buildings.
    § forward Purchase / forward
    funding for West Link
    preleased at 98% of total
    GLA, with the remaining 2%
    secured with 5 year master
    lease by echo investment
    S.A.
    § right of first Offer (“rOfO”)
    from echo investment for
    Beethovena and Browary
    development projects.
    EXTERNAL DEBT STRUCTURE WITH
    HEADROOM FOR DELEVERAGING
    Debt maturity profile
    2017 201820192020202120222023+
    13.6
    34
    45.9 259.8 0
    150 200 250 300
    50
    100
    (€m)
    1
    E xcluding Break Options; 4.5y including Break Options
    adjusted to reflec t Landlord’s benefit s from penalties
    to be paid by a tenant. E xcluding loans from shareholders (considered as equit y)
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    overview
    No. of operating investments 12
    GL A (sqm) 242,558
    Occupancy 98.5%
    WAU LT
    1 4.6 years
    Average proper t y’s age 6.5 years
    1 E xcluding Break Options; 4.5y including Break Options adjusted to reflec t Landlord’s benefit s from penalties to be paid by tenant.
    Selected consolidated financial data
    in ths PLN in ths EUR
    Consolidated statement of profit or loss 01.01.2017- 3 1.12 . 2 0 17 01.01.2016 -
    3 1.12 . 2 0 16 01.01.2017-
    3 1.12 . 2 0 17 01.01.2016 -
    3 1.12 . 2 0 16
    Net Operating Income (NOI) 13 5 ,116 10 0,784 31,73 0 23,096
    Profit before net financing costs 113 , 5 7 3 175 , 2 59 26, 671 4 0 ,16 3
    Profit before tax 181, 3 6 5 78 ,15 4 42,591 1 7, 9 1 0
    Profit for the year 13 3 , 370 53,403 31, 3 2 0 12,238
    Number of shares 15 6 ,13 3 ,17 9 13 3 ,9 31,912 15 6 ,13 3 ,17 9 13 3 ,9 31,912
    Profit per one share 0.85 0.40 0.20 0.09
    in ths PLN in ths EUR
    Consolidated statement of cash flows 01.01.2017- 3 1.12 . 2 0 17 01.01.2016 -
    3 1.12 . 2 0 16 01.01.2017-
    3 1.12 . 2 0 17 01.01.2016 -
    3 1.12 . 2 0 16
    Cash flows from operating ac tivities 10 0,921 82, 871 23,70 0 18,9 91
    Cash flows from investing ac tivities ( 8 2 2 ,7 76)(172 ,13 9 )(19 3 , 217 ) ( 3 9, 4 4 8 )
    Cash flows from financing ac tivities 742 , 610 9 2 ,131 174 , 3 9 1 21,113
    Net cash flows 20,755 2,863 4 , 8 74 656
    in ths PLN in ths EUR
    Consolidated statement of financial position As at
    3 1.12 . 2 0 17 As at
    3 1.12 . 2 0 16 As at
    3 1.12 . 2 0 17 As at
    3 1.12 . 2 0 16
    To t a l a s s e t s 3 ,15 8 , 2 7 2 2 , 2 2 0 , 0 61 757,216 5 01, 8 2 2
    Total equity 1, 0 2 0 ,915 16 0 , 312 24 4,771 36,237
    Non-current liabilities 1,268,291 1, 811, 4 51 304,081 409,460
    Current liabilities 8 6 9, 0 6 5 248,298 208,364 5 6 ,12 5
    Number of shares 15 6 ,13 3 ,17 9 13 3 ,9 31,912 15 6 ,13 3 ,17 9 13 3 ,9 31,912
    Book value per one share 6.54 1. 2 0 1. 5 7 0.27
    KEY FIGURES
    in ths PLN in ths EUR As at
    3 1.12 . 2 0 17 As at
    3 1.12 . 2 0 16 As at
    3 1.12 . 2 0 17 As at
    3 1.12 . 2 0 16
    Financial ratios
    Balance sheet equit y ratio in % 32%7%32% 7%
    Net Loan-to-Value ratio (net LTV) in %
    * 41% 62% 41%62%
    Funds from Operations (FFO) 68,8844 4 ,13 0 16 ,1671 0 ,113
    Funds from Operations (FFO) per share 0.44 0.33 0 .1 00.08
    Normalised Funds from Operation (FFO) 85,3834 4 ,13 02 0 , 0 51 1 0 ,113
    Normalised Funds from Operations (FFO) per share 0.550.33 0 .130.08
    Adjusted Funds from Operations (FFO) 17,506 (131, 5 87 ) 4 ,111(30,155)
    Adjusted Funds from Operations (FFO) per share 0 .11 ( 0 .9 8 ) 0.03 (0.23)
    EPRA Net asset value (EPRA NAV ) 1,101, 6 6 0 222,518 264,130 50,298
    EPRA Net asset value (EPRA NAV ) per share 7. 0 6 1. 6 6 1. 69 0.38
    EPRA Triple Net asset value (EPRA NNNAV ) 1, 0 2 0 ,915 16 0 , 312 24 4,771 36,237
    EPRA Triple Net asset value (EPRA NNNAV ) per share 6.54 1. 2 0 1. 5 7 0.27
    * Loan from Globalwor th Finance Guernsey Limited in the amount of EUR 165 million for the purposes of ratio calculation treated as an equit y.
    Net Loan-to-Value ratio calculated as: ( Total bank loans – cash and shor t-term deposits as well as par t of the restric ted cash
    constituting debt ser vice reser ve account maintained at the request of the bank lenders) / Investment proper t y.
    Funds from Operations (FFO) calculated as: Net Rental Income – Administrative expenses + Finance Income (excluding non-cash
    elements) – Interest Expenses (excluding impac t of amor tised cost and other non-cash elements).
    Normalised Funds from Operations calculated as: FFO – one-off non-recurring items (e.g. acquisition costs, tender offer cost).
    Adjusted Funds from Operations (AFFO) calculated as: FFO – Capitalised expenses on Investment Proper t y or Investment Proper t y
    Under Construction.
    EPRA Net Asset Value (EPRA NAV ) calculated as: Total equit y – Deferred tax assets on Investment Proper t y + Deferred tax liabilities
    on Investment Proper t y – Fair Value of financial instruments + Deferred tax on financial instruments.
    EPRA Triple Net Asset Value (EPRA NNNAV ) calculated as: EPRA NAV + Deferred tax assets on Investment Proper t y - Deferred tax
    liabilities on Investment Proper t y + Fair Value of financial instruments - Deferred tax on financial instruments – Fair value of debt.
    Number of shares – number of ordinar y shares of Grif fin Premium RE.. N.V. issued as of the balance sheet date. For the purpose of
    these consolidated financial statements the number of ordinar y shares of Grif fin Premium RE.. N.V. issued as of 3 March 2017 was
    used for EPS calculation for 2016.
    From the date of incorporation of the Grif fin Premium RE.. N.V. i.e. from 21 December 2016 until 3 March 2017 the number of shares
    increased from 45,0 0 0 shares to 133,931,912 shares.
    FINANCIAL
    INFORMATION FINANCIAL
    INFORMATION
    MAIN INDICATORS
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    overview Governance
    9
    Our market
    10
    Our Business model and Strategy 14
    Strategy in Action 16
    executive management Statement 20
    investment review 22
    Leasing review 24
    financial review 26
    risk report 28
    Viability Statement 33
    Board of Directors 34
    The Team 38
    Diversity 39
    STRATEGIC
    REVIEW
    aPPenDiceS
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    overview Governance
    10 11
    Griffin Premium re .. AnnuAL rePOrT An D finAn CiAL STAT emenTS 2 017 Griffin Premium re.. AnnuAL rePOrT An D finAn CiAL STAT emenTS 2 017
    OUR MARKET
    West Gate
    Robust macro driversOver the recent years, the Polish economy has had
    relatively stable per formance. This was par ticularly
    apparent during 20 09, when Poland was the only
    European countr y that avoided recession.
    Although since 2016 economic grow th slowdown has
    been obser ved in the whole of the European Union,
    Poland’s Gross Domestic Produc t has grown by 4.6%
    in 2017 compared to 2.9% in 2016.
    This acceleration of GDP increase was mainly driven
    by private consumption and a lower saving rate. In H2
    2017 a revival in investments was obser ved, especially
    in the public sec tor. Forecasts for the next years
    predic t stable grow th of the economy mainly driven
    by a positive trade balance, a higher investment rate
    and private consumption. In 2018, GDP is expec ted
    to rise by 3.8%, making the Polish economy one of
    the best per forming Central and Eastern European
    Countries. The acceleration of economic grow th in the second half
    of 2017 has also translated into the Polish labor market
    which has significantly improved in 2017. At the end of
    the year, the registered unemployment rate was 6.6%
    - the lowest rate in the last 26 years. While the
    unemployment has been systematically dropping, the
    average wage increased by 7.3% compared to last year.
    In the past year the Polish złot y proved to be one of
    the best performing currencies among emerging
    markets in relation to the dollar and euro. The PLN/
    EUR rate stable in past years and is expec ted to
    fluc tuate in a relatively narrow band in the near
    future. Attractive real estate marketPoland is the largest commercial real estate market in the
    Central and Eastern Europe region, at trac ting
    international investors with relatively wide yield spread
    despite stabilit y. Prime yields in all sec tors have been
    compressed to record levels: 5.20% for prime of fice
    proper ties and 5.15% for prime retail assets, but this
    remains attractive in comparison to Western-European
    countries.
    The at trac tive Polish real estate market is reflec ted in
    the transaction volume, constantly growing since the
    drop in 20 08- 09 caused by global economic turmoil.
    In 2017 the total investment volumes has exceeded
    EUR 5.0 billion, noting 10% y-o-y grow th and proving
    solid market liquidit y. The high demand for retail
    assets has been sustained at the level of EUR 2.0
    billion, while the volume in the of fice sec tor dropped
    slightly to EUR 1.6 billion (-12% comparing to 2016).
    There is an increasing share of large single assets and
    por tfolio transac tions in both of fice and retail sec tors.
    The total supply of modern of fice space in Poland
    amounts to 9.4 million sqm including 5.3 million sqm
    in Warsaw and 4.1 million sqm in regional cities.
    Despite the continuously growing stock, the vacancy
    rates are at relatively low levels: below 12% in Warsaw
    and below 10% in most of the major regional cities
    with slight decreasing trends over the last 3- 4
    quarters.
    25%
    75%
    -10 -8 -6
    -4
    -20
    2
    4
    6
    8
    10
    UK
    Hungary
    Czech Republic
    Eurozone Italy
    France
    Spain
    GreeceIreland
    Germany
    Poland
    2018E
    2017E
    2016A
    2015A
    2014A
    2013A
    2012A
    2011A
    2010A
    2009A
    2008A
    2007A
    2006A
    Real GDP growth (%)
    0 1
    2 3 4
    5
    6
    7 8
    2018E
    2017E
    2016A Bulgaria
    Slovakia
    Czech Republic
    Romania
    Hungary
    Poland
    25%
    75%
    GDP growth(%)
    2.9 4.6
    3.8
    2.1 3.8
    3.4
    4.7 7.0
    4.4
    2.5 4.6
    3.6
    3.3
    3.3
    3.1
    3.9
    3.6
    2.2
    0 1
    2
    3
    4 Average commercial yield spread (RHS)
    0 1
    2 3 4
    Average commercial yield spread (RHS)
    0 1
    2 3 4
    5
    6
    10Y Poland bond yield (LHS)
    Retail prime yields (LHS)
    Offce prime yields (LHS) 2017
    2016
    2015
    2014
    2013
    2012
    2011
    %
    25%
    0
    1000 2000
    3000
    4000
    5000
    6000
    Other
    Industrial
    Retail
    Offce 2018
    2017
    2016
    2015
    2014
    2013
    2012
    2011
    2010
    2009
    2008
    2007
    25%
    75%
    €m
    KEY DRIVERS
    economy immune to external economic shocks
    One of the highest growth in Cee
    Still offering attractive yield spread despite stability
    Solid market liquidity in Poland
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    overview Governance
    12 13
    Griffin Premium re .. AnnuAL rePOrT An D finAn CiAL STAT emenTS 2 017 Griffin Premium re.. AnnuAL rePOrT An D finAn CiAL STAT emenTS 2 017
    KEY DRIVERS
    The average headline rent in prime of fice assets
    located in Warsaw’s CBD remain at the level above
    EUR 20.0 sqm/month. In other zones, rental levels
    var y depending on proximit y to the cit y center,
    building and age standard and its micro-location,
    t ypically up to EUR 16.0 sqm/month. In most major
    regional cities, headline rents var y from about EUR
    13.0 to 14.5 sqm/month.
    The headline rent in prime retail assets located in
    Warsaw can achieve EUR 130.0 sqm/month, but
    this concerns relatively small units with a good
    position in centrally located retail properties, incl. high-street retail units. The average prime
    headline rent in regional cities varies in the range
    of 50.0 - 60.0 EUR/sqm. The average vacancy is
    below 3% in Warsaw and 5 - 6% in regional cities
    apar t from several exceptions, such as Wroclaw
    and Tri-cit y with lower vacancy rates.
    OUR MARKET
    COnTinueD
    0
    500
    1,000 5,300 Katowice
    Łódź
    Poznań
    Tri-City
    Wrocław
    Kraków
    Warsaw 0 5
    10
    15
    20
    25
    30 Katowice
    Łódź
    Poznań
    Tri-City
    Wrocław
    Kraków
    Warsaw
    Offce stock ('000 sqm)
    Vacancy rate (%)
    11.3
    9.5
    8.6
    8.2
    9.4
    9.8
    11.7
    Vacancy rate (RHS) Under construction (LHS)
    Stock (LHS) (€/sqm/month)
    25.0
    11.0 13.513.9
    11.5 12.0 12.8 13.6 23.0
    16.0
    14.6
    14.5
    13.2 14.014.0 14.1
    5 10 152025
    Warsaw (centr.)
    Warsaw (other) Krakow
    Wroclaw Lodz
    Katowice Tri-City Poznan
    20 42
    64
    86
    108
    130
    Prime retail rents (LHS)
    Rent (€/sqm/month)
    Tri-City
    Poznan
    Szczecin
    Lodz
    Krakow
    Katowice Agg.
    Wroclaw
    Warsaw 0 1
    2
    3
    4
    5 6
    Market vacancy rate (RHS)
    Market vacancy rate (%)
    25%
    75%
    1300.6
    5.71.8 nananana na
    2.7 3.5 6.1
    5.55.0
    3.35.4
    3.9
    55 55
    5555
    5050
    60
    Griffn Premium RE..’s share of stock (%)
    Griffin Premium re.. assets in strong sub-markets with stable rents and low vacancy rates
    CB Lubicz I/II
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    overview Governance
    14 15
    Griffin Premium re .. AnnuAL rePOrT An D finAn CiAL STAT emenTS 2 017 Griffin Premium re.. AnnuAL rePOrT An D finAn CiAL STAT emenTS 2 017
    OUR BUSINESS MODEL AND STRATEGY
    A clear and proven model
    our aim is to develop our property and deliver attractive
    returns to shareholders both from the existing portfolio
    and through further acquisitions of properties meeting
    stringent criteria.
    INPUTS PROVEN INVESTMENT STRATEGY OUTPUTS
    Leading management platform
    ¡ Proven track record
    ¡ market knowledge
    ¡ Size and scale in core market
    Quality portfolio
    ¡ Strong macro environment
    ¡ Diverse and international tenant base
    ¡ Long-term contrac ted cash flow streams
    Capital discipline
    ¡ financial strength
    ¡ robust euro-dominated rental income
    ¡ Strong corporate governance
    Expertise & Relationships
    ¡ Deep local market knowledge of our 33
    colleagues
    ¡ With leading real estate industr y specialists
    and some of the principal financial
    institutions in Poland
    Shareholders:
    We intend to regular y pay out
    approximately 90% of funds from
    operations to our shareholders.
    ¡ Pure office buildings
    ¡ High-street mixed-use buildings (with office and retail
    components) Property type
    Property quality
    Locations
    Yield
    Vac a nc y
    Tenant structure
    Volume and process
    ¡ mainly low or no need for extensive renovation
    ¡ Sustainable proper ties with high quality standards
    ¡ Central and leading/dominant non-central
    locations in major Polish cities
    ¡ Attrac tive pricing enabling dividend payment
    for investors
    ¡ focus on lower vacancy projec ts (10 -15%) unless special
    angle
    ¡ High solvency tenants
    ¡ Balanced and covenant strong properties
    ¡ Good tenant mix in multi-tenant buildings
    ¡ Single-tenant buildings with rather exceptionally long
    assets leases
    ¡ minimum asset value of eur 10m
    ¡ multi-use properties
    ¡ Clear and fast decision process
    Te n a n t s :
    Attrac tive and produc tive working
    environments.
    Employees:
    Challenging and rewarding careers.
    Occupancy
    98.5%
    GAV
    €680m
    GL A (sqm)
    242,558
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    Griffin Premium RE.. N.V. invests in premium
    pure office and mixed-use properties at
    established locations of major Polish cities
    The Company believes that strong economic fundamentals will drive development of various businesses and
    also the trend of at trac ting foreign business (BPO and SCC in par ticular) will be maintained. As a result
    demand from businesses and retailers for high qualit y of fice and retail space will remain high, ensuring that
    the Company will generate stable and predic table results. With this strategy Grif fin Premium RE.. N.V. is
    responding to trends and developments in the commercial proper ties market and creates value as such.
    Grif fin Premium RE.. N.V.’s core strategy is based on three pillars:
    our strategy is to systematically continue to grow and
    optimize our portfolio. w hen expanding our portfolio we
    strictly adhere to economic, ecological and sociocultural
    criteria.
    STRATEGY IN ACTION
    Hala Koszyki The idea for the development of Hala Koszyki and
    restoring its previous glor y was born back in 2012
    when the plot was bought.
    The idea
    We believed that Poland and Warsaw deser ved a
    scheme which would be a meeting place for
    Varsovians and tourists. Place that would provide a
    covered square for the cold winter months with a
    complete and modern leisure and food of fer. Western
    European st yle market hall with wide variet y of unique
    food outlets and restaurants in addition to a
    supermarket and drugstore among other retailers.
    The new centre of Warsaw urban life
    Dating back to 1909, Hala Koszyki is firmly entrenched in
    Warsaw central’s landscape and atmosphere. Following a
    revitalization, it features the original Ar t Nouveau façade
    and a func tional complex with a total of 37 restaurants,
    cafés and other ser vice units. Launched in 2016, Hala
    Koszyki has become a centre of urban social life,
    appealing to Warsaw residents, tourists and business
    visitors. Its obvious success would most likely result in a
    number of followers who would like to create similar
    concepts but Hala Koszyki will remain as the first and only
    place like that in Warsaw.
    Hala Koszyki’s atmosphere builds on more than
    10 0 years of the original hall’s commercial tradition,
    always a cultural and social hotspot in Warsaw.
    Today, it is an ideal place for meetings with friends,
    tasting global cuisine, visiting the hot test restaurant
    in town and enjoying ar t or shopping. The diverse
    of fering is sure to appeal to clients from various age
    groups. Visitors are drawn to Hala Koszyki’s interior
    design, which combines modernit y with a historical
    climate, features of a traditional fair hall and
    contemporar y meeting space. Thanks to Hala Koszyki,
    Warsaw has joined an elite group of cities – New York,
    London, Oslo, Florence, Rotterdam – where once-
    forgot ten public buildings are regaining their
    splendour, becoming cult places that teem with life
    around tables laden with all cusines of the world.
    DEVELOPMENT TIME LINE
    aUGUST 2014• Construction
    commenced. DeceMBer 2015• Building A construction
    completed. SePTeMBer 2016• facade
    completed.
    SePTeMBer/
    ocToBer 2015
    • Construction reached
    Ground level.
    Ma Y 2012• Acquisition of development
    land for Hala Koszyki.
    MarcH 2016• Buildings B and C
    construction
    completed. ocToBer 2016• Property formally delivered. JULY 2014• Building permit
    issued.
    Grif fin Premium RE.. N.V.’s
    por tfolio is made up of premium
    of fice and high-street mixed-use
    proper ties. The focus is on
    expanding the por tfolio on an
    ongoing basis thanks to the deep
    knowlegde of the markets in
    which we operate. Grif fin
    Premium RE.. N.V. will work
    towards this goal pragmatically,
    without setting targets per city.
    The qualit y and the potential of
    the primary cities central
    locations are decisive, not grow th
    as such.
    It is impor tant to carefully
    manage the risk and
    consistently size opportunities.
    Our investment policy is
    continuously adjusted to the
    market situation in order to
    unlock the best earnings
    oppor tunities and secure
    future returns. Expansion and active
    management of premium
    properties situated in central
    locations of major
    cities requires a hands-on,
    proactive and pragmatic
    organisation. Good contacts and
    a strong local net work are
    indispensable. Active asset
    management ensures optimum
    let ting of the por tfolio.
    Employees are encouraged to
    creatively look for opportunities
    and solutions of f the beaten
    track. For its tenants, Grif fin
    Premium RE.. N.V. is an
    organisation that speaks their
    language, is flexible and ac ts
    ef fec tively. Grif fin Premium RE..
    N.V. of fers its employees the
    opor tunit y to be par t of a
    compact and ambitious team. A conservative financing
    strategy is necessar y to realise
    more predic table and stable
    results. The Company wants to
    maintain sound financing
    structure and finance
    investments with an
    appropriate use of borrowed
    funds. This is why Grif fin
    Premium RE.. N.V. aims to keep
    the loan-to-value ratio below
    50% and keeps its sources of
    financing diverse. With regard
    to the interest rate risk, the
    company intends to keep major
    par t of the loan por tfolio to
    have a fixed interest rate.
    As of 31 December, 2017 major
    par t is floating, but the
    intention of the management is
    to implement this policy during
    2018.
    Portfolio Organisation Financing
    1 2 3
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    STRATEGY IN ACTION
    Tenants
    Mindspace is a rapidly-growing global provider
    of coworking spaces for teams of all sizes, with
    15 locations in London, Berlin, Munich, Hamburg,
    Tel a viv, Herzliya, w arsaw and will soon be expanding
    to the U.S.
    In an upscale coworking environment with inspiring unique
    designs, an exceptional level of ser vice to its members and a
    vibrant real-world communit y. Mindspace of fers hassle-free
    comfor t and produc tive of fices, with stunning lounges and
    meeting rooms, and fully-equipped kitchens.
    Mindspace opened the doors of its first location in Poland, at the
    renovated Hala Koszyki projec t. The location spans 4 floors and
    over 4,0 0 0 sqm. The new space accommodates over 50 0
    members. Mindspace of fers optimal working solutions to Polish
    companies, star tups and entrepreneurs, as well as to
    international businesses expanding to Poland. Mindspace is set
    to become the new center of the cit y’s innovation ecosystem
    through the events that take place in the communit y such as
    keynote speeches, workshops, hackathons and more.
    The vibrant, real-world communit y helps Warsaw members at
    Mindspace to form meaningful relationships with other members
    aspiring for greatness, locally and around the world.
    Mindspace’s entr y into Poland generated huge interest among
    the communit y and press, resulting in more than 50 0 news
    pieces from leading publications including Eurobuild, Puls
    Biznesu, Business Insider, Forbes, Spider’s Web and more.
    Location: Central Warsaw
    Address: 63 Koszykowa St.,
    Warsaw
    Ty p e : Mixed-use of fice, retail
    and leisure proper t y
    Year of Completion: 2 016
    GL A: 22,24 6 sqm
    Green certification: BREEAM
    *
    Architec t:JEMS Architekci
    Landlord: Grif fin Premium RE.. N.V.
    General Contractor: Erbud
    Tenants (selected): Piotr i Paweł,
    Mindspace, Multimedia,
    Eneris, Rossmann
    Awards: Proper t y Design Awards
    2017, CEEQ A Awards 2017
    - Retail Development of
    the Year
    Surrounding Hala Koszyki are three modern buildings
    of fering more than 15,50 0 sqm of high-end of fice
    space. Numerous revitalised office buildings and
    hotels are situated in the vicinit y. The building is
    located near Plac Konst y tucji, the Politechnika metro
    station and the busy traf fic ar ter y al. Niepodległości,
    making it well-connec ted with even the fur thest par ts
    of the capital.
    The original buildings of Hala Koszyki construc ted
    bet ween 1906 and 1908 have entered into the
    Mazowieckie Voivodship’s Register of Monuments.
    The complex modernization and redevelopment of
    Hala Koszki commenced in 2014 and was completed
    in Oc tober 2016.
    Hala Koszyki is located in the cit y center with ver y
    good access to public transpor t. The stations of
    Warsaw Public Bikes systems are situated nearby.
    Inside the complex there have been several cycling
    facilities installed e.g. racks, showers and lockers.
    Those solutions should encourage the visitors to use
    more environmentally friendly means of transport.
    Healthy and comfor table interior conditions will be
    obtained with solutions such as: lighting and thermal
    zoning, appropriate acoustic conditions or using
    materials with low emission of volatile organic
    compounds etc. Moreover systems consuming water
    and energy will be monitored. Shut-of f valves and
    a leak detec tion system will help to reduce
    water consumption.
    Hala Koszyki is distinguished among other
    developments with e.g. a materials responsible
    approach. Historic hall materials such as steel
    construc tion and bricks have been reused in the
    complex. Moreover, buildings are construc ted on the
    land which has been previously used. Retail and of fice
    func tions complement each other. Such an approach
    fits the concept of sustainable development.
    *
    in 2018 Hala Kosz yki received BREE AM Ver y Good cer tificate for
    the retail component
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    EXECUTIVE MANAGEMENT STATEMENT
    in this first year as a public company, Griffin Premium re .. n.v .,
    has laid strong foundations for the future in its ambition of
    becoming the leading office landlord in Poland
    Dear Shareholders, We are delighted to introduce the inaugural annual repor t as a
    public company for Grif fin Premium RE.. N.V. (GPRE). 2017 was
    both challenging but also a year of great accomplishment for
    the Company, with the successful initial public of fering in April,
    followed by the next phase of acquisitions in the final quar ter
    delivering fur ther scale to our platform.
    It is extremely satisf ying for all involved to see the evolution of
    the Company, which was conceptualised in 2016 taking the
    operating formula of leading real estate investments trust
    (REIT ) regimes around the world and then shaped through
    months of preparation before listing on 13 April 2017 on the
    Warsaw Stock Exchange as a specialist pure play real estate
    platform focused on of fice and high-street mixed-use
    proper ties across Poland. The total value of the IPO was PLN
    508 million (EUR 118 million), of which PLN 120 million (EUR 28
    million) represented additional net proceeds for the Company.
    We were pleased to receive good suppor t from a broad base
    of reputable investors including European Bank of
    Reconstruction and Development (EBRD) and Nationale
    Netherlanden OFE (NN).
    While share price per formance was disappointing in the months
    following the IPO, the next chapter of the Company’s shor t histor y
    was opened in Oc tober with the welcoming of Globalwor th as
    strategic shareholder, following their acquisition of a shareholding
    of approximately 71.6%. We are pleased to welcome Ioannis
    Papalekas, Globalwor th’s CEO and Founder, and Dimitris Raptis,
    Globalwor th’s Deput y CEO and Chief Investment Of ficer to our
    Board of Directors, and look forward to further cooperation
    bet ween our t wo companies. Globalwor th’s ambition is firmly
    aligned with the belief that GPRE of fers the ingredients of
    becoming the leading of fice landlord in Poland, and similarly seeks
    to ensure strong and long-term tenant relationships. Their
    involvement creates new possibilities for the Company, and we
    believe that together we can achieve not only all the goals that we
    assumed, but now look for ward to an even more promising future.
    PortfolioAt December 2017, the Company owned a por tfolio of nine
    of fice assets and three mixed-use proper ties with an
    aggregate value of EUR 680 million and 242,558 sq m gross
    leasable area. Financial occupancy end 2017 at 98.5%
    benefiting from a rental guarantee provided by the selling
    shareholder, Oak tree Capital Management, at the IPO.
    Never theless, it is notewor thy that underlying physical
    occupancy has risen from 84.4% at the end of 2016 to 92.4%
    today as a result of successful leasing ac tions by our team.
    Since IPO, Grif fin Premium RE..N.V. has focused on enhancing
    the business by improving operations, strengthening the
    balance sheet and planning future grow th. This has been
    accelerated following the introduc tion of Globalwor th as a
    strategic investor, and we are pleased to have concluded our
    first major acquisition in December. This comprised three
    high-quality office properties for an aggregate consideration of approximately EUR 160 million, formed of A4 Business Park
    in Katowice, Tr y ton Business House in Gdańsk and West Gate
    in Wrocław. This acquisition has grown our por tfolio by more
    than 30%, a faster pace than anticipated at IPO, and fur ther
    lif ts the bar of qualit y.
    An essential fac tor driving the success of the Company is our
    approach to real estate. It is much more than just buy and
    hold. We believe in ac tive asset management and our internal
    set-up enables us to manage new and existing assets
    ef ficiently for the long term, allowing us to capitalise on the
    oppor tunities they of fer at each stage. We are able to realise
    the creation of additional value through the repositioning of
    buildings, dealing with prevailing challenges and using internal
    knowledge and capabilities to respond to the expec tations of
    existing and new tenants. Such an approach requires more
    engagement and creativit y but we believe it is the only way to
    generate sustainable results over time.
    In line with our IPO business plan, we have successfully
    deployed EUR 28 million of primar y IPO proceeds into a new
    phase of high qualit y of fice assets. We have pre-funded the
    acquisition of West Link, an of fice building located in Wrocław
    which is to be completed in April 2018. We have also invested
    in a 25% par ticipation in joint ventures with Echo Investment
    S.A. for the development of t wo of fice schemes in Warsaw:
    Browar y Warszawskie and Beethovena. In addition, we have
    secured the right of first of fer (ROFO) to purchase the
    remaining 75% stake in these projec ts upon completion.
    Market ConditionsWe are for tunate to operate in a strong economic
    environment, with a real estate market suppor ted by strong
    tenant demand for space. GDP grow th in Poland, which has
    enjoyed 25 years of uninterrupted grow th, continued its strong
    per formance with an estimated annual grow th rate for 2017 of
    4.6%. This was mainly driven by the private consumption that
    expanded by 4.8%, investments and a stable labour market
    situation. With the public budget deficit at below 2% and
    inflation within the target range, this reinforces the positive
    pic ture of the Polish economy, which also in 2017
    was classified as a developed countr y by FTSE.
    The Polish proper t y market is a highly at trac tive investment
    destination. The most sought-af ter investment produc ts are
    of fice buildings in prime locations, not only in Warsaw, and
    retail schemes with dominant positions in their respec tive
    regions. Poland has at trac tively-priced proper ties compared
    to Western Europe. In addition, the investment risk associated
    with prime real estate is acceptable even to the most
    conservative investors.
    In 2017 the large number of of fice projec ts were delivered across
    Poland and the demand was filled up quickly and remained robust.
    Emerging trends which impac t on the future of fice market joined the
    traditional drivers of demand. Brexit has a strong impac t on real
    estate market as London position as the business has been
    jeopardized. Many companies plan to move their operations located
    in London to the continent. Some depar tments which employ lots of
    people are relocating also to Poland.
    Financial Performance Total revenue generated on our por tfolio in 2017 reached
    EUR 45.805 million reflec ting an 35% increase compared to 2016.
    This was mainly driven by the full year of operation of Hala
    Koszyki which was opened in Oc tober 2016 but also by ac tive
    asset management initiatives.
    The rise in the Company’s revenues was reflec ted in our FFO
    reaching EUR 16.2 million (2016: EUR 10.1 million).
    The total gross asset value of the por tfolio increased by EUR 213
    million by December 2017 reaching EUR 680 million. Such increase
    was mainly the result of the acquisitions but also due to revaluation
    gains across the por tfolio (largely due to occupancy improvement).
    We continue to reduce the leverage of the Company. With net LT V
    of 41% we are lower by 21p.p. compared to previous year.
    DividendConsistent with our principle of being set up like a REIT, we are
    commit ted to paying dividends to reflec t the flow of our underlying
    rental earnings to shareholders. Given the per formance of 2017 and
    our promising business prospec ts we will be proposing a dividend of
    EUR 11.3 million in respec t to 2017 financial year at the Annual
    General Meeting. We are also pleased to propose a refined dividend
    policy, with the intention to pay future dividends on a semi-annual
    basis at an amount equal to not less than 90% of the Company’s FFO
    to our shareholders.
    Te a mThe development and success of the Company would not be
    possible without the dedication and hard work of Grif fin Premium
    RE.. N.V.’s strong team of 33 professionals. We would like to thank all
    of our people for their commitment and contribution so far, which
    has already enabled the Company to become one of the leading real
    estate companies in Poland and we were delighted to be awarded
    the Newcomer of the Year Award for 2017 by Eurobild magazine.
    We would also like to thank our investors, tenants and business
    partners for their ongoing cooperation and support.
    Priorities for 2018 and beyondBuilding on the strong star t in 2017, we have ambitious plans for the
    future. We are considering further acquisition opportunities across
    Poland, alongside the optimal balance sheet struc ture. To achieve
    this the Company intends to raise the new equit y by way of private
    placement of around EUR 40 0 million. Of paramount impor tance is
    the asset management of our por tfolio, providing a strong
    proposition for existing and future tenants, and maintaining high
    qualit y assets with sustainable income streams. During the coming
    years, we will continue to enhance our financial management systems
    and refine our operations to address the needs of our stakeholders.
    We seek to create value for all our shareholders, tenants and the local
    communities by acting consistently in an ethical and socially
    responsible manner. Creating an environment in which people want
    to work and be associated with is a key objec tive for the company,
    and the way to achieve this is by building a modern, greener,
    environmentally-friendly portfolio. Through these actions, and
    ongoing grow th, we hope to succeed in our mission to become the
    leading of fice landlord in Poland, and par tner of choice for the wide
    range of tenants ac tive in the market. With our new strategic investor,
    stable proper t y market and our business model, we look ahead to
    2018 with positive expectations.
    Małgorzata Turek Rafał Pomorski
    chief executive officer c hief Financial officer
    7 March 2018 7 March 2018
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    0
    100 200
    300
    400
    500
    600
    700
    800 At IPO
    date ROFO
    /FP Standing
    +
    ROFO/FP EPP
    Portfolio At
    year end 0
    100
    200
    300
    400
    500
    600
    700
    800 2012
    20132014201520162017
    GAV
    Number of investments (incl. ROFO and FP)
    0
    2
    4
    6
    8
    10
    12
    14
    16 1 36
    8
    915
    INVESTMENT REVIEW
    Forward Purchase (FP)We secured for ward funding transac tion of West Link
    of fice building in Wroclaw. EUR 18 million were transferred
    to the vendor in the form of the bonds subscribed for in
    June 2017 (value at completion:
    EUR 36.4 million). The transac tion was financed with the
    issue of primar y shares within the IPO process.
    West Link will be a pure of fice projec t located in Wrocław,
    to be completed in April 2018. The total GL A of West Link
    is planned to amount to 14.4k sqm. The six storey building
    is located west of the cit y centre, next to strategic
    communication arteries for Wroclaw. A prelease for 98% of
    total GL A was signed mainly to Nokia and the remaining
    2% is secured with a 5 year master lease from the vendor.
    Right of First Offer (ROFO)25% stake in Warsaw’s projec ts developed by Echo
    Investment: Browary Warszawskie (stage J) and
    Beethovena (stage I&II) was acquired and Right Of First
    Of fer (ROFO) for the remaining 75% was secured. EUR 9.9
    million representing 25% of equit y required to complete
    the buildings was transferred to the vendor in the form of
    the bonds subscribed for in June and December 2017
    (25% of value at completion equals to EUR 33.3 million).
    The transac tion was financed with the issue of primar y
    shares within IPO process. ROFO acquisition may only be
    triggered if proper t y is completed (occupancy permit in
    place), at least 60% let and for the remainder a master
    lease for at least 3 years at market terms is granted by
    the vendor.
    Beethovena Business Park will be a pure of fice projec t
    located in Warsaw, with t wo stages to be completed in
    4Q2018 and 1Q2019, respec tively. The total GL A of
    Beethovena I and Beethovena II is planned to amount
    to 34k sqm. The business park will consist of t wo, 5 storey buildings
    strategically located in the Mokotow distric t.
    Browar y J will be a pure of fice projec t located in Warsaw to
    be completed in November 2018. The total GL A is planned
    to amount to 15k sqm of which 45% is pre-let to L’Oreal.
    The projec t consists of t wo par ts – a stepped shaped
    dominant building with 11 storeys and a lower wing of
    7 storeys. Browar y J will be par t of Browar y Warszawskie
    ( Warsaw Brewer y) – mixed-use (of fice, residential, retail)
    projec t occupying one of the most dynamic and fastest
    growing commercial and residential areas in Warsaw – the
    Wola district.
    EPP Portfolio Acquisition Acquisition of three high-qualit y of fice proper ties from
    Echo Polska Proper ties (EPP) valued at EUR 166.8 million
    in December 2017. The total GL A of the sub-por tfolio is
    71.2k sqm with average occupancy of 94%. Remaining
    vacant spaces are secured with master leases by EPP.
    The transac tion was financed with loan granted by an
    af filiate of our main shareholder - Globalwor th Asset
    Managers S.R.L.
    i n 2017 we acquired assets valued at €237 million G av by
    securing the r ight of First offer (roFo ) in two c lass “a”
    office properties being developed in w arsaw, prefunding
    (Forward Purchase) one asset in w roclaw and acquiring a
    portfolio of three modern standing assets located in main
    regional cities (Katowice, Gdansk, w roclaw). we also further
    progressed with the renovation and repair programme for
    selected assets.
    A4 Business Park
    Portfolio value increase since iPO (€m) evolution of portfolio value (€m)
    The por tfolio consists of the following proper ties:
    A4 Business Park in Katowice is a complex of three modern of fice buildings,
    7-10 storeys with additional standalone ten storey parking building. Main tenants
    include IBM Global Ser vices, PKP Cargo and Rock well Automation. The total
    GL A is 30.6k sqm of which 96% is leased and the remaining vacancy is covered
    by a master lease.
    Tr y ton Business House in Gdansk is a modern of fice building consisting of an
    eleven storey tower and t wo lower, six storey par ts. Main tenants include: Intel,
    Eltel, Asseco, Ciklum, Kainos, mBank, EY and Pramerica. The total GL A is
    24.0k sqm of which 88% is leased and the remaining vacancy is covered by
    a master lease.
    West Gate in Wroclaw is a modern of fice building with a L-shaped layout of each
    floor. Main tenants are Nokia, Deichmann, Aviva and Enel-Med. The total GL A is
    16.6k sqm of which 99% is leased.
    Renovation and Repair Programme of Standing Properties As par t of our ongoing strategy to of fer best-in-class real estate space to our
    business partners, the Company is continuing the improvement works of
    selec ted proper ties. As par t of this renovation and repair programme we
    invested a total of EUR 5.5 million in 2017 (building CAPEX and fit-out works).
    We invested another EUR 9.1 million in finishing works of of fice components in
    our mixed-use assets: Hala Koszyki and Supersam.
    Acquisitions in 2017 (Gross Asset Value):
    ¡ EUR 36.4 million – For ward Purchase – West Link;
    ¡ EUR 33.3 million – Right of First Of fer (25% stake) – Beethovena I,II; Browar y J;
    ¡ EUR 166.8 million – Por tfolio Acquisition – A4, Tr y ton, West Gate.
    Evolution of Portfolio
    No Asset Acq
    Date GAVCumul. GAV Ty p e
    1Renoma 2 01213 9.1 13 9.1Standing at IPO
    2 Bator y Building I 2 01311. 415 0. 5Standing at IPO
    3 Philips House 2 01313 . 316 3 .8Standing at IPO
    4 Bliski Centrum 2 01413 .71 7 7. 5Standing at IPO
    5 CB Lubicz I/II 2 01470.7248.2Standing at IPO
    6 Nordic Park 2 01424.0272.2Standing at IPO
    7 Green Horizon 2 01571. 3343.5Standing at IPO
    8 Supersam 2 01561. 5405.0Standing at IPO
    9 Hala Koszyki 2 01610 8.4 513 . 4Standing at IPO
    10 A4 Business Park 2 01768.55 81.9EPP Por tfolio
    11 Tryton Business House 2 01756.4638.3EPP Por tfolio
    12 West Gate 2 01741.9680.2EPP Por tfolio
    13 Beethovena I, II (25% stake) 2 01719. 870 0.0 ROFO/FP
    14 Browar y (25% stake) 2 01713.6713.6 ROFO/FP
    15 West Link 2 01736.4750.0 ROFO/FP
    GAV as of 31 December 2017.
    Acquisition date of developed projec t s (Hala Kosz yki, Supersam) adjusted to operation star t date;
    ROFO projec t s’ value presented as stake in GAV at completion.
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    0 5
    10
    15
    20
    25
    30
    35
    40 2018
    201920202021202220232024+
    3% 7%
    9%15% 6%
    2% 33%
    6%21%
    Lease Agreements
    Master Lease
    %
    59%
    29% 8
    % 4
    %
    MultinationalNationalMaster Lease
    State
    0
    10,000,000 20,000,000
    30,000,000
    40,000,000
    50,000,000 16Q4
    17Q4
    High-street retail
    High-street ofcePure ofce
    LEASING REVIEW
    From among the new lease agreements 19.5k sqm
    relates to the new leases and 14.0k sqm to renewals of
    existing leases. 26.3k sqm of leased space was signed
    with of fice tenants (22% of the of fice-component
    GL A) while 7.2k sqm concerned retail tenants (13% of
    the retail-component GLA).
    The average occupancy ratio increased from 84.4%
    (89.4% including Let ters of Intent) as of December
    2016 to 91.6% as of December 2017 on a like-for like
    basis (97.9% including master lease). The overall
    occupancy (including acquired EPP assets) was 92.4%
    (98.5% including master lease) as of December 2017.
    Due to the acquisition of EPP por tfolio, we have
    extended the list of blue chip, multinational tenants,
    strengthening the por tfolio’s risk profile: Nokia ( West
    Gate, fur ther space to be handed over in West Link),
    Rock well and IBM (A4 Business Park), Intel and
    Kainos (Tryton).
    In 2017 we have ac tively leased-up the of fice
    components of developed mixed-use assets.
    In Hala Koszyki a total of 6.0k sqm of fice space was
    signed, including Mindspace (over 4.0k sqm). In
    Supersam we have managed to sign of fice tenants
    for another 3.4k sqm (Groupon, Cit ySpace).
    Furthermore, the Company has continued to improve
    the risk profile of its por tfolio through the extension
    and/or expansion of leases with some of its prime
    tenants. In CB Lubicz both Capita (4.2k sqm) and
    Deutsche Bank (3.0k sqm) have extended their leases.
    Capita has also extended its lease in Green Horizon
    (2.2k sqm) and Infosys expanded in the building
    taking another 1.9k sqm. The biggest retail leases
    signed in 2017 were the extension of TK Max x
    (2.8k sqm) and a new lease with Biedronka for
    1.0k sqm – both in Renoma.
    The ac tive leasing at titude regarding standing assets
    as well as acquisition of strong tenant mix via EPP
    Por tfolio resulted in maintaining the high WAULT of
    4.6 years
    3. The acquisition of this pure-of fice por tfolio
    has also increased the share of of fice space in the
    por tfolio from 68% in December 2016 to 78% in
    December 2017.
    Top 10 Tenants by GRI
    Te n a n t GRI
    (€m) Share in
    Por t folio’s GRI
    Infosys 3.67. 9 %
    Nokia 2.55.4%
    Rockwell 1. 84.0%
    HP 1. 63.4%
    Intel 1. 53.2%
    PKP Cargo 1. 53.2%
    IBM 1. 53.2%
    International Paper 1. 32.8%
    Capita 1. 22.6%
    Mindspace 0 .91.9 %
    Grand Total 17. 43 7. 6 %
    in 2017 the c ompany has successfully negotiated the take-up
    or extension of c. 33.5k sqm of commercial GL a which
    constitutes 19% of its property portfolio.
    Tr y ton Business House
    Gross rental income by Tenants’ Origin
    Gross rental income by Tenants’ type (€)
    Lease expiry profile (by Gri)
    3 E xcluding Break Options; 4.5y including Break Options adjusted to
    reflec t Landlord’s benefit s from penalties to be paid by a tenant.
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    FINANCIAL REVIEW
    Revenues and Profitability
    ¡ Revenue reached EUR 45 ,805 thousand in 2017 (35%
    higher than in 2016).
    ¡ NOI also increased significantly in 2017, following
    the increase in total revenues and reaching a total
    of EUR 31,730 thousand (2016: EUR 23,096
    thousand), a significant improvement of 37% or
    EUR 8,634 thousand over 2016 figures.
    ¡ EBITDA amounted to EUR 26,671 thousand (2016:
    EUR 40,163 thousand), however, the decrease from
    2016 is due to the fair value movement on valuation.
    ¡ EPRA earnings amounted to EUR 15,890 thousand
    in 2017 (2016: EUR (243) thousand, representing an
    increase of EUR 16,133 thousand over 2017.
    ¡ Decreased finance costs during 2017 by 58%
    resulted mainly from exchange rate movement
    positively af fec ting valuation of bank debt.
    ¡ Earnings before tax of EUR 42,591 thousand increased
    as compared to 2016 (EUR 17,910 thousand) mainly as
    a result of higher revenue income and lower finance
    costs (2017: EUR 9,559 thousand as compared to 2016:
    EUR 22,675 thousand).
    Highlights
    ¡ Significant grow th in revenues and NOI by
    EUR 11,904 thousand and EUR 8,634 thousand,
    respec tively, resulting mainly from the leasing
    progress, full year operation of Hala Koszyki
    opened in Q4 2016 and the acquisition of three
    of fice buildings during 2017.
    ¡ Significant grow th in EBITDA by 38%
    compared to 2016.
    ¡ EPRA NAV as at 31 December 2017 increased
    by 425% from 31 December 2016 mainly due
    to conversion of shareholder loans into
    equit y, issue of the new shares within IPO
    and 2017 results.
    ¡ Solid financing struc ture with average cost of
    bank debt of 2,24% and average maturit y of
    more than 7 years.
    Portfolio Valuation
    ¡ The significant capex spent ac tivit y in 2017
    (c. EUR 12,715 thousand of investments on
    standing) influenced the value of our por tfolio
    positively, leading to a gain in OMV of
    EUR 32,946 thousand (excluding FX related to IP
    valuation).
    Shareholders Equity
    ¡ On 31 December 2017, total equit y amounted
    to EUR 244,771 thousand (31 December 2016:
    EUR 36,237 thousand).
    ¡ The number of shares changed during the year
    from 45,0 0 0 to 156,133,179.
    Total Assets and N AV
    ¡ Total assets at 31 December 2017 amounted
    EUR 757,216 thousand and increased by 51% from
    31 December 2016.
    ¡ EPRA NAV at 31 December 2017 (EUR 264,130
    thousand) increased by 425% from 31 December
    2016 (EUR 50,298 thousand), however, EPRA NAV
    per share was impac ted following the capital raise
    and as at 31 December 2017 amounted to
    EUR 1.69 per share, higher by c. 345% compared to
    31 December 2016 (0.38 per share).
    Cash Flows
    ¡ Cash and cash equivalents at 31 December 2017
    (EUR 37,643 thousand) increased by c. 97%
    compared to 31 December 2016 (EUR 19,123
    thousand).
    ¡ Cash generated from operating activities during
    the year amounted to EUR 23,700 thousand,
    representing an outstanding increase of 25%
    as compared to 2016.
    Financing
    ¡ Average cost of bank debt at the level of 2.24%
    (2016: 2.42%) and average maturit y of 7.2 years
    (2 016: 7.1).
    ¡ Net LT V at the level of 41% (considering
    shareholder loans as equit y) compared to
    62% in 2017.
    West Gate
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    RISK REPORT
    The Board assesses the organisation and the
    func tioning of the internal risk management and
    control systems that support that organisation on a
    continuous basis. The system of internal control is
    designed to manage rather than to eliminate the risk
    of failure to achieve business objec tives and, as such,
    can only provide reasonable, but not absolute,
    assurance against material misstatement or loss. The Board has considered four main groups of risks which the Company has to face: business, proper t y, financial & liquidit y and
    regulator y. The below table consists of a description of risks, impac t and the mitigation.
    Financial & liquidity risk
    Currency risk
    The Group’s consolidated financial
    statements are presented in Euro, the
    proper t y valuations are expressed in
    Euro, and the majorit y of the Group’s
    revenues, specifically rent revenues, are
    expressed in Euro, while the Group’s
    external debt is also expressed in Euro,
    which provides it with a natural hedge.
    However, the Company’s func tional
    currency is the PLN and cer tain of the
    Group’s costs, such as cer tain
    maintenance and modernization costs
    and labor and advisor y costs, are incurred
    in Polish zloty.Significant fluc tuations may lead to
    significant realised foreign exchange
    losses.
    Since variations of exchange rates
    significantly af fec t the value of
    prospec tive cash flows (purchase of
    foreign currencies, disbursement of loan
    tranches), the Group might consider to
    take recourse to the available derivatives,
    such as for wards or FX options.
    The Group also manages foreign currency
    risk by using natural hedging. The
    sensitivity analysis of FX risk is presented
    in the Note 25 of the Consolidated
    Financial Statements.
    Liquidity risk
    Liquidity risk constitutes refinancing risk
    thus risk of a fulfilment of existing
    obligations to pay when due. The potential impac t is that the company
    suffers reputational damage or that
    additional financing costs arise, which
    may lead to a lower direc t result.Proactive asset and cash management,
    quar terly review of budgets and
    comparison to ac tuals, the strategy and
    the result of planning process are the
    tools used for the early identification of
    the future liquidit y needs. The Group
    verifies its liquidit y on a regular basis.
    Current financing struc ture is
    charac terised by long average maturit y,
    well spread expir y dates and relatively
    low LT V. Additionally there are some cash
    reser ves maintained in case unforeseen
    liquidit y constraints are incurred.
    Interest rate risk
    The Group finances its operating
    ac tivities to a large extent using
    borrowings on which interest is calculated
    based on floating interest rates. For loans
    in Euro the applicable rate is EURIBOR.
    The development of interest rates is
    therefore of high significance to the
    Group. Interest rate risks are caused by interest
    rate fluc tuations that may result in rising
    financing costs, leading to a lower direc t
    result.
    The interest rate risk can be mitigated by
    hedging instruments available on the
    market (fixed rates, IRS) to reduce the
    par t financed with floating rates.
    The Group also plans to gradually reduce
    its indebtedness level. Additionally the
    vast majorit y of its leases include an
    indexation that is linked to the consumer
    price index announced by Eurostat.
    The sensitivity analysis of interest rate risk
    is presented in the Note 25 of the
    Consolidated Financial Statements.
    I d entif y
    R ep ort
    E va lua te
    R esp ond
    M onit o r
    RIS K
    ID ENTI FIC ATION
    & MANA GEM EN T
    P R O CESS
    The Board is responsible for the Company’s
    system of internal control and for
    maintaining and reviewing its effectiveness.
    The risk management and control system form an integral
    part of the business operations and the reporting and aim to
    ensure with a reasonable degree of certainty that the risks
    to which the company is exposed are identified adequately
    and controlled. IdentifyThe Board and the Audit Commit tee identif y risks
    with input from the key management of the Group.
    The Group follows an objec tives-based risk
    identification strategy to identify key principal risks
    for each repor ting period. Any event or fac tor that
    may endanger the achievement of the shor t and
    long-term goals par tly or completely is identified as a
    risk.
    EvaluateOnce risks have been identified, they are assessed as
    to their potential severit y of impac t on the Group’s
    per formance (a negative impac t on financial results)
    and to the probabilit y of occurrence, that is risk
    indexation.
    RespondOnce risks have been identified and evaluated, one or
    a combination of the following techniques are used to
    manage each particular risk:
    ¡ avoid (eliminate, withdraw from, or not become
    involved);
    ¡ control (optimise – mitigate);
    ¡ share (outsource or insure); and
    ¡ retain (accept and budget).
    The selec tion of a par ticular response strategy
    depends upon the magnitude of the impac t,
    probabilit y of occurrence, existing internal and
    external controls.
    MonitorThe initial risk management strategy may not address
    all issues as expec ted. Therefore, the Board will
    reassess, at each quarterly meeting, whether the
    previously selec ted controls are still applicable and
    ef fec tive, and the possible risk level changes in the
    business environment.
    ReportThe Group presents the principal risks profile on
    pages 29 to 32 of the Annual Repor t.
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    RISK REPORT COnTinueD
    RISK I M PAC TMITIGATION
    Breach of loan covenants May negatively af fec t the Group’s
    relationship with financing banks, may
    have going concern implications, and
    af fec t, negatively, its abilit y to raise
    further debt financing at competitive
    interest rates.The Group monitors on a regular basis its
    compliance with loan covenants and has
    increased its resources on monitoring in
    the area of loan contrac tual terms
    (including covenants) compliance.
    Business risk
    Exposure to the Economic Environment
    in Poland
    A negative trend in the economic ac tivit y
    in Poland may af fec t the Group’s tenants
    and potential new tenants and in turn can
    exert downward pressure on rent rates.A significant number of the Group’s
    tenants are subsidiaries of multinational
    groups with either insignificant exposure
    to developments in the Poland economy
    and/or very sound financial standing.
    The Group also ensures that long-term
    leases are signed with new tenants and
    that current leases are renewed prior to
    their expir y for a longer term and at
    index-linked rental rates, so as to
    minimise the risk of possible negative
    variations in rent rates over the shor t and
    medium term.
    Changes in the Political or Regulatory
    Framework in Poland or the European
    Union The Group was set up to carr y out
    investments in the Central Europe region,
    focusing first on proper t y investments in
    Poland. It is therefore exposed to political
    and regulatory framework changes that
    may occur in this region.The Group’s Executives frequently
    monitor political or regulatory
    developments in the Poland market
    through their own obser vation and also
    by frequent reviews of available third-
    par t y repor ts on the developments in
    Poland. In cases when changes in
    regulations occur, appropriate action is
    taken so as to maintain compliance with
    applicable regulations in Poland.
    Competition
    The Polish real estate market is currently
    characterized by competition between
    local, regional, national and international
    investors. The Group has been faced with a wide
    range of competitors in all areas of its
    business activities.
    The advantage of the Group is that it
    of fers a unique Polish pure of fice and
    high-street mixed-use platform with an
    aim to make regular dividend
    distributions. The Group por tfolio is well
    diversified with properties centrally
    located in major cities in Poland.
    Additionally, the Group has long-time
    experience in property management and
    good market awareness.
    RISK
    I M PAC TMITIGATION
    Property Risks
    Vacancy risk
    The risk occurs when the proper t y cannot
    be leased at a reasonable price or at all.
    Additionally, the risk may result from
    tenants reducing the leased space or
    being able to ef fec t reduc tions in the rent
    for economic reasons.Such developments can have negative
    impac t on the planned income from
    letting activities and consequently on the
    valuation of properties.
    To mitigate the risk the Group has
    adopted a focused acquisition strategy
    that contains stringent criteria for further
    acquisitions. All future acquisitions are
    targeted to consist of pure of fice and
    high-street mixed-use assets, which are
    located in central and leading cities in
    Poland and which will not require
    extensive renovation. The Company is
    planning to only purchase assets with a
    good tenant mix in multi-tenant buildings
    or single-tenant buildings with long
    leases, primarily focusing on buildings
    with vacancies of less than 15% with high
    solvency tenants. Additionally, the risk is
    minimised by regular monitoring of the
    market and tenants’ financial standing,
    continuously monitoring of expiring lease
    agreements, concluding long-term rental
    agreements as well as ongoing
    discussions with tenants and early
    identification and fulfilment of tenant
    requirements. Moreover, the properties
    are regularly monitored and qualit y of the
    buildings is improved.
    Property valuation risk
    The fair value of the por tfolio is subjec t to
    fluc tuations due to external and
    property-related factors. Main external
    fac tors are the market rents and interest
    rates as well as general demand for
    proper ties as an asset class. Any error or negative trend in valuations
    of proper ties would significantly impac t
    the results (NAV and EPS ) of the Group.
    The values of the proper ties are internally
    reviewed on a quar terly basis using the
    DCF method. The por tfolio is also
    semi-annually measured by independent
    reputable external exper ts in order to
    identify adverse developments as soon as
    possible. The sensitivity analysis of the
    significant unobser vable inputs used to
    fair value measurement, is presented in
    the Note 25 of the Consolidated Financial
    Statements.
    Acquisition of Properties Inabilit y to execute the Group’s plan of
    investing in high-qualit y assets would
    af fec t the Group’s objec tives of
    maximisation in NAV and EPS.The Group’s management team have a
    proven track record of acquiring high
    qualit y assets, most of them at a discount
    to their fair market values. The team
    remains in close contac t with leading
    European real estate agents with
    presence in Poland so as to get
    spontaneous access to potential sellers.
    The team takes the lead in negotiations
    with sellers of proper ties and puts in
    place safeguards (involvement of legal,
    financial, tax and technical third-par t y
    reputable and experienced due diligence
    advisers) and ensures the related
    agreements are concluded within a shor t
    period of time.
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    RISK I M PAC TMITIGATION
    Regulatory Risks
    Change in fiscal and tax regulationsAdverse changes in favourable taxation
    provisions in the jurisdic tions the Group’s
    legal entities operate in would negatively
    af fec t its net results.The Group, through engaging
    professional tax advisers on a regular
    basis in all the jurisdic tions where its legal
    entities operate, monitors very closely the
    upcoming changes in taxation legislation
    and ensures that all steps are taken for
    compliance and optimisation of the tax
    ef ficiency of its struc ture over time.
    Through regular tax compliance
    monitoring and conser vative policies in
    this area the Group ensures that the risks
    associated with potential additional,
    unexpec ted tax assessments is
    minimised.
    REIT status The Group would face risks associated
    with a REIT status following its conversion
    into a REIT. The legislative process is
    delayed and there is no par ticular date of
    finalization of implementation of REIT law.
    There is a risk in what form the
    Government implements the law and
    whether it will bring benefits for the
    C om pany.The Group’s Executives frequently
    monitor political or regulatory
    developments in the Poland market
    through their own obser vation and also
    by frequent reviews of available third-
    par t y repor ts on the developments in
    Poland. In cases when changes in
    regulations occur, appropriate action is
    taken so as to maintain compliance with
    applicable regulations in Poland.
    Risk Appetite The Company’s objec tive is to invest in proper ties in order to realise predic table and stable results in the long term and contribute to the
    livabilit y and safet y of historical inner-cities. Those goals are achieved by execution of a three pillar strategy: (i) por tfolio consisting of mainly
    premium properties, (ii) a hand’s on, proactive and pragmatic organisation and (iii) a conservative financing strategy.
    The execution of this strategy inevitably involves risks. However, the risk appetite within the strategy is conser vative, due to the fac t
    that the Company focuses entirely on the best proper ties in selec ted primar y cities. Qualit y is preferred over grow th of the proper t y
    por tfolio. Operational risk should be minimised and operational processes are based on best prac tices. The Company’s financial
    policy is best charac terised as conser vative (this includes commercial insurance coverage). Strong financial position profile is
    impor tant in order to remain at trac tive for debt investors.
    The risk appetite on compliance is nil: all laws and regulations must be stric tly adhered to. The Company has formulated clear
    guidelines for this and laid them down in various codes and regulations.
    Concluding – the Company’s overall risk appetite is conser vative, which is fully in line with its objec tive of generating more
    predic table and stable long-term results.
    Current or planned improvements to the entity’s risk management system The Board of Directors assesses the organisation continuously and the functioning of the internal risk management and control
    systems that suppor t that organisation. The outcome of these assessments and any significant appropriate ac tions are discussed
    with the Audit Commit tee together with the strategy and risks. In 2017, the internal control framework was reviewed and adjusted.
    In view of the limited complexit y of daily transac tions and the shor t internal communication lines, the absence of a separate internal
    audit depar tment is deemed to be acceptable in terms of risk management.
    RISK REPORT
    COnTinueD VIABILITY STATEMENT
    Indirec t fac tors which can have negative influence on
    groups financial performance:
    Factors which, in the opinion of the Management Board, will
    influence the Group’s financial performance in subsequent
    years include:
    ¡ future potential acquisitions including the
    respective financing of these acquisitions;
    ¡ regular revenue generated from the lease of
    space in of fices and high-street mixed-use
    assets;
    ¡ revaluation of the fair value of investment
    proper ties owned by the Group, including:
    ¡ changes of exchange rates;
    ¡ changing levels of net operating revenue;
    ¡ cost of sales and general and administrative
    expenses;
    ¡ measurement of liabilities due to bank loans
    at amortised cost;
    ¡ measurement of loans and cash due to
    changing foreign exchange rates;
    ¡ changes in interest rate; and
    ¡ compliance with loan covenants.
    ¡ changes in political and economic
    environment across the globe;
    ¡ uncer taint y as to key assumptions of fiscal
    policy in Poland (ongoing changes to tax laws
    and their interpretation);
    ¡ slower than expec ted implementation pace of
    the REIT legislation in Poland;
    ¡ continuously increasing supply of new of fice
    buildings in Polish real estate market;
    ¡ new retail developments in cities where the
    Company’s high-street mixed-use assets are
    located;
    ¡ e-commerce impac ting traditional retail in
    shopping centres; and
    ¡ decreasing competition in Polish banking
    sec tor due to its consolidation and
    “repolonisation”.
    Based on the assessment per formed, the Board
    concluded that it has a reasonable expec tation that
    the Company will be able to continue in operation
    and meet all its liabilities as they fall on 31 December
    2018.
    Green Horizon
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    Ms Claudia Pendred has over 25 years of experience of investments
    and financing throughout Central and Eastern Europe, South Eastern
    Europe and Nor th Africa.
    Previously she was a Direc tor for Proper t y & Tourism at the European
    Bank for Reconstruction and Development (EBRD), where she
    expanded the bank ’s proper t y ac tivities into new countries and new
    produc ts. Before that she was the EBRD Direc tor for Romania and
    was based in Bucharest. Prior to the EBRD, Ms Pendred worked at
    N.M. Rothschild & Sons, where most recently she was Direc tor of
    Corporate Finance, focused on Central and Eastern Europe. Earlier
    on, she worked at J. Henr y Schroder Wagg & Co in their International
    Finance Department and before that she worked with the World Bank
    in Washington DC.
    Ms Pendred is and has been on several Boards and Investment
    Commit tees including various proper t y funds. Ms Pendred holds an
    MBA from INSEAD Business School, an MA from Har vard Universit y
    and a BA from the Universit y of Oxford.
    Claudia Pendred
    non-executive Director,
    independent member
    Thomas de Wit te holds the position of Chief Financial and Risk
    Of ficer (CFRO) at Geneba Proper ties N.V., an NPEX-listed real estate
    investment fund located in Amsterdam. He joined the company in
    September 2015 with key responsibilities for finance, repor ting and
    risk management. Prior to that he spent 12 years at Vastned Group, a
    group of Euronext-listed real estate companies. As CFO at Vastned
    Group Mr. de Wit te played a key role in managing the repor ting,
    treasur y and financing of the group. He was responsible for taxes, IT
    and human resources. From 1991 until 20 03 he worked for Ar thur
    Andersen Accountants, and, af ter it was acquired, for Deloit te &
    Touche Accountants.
    He is also a member of the super visor y board and chairman of the
    audit commit tee of Staedion, a housing association in The Hague.
    Additionally, he is a member of the Raad van Toezicht and chairman
    of the financial commission of Koninklijke Diergaarde Blijdorp
    (Rot terdam Zoo). He is a member of CFO Executive Global Net work
    and Finanza Rijnmond.
    Thomas de Wit te holds master’s degrees in business economic s and
    Dutch law from the Erasmus Universit y of Rot terdam, where he also
    completed a postgraduate accountancy (CPA) course.
    Thomas De Witte
    non-executive Director,
    independent member
    Marcus M.l.J. van Campen
    non-executive Director,
    independent member
    Mr van Campen currently ser ves as the direc tor of Astar ta Holding
    NV in Amsterdam, a company listed on the Warsaw Stock Exchange,
    which is ac tive in the agricultural sec tor in Ukraine; the direc tor of
    Ovostar Union NV in Amsterdam, also quoted on WSE, a ver y
    successful company in the field of eggs, egg produc ts and poultr y;
    and the direc tor of the European subsidiaries (outside Italy) of
    Salvatore Ferragamo Spa in Florence, Italy, one of the principal
    players in the luxur y sec tor in Europe.
    Mr van Campen began his professional career at Océ van der Grinten
    NV (1968 -1976). In the period from 1976 -20 02, Mr van Campen ser ved
    as the general counsel at Amstelland NV (currently AM NV ). Marcus
    van Campen has extensive knowledge in the field of construc tion,
    real estate and project development, including in the financing
    thereof. Mr van Campen has extensive experience in corporate
    governance mat ters, monitoring ac tivities carried out by financial
    super vision authorities such as the AFM, and in transparency
    requirements.
    Marcus van Campen holds a Master’s degree in law from Universit y
    of Nijmegen, the Netherlands.
    BOARD OF DIRECTORS
    Małgorzata Turek, has accumulated over 20 years of experience in
    the real estate sec tor while working for real estate investors and
    developers as well as for international law firms, and is a renowned
    professional in asset management, acquisitions and asset disposals.
    In 20 05, Ms. Turek decided to expand her career, while changing
    from law firms to real estate investors and developers. First, she
    worked for a leading Krakow-based development company (GD&K )
    where – as a management board member – she super vised all stages
    of development projects.
    Prior to joining Grif fin Premium RE.. N.V. she spent five years at
    various Skanska Proper t y companies and all its proper t y units in
    Poland. While at Skanska, Ms. Turek was COO at its of fice
    development division and a member of the management board
    super vising subsidiaries of the Skanska Proper t y group. Her duties
    included supervising Skanska Property’s transactions and operations.
    Recently she was also involved with transac tions at Skanska’s CEE
    level. During her tenure at Skanska, she executed transac tions
    involving over EUR 1 billion wor th of assets and commercialized over
    30 0 0 0 0 sqm of of fice space.
    Ms. Turek graduated from the Law and Administration Depar tment at
    the Jagiellonian Universit y in Krakow. She is also a member of the Bar
    Association in Poland. Rafał Pomorski is an experienced finance and accounting professional. In
    2015 - 2016, he was responsible for finance at Grif fin Real Estate, a leading
    and dynamically growing investment group operating in Central and
    Eastern Europe’s commercial real estate market. From 2011, he worked as
    finance manager at MGPA, a private equit y firm investing on the proper t y
    market, a position he held until 2015, also af ter MGPA was acquired by
    BlackRock in 2013. His professional career began in 20 07 at PwC’s audit
    depar tment, where he remained until 2010.
    In 20 07, Rafał Pomorski obtained a master’s degree in economic s from
    Maria Curie-Skłodowska Universit y in Lublin. He became a member of the
    Association of Chartered Certified Accountants in 2016.
    Ioannis Papalekas is the Founder & Chief Executive Of ficer of
    Globalwor th Real Estate Investment Ltd. Ioannis has nearly
    20 years of real estate investment and development experience,
    predominantly in Romania, having created one of the most successful
    real estate development and investment groups in the Romanian real
    estate market. He is experienced in the acquisition, master planning,
    development, reconstruction, refurbishment, operation and asset
    management of land and buildings across all major asset classes in
    Romania. Ioannis has been responsible for the development of more
    than 40 0k sqm of commercial (of fice, retail and logistic s) space and
    1,0 0 0 residential units in Romania. Dimitris Raptis is the Deput y Chief Executive Of ficer and Chief
    Investment Of ficer of Globalwor th Real Estate Investments Ltd.
    Dimitris joined Globalwor th in November 2012, following 16 years of
    experience in the financial ser vices and real estate investment
    management industries with Deutsche Bank, the last 12 years as a
    senior member of the real estate investment management group of
    Deutsche Bank’s Asset and Wealth Management division (‘RREEF’).
    From 20 08 to 2012, Dimitris was Managing Direc tor and European
    Head of Por t folio Management for RREEF Oppor tunistic Investments
    (ROI). In this role he was responsible for overseeing ROI’s acquisitions
    across Europe as well as managing ROI’s pan-European real estate
    investment por t folio consisting of 40 investments with a gross asset
    value in excess of EUR 6 billion. From 20 0 0 to 20 08, Dimitris was a
    senior member of the team responsible for originating, structuring
    and executing real estate investments, with a main focus on the
    French, Italian and South-Eastern European markets with an
    enterprise value in excess of EUR 5.5 billion across all major asset
    classes
    Andreas Segal is deput y CEO and CFO of BUWOG AG, an Austrian-
    German real estate plat form and developer listed on Vienna Stock
    Exchange (AT X ). Prior to that he was CFO of Deutsche Wohnen AG,
    the second largest, M-DA X listed residential player in Germany,
    focused on asset management, privatisations and nursing homes.
    Before he joined Wohnen AG he had been Co-CEO and CFO of GSW
    Immobilien AG, an M-DA X listed residential real estate plat form. He
    also worked for a German consumer elec tronic s retail chain where he
    was responsible for the corporate restruc turing, and later held
    positions in the corporate banking department at Commerzbank AG.
    Andreas Segal holds a degree in law and a pre-degree in business
    administration and is also a graduate of the Advanced Management
    Program of the Harvard Business School.
    Andreas Segal
    non-executive Director,
    independent member
    Małgorzata Turek
    Chief executive Officer
    Rafał Pomorski
    Chief financial Officer
    Ioannis Papalekas
    non-executive Director
    Dimitris Raptis
    non-executive Director
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    BOARD OF DIRECTORS COnTinue D
    Changes in the Board of Directors in 2 0 17 On 7 March 2017 Inter trust Management B.V. and
    Intertrust (Netherlands) B.V. voluntarily resigned from
    the of fice as direc tors of Grif fin Premium RE.. N.V.
    On 13 March 2017 an Extraordinar y Shareholder
    Meeting appointed Przemysław T. Kr ych, Maciej
    Dyjas, Nebil Senman and Karim Khairallah as
    Non-Executive Direc tors of the Company subjec t to
    and ef fec tive as of conversion of the Company into a
    public entit y. On the same date the Extraordinar y
    Shareholder Meeting appointed Marcus M.L.J. van
    Campen, Andreas Segal and Thomas Martinus de
    Wit te as independent Non-Executive Direc tors of
    Grif fin Premium RE.. N.V. subjec t to and ef fec tive as of
    the set tlement of the Of fering.
    Ms. Dorota Wysokinska-Kuzdra, the former Chief
    Executive Of ficer of the Company, voluntarily
    resigned as executive direc tor of the Company with
    ef fec t from 28 July 2017.
    On 28 July 2017 the Board resolved to nominate
    Ms. Małgorzata Turek for appointment as Executive
    Direc tor of the Company by the General Meeting at
    the EGM which was held on 11 September 2017, for an
    indefinite term. Subjec t to and ef fec tive as per the
    appointment by the General Meeting, the Board
    resolved to grant Ms. Małgorzata Turek the title of
    Chief Executive Of ficer. In accordance with the
    nomination of the Board, on 11 September 2017
    EGM appointed Ms. Małgorzata Turek as Executive
    Direc tor of the Company and granted the title of
    Chief Executive Officer.
    At the same date the Board resolved to nominate
    Ms. Claudia Pendred for appointment as independent
    Non-Executive Direc tor of the Company by the General
    Meeting at the EGM which was held on 11 September
    2017, for a term until immediately af ter the annual general
    meeting held in 2020. In accordance with the nomination
    of the Board, on 11 September 2017 EGM appointed
    Ms. Claudia Pendred independent Non-Executive
    Direc tor of the Board of Direc tors. In connec tion with the tender of fer as announced on
    4 Oc tober 2017, each Direc tor of the Company has
    voluntarily resigned as Direc tor of the Company,
    subjec t to and conditional upon the occurrence of
    and ef fec tive as of the acquisition of at least 50.01%
    of all shares in the share capital of the Company by
    Globalwor th Asset Managers SRL pursuant to the
    tender offer (“Acquisition Moment”).
    On 15 November 2017 the general meeting resolved
    to discharge all the members of the Board of
    Direc tors from liabilit y for the per formance of their
    duties up to and including the date of this
    extraordinary general meeting. The discharge is
    subjec t to and conditional upon the occurrence of
    and effective as of the Acquisition Moment and
    granted for the per formance of their duties, on the
    basis of the information provided to the general
    meeting of the Company through the tender of fer
    documents, press releases and other publicly
    available information.
    Af ter the Acquisition Moment, the Board of Direc tors
    consists of ten Direc tors in total, including t wo
    Executive Direc tors and eight Non-Executive
    Direc tors. All the current direc tors: Ms M. Turek,
    Mr R. Pomorski, Mr M.W. Dyjas, Mr N. Senman,
    Mr A. Segal, Mr M.M.L.J. van Campen,
    Mr T.M. de Wit te, Ms C. Pendred with exception of
    Mr Khairallah were reappointed and additionally
    Mr I. Papalekas and Mr D. Raptis were appointed as
    Non-Executive Directors.
    On 27 Februar y 2018 Mr. Maciej Dyjas and
    Mr. Nebil Senman resigned from the positions of
    Non-Executive Direc tors. On 21 December 2017
    Mr Przemysław T. Kr ych resigned from the position of
    the Chairman of the Board of Direc tors. For more
    information please see Note 36 in Consolidated
    Financial Statement.
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    THE TEAM
    Gender diversity
    ¡ Over 20 years of experience in the real estate sec tor
    ¡ Experience in real estate companies and developers as
    well as international law firms
    ¡ Member of Bar Association in Poland
    ¡ Joined GPRE NV in September 2017
    Małgorzata Turek
    Board member, CeO
    ¡ 12 years of experience in real estate companies and
    consulting companies
    ¡ Experience gained in companies such as PWC, MGPA,
    BlackRock, Grif fin Real Estate
    ¡ Member of the Association of Chartered Certified
    Accountants responsible for IPO of GPRE NV in 2017
    Rafał Pomorski
    Board member, CfO
    G. Podlasek(Group Head)
    + 7 People
    Construction & Development
    K. Klin(Group Head)
    + 5 People
    Leasing
    J. Sawicka(Group Head)
    + 1 Person
    Legal
    T. Jelinowski(Group Head)
    + 5 People
    Finance
    A. Apostoł(Group Head)
    + 2 People
    Investment
    R. Królikowski(Group Head)
    + 2 People
    Asset and Property Management
    3 People
    Administration
    * Team struc ture and composition as at Repor t date.
    DiVer SiT Y
    An impor tant pillar of each organization is to at trac t
    and retain people within its struc ture, improve the
    best talents and give satisfac tion to each employee.
    The Group policy regarding employment is focused
    on hiring the best candidates regardless gender, age
    or ethic group. Information connec ted with diversit y
    of the team is specified below:
    Age Total professional experience in years
    55%
    45%
    MaleFemale
    3
    %
    61%
    36%
    Under 25 years25-4041-50
    9
    %
    9%
    55%
    Up to 3 years3-6 years6-10 yearsOver 10 years
    27%
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    overview Governance
    Portfolio Overview 42
    Green Horizon 44
    CB Lubicz i/ii 45
    Tryton Business House 46
    A4 Business Park 47
    West Gate 48
    nordic Park 49
    Batory Building i 50
    Bliski Centrum 51
    Philips House 52
    renoma 53
    Supersam 54
    Hala Koszyki 55
    West Link 56
    Browary Warszawskie 57
    Beethovena (stage i&ii) 57
    PORTFOLIO
    OVERVIEW
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    Biura Koszyki są zlokalizowane tuż obok dobrze
    znanej wszystkim mieszkańcom Warszawy
    Hali Koszyki. Secesyjny budynek został
    zaprojektowany przez Juliusza Dzierżanowskiego
    na miejscu folwarku o tej nazwie. W 1909 roku,
    gdy halę udostępniono warszawiakom, uważano
    ją za szczyt nowoczesności.
    Bramy prowadzące do wnętrza zostały ozdobione
    metalowymi ornamentami i okuciami wykonanymi
    przez warsztat Zielezińskiego. Z góry spoglądały na wchodzących rzeźby Zygmunta Józefa Otto,
    przedstawiające głowę byka i syrenkę.
    Mieściły się tu stoiska ze świeżą żywnością,
    mięsem, rybami i żywym ptactwem, a także
    z przedmiotami do domu i kuchni. W miejscu
    dzisiejszych budynków biurowych znajdowały
    się natomiast podjazdy dla wozów konnych.
    Hala Koszyki tętniła życiem i była chętnie
    odwiedzana przez mieszkańców Warszawy.
    Dziś wraca do życia, łącząc przeszłość z przyszłością.Historia miejsca Biura Koszyki is located in the immediate
    vicinity of Warsaw’s well-known landmark, Hala
    Koszyki. The art nouveau building was designed
    by Juliusz Dzierżanowski on the site of
    a manor of the same name. In 1909, when
    Hala Koszyki was opened to Varsovians, it was
    hailed as representing the pinnacle of modernity.
    The gates leading to the interior were decorated
    with metal ornamentation and fittings produced by
    the Zieleziński workshop. Sculptures by Zygmunt Józef Otto, in the form of the head of a bull and
    a mermaid, peered down on the visitors.
    Stalls with fresh groceries, meat, fish and live
    birds, as well as home and kitchen appliances
    were located here. The place occupied today
    by office buildings was the site of a forecourt for
    horse-drawn carriages. Hala Koszyki was full
    of life and eagerly visited by Varsovians.
    Today it is coming back to life, combining the past
    and present day.A location rich with history
    Hala Koszyki 1909 Hala Koszyki 1953 Fot. Archiwum / Archive – Robert Marcinkowski
    Our property portfolio
    is diversified in terms
    of business and geography.
    i t currently comprises nine pure office buildings and three
    high-street mixed-use office and retail projects, all of which
    are in prime, proven locations in the centre or on the main
    streets of six of the largest Polish cities: w arsaw, wroclaw,
    Lodz, Krakow, Katowice and Gdansk. The value of these
    properties was e Ur 680 million at the end of 2017.
    Grif fin Premium RE.. N.V.’s dedicated management team oversees a
    high-qualit y diversified tenant base representing a wide array of industries
    and sectors, with long-term relationships translating into long-term leases.
    Grif fin Premium RE.. N.V.’s proper t y por tfolio features ver y high occupancy
    rates, in the area of 98.5% (92.4% excluding master leases). This direc tly
    translates into stable rental income for the company.
    PORTFOLIO OVERVIEW
    c La SS a oFFice S EPP ASSETS
    AT C . € 1 6 7. 0 M cLa SS a oFFice SGPRE INITIAL PORTFOLIO
    VALUED AT C.€513M GPRE CONTRACTED/
    OPTION
    Class ‘A’ offices High-Street mixed-use ePP Office forward Purchase At €36.0m
    Batory Building I
    GAV €11. 4 m
    GL A (sqm) 6 , 610
    Philips House
    GAV€13 . 3 m
    GL A (sqm) 6 , 217
    Hala Koszyki
    GAV * €10 8.4 m
    GL A (sqm) 22,24 6
    A4 Business Park
    GAV€68.5m
    GL A (sqm) 30,556
    GAV€56.4m
    GL A (sqm) 24, 016
    GAV€41.9 m
    GL A (sqm) 16,646
    West Link
    Completion H1 18
    GL A (sqm) 14, 3 6 2
    Nordic Park
    GAV€24.0 m
    GL A (sqm) 9, 0 24
    CB Lubicz I/II
    GAV€ 70.7m
    GL A (sqm) 23 ,9 8 6
    Renoma
    GAV€13 9.1m
    GL A (sqm) 40,604
    Beethovena (stage I&II)
    CompletionH1 19/H2 19
    GL A (sqm) 1 7, 8 4 5 / 1 6 , 3 8 0
    Tryton Business House
    Green Horizon
    GAV € 71. 3 m
    GL A (sqm) 3 3 , 510
    Bliski Centrum
    GAV€13 .7m
    GL A (sqm) 4,9 2 0
    Supersam
    GAV€ 61. 5 m
    GL A (sqm) 24,223
    Browary J
    Completion H2 18
    GL A (sqm) 14,979
    West Gate
    rOfO Assets At €135m
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    LODZ K R AKOW
    PORTFOLIO REVIEW
    Green HorizonCB Lubicz I/II
    Green Horizon’s outstanding location in the north-
    eastern part of Lodz’s business district and the high
    quality of this modern office complex have attracted
    Polish and international businesses seeking fresh
    office space in an attractive area. Lubicz Business c
    entre consists of two modern class
    a buildings situated in a prestigious district of
    Krakow – an excellent location close to the historic
    o ld Town, the main Krakow train station, Galeria
    Krakowska shopping mall and university campuses.
    The complex comprises t wo seven-floor class A of fice buildings.
    The centre stands out for its respec tful at titude towards the
    environment. Its t wo buildings have gold level LEED eco cer tificates.
    Green Horizon’s most important eco-friendly solutions include
    energy-saving lighting and an efficient air-conditioning system that
    also uses cool air from outside the building. The complex’s excellent location and top-notch of fice interiors
    make Lubicz an ideal place for companies from a variet y of
    sec tors, including banking, energy and BPO. Both of the
    buildings hold the prestigious BREEAM cer tificates at the “ver y
    good” level in the assets and building management categories.
    BREEAM is currently one of the most frequently used eco
    building evaluation methods in Europe.
    Location:
    Lodz, 106a Pomorska St.
    Status: Standing Property
    Description: Multi-tenanted office
    building
    Ownership: 10 0%
    Year of Completion: 2012/2013
    Appraised Value “As Is”: EUR 71.3 million
    GL A 3 3 , 510 s q m
    Occupancy Including
    Rental Gurantee 10 0%
    Occupancy Excluding
    Rental Guarantee 10 0%
    Contracted Rent EUR 5.2 million
    W A U LT: 5.6 years
    (5.2 incl. Break Options)
    Selected Tenants: Infosys, Capita, PKO BP,
    McCormick, Skanska Location: Krakow, 23 and 23a
    Lubicz St.
    Status: Standing Property
    Description: Multi-tenanted office
    building
    Ownership: 10 0%
    Year of Completion: 20 0 0 CB I/20 09 CB II
    Appraised Value “As Is”: EUR 70.7 million
    GL A 23 ,9 8 6 s q m
    Occupancy Including
    Rental Guarantee 10 0%
    Occupancy Excluding
    Rental Guarantee 9 7.1 %
    Contracted Rent EUR 5.0 million
    W A U LT: 3.5 years
    (3.4 incl. Break Options)
    Selected Tenants: International Paper,
    Capita, Deutsche Bank
    The complex is situated right next to a major traf fic
    interchange, Rondo Solidarnosci, with convenient
    connec tions to the cit y centre and its showcase
    promenade, ul. Piotrkowska. Another at tribute is the
    complex’s close proximit y to the largest campus of
    the Universit y of Lodz, which creates new
    oppor tunities for get ting in touch with a potential
    future workforce. The complex’s strategic location near Rondo
    Mogilskie, one of the most impor tant public transit
    interchanges in Krakow, means it is ver y well
    connec ted with other par ts of town. Krakow-Balice
    International Airpor t is 30 minutes away.
    High-quality office building designated for
    BPO operation in Poland with Skanska’s full
    construction guarantee package.
    Most prestigious location within historical
    part of the city and access to road
    infrastructure.
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    GDANSK KATOWICE
    PORTFOLIO REVIEW COnTinueD
    Tryton Business House A4 Business Park
    Tryton Business House is an office building located in
    one of the most characterful places in Gdansk, at the
    junction of Jana z Kolna and waly Piastowskie
    streets, in the vicinity of the inner city centre. The a
    4 Business Park complex is situated on
    Francuska Street in the southern part of the city.
    The main goal of the projec t was to design a metropolitan
    building that would ideally fit-in to this par t of the cit y while also
    giving it a modernistic st yle. A glass front elevation was used to
    provide this, charac terised by a simple and moderate form.
    Tr y ton Business House consists of an eleven-storey tower and
    t wo lower, six-storey buildings. They are connec ted by walk ways,
    which makes it possible to move about the establishment
    without leaving the building.
    The exceptional feature of the building is its elevation. The glass
    sides from floor to ceiling makes the building appear light weight
    and provides comfor t at work by allowing large amounts of
    daylight in. The projec t is located in a strategic place, next to the A4
    motor way allowing fast and easy access to the border with
    Germany to the West and Ukraine to the East. In addition, within
    2 km distance, a Murckowska intersec tion of A4 motor way and
    expressway no 86 is located, which allows access to Tri-Cit y to
    the Nor th and the Czech Republic to the South. Moreover, the
    great advantage of this projec t is the vicinit y of Trzy Staw y
    shopping centers and green areas.
    Location:
    Gdansk, 11 Jana z Kolna
    St.
    Status: Standing Property
    Description: Multi-tenanted office
    building
    Ownership: 10 0%
    Year of Completion: 2 016
    Appraised Value “As Is”: EUR 56.4 million
    GL A 24, 016 s q m
    Occupancy Including
    Rental Gurantee 10 0%
    Occupancy Excluding
    Rental Guarantee 88.3%
    Contracted Rent EUR 3.8 million
    W A U LT: 4.0 years
    Selected Tenants: Intel, mBank, PGS
    Sof t ware, Ciklum,
    Kainos
    Location: Katowice, 42 Francuska
    St.
    Status: Standing Property
    Description: Multi-tenanted office
    building
    Ownership: 10 0%
    Year of Completion: 2014/2015/2016
    Appraised Value “As Is”: EUR 68.5 million
    GL A 30,556 sqm
    Occupancy Including
    Rental Gurantee 10 0%
    Occupancy Excluding
    Rental Guarantee 96.4%
    Contracted Rent EUR 5.0 million
    W A U LT: 4.5 years
    Selected Tenants: IBM, PKP Cargo,
    Rockwell
    The exceptional feature of the building is
    its elevation. The great advantage of this project is the
    vicinity of Trzy Stawy shopping centers and
    green areas.
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    WROCL AW WARSAW
    PORTFOLIO REVIEW COnTinueD
    West Gate Nordic Park
    west Gate is a modern “ a” class office building
    which offers an office area of 16,000 sqm. n
    ordic Park is a modern eight-floor office building
    featuring timeless architectural design.
    The projec t is situated at the junc tion of Lotnicza, Na Ostatnim
    Groszu, Legnicka and Milenijna streets, which guarantees a great
    exposure for the building. The proximit y of public transpor t
    stops and the main traf fic ar teries of Wrocław provide easy
    access to the cit y centre and ver y good links to the airpor t and
    the A8 motor way ring road. It is situated in one of Warsaw’s trendiest distric ts, Powisle.
    Nordic Park is a boutique of fice building, meaning it is not par t
    of a larger business complex.
    The building can be seen from Most Poniatowskiego, one of the
    most impor tant bridges in Warsaw, connec ting the cit y centre
    with the Praga distric t. This interesting and convenient location
    means it is easy to get to the centre, where numerous
    government and financial institutions are located, including the
    Warsaw Stock Exchange. The Powisle commuter train station is
    located direc tly in front of the building.
    Location:
    Wroclaw, 12 Lotnicza St.
    Status: Standing Property
    Description: Multi-tenanted office
    building
    Ownership: 10 0%
    Year of Completion: 2 015
    Appraised Value “As Is”: EUR 41.9 million
    GL A 16,646 sqm
    Occupancy Including
    Rental Guarantee 9 9. 4%
    Occupancy Excluding
    Rental Guarantee 9 9. 4%
    Contracted Rent EUR 2.9 million
    W A U LT: 5 .1 y e a r s
    Selected Tenants: Nokia, Deichamnn,
    Aviva, K&D Foods
    Location: Warsaw, 8
    Kruczkowskiego St.
    Status: Standing Property
    Description: Multi-tenanted office
    building
    Ownership: 10 0%
    Year of Completion: 2000
    Appraised Value “As Is”: EUR 24.0 million
    GL A 9, 0 24 s q m
    Occupancy Including
    Rental Guarantee 9 9.7 %
    Occupancy Excluding
    Rental Guarantee 74 . 2 %
    Contracted Rent EUR 1.9 million
    W A U LT: 3.2 years
    Selected Tenants: Baxter, ZBP, Korean
    Cultural Centre,
    Vedim, Ec h&W
    There are numerous service and retail outlets
    near the project, as well as a park and some
    recreational areas. Boutique office building situated in proximity
    to the Central Business District (CBD).
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    WARSAW WARSAW
    PORTFOLIO REVIEW COnTinueD
    Batory Building I Bliski Centrum
    a modern six-floor office building on
    a l. Jerozolimskie, one of w arsaw’s main traffic arteries. This six-floor building is situated in an upscale area
    at the heart of w arsaw’s business district.
    The building’s architec ture pays tribute to the legendar y Polish
    ocean liner the Stefan Bator y. The location benefits from close
    proximit y to the cit y centre, Warsaw Chopin Airpor t and the
    Warsaw bypass connec ting to the A2 highway.
    Al. Jerozolimskie is one of the most impor tant of fice distric ts in
    Warsaw. Having undergone a revitalisation, the post-industrial
    area of Wlochy has been at trac ting of fice, retail and ser vice
    projec ts for years. Bator y Building I was completed in 20 0 0 and
    continues to maintain high standards of of fice space. It is also
    popular among tenants, continuing to enjoy ver y strong
    occupancy levels.
    The building, par t of a t wo-building complex, features 6,60 0 sqm
    of of fice space for tenants. It was originally finished in 20 0 0 and comprehensively
    modernised in 20 05, including installation of a modern
    air-conditioning system.
    The building is just 40 0 metres away from ul. Marszalkowska,
    one of Warsaw’s most impor tant streets, and close to
    Al. Jerozolimskie. Impor tant government and financial
    institutions are located nearby. Bliski Centrum benefits from
    its close proximit y to a wide array of hotels, restaurants and
    infrastruc ture (tram and bus stops, the Metro Centrum station,
    and trains).
    Location:
    Warsaw, 212A
    Jerozolimskie Av.
    Status: Standing Property
    Description: Multi-tenanted office
    building
    Ownership: 10 0%
    Year of Completion: 2000
    Appraised Value “As Is”: EUR 11.4 million
    GL A 6 , 610 s q m
    Occupancy Including
    Rental Guarantee 91.9 %
    Occupancy Excluding
    Rental Guarantee 9 0 .1%
    Contracted Rent EUR 0.9 million
    W A U LT: 3.7 years
    (3.2 incl. Break Options)
    Selected Tenants: Solid Group, Impuls-
    Leasing, ZST, Curver
    Location: Warsaw, 8 Zurawia St.
    Status: Standing Property
    Description: Multi-tenanted office
    building
    Ownership: 10 0%
    Year of Completion: 2000
    Appraised Value “As Is”: EUR 13.7 million
    GL A 4,920 sqm
    Occupancy Including
    Rental Guarantee 10 0%
    Occupancy Excluding
    Rental Guarantee 96.5%
    Contracted Rent EUR 1.0 million
    W A U LT: 6.2 years
    Selected Tenants: Eurozet, E-TOTO,
    Polkomtel
    Modern office building, well located along
    the “Jerozolimskie Corridor”, one of the main
    office clusters in Warsaw. Six-storey office building in the heart
    of Warsaw’s city centre.
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    WARSAW WROCL AW
    PORTFOLIO REVIEW COnTinueD
    Philips House Renoma
    completed in 1999, Philips House has become
    a permanent fixture of w arsaw’s office building
    landscape. r
    enoma is a modern multi-functional building
    combining retail and services with office space,
    located right in the centre of w roclaw, with
    modernist architecture dating back to 1930.
    Being close to one of the capital’s major traf fic ar teries ensures
    a ver y good connec tion with the cit y centre. The headquar ters
    of Philips have been in the building for years.
    Al. Jerozolimskie is not merely one of the most impor tant traf fic
    ar teries in Warsaw but also a major of fice distric t. The post-
    industrial distric t of Wlochy has been revitalised and has been
    at trac ting of fice projec ts for years. Well-developed retail and
    ser vice infrastruc ture can be found in the vicinit y, with shopping
    mall Blue Cit y and Reduta as well as Makro Cash & Carr y, E.
    Leclerc and other outlets.
    The location benefits from a close proximit y to the cit y centre,
    Warsaw Chopin Airport and the Warsaw bypass connecting to
    the A2 highway. The Old Town and the opera house are nearby. The building
    stands out for its unique façade, which was completely restored
    during the building’s modernisation and expansion in 20 09.
    Por trait sculptures on the façade presenting people from various
    continents were intended by the building’s founders, the
    Wer theim brothers, to symbolise not just diversit y and the
    foreign origin of the goods available there before the war but
    also –and more impor tantly–to emphasise openness to other
    people and respec t for their beliefs.
    Renoma today stands out not just because of its looks.
    Continuing tradition, the centre combines retail of ferings with
    promotion of the ar ts and hosting of impor tant cultural events as
    well as educational and social programmes prepared for the
    residents of Wroclaw.
    Location:
    Warsaw, 195A
    Jerozolimskie Av.
    Status: Standing Property
    Description: Multi-tenanted office
    building
    Ownership: 10 0%
    Year of Completion: 1999
    Appraised Value “As Is”: EUR 13.3 million
    GL A 6,217 sqm
    Occupancy Including
    Rental Guarantee 10 0%
    Occupancy Excluding
    Rental Guarantee 9 0 .9 %
    Contracted Rent EUR 1.1 million
    W A U LT: 4.4 years
    Selected Tenants: Philips, Trane,
    eConsulting
    Location: Wroclaw,
    40 Swidnicka St.
    Status: Standing Property
    Description: Miexed-use of fice &
    high-street retail
    Ownership: 10 0%
    Year of Completion: 2009
    Appraised Value “As Is”: EUR 139.1 million
    GL A 40,604 sqm
    Occupancy Including
    Rental Guarantee 94.3%
    Occupancy Excluding
    Rental Guarantee 94.3%
    Contracted Rent EUR 7.8 million
    W A U LT: 3.8 years
    (3.6 incl. Break Options)
    Selected Tenants: HP, Inditex Group, TK
    Max x, LPP Group, Empik
    Renoma’s lower floors are occupied by over 120
    stores and ser vice units, along with a restaurant
    sec tion, while the upper floors are used for of fice
    space. The building is well-connec ted with other
    par ts of town thanks to numerous tram and bus lines.
    Well established office location in Warsaw,
    very popular among tenants. Successful redevelopment of the 1930
    department store with unique modernist
    architecture, one of the landmarks
    in Wroclaw.
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    KATOWICE WARSAW
    PORTFOLIO REVIEW COnTinueD
    Supersam Hala Koszyki
    Supersam is a modern multi-functional building
    combining retail and services with office space. Hala Koszyki is a coherent combination of historic
    architecture with a contemporary design.
    Located in the ver y centre of Katowice – the hear t of the Silesian
    agglomeration – in a traditionally commercial par t of town, close
    to the high street. The location is not incidental. This is where
    residents of the cit y and region have been shopping for more
    than 70 years. The building’s architec ture echoes early modernist
    shopping centre designs.
    Supersam is not just a place for shopping and corporate
    headquar ters, but also for promoting culture and for meetings.
    During the Of f Festival, for example, the area around the
    building is host to a variet y of exhibits promoted by Grif fin Ar t
    Space. Supersam is thus par t of a campaign promoting
    Katowice’s image as a modern metropolis with a vast open space
    for its residents. The buildings have a common technical ser vice and are
    connec ted by underground storeys. The complex has a retail
    leasable area of almost 6,50 0 sqm and of fice par t of almost
    15,50 0 m2 and it includes: restored historic market hall in the
    central part, restored historic administration building,
    three of fice buildings, covered patio / ser vice par t at the back
    of the complex, intimate squares on other undeveloped spaces,
    including the open square from Koszykowa street.
    The real estate is located in the ver y center of Warsaw at
    Koszykowa street, distric t Śródmieście. At a distance of about
    20 0 m, are located Plac Konst y tucji and Plac Politechniki - one of
    the main squares of Warsaw. Additionally, within a radius of 1,0 0 0
    meters from Hala Koszyki there are all the most impor tant
    elements determining the struc ture of this area of the cit y–
    Location: Katowice,
    8 Piotra Skargi St.
    Status: Standing Property
    Description: Mixed-use of fice
    & high-street retail
    Ownership: 10 0%
    Year of Completion: 2 015
    Appraised Value “As Is”: EUR 61.5 million
    GL A 24,223 sqm
    Occupancy Including
    Rental Guarantee 96.8%
    Occupancy Excluding
    Rental Guarantee 88.9%
    Contracted Rent EUR 3.9 million
    W A U LT: 4 .9 y e a r s
    (4.7 incl. Break Options)
    Selected Tenants: LPP Group, Spor ts
    Distric t, Pure, ALDI,
    JAMF, Groupon Location: Warsaw,
    63 Koszykowa St.
    Status: Standing Property
    Description: Mixed-use of fice
    & retail and leisure
    Ownership: 10 0.0%
    Year of Completion: 2 016
    Appraised Value “As Is”: EUR 108.4 million
    GL A 22,24 6 sqm
    Occupancy Including
    Rental Guarantee 10 0.0%
    Occupancy Excluding
    Rental Guarantee 7 7. 7 %
    Contracted Rent EUR 6.9 million
    W A U LT: 5.8 years
    Selected Tenants: Multimedia, Mindspace,
    Eneris, Piotr i Pawel,
    Restaurant Gessler,
    Rossmann
    Launched at the end of 2015, the building features
    nearly 10 0 stores and ser vice units in over 18,0 0 0 sqm
    of space. The remaining area is for of fice tenants.
    Businesses particularly appreciate Supersam’s central
    location and excellent connec tions to other par ts of
    town and the entire agglomeration. The building is
    situated near a train and bus station as well as the
    Spodek venue, a landmark of Katowice and Silesia. Palace of Culture and Science, Plac Defilad, Plac
    Trzech Krzyży, Aleje Ujazdowskie, Łazienki Królewskie,
    Pole Mokotowskie and Central Station. The
    immediate environment is dominated by dense
    residential buildings partially preserved, partially
    rebuilt af ter war damage (residential houses with
    shops and ser vices at the ground floor level), public
    buildings, hotels as well as small of fice buildings built
    in recent years. The location of Hala Koszyki in the
    middle of an area with such a diverse func tional and
    spatial struc ture, in which all t ypes of urban ac tivities
    are represented and good access to the
    communication system, makes this real estate well
    perceived.
    Unique architecture evoking early modernist
    department stores.
    After only one month since opening
    Hala Koszyki has already become the new
    centre of Warsaw urban life.
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    PORTFOLIO REVIEW COnTinueD
    WROCL AW
    West Link
    WARSAW
    Browary Warszawskie
    WARSAW
    Beethovena (stage i&ii)
    Browar y projec t occupies one of the most dynamic and fastest
    growing commercial and residential area in Warsaw – Wola
    distric t, to be classified from 2017 as Warsaw CBD West (already
    agreed by Warsaw Research Forum).
    Thanks to the 2nd Metro Line which runs through Wola (Metro
    station is few minutes walk of the Browar y site), the location
    guarantees unquestionable accessibilit y to all areas across the
    cit y. On top the Metro facilit y, the location is exceptionally well
    ser viced by numerous bus and tram lines. Retail and leisure of fer,
    including a selec tion of restuarants, bars, cafes and hotels are
    available at the door step. Beethovena Business Park will be strategically located at the
    junc tion of Beethovena, Idzikowskiego and Witosa Streets,
    providing direc t link to the southern and eastern distric ts of
    Warsaw. The location ensures excellent connec tion to the cit y
    center as well as Warsaw Chopin Airpor t. A new tram connec ting
    Wilanów distric t with West Railway Station, with stop just
    adjacent to Beethovena is scheduled for completion in years
    2018-2020.
    West Link is located west from cit y centre, within the block of
    Lotnicza, Na Ostatnim Groszu and Legnicka Streets, a strategic
    communication ar teries for Worcław. The corner location at the
    main roads guarantees convenient access for public transpor t
    users (by way of a number of bus and tram lines) as well as car
    users. Cit y centre and Wroclaw Airpor t are comfor tably
    accessible within few minutes drive time.
    The location provide exceptional visibilit y and exposure and is
    ver yb well recognized point across the cit y.
    Location:
    Wroclaw, Na Ostatnim
    Groszu St.
    Status: Under developement
    Description: Multi-tenanted office
    building
    Ownership: Forward purchase right
    Year of Completion: 2018
    Appraised Value “As Is”: EUR 36.4 million
    GL A 14, 3 6 2 s q m
    Occupancy Including
    Rental Guarantee 10 0%
    Occupancy Excluding
    Rental Guarantee 9 7, 7 %
    Contracted Rent EUR 2.5 million
    W A U LT: 7.1 y e a r s
    (6.6 incl. Break Options)
    Selected Tenants: NOKIA Solutions &
    Net works, Hilti,
    Centrum rozwoju
    Dziecka
    Location: Warsaw, Grzybowska St.
    Status: Under developement
    Description: Mixed-use of fice
    and retail
    Ownership: Right of first of fer
    Year of Completion: 2018
    GL A 14,979 sqm Location: Warsaw, Grzybowska St.
    Status: Under developement
    Description: Mixed-use of fice
    and retail
    Ownership: Right of first of fer
    Year of Completion: 2 019
    GL A 34,225 sqm
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    overview Governance
    58
    GOVERNANCE
    Corporate Governance report 60
    Directors’ report 67
    non-executive Directors’ report 68
    nomination and remuneration
    Committee report 69
    Audit Committee report 71
    investment Committee report 74
    Sustainability report 75
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    CORPORATE GOVERNANCE REPORT
    Corporate governance means a responsible approach to company management and control geared towards the creation of
    sustainable value added. Key aspec ts of good corporate governance include ef ficient cooperation bet ween the executive direc tors
    and non-executive directors, respecting shareholder interests and transparent corporate communication. It is the Company’s
    ambition to match the highest standards in the area of corporate governance. This sec tion contains an over view of GPRE’s
    governance struc ture and the information required pursuant to the Dutch Corporate Governance Code as well as best prac tices of
    the Warsaw Stock Exchange. Deviations from the codes must be explained in accordance with the “apply or explain” prac tice.
    1. Corporate Governance Report
    a) Governance structure
    Grif fin Premium RE.. N.V. is a public limited liabilit y company under Dutch law. Grif fin Premium RE.. N.V.’s shares are listed and traded
    on the Warsaw Stock Exchange. A list of par ticipations, joint ventures and suchlike of the Group is included in the notes to the
    financial statements on page 85 and following.
    As of 13 March 2017 the Company was conver ted into a public limited company, and since then has had a one-tier board struc ture consisting
    of Executive Direc tors (“Executive Direc tors”) and Non-Executive Direc tors (“Non-Executive Direc tors”). In 2017 several changes were made
    to the Board, as described in paragraph 12 of the Strategic Review. The Board is the statutor y executive body (raad van bestuur) and the
    members are collec tively responsible for the Company’s management and the general af fairs of the Company.
    Board of Directors
    Member
    Attendance
    at the Board meetings held
    Małgorzata Turek (CEO) 7/ 7
    Rafał Pomorski (CFO) 12 /12
    Ioannis Papalekas (Non-Executive Direc tor) 1/2
    Dimitris Raptis (Non-Executive Director) 1/2
    Andreas Segal (Non-Executive Director, independent member) 8/9
    Marcus M.L.J. van Campen (Non-Executive Direc tor, independent member) 9/9
    Thomas de Witte (Non-Executive Director, independent member) 8/9
    Claudia Pendred (Non-Executive Director, independent member) 7/ 7
    b) Powers, responsibilities and function The Board may divide its duties among its members. Task that have not been specifically allocated fall within the power of the Board as a
    whole. The Executive Direc tors are in par ticular responsible for the day-to-day management of the Company. The Non-Executive Direc tors
    shall be entrusted with the super vision of the per formance of the tasks by the members of the Board. The last cannot be deprived from the
    Non-Executive Direc tors by means of an allocation of duties. In addition, both Executive Direc tors and Non-Executive Direc tors must per form
    such duties assigned to them. Pursuant to Dutch law and the Ar ticles of Association, an Executive Direc tor may not be allocated the tasks of:
    (a) ser ving as chairperson of the Board; (b) fixing the remuneration of a member of the Board; or (c) nomination of members of the Board for
    appointment. Nor may an Executive Direc tor par ticipate in the adoption of resolutions (including any deliberations in respec t of such
    resolutions) related to the remuneration of Executive Directors.
    The Board may per form all ac ts necessar y or useful for achieving the Company’s objec tives, with the exception of those ac ts that are
    prohibited or expressly at tributed to the General Meeting by law or by the Ar ticles of Association. In per forming its duties, the Board is
    required to be guided by the interests of the Company and the Group, taking into consideration the interests of the Company’s stakeholders
    (which includes the shareholders and the Company’s creditors, employees and clients) as well as the corporate social responsibilit y issues that
    are relevant to the business. The Board must submit cer tain impor tant decisions to the General Meeting for approval. The lack of such
    approval, however, does not af fec t the authorit y of the Board or its members to represent the Company.
    Subjec t to cer tain statutor y exceptions, the Board as a whole is authorised to represent the Company. In addition, each Executive Direc tor
    may solely represent the Company. Pursuant to the Ar ticles of Association, the Board is authorised, without prejudice to its responsibilit y, to
    appoint at torneys (procuratiehouders) who are authorised to represent the Company within the limits of their delegation.
    Pursuant to the Ar ticles of Association, the Board may establish one or more sets of regulations dealing with such mat ters as its
    internal organisation, the manner in which decisions are taken and any other mat ters concerning the Board (the “Board
    Regulations”). The Board Regulations shall be placed on the Company’s website and applied in addition to the relevant provisions of
    the Ar ticles of Association.
    c) Management of the Company (Executive and Non-Executive Directors)
    Name AgeGender NationalityPosition Member as ofScheduled
    for
    re-election
    Executive Directors
    Małgorzata Turek 48F PolishCEO, Executive Direc tor 11 September 2017Indefinite
    Rafał Pomorski 34M PolishCFO, Executive Direc tor 21 December 2016Indefinite
    Non-Executive Directors
    Ioannis Papalekas 41M GreekNon-Executive Director 6 December 20172021
    Dimitris Raptis 42MGreek/British Non-Executive Director 6 December 20172020
    Marcus M.L.J. van Campen 73M DutchNon-Executive Director, independent Listing Date2020
    Andreas Segal 48M GermanNon-Executive Director, independent Listing Date2020
    Claudia Pendred 59F BritishNon-Executive Director, independent 11 September 20172020
    Thomas Martinus de Witte 51M DutchNon-Executive Director, independent Listing Date2021
    d) Board Commitees Some of the tasks of the Board are per formed by commit tees. There were three commit tees in the 2017 financial year: Audit Commit tee,
    Investment Committee and Nomination and Remuneration Committee. These committees are tasked with preparing the decision-making
    of and advising the Board, although the Board remains collec tively responsible for the fulfilment of the duties delegated to its commit tees.
    The Non-Executive Direc tors shall prepare and publish a repor t on its func tioning and ac tivities and of the commit tees during the preceding
    financial year. In accordance with the Ar ticles of Association and the Board Regulations, the Board has drawn up rules on each commit tee’s
    role, responsibilities and func tioning. The commit tee regulations are incorporated in the Board Regulations as approved on 27 Februar y 2018
    and ef fec tive from this date.
    e) Key features of the Company’s internal control and risk management systems with respect to the process of
    preparation of the financial statements of Griffin Premium RE.. N.V. and the Griffin Premium RE.. Group
    The Board of Grif fin Premium RE.. N.V. is responsible for the implementation and func tioning of the internal control system in the
    process of the preparation of separate financial statements of the Company and the consolidated financial statements of the
    Grif fin Premium RE.. Group.
    The obligation to prepare financial statements is realised in prac tice by the Board with the suppor t of qualified personnel of
    the Finance Department.
    Since 2017 the preparation of the annual financial statements are preceded by a meeting of the Audit Commit tee with independent auditors
    in order to determine the audit scope and plan, and to discuss potential risk areas which may have an impac t on the truthfulness
    and fairness of the financial statements.
    Preparation of the financial statements is an orderly process. Statements of Polish SPVs are prepared by an external accounting ser vice
    provider MDDP Spółka z ograniczoną odpowiedzialnością Finanse i Księgowość Spółka komandy towa and Ifas spółka z ograniczona
    odpowiedzialnością spółka komandy towa together with the personnel of the Finance Depar tment, in accordance with their competences and
    qualifications. Until 30 June 2017 accounting books of the Company were kept by OCM Netherlands Coop. As from July 2017 the books were
    taken over by Inter trust Group. Separate financial statements of the Grif fin Premium RE.. N.V. are prepared on the basis of its books of
    account. The books of account of the most significant Group companies are maintained using the finance and accounting system, Raks 2017.
    Consolidated financial statements are draf ted on the basis of consistent consolidation packages prepared elec tronically for separate
    companies. The process of consolidation is executed by the Depar tment of Repor ting and Consolidation of MDDP Spółka z ograniczoną
    odpowiedzialnością Finanse i Księgowość Spółka komandy towa and is super vised by the Finance Depar tment.
    The companies of the Grif fin Premium RE.. Group apply consistent accounting policies approved by the Management Boards
    of Grif fin Premium RE.. N.V. and subsidiar y companies. The correc tness of application of the accounting policies by individual companies is
    regularly monitored by the Finance Department.
    Finance Department is responsible for recommending solutions relating to modifying and updating accounting policies to comply with
    Warsaw Stock Exchange (“WSE”) repor ting requirements, as well as for implementing solutions approved by the Management Board.
    During the preparation of the financial statements, among others, the following control activities are carried out:
    ¡ assessment of significant, non-routine transac tions in terms of their ef fec t on the financial position of the Group or the manner
    of their presentation in the financial statements;
    ¡ verification of the correctness of the assumptions underlying accounting estimates;
    ¡ comparative and substantive analyses of financial data;
    ¡ verification of the arithmetical correctness and consistency of financial data;
    ¡ analysis of disclosure completeness.
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    CORPORATE GOVERNANCE REPORT COnTinueD
    Annual financial statements are for warded to the Chief Financial Of ficer for preliminar y verification and then to the Board for final
    verification and authorisation.
    Annual financial statements are subjec t to an audit by an independent cer tified auditor. From 2017 an auditor presents post-audit
    conclusions and obser vations to the Audit Commit tee.
    f) Corporate governance code Application of the Corporate Governance Code of the Warsaw Stock Exchange and the Dutch Corporate Governance Code
    to the Company
    On 9 December 20 03, the Dutch Corporate Governance Commit tee, also known as the Tabaksblat Commit tee, released the Dutch
    Corporate Governance Code (the Dutch Code). With ef fec t from 1 Januar y 20 09, the Dutch Code has been amended by the Frijns
    Commit tee. On 8 December 2016, the Commit tee published the revised Dutch Code. The revised Dutch Code – “comply or explain
    mandator y” - has entered into force as of 1 Januar y 2017. The Dutch Code contains principles and best prac tice provisions for
    management boards, non-executive boards, shareholders and general meetings of shareholders and audit and financial reporting.
    Grif fin Premium RE.. N.V. complies with the principles and best prac tice provisions stipulated in this Code and, where it does not
    comply with them, this is included in sec tion “g” of this paragraph.
    In accordance with the WSE rules, Grif fin Premium RE.. N.V., as a public company listed on the Warsaw Stock Exchange, should
    obser ve the principles of corporate governance set out in the WSE best prac tices. The WSE best prac tices is a set of
    recommendations and rules of procedure for governing bodies of publicly-listed companies and their shareholders. The WSE rules
    and resolutions of the WSE management board and its council set for th the manner in which publicly-listed companies disclose
    information on their compliance with corporate governance rules and the scope of information to be provided. If a cer tain rule is not
    complied with by a publicly-listed company on a permanent basis or has been breached incidentally, such publicly-listed company is
    required to disclose this fac t in the form of a current repor t. Fur thermore, a publicly-listed company is required to at tach to its annual
    repor t information on the scope in which it complied with the WSE best prac tices in a given financial year.
    The corporate governance code of the Warsaw Stock Exchange and the Dutch Code are mainly based upon the same or at least
    comparable principles of good corporate governance. However, in view of its listing on the Warsaw Stock Exchange, the Company
    shall apply the corporate governance code of the Warsaw Stock Exchange and, therefore, it does comply with the Dutch Code to the
    extent that the Dutch Code does not deviate from the corporate governance code of the Warsaw Stock Exchange.
    g) Deviations from the Dutch corporate governance code The prac tices where the Company is not in compliance with the Dutch code are the following:
    Composition and size
    Best prac tice provision 2.1.1:
    The non-executive board should prepare a profile, taking account of the nature and the ac tivities of the enterprise af filiated with the
    company. The profile should address:
    i. the desired exper tise and background of the non-executive board members;
    ii. the desired diverse composition of the non-executive board, referred to in best prac tice provision 2.1.5;
    iii. the size of the non-executive board; and
    iv. the independence of the non-executive board members.
    The profile should be posted on the company’s website.
    Grif fin Premium RE.. N.V.`s does not comply entirely with this point. Profile of the non-executive board are posted on the company`s
    website but their do not contain all required information.
    Best prac tice provision 2.1.7:
    The composition of the non-executive board is such that the members are able to operate independently and critically vis-ŕ-vis one
    another, the management board, and any particular interests involved. In order to safeguard its independence, the non-executive
    board is composed in accordance with the following criteria:
    i. any one of the criteria referred to in best prac tice provision 2.1.8, sec tions i. to v. inclusive should be applicable to at most one
    non-executive board member;
    ii. the total number of non-executive board members to whom the criteria referred to in best prac tice provision 2.1.8 are applicable
    should account for less than half of the total number of non-executive board members; and
    iii. for each shareholder, or group of af filiated shareholders, who direc tly or indirec tly hold more than ten percent of the shares in the
    company, there is at most one non-executive board member who can be considered to be af filiated with or representing them as
    stipulated in best prac tice provision 2.1.8, sec tions vi. and vii.
    Four out of eight Non-Executive Direc tors do not qualif y as independent within the meaning of the Dutch Code. These non-
    independent Executive Direc tors are, through their wider association with the group and its operations, considered to have unique
    knowledge of the group and its industr y. The current board’s diversit y of professional exper tise and demographics make it a highly
    ef fec tive board with regards to Grif fin Premium RE.. N.V.’s current strategies.
    Best prac tice provision 2.2.1:
    A management board member is appointed for a maximum period of four years. A member may be reappointed for a term of not
    more than four years at a time. The diversit y objec tives from best prac tice provision 2.1.6 should be considered in the preparation of the appointment or
    reappointment.
    At present, the Company does not fully comply with the Dutch Ac t on Management and Super vision, which – among others – aims at
    a representation of at least 30% of either gender in the Board of Direc tors. The Board of Direc tors continues to strive to achieve a
    balanced composition of the Board in terms of gender, but it will continue to selec t members primarly on the basis of exper tise,
    experience, background and skills. The Board of Direc tors now has a composition of at least 20% of either gender. The current
    executive members of the Board (Małgorzata Turek and Rafał Pomorski) are appointed for an indefinite term. The purpose thereof is
    to safeguard the continuit y of the Company and its Group Companies.
    Organisation of the non-executive board and reports
    Best practice provision 2.3.1:
    The division of duties within the non-executive board and the procedure of the non-executive board should be laid down in the
    terms of reference. The non-executive board’s terms of reference should include a paragraph dealing with its relations with the
    management board, the general meeting, the employee participation body (if any) and the executive committee (if any). The terms
    of reference should be posted on the company’s website.
    Grif fin Premium RE.. N.V. has adopted the board’s terms of reference but Non-Executive Direc tor tasks are split into dif ferent
    categories. The terms of references are not posted on the company`s website.
    Best practice provision 2.3.2:
    If the non-executive board consists of more than four members, it should appoint from among its members an audit commit tee, a
    remuneration commit tee and a selec tion and appointment commit tee. Without prejudice to the collegiate responsibilit y of the
    non-executive board, the dut y of these commit tees is to prepare the decision- making of the non-executive board. If the non-
    executive board decides not to establish an audit commit tee, a remuneration commit tee or a selec tion and appointment commit tee,
    the best prac tice provisions applicable to such commit tee(s) should apply to the entire non-executive board.
    Grif fin Premium RE.. N.V. has combined the remuneration commit tee and selec tion and appointment commit tee into one nomination
    and remuneration commit tee. Due to the size of the company it does not believe to be ef ficient to maintain a separate remuneration
    committee and selection and appointment committee.
    Best practice provision 2.3.7:
    The vice-chairman of the non-executive board should deputise for the chairman when the occasion arises.
    No formal vice-chairman has been appointed. If the chairman is not available to at tend a board meeting, in prac tice one of the other
    independent Non-Executive Direc tors will chair the meeting.
    Preventing conflicts of interest
    Best prac tice provision 2.7.3:
    A conflic t of interest may exist if the company intends to enter into a transac tion with a legal entit y:
    i. in which a member of the management board or the non-executive board personally has a material financial interest; or
    ii. which has a member of the management board or the non-executive board who is related under family law to a member of the
    management board or the non-executive board of the company.
    A management board member should repor t any potential conflic t of interest in a transac tion that is of material significance to the
    company and/or to such management board member to the chairman of the non-executive board and to the other members of the
    management board without delay. The management board member should provide all relevant information in that regard, including
    the information relevant to the situation concerning his spouse, registered par tner or other life companion, foster child and relatives
    by blood or marriage up to the second degree.
    A non-executive board member should repor t any conflic t of interest or potential conflic t of interest in a transac tion that is of
    material significance to the company and/or to such non-executive board member to the chairman of the non-executive board
    without delay and should provide all relevant information in that regard, including the relevant information per taining to his spouse,
    registered par tner or other life companion, foster child and relatives by blood or marriage up to the second degree. If the chairman
    of the non-executive board has a conflic t of interest or potential conflic t of interest, he should repor t this to the vice-chairman of the
    non-executive board without delay.
    Grif fin Premium Re.. N.V for the most par t complies with this provision, except that no formal chairman and vice-chairman has been
    appointed. If the chairman of the board has a conflic t of interest or potential conflic t of interest that is of material significance to the
    company and/or to him, in prac tice he shall repor t this immediately to the chairman of the audit commit tee and/or another Non-
    Executive Director.
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    CORPORATE GOVERNANCE REPORT COnTinueD
    Best prac tice provision 2.7.5:
    All transac tions bet ween the company and legal or natural persons who hold at least ten percent of the shares in the company
    should be agreed on terms that are customar y in the market. Decisions to enter into transac tions with such persons that are of
    material significance to the company and/or to such persons should require the approval of the non-executive board. Such
    transac tions should be published in the management repor t, together with a declaration that best prac tice provision 2.7.5 has been
    complied with.
    On December 18, 2017 the entit y and its significant shareholder Globalwor th Asset Managers SRL, operating through its subsidiar y
    Globalwor th Finance Guernsey Limited, signed a shor t-term corporate loan agreement, under which Grif fin Premium RE.. N.V. was granted a
    conver tible loan amounting to EUR 165 million. A resolution of the managing direc tors accepting the loan agreement was adopted on
    December 18, 2017, yet it was not signed by the former Chairman of the Board of Direc tors. The resolution was signed by the Board on
    Februar y 27, 2018.
    Remuneration policy – management board
    Best practice provision 3.1:
    The remuneration policy applicable to management board members should be clear and understandable, should focus on long-term value
    creation for the company and its affiliated enterprise, and take into account the internal pay ratios within the enterprise. The remuneration
    policy should not encourage management board members to ac t in their own interest, nor to take risks that are not in keeping with the
    strategy formulated and the risk appetite that has been established. The non-executive board is responsible for formulating the remuneration
    policy and its implementation.
    Grif fin Premium RE..N.V. has created its remuneration policy which is expec ted to be adopted in 2018.
    Provision of information
    Best prac tice provision 4.2.2:
    The company shall formulate an outline policy on bilateral contac ts with the shareholders and publish this policy on its website.
    Grif fin Premium RE.. N.V. has not adopted a bilateral contac t policy yet, but expec ts to adopt this in 2018. Upon adoption Grif fin Premium RE..
    N.V. will publish the bilateral contac t policy on the company’s website at w w w.grif fin-premium.com.
    Best prac tice provision 4.2.3:
    Analyst meetings, analyst presentations, presentations to institutional or other investors and press conferences should be announced in
    advance on the company’s website and by means of press releases. Analysts’ meetings and presentations to investors should not take place
    shor tly before the publication of the regular financial information. All shareholders should be able to follow these meetings and presentations
    in real time, by means of webcasting, telephone or other wise. Af ter the meetings, the presentations should be posted on the company’s
    website.
    The Company shall initially not enable shareholders to follow analyst meetings, presentations to (institutional) investors and press conferences
    in real time by means of webcasting, telephone or other wise, since, considering the Company’s size, it would create an excessive burden to
    provide such facilities. In this respec t the Company does not comply with best prac tice provision 4.2.3 of the Dutch Code. The Company shall
    regularly examine whether it is desirable to provide those facilities and possibly amend its policy in this respec t. In accordance with best
    prac tice provision 4.2.3 of the Dutch Code, the Company shall announce meetings with analysts, presentations to analysts, presentations to
    (institutional) investors and press conferences in advance on the Company’s website and by means of press releases. Af ter the meetings, the
    presentations shall be posted on the Company’s website.
    Casting votes
    Best practice provision 4.3.3:
    The general meeting of shareholders of a company not having statutor y t wo tier status (struc tuurregime) may pass a resolution to cancel the
    binding nature of a nomination for the appointment of a member of the management board or of the non-executive board and/or a resolution
    to dismiss a member of the management board or of the non-executive board by an absolute majorit y of the votes cast. It may be provided
    that this majorit y should represent a given propor tion of the issued capital, which propor tion may not exceed one third. If this propor tion of
    the capital is not represented at the meeting, but an absolute majorit y of the votes cast is in favour of a resolution to cancel the binding nature
    of a nomination, or to dismiss a board member, a new meeting may be convened at which the resolution may be passed by an absolute
    majorit y of the votes cast, regardless of the propor tion of the capital represented at the meeting.
    The Ar ticles of Association provide that the Board may make binding nominations. The general meeting can overrule the binding nature of a
    nomination by a 2/3 majorit y of the votes cast, representing at least 50% of the issued share capital. Fur thermore the Ar ticles of Association
    provide that the general meeting may only adopt a resolution to suspend or dismiss a member of the Board (i) at the proposal of the Board by
    a simple majorit y of votes cast and (ii) without such proposal by a 2/3 majorit y votes cast, representing at least 50% of the issued share capital.
    These provisions deviate from best prac tice provision 4.3.3: The purpose of these provisions is to safeguard the continuit y of the Company
    and its Group companies.
    One-tier governance structure
    Best prac tice provision 5.1.3:
    The chairman of the management board should not be an executive direc tor or former executive direc tor of the company, and should be
    independent within the meaning of best prac tice provision 2.1.8. Mr Kr ych was appointed to ser ve as the Non-Executive Chairman of the
    Board due to his unique in-depth knowledge of the real estate industr y, especially the Polish of fice and high-street retail markets. The
    shareholders of the Company determined that he was the best candidate for the position despite not satisf ying the independence criteria in light of the fac t that during the initial period of operations immediately following the Of fering, the Board should be chaired by an individual
    who is well-recognized in the market and who has extensive knowledge of the Group’s real estate por tfolio. On December 21, 2017, Mr Kr ych
    has resigned from the position of Non-Executive Chairman of the Board. In the upcoming months the shareholders will appoint a new
    Chairman of the Board.
    h) Non-Compliance with the Corporate Governance Code of the Warsaw Stock Exchange The prac tices where the Company is not in compliance with the Corporate Governance Code of the Warsaw Stock Exchange are
    the following:
    Dividend payment date
    Detailed principle No. IV.Z.16. of the Corporate Governance Code of the Warsaw Stock Exchange (i) requires that the dividend record
    date and the dividend payment date should be set so as to ensure that the period bet ween them is not longer than 15 business days;
    and (ii) provides that a longer period bet ween these dates requires a justification.
    The Company cannot guarantee that it will adhere to the above principle since in accordance with Ar ticle 29.2 of the Ar ticles of
    Association, unless the Board determines another date of payment, distributions on Shares shall be made payable within thir t y days
    af ter they have been declared.
    Real-time broadcasts of the General Meeting
    Detailed principle No. IV.Z.2. of the Corporate Governance Code of the Warsaw Stock Exchange provides that if it is justified by the
    shareholder struc ture, the Company should ensure publicly available real-time broadcasts of general meetings. Pursuant to
    recommendation No. IV.R.2, if it is justified by the struc ture of shareholders or expec tations of shareholders notified to the company,
    and if the Company is in a position to provide the technical infrastruc ture necessar y for a general meeting to proceed ef ficiently
    using elec tronic communication means, the company should enable its shareholders to par ticipate in a general meeting using such
    means, in particular through: (i) real-life broadcast of the general meeting; (ii) real-time bilateral communication where shareholders
    may take the floor during a general meeting from a location other than the general meeting; and (iii) exercise of the right to vote
    during a general meeting either in person or through a proxy.
    The Company cannot guarantee that the above principles will be implemented, but will in each case analyse the Company’s
    shareholding struc ture and the expec tations of the shareholders which will have been communicated to it and will review whether
    ensuring publicly available real-time broadcasts of the general meetings is justified.
    i) Holders of all securities which confer special control rights The Company did not issue any securities that give special control rights.
    j) Restrictions on exercising voting rights There are no restric tions on the transfer of ownership rights to securities of Grif fin Premium RE.. N.V., except for lock-up agreements.
    The members of the Board
    In a separate lock-up let ter, constituting an at tachment to the Under writing Agreement Przemysław T. Kr ych, Maciej Dyjas and
    Nebil Senman under took to the Global Coordinators that from the date of the Under writing Agreement until the lapse of 720 days
    following the first listing date of the shares in the Company on the WSE, Przemysław T. Kr ych, Maciej Dyjas and Nebil Senman will
    not, without the writ ten consent of the Global Coordinator in any way dispose of any Shares with some exceptions. The Global
    Coordinators had full discretion to waive the lock-up at any time before its expir y. On 29 September 2017 lock-up period was waived
    by the Global Coordinators.
    On 3 Oc tober 2017 based on the Investment Agreement signed bet ween Grif fin Netherlands II B.V., GT Netherlands III B.V., Grif fin
    Premium RE.. N.V., Grif fin topco II S.A R.L., Grif fin Topco III S.A R.L. and Globalwor th Asset Managers SRL Przemysław T. Kr ych,
    Maciej Dyjas and Nebil Senman under took that from the date on which Tender Of fer was set tled until the lapse of four years, will not,
    without the writ ten consent of Globalwor th Asset Managers SRL in any way dispose of any Shares with some exceptions.
    k) Regulations concerning appointment or removal of Management Board Members, the rights of those
    persons, in particular, the right to make decisions on share issue or redemption
    The Board shall consist of at least one Executive Direc tor and at least three Non-Executive Direc tors, provided that the Board shall
    be comprised of a maximum of fif teen direc tors and that the majorit y of the Board consists of Non-Executive Direc tors.
    The General Meeting appoints the members of the Board as described below. Each Executive Direc tor member shall be appointed
    or re-appointed for a period to be determined by the General Meeting. Each Non-Executive Direc tor shall be appointed or re-
    appointed for a period of not more than four years provided that, unless a Non-Executive Direc tor resigns earlier, his appointment
    period shall end immediately af ter the annual General Meeting that will be held in the four th calendar year af ter the date of his
    appointment. Only natural persons (not legal entities) may be appointed as Non-Executive Direc tors.
    The General Meeting may at any time dismiss or suspend any member of the Board. If the Board proposes the dismissal or
    suspension of a Board member to the General Meeting, the General Meeting can resolve upon such dismissal or suspension by a
    resolution adopted by a simple majorit y of the votes cast. If the Board has not made a proposal for the dismissal or suspension of a
    Board member, the General Meeting can only resolve upon the dismissal or suspension of such Board member by a resolution
    adopted by a majorit y of at least t wo thirds of the votes cast representing more than half of the issued capital. An Executive Direc tor
    may also be suspended by the Board. A suspension may be discontinued at any time by the General Meeting.
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    If either the General Meeting or the Board has suspended a member of the Board, the General Meeting is required within three
    months af ter the suspension has taken ef fec t to resolve either to dismiss such member, or to terminate or continue the suspension,
    failing which the suspension shall lapse. A resolution to continue the suspension may be adopted only once and in such event the
    suspension may be continued for a maximum period of three months.
    The Board shall appoint one of the Non-Executive Direc tors to be the Chairperson of the Board.
    The Non-Executive Direc tors shall prepare a profile of the Board’s scope and composition taking into account the nature of the
    Company’s business, its activities, and the desired expertise, experience and independence of its members. The composition of the
    Board shall be such that the combined experience, exper tise and independence of its members meets the Board profile and enables
    the Board to best carr y out the variet y of its responsibilities and duties to the Company and the Company’s stakeholders, consistent
    with applicable law and regulations.
    l) Implementing changes to the Articles of Association of Griffin Premium RE.. N.V.The General Meeting may resolve to amend the Ar ticles of Association, subjec t to a proposal by the Board. The General Meeting
    may fur thermore resolve to change the corporate form of the Company. A change of the corporate form shall require a resolution to
    amend the Ar ticles of Association, subjec t to a proposal by the Board. The rights of shareholders may be changed only by amending
    the Ar ticles of Association in compliance with Dutch law.
    m) Functioning of the General Meeting of Shareholders, its fundamental powers, rights of the
    shareholders and the manner of exercising those rights
    An annual General Meeting shall be held once ever y year within six months from the end of the preceding financial year.
    Other General Meetings are held as of ten as the Board deems such to be necessar y
    Impor tant mat ters that require approval of the General Meeting include:
    ¡ adoption of the financial statements for the last financial year;
    ¡ material changes to the Ar ticles of Association;
    ¡ proposals relating to the appointment of Board members;
    ¡ the policy of the Company on additions to reser ves and on dividends (the level and purpose of the addition to reser ves, the
    amount of the dividend and the t ype of dividend);
    ¡ any proposal to pay out dividends;
    ¡ discharge of Executive Directors from liability;
    ¡ discharge of Non-Executive Directors from liability;
    ¡ each substantial change in the corporate governance struc ture of the company and in the compliance with Dutch Corporate
    Governance Code;
    ¡ the appointment of the external auditor; and
    ¡ the main conclusions of the assessment of the func tioning of the external auditor.
    Each shareholder shall be entitled to at tend the General Meeting, to address such meeting and, to the extent applicable, to exercise
    his or her voting rights. Shareholders individually or jointly representing at least 3% of the issued share capital have the right to
    request the Board to place items on the agenda of the General Meeting.Each Share entitles the holder to one vote at a General
    Meeting. Shareholders may vote by proxy. In the General Meeting, no voting rights may be exercised for any Share held by the
    Company or a subsidiar y of the Company, nor for any Share for which the Company or a subsidiar y of the Company holds the
    depositary receipts.
    The meeting documents, minutes and presentations are placed on the website.
    CORPORATE GOVERNANCE REPORT COnTinueD DIRECTORS’ REPORT
    The Direc tors present their Annual Repor t and the audited consolidated financial statements of the Group for the year ended
    31 December 2017.
    The Board of Direc tors states that to the best of its knowledge:
    i. the internal risk management and control systems provide reasonable assurance that the financial repor ting does not contain any material
    inaccuracies (as described in Risk Repor t, Strategic Review sec tion);
    ii. based on the current state of af fairs, it is justified that the financial repor ting is prepared on a going concern basis (as disclosed in the Note
    1.4 of the consolidated financial statements) and
    iii. the repor t states those material risks and uncer tainties that are relevant to the expec tation of the company’s continuit y for the period of
    t welve months af ter the preparation of the repor t (as disclosed in the Note 1.4 of the consolidated financial statements).
    To the best of the Board of Direc tors knowledge:
    i. the financial statements provide a fair view of the assets, liabilities, financial position and profit or loss of the issuer and of the companies
    included in the consolidation taken as a whole; and
    ii. the direc tors’ repor t provides a fair view of the situation on the balance sheet date and of developments during the financial year of the
    issuer and of its af filiated companies whose information has been included in its financial statements, together with a description of the
    main risks the issuer faces.
    Directors’ IndemnitiesThe indemnit y of the Board members as against claims from third par ties is described in the Ar ticles of Association. The Company also
    maintains qualif ying third-par t y indemnit y provisions in the form of a Direc tors’ and Of ficers’ insurance policy for the benefit of its Direc tors,
    which were made during the year and remain in force at the date of this repor t.
    Investment Polic y The Group’s investment strategy focuses on generating at trac tive risk-adjusted returns, made up of a combination of yield and capital
    appreciation, by investing in a diversified por tfolio of proper ties. Key highlights of the Company’s investment policy are presented below:
    Profile of Underlying Investments
    ¡ Focus on commercial assets (existing or to be developed);
    ¡ Geographically located in largest cities of Poland;
    ¡ Most of the income to be derived from multinational corporates and financial institutions; and
    ¡ Euro-denominated, long-term, triple net and annually indexed leases, with corporate guarantees where possible.
    Investment Themes
    ¡ Developments with pre-let tings from high-qualit y tenants.
    Results and Dividends The results for the year are set out in the consolidated statement of comprehensive income on page 80 of the Annual Repor t.
    The Company has announced its intention to distribute a dividend of EUR 11.3 million, payable in respec t to the period commencing with the
    completion of the Of fering until the end of 2017, to holders of Shares at that time. For subsequent years, the intention of the Company is to
    distribute the equivalent of 90% of the Company’s Funds from Operations.
    The dividend policy will, however, be reviewed from time to time and any future dividends will be paid taking into account several fac tors
    concerning the Company, including the Company’s prospec ts, future profits, cash requirements, financial standing, level of liquidit y ratios,
    expansion plans as well as the laws and regulations per taining to this subjec t in order to make the decision.
    All shares carr y equal rights to dividends (and advance dividend payments, respec tively) and entitle the holders to par ticipate in
    the Company’s profit from the date of their purchase and the dividend date is set af ter the date of purchase (or registration) of the shares.
    Going Concern As disclosed in Note 1.4 of the consolidated financial statements, the Direc tors believe that it is appropriate to continue to adopt the going
    concern basis in preparing the consolidated financial statements as the Company expec ts to have access to adequate financial resources to
    continue in operational existence for the foreseeable future.
    Supply of Information to the Board The Board meetings are the principal source of regular information for the Board, enabling it to determine policy and to monitor per formance
    and compliance. Each Direc tor has direc t access to the Company Secretar y and may, at the expense of the Company, seek independent
    professional advice on any mat ter that concerns them in the fur therance of their duties.
    Delegation of Functions The Board has contrac tually delegated to external agencies the custodial ser vices and the accounting ser vices of the Company
    and some of its subsidiaries. Each of these contrac ts were entered into af ter full and proper consideration of the qualit y and cost
    of ser vices of fered.
    AuditorsThe auditors, Ernst & Young Accountants LLP, have indicated their willingness to continue in of fice. Accordingly, a resolution for their
    reappointment will be proposed at the for thcoming AGM.
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    NON-EXECUTIVE DIRECTORS’ REPORT NOMINATION AND REMUNERATION COMMITTEE REPORT
    Throughout the year ended 31 December 2017, the Remuneration Commit tee comprised three Non-Executive Direc tors:
    Maciej Dyjas (as Chairman), Thomas Mar tinus de Wit te and Marcus M.L.J. van Campen. With respec t to the changes within
    composition of the Board of Direc tors and the Commit tee please refer to Note 36 of consolidated financial statements.
    The Chairman of the Commit tee is appointed by the Board and the members are appointed by the Board, in consultation with the
    Chairman of the Commit tee. The Commit tee shall have a minimum of t wo members. All members of the Commit tee shall be
    Non-Executive Direc tors with the majorit y of the members (including chairman) being independent.
    The Company Secretary shall take minutes of the meeting. The minutes shall be adopted in the same meeting or in the next meeting
    of the Investment Commit tee, and shall be signed by the chairperson of the Investment Commit tee and the Company Secretar y.
    A copy of the minutes will be sent to the Board.
    The duties of the Nomination and Remuneration Committee include:
    ¡ advising the Board on the exercise of its duties regarding the remuneration policy;
    ¡ preparing proposals for the Board on these subjec ts;
    ¡ preparing the remuneration report;
    ¡ drawing up selec tion criteria and appointment procedures for Board members;
    ¡ periodically assessing the size and composition of the Board members and the functioning of the individual members; and
    ¡ making proposals for appointments and re-appointments.
    The emoluments of the Non-Executive Direc tors is a mat ter for the Board. No Direc tor may be involved in any decisions
    as to his own emoluments.
    Remuneration Policy for Members of the Management Board The remuneration of the Executive Direc tors shall be determined by the Board with due obser vance of the remuneration policy
    adopted by the General Meeting (as summarised below). Executive Direc tors may not take par t in the decision-making process in
    respec t of the remuneration of Executive Direc tors. A proposal with respec t to a remuneration scheme in the form of Shares or rights
    to Shares is submit ted by the Board to the General Meeting for its approval. This proposal must set out at least the maximum
    number of Shares or rights to Shares to be granted to Executive Direc tors and the criteria for granting or amendment.
    The remuneration of the Non-Executive Direc tors shall be determined by the General Meeting upon a proposal of the Board, with
    due obser vance of the remuneration policy adopted by the General Meeting. Non-Executive Direc tors may not receive Shares and/
    or options or similar rights to acquire Shares as par t of their remuneration.
    Scenario analysis The Code requires that the Board of Direc tors analyses the possible outcomes of the variable remuneration components and their
    impac t on the Executive Board’s total remuneration. This analysis is conduc ted at least once ever y three years. In cases not covered
    by the remuneration policy, the Board of Direc tors decides. Any decision must match the principles and intent of the remuneration
    policy as closely as possible. Where necessar y, the Board of Direc tors will inform the Annual General Meeting.
    Remuneration policy components
    Fixed annual base salary
    Executive Direc tors
    The Executive Direc tors are entitled to a base salar y. The base salar y of the Executive Direc tors is benchmarked against relevant
    comparable markets and companies.
    Non-Executive Directors
    The current annual compensation of the Non-Executive Direc tors is as follows:
    Non-Executive Direc tor: EUR 20,0 0 0; and
    Membership commit tee of the Board of Direc tors: EUR 5,0 0 0 (per commit tee).
    Variable remuneration
    Executive Direc tors
    The Company is in the process of finalising its remuneration policy with respec t to the Executive Direc tors. The policy shall be aimed in
    attracting, motivating and retaining highly qualified executives and rewarding board members with balanced and competitive remuneration,
    while aligning with the shor t-term operational objec tives of the Company leading to longer term value creation. The policy shall promote the
    achievement of strategic goals as well as promote ethical culture and responsible corporate governance.
    Pension and fringe benefits
    Executive Direc tors
    The Executive Direc tors are not entitled to any pension contributions.
    The Executive Direc tors will be entitled to customar y fringe benefits, such as expense allowances and reimbursement of costs.
    IntroductionGrif fin Premium RE.. N.V. per formed well in 2017 which was the first year for this recently established business, especially in terms of
    valuable increase of its por tfolio as well as improved key per formance indicators.
    In the past year Non-Executive Direc tors fulfilled their responsibilities as laid down in the Ar ticles of Association, Dutch Corporate
    Governance Code, best prac tices of Warsaw Stock Exchange and board regulations with the gretatest of care.
    A partnership with the Executive Directors Non-Executive Direc tors are always entrusted with the general management of the Company and the enterprise connec ted with it
    and are responsible for super vising the Company’s management and the Company’s general af fairs and the business connec ted with
    it and for advising the Executive Direc tors. In so doing, the Non-Executive Direc tors are also focused on the ef fec tiveness of the
    Company’s internal risk management and control systems and the integrit y and qualit y of the financial repor ting.Executive Direc tors
    are responsible for the day-to-day operations of the Company. The role of Non-Executive Direc tors is to super vise the policies of the
    Executive Direc tors and the general af fairs of the Company and its subsidiaries, as well as to provide advice to them. Each of the
    Non-Executive Direc tors has their own responsibilit y for obtaining all the required information from Executive Direc tors and external
    auditors that are necessar y in order to under take their duties as a super visor y organ.
    In 2017 a lot of extensive discussions took place bet ween the Executive Direc tors and Non-Executive Direc tors concerning the
    monitoring of the capital and financing struc ture, the fur ther implementation of the risk and control framework, working with
    external auditor and current state of af fairs. On the organisational level it was a year of changes based on forming the whole Group.
    The Executive Direc tors as well as other top management of the Group provided Non-Executive Direc tors with regular, prompt and
    comprehensive repor ts on the business developments, strategy and prospec ts for the future, including risks and oppor tunities,
    policies and risk management. Any deviations to the plans and budgets were dicussed in detail. All significant transac tions and
    decisions were discussed with Non-Executive Direc tors and examined by them in detail.
    Main activities of Non-Executive Directors In the 2017 financial year Non-Executive Direc tors mostly focused on the organisation of the Company and the Group,
    implementation and improvement of the internal risk management system as well as ensuring adaptation of the corporate
    governance and compliance with respec tive laws and regulations, especially those applicable to public companies. On this level it
    was a year of changes and adaptation to the new circumstances. There were also a few changes to the Non-Executive Direc tors
    throughout the year. Those changes are listed on page 36.
    Investor relation activities During the year, Non-Executive Direc tors received detailed information on investor relations. Updates were given in several meetings, and
    repor ts on Grif fin Premium RE.. N.V. by several analysts were sent to the Non-Executive Direc tors promptly. Grif fin Premium RE.. N.V.
    cooperated with dif ferent specialists and analysts and asked investors for their opinion about the group per formance. This information is
    required by Non-Executive Direc tors to be up to date with the feedback from shareholders and investors.
    Evaluation external auditor EY was appointed as Grif fin Premium RE.. Group external auditor as of the 2017 repor ting year. The chairman of the Board and the
    chairman of the Audit Commit tee consult at least once a year with the external auditor.
    Adoption of the 2017 consolidated financial statement and approval of separate financial statements
    of the
    Company On 2 March 2018 in the presence of the auditor, first during the Audit Commit tee and then during the meeting of the Board on
    4 March 2018, Non-Executive Direc tors examined and discussed in detail consolidated and separate financial statements as at
    31 December 2017, together with the management repor t and the proposal for appropriation of profits. The auditor repor ted on the
    key results of the audit and answered all the questions of Non-Executive Direc tors. Af ter the discussion the financial statements were
    recommended by the Audit Commit tee for approval by the Board. Non-Executive Direc tors accepted the recommendation of the
    Audit Commit tee and approved standalone and consolidated financial statements which were therefore adopted. The Non-
    Executive Direc tors accepted the proposal of Executive Direc tors as to the appropriation of the net retained profits. Therefore the
    Board will recommend the payment of the dividend in the amount of EUR 11.3 million to the Annual General Meeting.
    Self-assesment of Non-Executive Directors Non-Executive Direc tors annually evaluate their own per formance. The conclusion of the evaluation with respec t to the 2017 financial
    year was that the Non-Executive Direc tors in general per formed well, that cooperation within and with the commit tees is good, that
    the Board operates independently and that it is adequately resourced for its tasks. The preparations for meetings by the Executive
    Direc tors and the collaboration are proper.
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    NOMINATION AND REMUNERATION COMMITTEE REPORT COnTinueD
    Non-Executive Directors
    The Non-Executive Direc tors will be entitled to reimbursement costs.
    Adjustments to variable remuneration Pursuant to Dutch law, the variable remuneration of managing direc tors may be reduced or managing direc tors may be obliged to
    repay (par t of ) their remuneration to the company if cer tain circumstances apply, which are summarised below.
    Pursuant to Dutch law, the Board may adjust the variable remuneration to an appropriate level if payment of the variable
    remuneration were to be unacceptable according to the criteria of reasonableness and fairness. In addition, the Board will have the
    authorit y under Dutch law to recover from an Executive Direc tor any variable remuneration awarded on the basis of incorrec t
    financial data in respec t of underlying targets or other circumstances of which the variable remuneration is dependent.
    Reference group and market positioning We of fer a remuneration package that is competitive as compared to a relevant labor market. To define this market, a reference
    group is created, consisting of companies that are comparable to us in terms of size and complexit y, data transparency and
    geographical area. For as long as Grif fin Premium RE.. Group is positioned around the median of the group of companies with
    respec t to size (measured by enterprise value, revenue and number of employees), the median market level may ser ve as a reference
    in determining the level of pay for the Board of Direc tors.
    Service and severance agreements Set out below are the material terms of the management contrac ts of the Executive Direc tors.
    Małgorzata Turek
    Małgorzata Turek, the Company’s Executive Direc tor and CEO entered into a management and/or employment contrac t with the Company
    and/or its subsidiar y (the “CEO Contrac ts”). The CEO Contrac ts was entered into for an unspecified term and each par t y have a right to
    terminate the CEO Contrac ts with six months’ notice (unless terminated by the Company with immediate ef fec t for cause).
    The CEO Contrac ts provide for the non-compete obligations of Małgorzata Turek during the term of the CEO Contrac ts, as well as
    for 12 months following their termination. During the non-compete period following the termination of the CEO Contrac ts,
    Małgorzata Turek is entitled to receive monthly base remuneration for each month of the non-compete period.
    Rafał Pomorski
    Rafał Pomorski, the Company’s Executive Direc tor and CFO entered into a management and/or employment contrac t with the Company and/
    or its subsidiar y (the “CFO Contrac ts”). The CFO Contrac ts was entered into for an unspecified term and each par t y have a right to terminate
    the CFO Contrac ts with six months’ notice (unless terminated by the Company with immediate ef fec t for cause).
    The CFO Contrac ts provide for Rafał Pomorski’s non-compete obligations during the term of the CFO Contrac ts, as well as for
    12 months following their termination. During the non-compete period following the termination of the CFO Contrac ts,
    Rafał Pomorski is entitled to receive monthly base remuneration for each month of the non-compete period.
    Amounts in €‘0 0 0 Base Salar y Short Term
    Incentives Dividends Other
    benefits To t a l
    emoluments
    Current Directors
    Małgorzata Turek 67–––67
    Rafał Pomorski 7570 ––14 5
    Ioanis Papalekas 1–––1
    Dimitris Raptis 1–––1
    Andreas Segal 18–––18
    Marcus M.L.J. Van Campen 18–––18
    Thomas Martinus De Witte 22–––22
    Claudia Pendred 6–––6
    Former Directors
    Dorota Wysokińska-Kuzdra 80–––80
    Przemysław Kr ych 17–––17
    Maciej Dyjas 22–––22
    Nebil Senman 22–––22
    Karim Khairallah 16–––16
    Internal pay ratio The pay ratio of CEO compensation compared to the median of all other employees remuneration in December 2017 is 5:1.
    Due to the fac t that the Group was ef fec tively created in April 2017 and, additionally, there was a change of CEO during the year the
    ratio is calculated based on monthly data for December 2017 instead of annual figures.
    AUDIT COMMITTEE REPORT
    During the year ended 31 December 2017, the Audit Commit tee comprised three Non-Executive Direc tors: Andreas Segal (as Chairman),
    Thomas de Wit te and Nebil Senman . With respec t to the changes within composition of the Board of Direc tors and the Commit tee please
    refer to Note 36 of consolidated financial statements.
    The Chairman of the Commit tee is appointed by the Board and the members are appointed by the Board, in consultation with the Chairman
    of the Commit tee. The Commit tee shall have a minimum of t wo members. All members of the Commit tee shall be Non-Executive Direc tors
    with relevant financial experience with the majorit y of the members (including chairman) being independent.
    The Company Secretary shall take minutes of the meeting. The minutes shall be adopted in the same meeting or in the next meeting
    of the Audit Commit tee, and shall be signed by the chairperson of the Audit Commit tee and the Company Secretar y. A copy of the minutes
    will be sent to the Board.
    Audit Committee
    Member Attendance
    Andreas Segal 1/2
    Thomas de Wit te 2/2
    Nebil Senman 2/2
    Principal Duties of the Committee The role of the Commit tee includes the following:
    ¡ Financial Reporting:
    – monitoring the integrity of the consolidated financial statements and any formal announcements regarding financial performance;
    – reviewing and repor ting to the Board on the significant issues and judgements made in the preparation of the Group’s published
    financial statements, preliminary announcements and other financial information having regard to matters communicated by the
    independent auditors; and
    – assessing whether the Annual Report and financial statements, taken as a whole, are fair, balanced and understandable and provide the
    information necessary for shareholders to assess the Company’s performance, business model and strategy.
    ¡ Controls and Safeguards:
    – keeping under review the ef fec tiveness of the Company’s internal controls and risk management systems;
    – reviewing the Company’s arrangements for its employees to the Board and the Commit tee discuss the outcome of the valuation raise
    concerns, in confidence, about possible wrongdoing in process and the details of each proper t y on a semi-annual basis. The financial
    repor ting or other mat ters and ensuring that these management liaise with valuers on a regular basis and meet them on arrangements
    allow proportionate and independent investigation of such matters and appropriate follow-up action;
    – considering annually whether there is a need for the Company to have its own internal audit func tion; and
    – approving any transac tions with related par ties.
    ¡ External Audit:
    – reviewing the ef fec tiveness of the external audit process and the auditor’s independence;
    – considering and making recommendations to the Board on the appointment, reappointment, replacement and remuneration of the
    Company’s independent auditor;
    – developing and implementing a policy on the engagement of the external auditor to supply non-audit ser vices; and
    – repor ting to the Board, identif ying any mat ters in respec t of which it considers that ac tion or improvement is needed and making
    recommendations as to the steps to be taken.
    The complete details of the Commit tee’s formal duties and responsibilities are set out in the Commit tee’s t terms of reference formally
    ef fec tive since 27 Februar y 2018..
    Activities of the Committee During the year ended 31 December 2017 and up to the date of this repor t the Commit tee has been ac tive in the following areas, presented
    below under the three key areas of focus of financial repor ting, controls and safeguards as well as external audit:
    Financial Reporting:
    ¡ reviewed the Annual Repor t for the year ended 31 December 2017 prior to their approval by the Board;
    ¡ reviewed the Interim Repor t and unaudited interim consolidated financial statements for the half year ended 30 June 2017
    prior to their approval by the Board;
    ¡ reviewed the Quar terly Repor ts.
    The Commit tee has had regular contac t with management during the process of preparation of the Annual Repor t and consolidated financial
    statements and the auditor during the audit thereof. In planning its work and reviewing the audit plan with the auditor, the Commit tee took
    account of the most significant issues and risks, both operational and financial, likely to have an impac t on the Group’s financial statements
    and selec ted the following as the most significant issues impac ting the Company’s financial statements and Annual Repor t disclosures:
    ¡ investment property appraisal process;
    ¡ accounting for business acquisitions and disposals;
    ¡ use of the going concern principle as a basis for preparation of the financial statements;
    ¡ underlying cash flow projections and sensitivity analysis supporting the viability statement; and
    ¡ compliance with the fair, balanced and understandable principle.
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    AUDIT COMMITTEE REPORT COnTinueD
    Investment Property Valuations Valuations for investment proper t y are prepared by an external valuer: CBRE Sp. z o.o. and Knight Frank Sp. z o.o. The valuation of the
    investment proper t y is inherently subjec tive, requiring significant estimates and assumptions by the valuer. Errors in the valuation could have
    a material impac t on the Group’s net assets value. Fur ther information about the por tfolio and inputs to the valuations are set out in Note 4
    of the consolidated financial statements.
    The Board and the Commit tee discuss the outcome of the valuation process and the details of each proper t y on a semi-annual basis.
    The management liaise with valuers on a regular basis and meet them on a semi-annual basis prior to the finalisation of the por tfolio valuation.
    The external auditor has access to the external valuer and comments on the key assumptions used in the valuations per formed and
    movements on proper t y values. 10 0% of the por tfolio was externally valued as of the end of 2017.
    Accounting for Acquisitions and Disposals The Commit tee notes that there is judgement involved in identif ying and valuing the consideration given and the fair value of the assets
    acquired in a business combination, or in the acquisition of assets. The Commit tee also notes that there is judgement involved in the
    accounting for disposals, particularly around the valuation of the consideration receivable. In December 2017 there were new acquisitions of
    Tr y ton Business House, A4 Business Park and West Gate Projec ts. The Company assumed that the value determined by an external valuer
    (Knight Frank) best reflec ts the market value of these proper ties at the end of 2017.
    Going Concern Principle The Commit tee has considered management’s assessment and conclusion of continuing to use the going concern assumption as a basis of
    preparation of the Company’s financial statements, as suppor ted by detailed cash flow projec tions for the period up to 31 December 2018
    and supporting documentation. Following their review of the Management’s assessment, the Committee concurred with Management’s
    conclusion to continue using the going concern assumption as a basis of preparation of the Company’s financial statements.
    Fair, Balanced and Understandable Principle The Commit tee has considered the Annual Repor t and financial statements and, taken as a whole, consider them to be fair, balanced and
    understandable and provide the information necessary for shareholders to assess the Company’s performance, financial position, business
    model and strategy.
    The Commit tee has reviewed the Company’s Annual Repor t and financial statements for the year ended 31 December 2017 and has advised
    the Board that, in its opinion, the Annual Repor t and financial statements, taken as a whole, are fair, balanced and understandable and provide
    the information necessary to assess the Company’s performance, operating model and strategy.
    Controls and Safeguards:
    ¡ reviewed the risk matrix used to identif y and monitor the significant risks encountered by the Group, as well as the analysis underlying the
    viability report;
    ¡ reviewed the principal risks and uncer tainties identified by Management and the update thereof during 2017, presented on pages 29-32 of
    the Annual Repor t;
    ¡ per formed an assessment of the internal controls of the Group and in par ticular the controls over the most significant financial repor ting
    risks:
    – The Audit Commit tee reviewed the repor t on controls over identified significant financial repor ting risks, prepared by Management
    and submit ted to the Audit Commit tee by the Company’s Chief Financial Of ficer. The Audit Commit tee concluded that, although
    some improvements with respec t to the closing procedures can be made, the related internal control environment is adequate
    considering the current size and activities of the Company and its subsidiaries; and
    ¡ considered whether there is a need for an internal audit func tion:
    – The Commit tee does not consider at present for there to be a need for an internal audit func tion, given the size of the Group and the
    fac t that its internal control procedures are still under development so as to align these to the level of continuous development of the
    Group’s activities.
    External Audit: The Commit tee held regular meetings and discussions with the external auditor:
    ¡ The Audit Commit tee held discussions with the auditor at the planning phase and at the end of the audit at the repor ting stage, before the
    approval of the Company’s consolidated financial statements and Annual Repor t for the year ended 31 December 2017.
    ¡ At the planning stage of the audit for the year ended 31 December 2017, the Chairman of the Commit tee met the auditor in September
    2017. During this meeting the draf t audit plan was presented, reviewed and discussed, as well as a discussion held regarding the risks on
    which the audit would be focusing. Findings from half year review were also discussed during the meeting. The auditor explained that the
    risks the audit would focus on were the following:
    – Valuations of investment properties;
    – Bank covenants and financing;
    – Revenue recognition; and
    – Ta x e s .
    Assessed the independence and objectivity of the external auditor: Ernst & Young Accountants LLP has been appointed as the Company’s independent auditor in Februar y 2017.
    The Commit tee considers the reappointment of the external Auditor, including rotation of the audit par tner.
    In addition, the external Auditor is required to rotate the audit par tner responsible for the Group’s audit ever y five years.
    The auditor has confirmed to the Audit Commit tee its independence of the Group.
    The independence and objec tivit y of the independent auditor is reviewed by the Commit tee, which also reviews the terms under which the
    independent auditor is appointed to per form non-audit ser vices.
    Audit Fees and Non-Audit Services The table below summarises the remuneration of Ernst & Young LLP and other entities of EY during the years ended 31 December 2017:
    Ernst &
    Yo u n g
    Accountants LLPAssociated
    Ernst & Yo u n g
    Companies To t a l
    Audit fees Annual Repor t 8710 4 19 1
    Audit fees in relation to the initial public of fering 10 810 8
    Other audit fees 1813 8 15 6
    To t a l 105350 455
    The Commit tee has reviewed the level of audit fees of the external auditor for the year ended 31 December 2017 and has considered that they
    are in line with the Group’s level of development and non-recurring tasks that occurred in 2017.
    Reviewed the ef fec tiveness of the external auditor and recommended its reappointment to the Board:
    For the year ended 31 December 2017 the Commit tee reviewed the ef fec tiveness of the external auditors. Fur thermore, the Chairman of the
    Audit Commit tee discussed with the external auditor in Februar y 2018 their final findings on the audit of the Annual Repor t and consolidated
    financial statements for the year ended 31 December 2017 and their draf t audit opinion thereon.
    Local statutor y audits of individual subsidiar y companies are also required in some jurisdic tions in which the Group operates.
    EY Poland and EY Luxembourg carr y out these audits in Poland and Luxembourg respec tively.
    Following this review, the Commit tee recommended to the Board that Ernst & Young Accoountants LLP be reappointed as external auditors
    for the year ending 31 December 2018.
    For any questions on the ac tivities of the Commit tee not addressed in this repor t, a member of the Audit Commit tee remains available to
    at tend each Annual General Meeting to respond to such questions.
    Andreas Segal
    audit committee chairman
    7 March 2018
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    INVESTMENT COMMITTEE REPORT
    Throughout the year 2017 there were four members of Investment Commit tee: Karim Khairallah, Maciej Dyjas, Nebil Senman and
    Przemyslaw Kr ych. On 6 of December 2017 Karim Khairallah resigned from his func tions. On 21 December 2017 Przemysław Kr ych
    resigned from the func tion as the member of Investment Commit tee. With respec t to the changes within composition of the Board
    of Direc tors and the Commit tee please refer to Note 35 of consolidated financial statements.
    The Chairman of the Commit tee is appointed by the Board and the members are appointed by the Board, in consultation with the
    Chairman of the Commit tee. The Commit tee shall have a minimum of t wo members. All members of the Investment Commit tee must
    be Non-Executive Direc tors.
    The responsibilities of the Investment Commit tee mainly include:
    a. considering suitable acquisitions, which fit within the company’s business strategy; and;
    b. making final decisions regarding acquisitions and disposals to be made by the company, ac ting under a delegated mandate
    from the Board.
    During the year there was one commit tee meeting. The meetings are generally held at the of fice of the Company, but may also take
    place elsewhere or by means of a conference call, video-conference, or similar communications equipment provided that all
    members of the Investment Commit tee par ticipating in the meeting can hear each other and none of them has objec ted to this way
    of decision-making. After each meeting all recommendations were presented to the Board for consideration.
    The convocation notices of an Investment Commit tee meeting are given by e-mail, fax or mail, at such time that all the members of
    the Investment Commit tee are given oppor tunit y to par ticipate in and prepare themselves for the meeting ultimately eight days in
    advance. In urgent cases, the chairperson of the Investment Commit tee may determine that the meeting shall be convened upon
    shor ter notice, but in any case no later than t wo business days before the meeting. Any notice of the Investment Commit tee meeting
    shall contain the agenda for the meeting. The agenda stating the mat ters for decision, shall be drawn up by the chairperson of the
    Investment Commit tee. The other information and decision material for the meeting shall be circulated as soon as possible, but in
    any case no later than t wo business days before the meeting.
    The Company Secretar y shall take minutes of the meeting. The minutes shall be adopted in the same meeting or in the next meeting
    of the Investment Commit tee, and shall be signed by the chairperson of the Investment Commit tee and the Company Secretar y.
    A copy of the minutes will be sent to the Board.
    Investment Committee
    Member Attendance
    Karim Khairallah 1/1
    Przemysław Kr ych 1/1
    Maciej Dyjas 1/1
    Nebil Senman 1/1
    Introduction Grif fin Premium RE.. N.V. with its strategy aims to add value for its shareholders, tenants,suppliers and staf f, as well as to local
    communities. Grif fin Premium RE.. N.V. aims to do business while adhering to stric t business ethics and corporate social
    responsibilit y which we believe adds and sustains long-term value for the Company, our shareholders, the communit y and the
    environment. The Company and its subsidiaries, in conduc ting its business ac tivities, under take to comply with all laws and
    regulations regarding use of land and protec tion of the natural environment. The Company and its subsidiaries are not a par t y to any
    pending proceedings regarding potential environmental protection violations.
    General social and economic aspects The Company qualit y is founded upon best-in-class proper ties. Our por tfolio consists of at trac tive upscale proper ties situated in the centre of
    or on the main streets of the largest Polish cities. Grif fin Premium RE.. N.V. invests in historical inner cities, contributing to the liveabilit y and
    preser vation of cultural spaces. The best example which deser ves an honorable mention is the excellent func tioning of Hala Koszyki in
    Warsaw. The Hala Koszyki projec t has become known mainly through its commercial and ser vice func tion. It is a meeting place, life st yle
    of fering good cuisine and an unique atmosphere. In this proper t y there are dozen of restaurants with cuisine from around the world, bars and
    cafes. Among the tenants there are enthusiasts and exper ts in regional cuisine. Such wide and unique culinar y of fers and accompanying
    ser vices as well as an original, historic interior give a unique charac ter and create a unique atmosphere of the place, conducive to spending
    free time. In addition, there are cyclical prosocial events organised available to a wide range of recipients, aimed at promoting culture and ar t,
    meetings with authors, pro-health activities, including the promotion of organic food, healthy nutrition and regional products. Almost every
    weekend public music concer ts take place. The hall is also a place for meetings and occasional events. The square in front of the hall is open
    from the street, it is a local meeting place. Diversified ac tivities include cooperation with non-profit organisations to promote cultural, ar tistic
    and educational values. The spaces in the hall have become a place for displaying bold contemporar y ar t projec ts and exhibitions, making
    them available to a wide audience. Taking care of ever yday ordinar y needs of local residents and clients it has created an oppor tunit y to do
    ever yday shopping, use the ser vices of laundr y, hairdresser. In the hall there is a large supermarket, drugstore, specialist food stores (cheese,
    olives, wine, meat and sausages, baker y, confec tioner y, etc.), a household goods store, a bookshop and a bazaar. This ac tivit y constitutes the
    resumption of historic commercial func tions for the urban capital area and contributes to the maintenance of commercial spaces in the urban
    center of the cit y. Moreover, it contributes to the creation of Warsaw as an at trac tive place for living, investing and tourism.
    Environmental aspects We continue to focus on investing in environmentally friendly proper ties. Creating an environment in which people want to work and
    be associated with is a key objec tive for Grif fin Premium RE.. N.V., there is no bet ter way to achieve this than by building a “greener”
    and more environmentally-friendly por tfolio. The Company focus on investments that either have received green accreditation or
    have the potential to receive it in the future. Building a sustainable por tfolio is also a commitment to our par tners and our
    shareholders to create value for the long term. Below are presented assets which possess green cer tificates with the t ype of
    certificate.
    ¡ Green Horizon - LEED.
    ¡ West Gate - BREEAM.
    ¡ A4 Business Park - BREEAM.
    ¡ Tr y ton Business House BREEAM.
    Currently we are in recer tfication process for the following assets:
    ¡ CB Lubicz I/II.
    ¡ Renoma.
    ¡ Hala Koszyki.
    SUSTAINABILITY REPORT
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    SUSTAINABILITY REPORT COnTinueD
    Personnel and organisation Grif fin Premium RE.. N.V. ac tively work together with tenants, par tners and the communit y to identif y ways to improve the ef fec tiveness
    and efficiency of properties. Active management of our properties ensure that they operate according to their specifications. Creating and
    ac tively managing a premium cit y of fice and and high-street mixed-use por tfolio requires a hands-on, proac tive and pragmatic organisation.
    Grif fin Premium RE.. N.V.’s contac ts and a strong local net work are indispensable. Direc t contac ts with tenants and a horizontal organisation
    ensure fast response times. Grif fin Premium RE.. N.V. of fers employees the oppor tunit y to work for a medium ambitious organisation
    dedicated to creating a high-qualit y sustainable por tfolio leased to leading tenants. Employees play a crucial role in the transformation
    to a high-qualit y por tfolio and therefore in the ef fec tive execution of the strategy. It is impor tant for Grif fin Premium RE.. N.V. to rally its
    employees and get ever ybody to jointly move for ward. The struc ture of employees in 2017 is presented below.
    Total Number of Employees During the Year
    Number of females hired in 2017: 10
    Number of males hired in 2017: 7
    Number of Staf f hired in 2017: 17
    Number of females as at 31 December 2017: 18
    Number of males as at 31 December 2017: 23
    Total number of Staff as at 31 December 2017:
    41*
    * Including Non-Executive Directors
    Shareholders & Stakeholders RelationsThe trust of our shareholders and stakeholders is essential to the success of the Company. The dialogue and transparency with
    stakeholders, among whom shareholders are of par ticular significance, is a key aspec t of Company’s operations. The Company
    pursues a regular and construc tive dialogue with its current and potential shareholders to provide objec tive information about
    the Company’s current operations and strategic goals.
    In this context the following ways of communications are used:
    ¡ organizing a regular meetings with current and prospective shareholders;
    ¡ participation in the real estate industry and general business related events gathering both shareholders and business partners;
    ¡ road shows to discuss the key business developments and strategy; and
    ¡ distribution of the current and periodic repor ts as well as relevant press releases to the shareholders.
    In 2017 the Company distributed 37 of current repor ts as well as 5 periodic repor ts (Standalone Financial Statement of Grif fin
    Premium RE. N.V. for 2016, Consolidated Financial Statements of Grif fin Premium RE.. N.V. Group for 2016, Interim condensed
    financial statements for the three month period ended 31 March 2017, Consolidated condensed interim financial repor t for the
    period ended 30 June 2017 and Consolidated condensed interim financial repor t for period ended 30 September 2017). Apar t from
    this, on the Company website 3 presentations have been published: Q1 2017 Investor presentation, H1 2017 Results investor
    presentation, Q3 2017 Financial results and operational data.
    In the near future the Company would like to implement:
    – Press conferences to announce financial performance.
    – Ad-hoc conference calls/queries from the market players (concerning Company’s performance, strategy, finances.
    – One-on-one meetings with funds and analysts, during investor conferences.
    – Sur veying of the Company’s image as seen by capital market players.
    GPRE Shares
    a. Shareholders with direct or indirect ownership of significant blocks of shares
    According to the information available to Grif fin Premium RE.. N.V., the shareholding struc ture of the Company as of
    31 December 2017 was as follows:
    Shareholders Number of shares Par value per
    share EUR Value of
    share capital EUR %
    Globalwor th Asset Managers SRL 111 8 9 0 9 3 31111 8 9 0 9 3 3 71, 6 6
    Nationale Nederlanden OFE 15 600 000115 600 000 9,9 9
    European Bank for Reconstruction and Development 14 807 0 0 0114 807 0 0 0 9, 4 8
    Other shareholders 13 835 246113 835 246 8,87
    To t a l
    156 133 179 156 133 179 100,0
    Przemysław T. Kr ych (Chairman of the Board of Direc tors until 21 December 2017), Maciej Dyjas (Non-Executive Direc tor until 27
    Februar y 2018) and Nebil Senman (Non-Executive Direc tor until 27 Februar y 2018). Grif fin Premium RE.. N.V. through SO SPV 117 Sp.
    z o.o. purchased 5,649,123 shares (1,883,041 shares each) with an aggregate value of PLN 32,20 0,0 01.10 through the Of fering and held
    the same amount of shares as of the balance sheet date and the date of this repor t.
    From the balance sheet date until the repor t publication date there were no changes in the ownership struc ture.
    Globalworth asset Managers S rL n ationale n ederlanden o Fe e uropean Bank of r econstruction and Development other shareholders (free float)
    10% 9%
    9%
    72%
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    FINANCIAL
    STATEMENTS
    Consolidated financial Statements 80
    Standalone financial Statements 133
    independent Auditor's report 149
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    Note
    Year ended 31 December
    2 0 17
    € ‘000 Restated
    2 016*
    € ‘000
    Revenue 745,805 3 3 ,9 01
    Operating expenses 8(14 , 0 75 ) (10,8 05)
    Net operating income  31,73 0 23,096
    Administrative expenses 9(7,821) (4,502)
    Fair value movement 3, 43 ,19 9 21,407
    Other expenses ( 721) ( 731)
    Other income  284 893
       (5,059) 1 7, 0 6 7
    Profit before net financing costs  26, 671 4 0 ,16 3
    Net financing costs  
    – Finance cost 11( 9, 5 59 ) (22,675)
    – Finance income 1025,479 422
       15,92 0 (22,253)
    Profit before tax  42,591 1 7, 9 1 0
    Income tax (expenses) 12( 11, 2 7 1) (5,672)
    Profit for the year  31, 32 0 12,238
     
    Attributable to:  
    Equit y holders of the parent 31, 32 0 12,238
       31, 32 0 12,238
     
    Earnings per share (basic and diluted):  0.20 0.09
    EPRA Earnings per share (basic and diluted):  0 .16 0.00
    * for details of the changes in presentation of prior year data please refer to Note 34.
    EPRA Earnings – Profit af ter tax at tributable to the equit y holders of the Company, excluding investment proper t y revaluation, gains,
    losses on investment proper t y disposals and related tax adjustment for losses on disposals, bargain purchase gain on acquisition of
    subsidiaries, acquisition costs, changes in the fair value of financial instruments and associated close-out costs and the related
    deferred tax impac t of adjustments made to profit af ter tax. ( This is non-IFRS measure).
    EPRA Earnings per share – EPRA Earnings divided by the basic or diluted number of shares outstanding at the year or period end.
    ( This is non-IFRS measure).
    CONSOLIDATED STATEMENT OF PROFIT OR LOSS
    Year ended 31 December
    2 0 17
    € ‘000 Restated
    2 016*
    € ‘000
    Profit for the year 31, 32 0 12,238
    Other comprehensive income transferable later on to the profit/(loss):  
    Foreign currency translation reserve 10 , 313 (3 , 271)
    Other comprehensive income/(loss) 10 , 313 (3 , 271)
    Total comprehensive income/(loss) for the year, net of tax 41, 6 33 8,967
     
    Comprehensive income attributable to:  
    Equit y holders of the parent 41, 6 33 8,967
    CONSOLIDATED STATEMENT OF FINANCIAL POSITION
    As at 31 December
    Note 2 0 17
    € ‘000 Restated
    2 016*
    € ‘000
    ASSETS   
    Non-current assets   
    Investment property** 36 8 0 ,13 0 470,38 0
    Long-term loans 19– 790
    Available for sale financial assets 185,897 –
    Other long-term assets 47 –
    Other receivables 69 10
    Long-term restricted cash 242,958 2,550
    Deferred tax assets 12– 7, 6 74
       6 8 9,10 1 4 81, 4 0 4
    Current assets   
    Short-term loans 1960 –
    Trade and other receivables 2310,634 3 , 813
    Income tax receivable 1 32
    Debentures 1718, 3 89 –
    Available for sale financial assets 184,346 –
    Cash and cash equivalents 2434,685 16 , 573
       6 8 ,115 2 0, 418
    TOTAL ASSETS  7 5 7, 2 16 5 01, 8 2 2
    * for details of the changes in presentation of prior year data please refer to Note 34.
    ** earlier position was divided into Completed investment proper t y and Investment under construc tion. As at 31 December 2016 the position consisted of Completed
    investment property only.
    CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
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    CONSOLIDATED STATEMENT OF FINANCIAL POSITION COnTinueD
    As at 31 December
    Note 2 0 17
    € ‘000 Restated
    2 016*
    € ‘000
    EQUITY AND LIABILITIES   
    Total equity   
    Issued share capital 26156,133 45
    Share premium 1. 3 44,026 –
    Other reserves 8 ,12 1 –
    Foreign currency translation reserve 5 ,17 1 (5,142)
    Net assets attributable to shareholders 26– 41, 3 3 4
    Retained earnings 31, 32 0 –
    Equit y at tributable to equit y holders of the parent  244,771 36,237
    Non-current liabilities  
    Bank loans 20278,690 252,535
    Other borrowings 20–1 3 7, 9 1 9
    Deferred tax liability 1219, 0 2 0 15, 6 5 8
    Guarantees retained from contractors 22, 25537 357
    Deposits from tenants 22, 255,834 2,991
       304,081 409,460
    Current liabilities  
    Bank loans 2026,202 49,050
    Other borrowings 2016 5 , 413 16
    Guarantees retained from contractors 22, 25508 13 3
    Trade and other payables 22, 2515, 23 8 6,583
    Deposits from tenants 22, 25270 343
    Income tax payable 733 –
       208,364 5 6 ,12 5
    TOTAL EQUITY AND LIABILITIES  7 5 7, 2 16 5 01, 8 2 2
    CentsCents
    NAV per share 1. 57 0.27
    Diluted NAV per share 1. 57 0.27
    EPRA NAV per share 1. 69 0.38
    * for details of the changes in presentation of prior year data please refer to Note 34.
    Net Asset Value (NAV ) Per Share (This is non-IFRS measure)
    Equity attributable to equity holders of the company divided by the number of Ordinar y shares in issue at the period end .
    EPRA NAV Per Share (This is non-IFRS measure)
    EPRA NAV divided by the basic/diluted number of shares outstanding at the year or period end . (This is non-IFRS measure)
    Net Assets Value (NAV ) (This is non-IFRS measure)
    Equity attributable to equity holders of the company and/or net assets value .
    EPRA Net Assets (EPRA NAV ) (This is non-IFRS measure)
    Net assets per the statement of financial position, excluding the mark-to-market on ef fec tive cash flow hedges and related debt
    adjustments and deferred taxation on revaluations excluding goodwill.
    CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
    Note Issued share
    capital€ ‘000 Share
    premium € ‘000 Foreign
    currency
    translation reserve€ ‘000 Net assets
    attributable to
    shareholders € ‘000 Other
    reserves € ‘000 Retained
    earnings € ‘000 To t a l  
    1 Januar y 2017  45 – (5,142) 41, 33 4 – – 36,237
    Profit for the year  – – – – – 31, 32 0 31, 32 0
    Other comprehensive income  – – 10 , 313 – – – 10 , 313
    Total comprehensive income  – – 10 , 313 – – 31, 32 0 41, 6 33
    Shares issued for capital  156,088 44,026 – – – – 2 0 0 ,114
    The reorganisation of the Group 1. 3– – – (41, 33 4) 8 ,12 1 – ( 3 3 , 2 13 )
    At 31 December 2017 26 156,133 44,026 5 ,17 1 – 8 ,12 1 31, 32 0 244,771
    At 1 Januar y 2016 – – (1, 871) 86,349 – – 8 4,478
    Profit for the year – – – 12,238 – – 12,238
    Other comprehensive income – – (3 , 271) – – – (3 , 271)
    Total comprehensive income – – (3 , 271) 12,238 – – 8,967
    Operations with shareholders – – – (1,141) – – (1,141)
    Issue of share capital 45 – – – – – 45
    Dividend paid 14– – – ( 5 6 ,112 ) – – ( 5 6 ,112 )
    At 31 December 2016 45 – (5,142) 41, 3 3 4 – – 36,237
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    CONSOLIDATED STATEMENT OF CASH FLOWS
    Note 2 0 17
    € ‘000 Restated
    2 016*
    € ‘000
    Profit/(loss) before tax  42,591 1 7, 9 1 0
    Adjustments to reconcile profit before tax to net cash flows  
    Fair value movement on investment property ( 3 ,19 9 ) ( 21, 4 07 )
    Net financing (income)/costs (16 , 4 69) 22,253
    Operating profit before changes in working capital  22,923 18,75 6
    Decrease/(increase) in trade and other receivables (3,609) (14)
    (Decrease)/increase in trade and other payables 2, 671 45
    Movements in deposits from tenants and other deposits 2,052 (806)
    VAT settlements 1,066 2,086
    Other items (1,444) (865)
    Income tax paid 41 ( 2 11)
    Cash flows from operating activities  23,700 18,9 91
    Investing activities   
    Capital expenditure on investment property (14 , 6 2 1) (14, 49 9 )
    Expenditure on investment property under construction  –(24,96 6)
    Rental Guarantee Payment (CAPEX) 3,986 –
    Payment for acquisition of subsidiaries less cash acquired 28 (155,151) –
    Dividend received 3 –
    Movements in loans granted ( 2 7, 4 6 6 ) –
    Interest received 32 17
    Cash flows from investing activities  (19 3 , 2 17 ) ( 3 9, 4 4 8 )
    Financing activities   
    Proceeds from share issuance 29,129 –
    Bank loan proceeds 11, 0 9 8 13 8 ,9 9 0
    Bank loan repayments (8,702)(87,996)
    Proceeds from borrowings 16 4 ,19 4 4, 316
    Repayment of borrowings ( 1,118 ) (24, 281)
    Payment of other financing costs – (30)
    Interest paid ( 7, 3 3 7 ) (8,498)
    Change in restric ted cash (12 , 873) (1,388)
    Cash flows from financing activities  174 , 3 9 1 21,113
    Net increase/(decrease) in cash and cash equivalents  4 , 8 74 656
    Cash and cash equivalents at the beginning of the period 10,010 9,9 61
    Translation differences 773 (607)
    Cash and cash equivalents at the end of the period 2415, 6 57 10,010
    * for details of the changes in presentation of prior year data please refer to Note 34.
    SECTION I: BASIS OF PREPARATION This sec tion contains the Group’s significant accounting policies that relate to the financial statements as a whole. Significant
    accounting policies and related management’s estimates, judgements and assumptions in application of those policies specific to
    each note are included with that note. Accounting policies relating to non-material items are not included in these financial
    statements.
    1. Basis of Preparation The consolidated financial statements of the Group include consolidated financial data as of 31 December 2017 and for the year
    ended 31 December 2017 in relation to the consolidated profit and loss account, the consolidated statement of changes in equit y
    and the consolidated cash flow statement.
    The comparative data include consolidated financial data as of 31 December 2016 and for the year ended 31 December 2016 in
    relation to the consolidated profit and loss account, the consolidated statement of changes in equit y and the consolidated cash flow
    statement.
    Unless indicated other wise, all financial data in the Group’s consolidated financial statements have been presented in thousands
    of
    EUR.
    The accumulated profit contains results of the entities within the Group since 1 Januar y 2017 to 31 December 2017, which includes
    results from 1 Januar y 2017 up to finalisation of the Reorganisation.
    1.1. Corporate information
    Grif fin Premium RE.. N.V. Group (fur ther “ Griffin Premium RE.. Group”, “the Group ” or “GPRE Group ”) owns and manages
    yielding real estates throughout Poland. On 31 December 2017 the Group is composed of the entities presented below in Note 1.2.
    In the period until 3 March 2017 these entities were owned direc tly or indirec tly by Grif fin Topco II S.á r.l. (“ GT II”) and Grif fin Topco
    III S.á r.l. (“ GT III”), which are entities indirec tly controlled by a fund ultimately controlled by Oak tree Capital Management
    Group
    LLC.
    On 21 December 2016, Grif fin Premium RE.. N.V. (“ the Company”) was incorporated with the aim to become a holding company to
    the Group for the purpose of creating a real estate platform to be then listed on Warsaw Stock Exchange. With ef fec t from 3 March
    2017 Grif fin Premium RE.. N.V. became the legal parent of entities’ operations which were previously direc tly and indirec tly controlled
    and managed by GT II and GT III following a reorganisation as described in the Note 1.3.
    With respec t to financial data for 2016 the Management Board of Grif fin Premium RE.. N.V. assumed responsibilit y to authorise the
    Group’s Consolidated Financial Statements to be issued. The Consolidated Financial Statements of the Group for 2016 were not the
    statutor y financial statements of Grif fin Premium RE.. N.V. The Consolidated Financial Statements were authorised for issue by the
    Management Board of Grif fin Premium RE.. N.V. on 8 March 2017. The Management Board had no power to change these
    Consolidated Financial Statements af ter issue. For the consolidated financial statements prepared as of 31 December 2017 of Grif fin
    Premium RE.. Group data listed above are used as a comparative data.
    Company’s shares are listed on the Warsaw Stock Exchange since 13 April 2017.
    1.2. Struc ture of the Group
    The main area of business ac tivities of the Group is to manage an unique Polish pure of fice and high-street mixed-use platform. The
    Group focuses its operational ac tivities on the ac tive management of its tenant base, closely monitoring the Polish real estate market
    to ensure that the current por tfolio meets the expec tations of its current and future tenants.
    The principal ac tivit y of Grif fin Premium RE.. N.V. as the parent company is the holding of interests in and rendering management
    and advisor y ser vices to other companies in the Group.
    Execution by the Company of the advisor y, management and financial func tions ser ves to:
    ¡ super vise of the implementation of the Group’s strategy;
    ¡ ensure a quick flow of information across the Group;
    ¡ strengthen the efficiency of cash and financial management of individual entities;
    ¡ strengthen the market position of the Group as a whole.
    These Consolidated Financial Statements of the Group comprise the Company and the other entities mentioned below
    (the
    “ Entities ”):
    Griffin Premium RE.. N.V. – a private limited liabilit y company, with its registered of fice at Claude Debussylaan 15, 1082MC
    Amsterdam. On 21 December 2016, the company was registered in the Netherlands Chamber of Commerce Business Register under
    the number 67532837.
    NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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    Dom Handlow y Renoma Spółka z ograniczoną odpowiedzialnością Sp. k. – Registered of fice is located at Szucha 6 Street,
    Warsaw, Poland. The Company was formed on the basis of a Notarial Deed drawn up on 27 November 20 09. On 2 December 2015
    DH Renoma Sp. z o.o. changed its legal form into Dom Handlow y Renoma Sp. z o.o. Sp.k. The Company was entered in the Register
    of Businesses maintained by the Distric t Cour t in Warsaw, XII Business Depar tment of the National Cour t Register on 28 Januar y
    2015, with the reference KRS number 589297. The company is the owner of the high-street mixed-use building located in Wrocław
    known as “Renoma”.
    IB 14 Fundusz Inwestycyjny Zamknięty Akty wów Niepublicznych – The Fund operates on the basis of Investment Funds and
    Management of Alternative Investment Funds Ac t of 27 May 20 04 (Journal of Laws of 2016, Item 1896, as amended).
    On 20 November 2015, the Fund was entered in the register of Investment Funds maintained by the Regional Cour t (Sąd Okręgow y)
    in Warsaw, 7th Civil Registr y Division, under No. RFi 1250.
    Charlie RE Sp. z o.o. – a company in the form of limited liabilit y company existing under the laws of the Republic of Poland, with its
    registered of fice at Al. Szucha 6, Warsaw, Poland. The Company was entered in Register of Businesses of the National Cour t Register
    maintained by the Distric t Cour t in Warsaw, XII Business Depar tment of the National Cour t Register, with the reference KRS number 594818.
    December RE Sp. z o.o. – a company in the form of limited liabilit y company existing under the laws of the Republic of Poland, with
    its registered of fice at Al. Szucha 6, Warsaw, Poland. The Company was entered in Register of Businesses of the National Cour t
    Register maintained by the Distric t Cour t in Warsaw, XII Business Depar tment of the National Cour t Register, with the reference
    KRS
    number 594700.
    Akka RE Sp. z o.o. – a company in the form of limited liabilit y company existing under the laws of the Republic of Poland, with its
    registered of fice at Al. Szucha 6, Warsaw, Poland. The Company was entered in Register of Businesses of the National Cour t Register
    maintained by the Distric t Cour t in Warsaw, XII Business Depar tment of the National Cour t Register, with the reference KRS number
    594695.
    Akka SCSp – a special limited par tnership established and existing under the laws of the Grand Duchy of Luxembourg, with its
    registered of fice at 6, rue Eugene Rupper t, L-2453 Luxembourg, registered in the Luxembourg Register of Commerce and
    Companies under the number B201.731.
    Charlie SCSp – a special limited par tnership established and existing under the laws of the Grand Duchy of Luxembourg, with its
    registered of fice at 6, rue Eugene Rupper t, L-2453 Luxembourg, registered in the Luxembourg Register of Commerce and
    Companies under the number B199.336.
    December SCSp – a special limited par tnership established and existing under the laws of the Grand Duchy of Luxembourg, with its
    registered of fice at 6, rue Eugene Rupper t, L-2453 Luxembourg, registered in the Luxembourg Register of Commerce and
    Companies under the number B205.185.
    GPRE Management Sp. z o.o. – acquired by the Group in Januar y 2017 – an entit y in the form of limited liabilit y company existing
    under the laws of the Republic of Poland, with its registered of fice at Al. Szucha 6, Warsaw, Poland. The Company was entered in
    Register of Businesses of the National Cour t Register maintained by the Distric t Cour t in Warsaw, XII Business Depar tment of the
    National Cour t Register, with the reference KRS number 602904.
    Griffin Premium RE Lux S.á r.l. – a private limited liabilit y company, with its registered of fice at 6, rue Eugene Rupper t, L-2453
    Luxembourg. On 17 Januar y 2017, the company was registered in the Register of Commerce and Companies under the
    number
    B 2 118 3 4 .
    Lima Sp. z o.o. – company acquired by the Group on 25 April 2017 – a company in the form of limited liabilit y company existing
    under the laws of the Republic of Poland, with its registered of fice at Al. Szucha 6, Warsaw, Poland. The Company was entered in
    Register of Businesses of the National Cour t Register maintained by the Distric t Cour t in Warsaw, XII Business Depar tment of the
    National Cour t Register, with the reference KRS number 654807.
    Ormonde Sp. z o.o. – company acquired by the Group on 22 December 2017 – a company in the form of limited liabilit y company
    existing under the laws of the Republic of Poland, with its registered of fice at Al. Szucha 6, Warsaw, Poland. The Company was
    entered in Register of Businesses of the National Cour t Register maintained by the Distric t Cour t in Warsaw, XII Business
    Depar tment of the National Cour t Register, with the reference KRS number 403662. The company is a general par tner to Emfold
    investments Spółka z ograniczoną odpowiedzialnością Sp.k.
    Emfold investments Sp. z o.o. – company acquired by the Group on 22 December 2017 – a company in the form of limited liabilit y
    company existing under the laws of the Republic of Poland, with its registered of fice at Al. Szucha 6, Warsaw, Poland. The Company
    was entered in Register of Businesses of the National Cour t Register maintained by the Distric t Cour t in Warsaw, XII Business
    Depar tment of the National Cour t Register, with the reference KRS number 590437. The company is a limited par tner to Emfold
    investments Spółka z ograniczoną odpowiedzialnością Sp.k.
    1. Basis of Preparation continued Bakalion Sp. z o.o. – Registered of fice is located at Szucha 6 Street, Warsaw, Poland. The Company was formed on the basis of a
    Notarial Deed drawn up on 19 December 2012. The Company is registered in the Register of Businesses maintained by the Distric t
    Cour t in Warsaw, XII Business Depar tment of the National Cour t Register, with the reference KRS number 446054.
    The company owns t wo of fice buildings located in Kraków known as “Centrum Biurowe Lubicz I and II”.
    Centren Sp. z o.o. – Registered of fice is located at Szucha 6 Street, Warsaw, Poland. The Company was formed on the basis of a
    Notarial Deed drawn up on 4 Februar y 2013. The Company is registered in the Register of Businesses maintained by the Distric t
    Cour t in Warsaw, XII Business Depar tment of the National Cour t Register, with the reference KRS number 465417. The company owns
    an of fice proper t y located in Łódź called “Green Horizon”.
    Dolfia Sp. z o.o. – Registered of fice is located at Szucha 6 Street, Warsaw, Poland. The Company was formed on the basis of a
    Notarial Deed drawn up on 19 December 2012. The Company is registered in the Register of Businesses maintained by the Distric t
    Cour t in Warsaw, XII Business Depar tment of the National Cour t Register, with the reference KRS number 445995.
    The company owns an of fice proper t y located in Warsaw, known as “Bator y Of fice Building I”.
    Ebgaron Sp. z o.o. – Registered of fice is located at Szucha 6 Street, Warsaw, Poland. The Company was formed on the basis of a
    Notarial Deed drawn up on 19 December 2012. The Company is registered in the Register of Businesses maintained by the Distric t
    Cour t in Warsaw, XII Business Depar tment of the National Cour t Register, with the reference KRS number 446794.
    The company owns an of fice proper t y located in Warsaw, known as “Bliski Center”.
    Hala Koszyki Sp. z o.o. (formerly Lenna Investments Sp. z o.o) – Registered of fice is located at Szucha 6 Street, Warsaw, Poland.
    The Company was formed on the basis of a Notarial Deed drawn up on 30 September 2011. The Company is registered in
    the Register of Businesses maintained by the Distric t Cour t in Warsaw, XII Business Depar tment of the National Cour t Register, with
    the reference KRS number 399453. On 22 November 2017 Entit y merged with Hala Koszyki Sp. z o.o. and Grayson Investments Sp. z
    o.o. using the interest pooling method. Af ter merger the Entit y changed the name into Hala Koszyki Sp. z o.o. The company is the
    owner the complex of three of fice and one retail buildings located in Warsaw known as “Hala Koszyki”.
    Lamantia Spółka z ograniczoną odpowiedzialnością Sp. k. – Registered of fice is located at Szucha 6 Street, Warsaw, Poland. The
    Company was formed as a result of the conversion of Cyrion Sp. z o.o. into Lamantia Sp. z o.o. Sp.k. on the basis of the resolution of
    Extraordinar y General Shareholders Meeting of 8 December 2015. The registration of the conversion was made on 21 December
    2015. The Company is registered in the Register of Businesses maintained by the Distric t Cour t in Warsaw, XII Business Depar tment
    of the National Cour t Register, with the reference KRS number 593148. The company owns an of fice proper t y located in Warsaw
    called “Philips House”.
    Lamantia Sp. z o.o. – Registered of fice is located at Szucha 6 Street, Warsaw, Poland. The Company was formed on the basis of a
    Notarial Deed drawn up on 8 Januar y 2015. The Company is registered in the Register of Businesses maintained by the Distric t Cour t
    in Warsaw, XII Business Depar tment of the National Cour t Register, with the reference KRS number 551021. The company is a general
    par tner to Lamantia Spółka z ograniczoną odpowiedzialnością Sp.k.
    Nordic Park Offices Spółka z ograniczoną odpowiedzialnością Sp. k. – Registered of fice is located at Szucha 6 Street, Warsaw,
    Poland. The Company was formed as a result of the conversion of Kafue Investments Sp. z o.o. into Nordic Park Of fices Sp. z o.o.
    Sp.k. on the basis of the resolution of Extraordinar y General Shareholders Meeting of 15 April 2016. The registration of the
    conversion was made on 11 May 2016. The Company is registered in the Register of Businesses maintained by the Distric t Cour t in
    Warsaw, XII Business Depar tment of the National Cour t Register, with the reference KRS number 61770 0. The company owns an
    of fice proper t y located in Warsaw called “Nordic Park”.
    Nordic Park Offices Sp. z o.o. – Registered of fice is located at Szucha 6 Street, Warsaw, Poland. The Company was formed on the
    basis of a Notarial Deed drawn up on 4 Februar y 2016. The Company is registered in the Register of Businesses maintained by the
    Distric t Cour t in Warsaw, XII Business Depar tment of the National Cour t Register, with the reference KRS number 602816. The
    company is a general par tner to Nordic Park Of fices Spółka z ograniczoną odpowiedzialnością Sp.k.
    DH Supersam Katowice Sp. z o.o. – Registered of fice is located at Szucha 6 Street, Warsaw, Poland. The Company was formed on
    the basis of a Notarial Deed drawn up on 15 Oc tober 2010. The Company is registered in the Register of Businesses maintained by
    the Distric t Cour t in Warsaw, XII Business Depar tment of the National Cour t Register, with the reference KRS number 382110. The
    company is the owner of the high-street mixed-use building located in Katowice known as “Supersam”.
    Dom Handlow y Renoma Sp. z o.o. – Registered of fice is located at Szucha 6 Street, Warsaw, Poland. The Company was formed on
    the basis of a Notarial Deed drawn up on 8 Januar y 2015 as Sebrena Sp. z o.o. On 18 June 2015 its name was changed into Dom
    Handlow y Renoma Sp. z .o.o. The Company is registered in the Register of Businesses maintained by the Distric t Cour t in Warsaw, XII
    Business Depar tment of the National Cour t Register, with the reference KRS number 545107. The company is a general par tner to
    Dom Handlow y Renoma Spółka z ograniczoną odpowiedzialnością Sp. k.
    NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS COnTinueD
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    Entity Registered office
    As at
    2 0 17 % Consolidation
    method
    Ormonde Sp. z o.o. Warsaw/Poland10 0full
    Emfold investments Sp. z o.o. Warsaw/Poland10 0full
    Emfold investments Spółka z ograniczoną odpowiedzialnością Sp. k. Warsaw/Poland10 0full
    Wetherall Investments Sp. z o.o. Warsaw/Poland10 0full
    Iris Capital Sp. z o.o Kielce/Poland10 0full
    A4 Business Park Iris Capital Spółka z ograniczoną odpowiedzialnością Sp. k. Warsaw/Poland10 0full
    Wagstaf f Investments Sp. z o.o Warsaw/Poland10 0full
    West Gate Wrocław Sp. z o.o. Warsaw/Poland10 0full
    Echo – West Gate Spółka z ograniczoną odpowiedzialnością Sp. k. Kielce/Poland10 0full
    Management Board of:
    Griffin Premium RE.. N.V.
    ¡ Dorota Wysokińska – Kuzdra – Executive Direc tor (till 28 July 2017)
    ¡ Małgorzata Turek – Executive Direc tor (since 11 September 2017)
    ¡ Rafał Pomorski – Executive Direc tor
    ¡ Inter trust Management N.V. – Member of the Management Board (till 7 March 2017)
    ¡ Przemysław T. Kr ych – Non-Executive Direc tor (from 13 March 2017 till 21 December 2017)
    ¡ Maciej Dyjas – Non-Executive Direc tor (since 13 March 2017 till 27 Februar y 2018)
    ¡ Nebil Senman – Non-Executive Direc tor (since 13 March 2017 till 27 Februar y 2018)
    ¡ Karim Khairallah – Non-Executive Direc tor (from 13 March 2017 till 6 December 2017)
    ¡ Ioannis Papalekas – Non-Executive Direc tor (since 6 December 2017)
    ¡ Dimitris Raptis – Non-Executive Direc tor (since 6 December 2017)
    ¡ Claudia Pendred – Independent Non-Executive Direc tor (since 11 September 2017)
    ¡ Marcus M.L.J. van Campen – Independent Non-Executive Direc tor (since 13 March 2017)
    ¡ Andreas Segal – Independent Non-Executive Direc tor (since 13 March 2017)
    ¡ Thomas Mar tinus de Wit te – Independent Non-Executive Direc tor (since 13 March 2017)
    1.3. Reorganisation
    Grif fin Premium RE.. N.V. was established in the Netherlands on 21 December 2016. At the date of its incorporation, the Company
    was a dormant company with no ac tivities with Grif fin Netherlands II N.V. (“ GN II”) and GT Netherlands III N.V. (“ GTN III”) being its
    shareholders.
    During the period from December 2016 to 3 March 2017, a reorganisation took place where, through the number of steps comprising
    sales and in-kind contributions of shares and loans, the Company became the holding company for the Entities (the
    “ Reorganisation ”).
    Specifically, the Reorganisation began with the establishment of the Company by GN II and GTN III and proceeded through the
    following stages.
    ¡ Sale of shares in Akka SCSp, Charlie SCSp and December SCSp by respec tively IB 14 FIZ AN, GT II FIZ AN and IB 15 FIZ AN to Akka
    RE Sp. z o.o., Charlie RE Sp. z o.o. and December RE Sp. z o.o. in December 2016.
    ¡ Sale of general par tners’ shares in Akka SCSp, Charlie SCSp and December SCSp by GT II and GT III to Grif fin Premium RE Lux S.à
    r.l. in Januar y 2017.
    ¡ Sale of shares in Lamantia Sp. z o.o., Dom Handlow y Renoma Sp. z o.o. and Nordic Park Of fices Sp. z o.o. by GT II and GT III to
    Grif fin Premium RE.. N.V. in Januar y 2017 and Februar y 2017.
    ¡ Contributions of shares in Bakalion Sp. z o.o., Centren Sp. z o.o., Dolfia Sp. z o.o., DH Supersam Katowice Sp. z o.o., by GT II and
    GT III to GN II and GTN III respec tively in Januar y 2017.
    ¡ Contribution of Centren Sp. z o.o., Bakalion Sp. z o.o., DH Supersam Katowice Sp. z o.o., Dolfia Sp. z o.o., Akka RE Sp. z o.o.,
    Charlie RE Sp. z o.o. and December RE Sp. z o.o. by GN and GTN III to the Company in Januar y 2017.
    ¡ Contribution of IB 14 FIZ AN from GTN III to the Company in Januar y 2017.
    ¡ Purchase of GPRE Management Sp. z o.o. shares by the Company in Januar y 2017.
    ¡ Contribution of Centren Sp. z o.o. shares from the Company to IB14 FIZ AN in Januar y 2017.
    Together with the transfers of the shares of relevant entities, the transfers of related intra group loans were per formed through the
    following steps:
    ¡ Sale of all loans toward the Entities by Grif fin Finance II Sp. z o.o. and Grif fin Finance III Sp. z o.o. to GT II and GT III respec tively in
    January 2017.
    ¡ Contribution of all the loans toward the Entities by GT II and GT III to GN II and GTN III respec tively and then by GN II and GTN III
    to the Company in January and February 2017
    ¡ Sale of all the loans toward the Entities by the Company to IB 14 FIZ AN in Januar y, Februar y and March 2017.
    ¡ Sale of all the loans toward the Entities by IB 14 FIZ AN to GPRE Management Sp. z o.o. in Januar y, Februar y and March 2017. As a
    result all loans towards Entities held by GPRE Management Sp. z o.o. are eliminated on consolidation.
    1. Basis of Preparation continued Emfold investments Spółka z ograniczoną odpowiedzialnością Sp. k. – company acquired by the Group on 22 December 2017.
    Registered of fice is located at Szucha 6 Street, Warsaw, Poland. The Company was entered in the Register of Businesses maintained
    by the Distric t Cour t in Warsaw, XII Business Depar tment of the National Cour t Register, with the reference KRS number 611695. The
    company is the owner of the of fice building located in Gdańsk known as “Tr y ton Business House”.
    Wetherall Investments Sp. z o.o. – company acquired by the Group on 22 December 2017 – a company in the form of limited
    liabilit y company existing under the laws of the Republic of Poland, with its registered of fice at Al. Szucha 6, Warsaw, Poland. The
    Company was entered in Register of Businesses of the National Cour t Register maintained by the Distric t Cour t in Warsaw, XII
    Business Depar tment of the National Cour t Register, with the reference KRS number 405166. The company is a general par tner to A4
    Business Park Iris Capital Spółka z ograniczoną odpowiedzialnością Sp.k.
    Iris Capital Sp. z o.o. – company acquired by the Group on 22 December 2017 – a company in the form of limited liabilit y company
    existing under the laws of the Republic of Poland, with its registered of fice at Al. Solidarności 36, Kielce, Poland. The Company was
    entered in Register of Businesses of the National Cour t Register maintained by the Distric t Cour t in Kielce, X Business Depar tment of
    the National Cour t Register, with the reference KRS number 406675. The company is a limited par tner to A4 Business Park Iris Capital
    Spółka z ograniczoną odpowiedzialnością Sp.k.
    A4 Business Park Iris Capital Spółka z ograniczoną odpowiedzialnością Sp. k. – company acquired by the Group on 22 December
    2017. Registered of fice is located at Szucha 6 Street, Warsaw, Poland. The Company was entered in the Register of Businesses
    maintained by the Distric t Cour t in Kielce, X Business Depar tment of the National Cour t Register, with the reference KRS number
    614852. The company is the owner of the of fice building located in Katowice known as “A4 Business Park”.
    Wagstaff Investments Sp. z o.o. – company acquired by the Group on 22 December 2017 – a company in the form of limited liabilit y
    company existing under the laws of the Republic of Poland, with its registered of fice at Al. Szucha 6, Warsaw, Poland. The Company
    was entered in Register of Businesses of the National Cour t Register maintained by the Distric t Cour t in Warsaw, XII Business
    Depar tment of the National Cour t Register, with the reference KRS number 404848. The company is a general par tner to Echo –
    West Gate Spółka z ograniczoną odpowiedzialnością Sp.k.
    West Gate Wrocław Sp. z o.o. – company acquired by the Group on 22 December 2017 – a company in the form of limited liabilit y
    company existing under the laws of the Republic of Poland, with its registered of fice at Al. Szucha 6, Warsaw, Poland. The Company
    was entered in Register of Businesses of the National Cour t Register maintained by the Distric t Cour t in Kielce, X Business
    Depar tment of the National Cour t Register, with the reference KRS number 412286. The company is a limited par tner to Echo – West
    Gate Spółka z ograniczoną odpowiedzialnością Sp.k.
    Echo – West Gate Spółka z ograniczoną odpowiedzialnością Sp. k. – company acquired by the Group on 22 December 2017.
    Registered of fice is located at Al. Solidarności 36, Kielce, Poland. The Company was entered in the Register of Businesses maintained
    by the Distric t Cour t in Kielce, X Business Depar tment of the National Cour t Register, with the reference KRS number 615824. The
    company is the owner of the of fice building located in Wrocław known as “West Gate”.
    Entity Registered office
    As at
    2 0 17 % Consolidation
    method
    Grif fin Premium RE.. N.V. (parent company) Amsterdam/The Netherlands10 0full
    Bakalion Sp. z o.o. Warsaw/Poland10 0full
    Centren Sp. z o.o. Warsaw/Poland10 0full
    Dolfia Sp. z o.o. Warsaw/Poland10 0full
    Ebgaron Sp. z o.o. Warsaw/Poland10 0full
    Hala Koszyki Sp. z o.o. (formerly Lenna Investments Sp. z o.o.) Warsaw/Poland10 0full
    Lamantia Spółka z ograniczoną odpowiedzialnością Sp. k. Warsaw/Poland10 0full
    Lamantia Sp. z o.o. Warsaw/Poland10 0full
    Dom Handlow y Renoma Sp. z o.o. Warsaw/Poland10 0full
    Dom Handlow y Renoma Spółka z ograniczoną odpowiedzialnością Sp. k. Warsaw/Poland10 0full
    Dom Handlow y Supersam Sp. z o.o. Warsaw/Poland10 0full
    Nordic Park Of fices Spółka z ograniczoną odpowiedzialnością Sp. k. Warsaw/Poland10 0full
    Nordic Park Of fices Sp. z o.o. Warsaw/Poland10 0full
    Akka SCSp Luxembourg/Luxembourg10 0full
    Charlie SCSp Luxembourg/Luxembourg10 0full
    December SCSp Luxembourg/Luxembourg10 0full
    Akka RE Sp. z o.o. Warsaw/Poland10 0full
    Charlie RE Sp. z o.o. Warsaw/Poland10 0full
    December RE Sp. z o.o. Warsaw/Poland10 0full
    IB 14 FIZ Ak t y wów Niepublicznych Warsaw/Poland10 0full
    GPRE Management Sp. z o.o. Warsaw/Poland10 0full
    Lima Sp. z o.o. Warsaw/Poland10 0full
    Grif fin Premium RE Lux S.á r.l. Luxembourg/Luxembourg10 0full
    NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS COnTinueD
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    1.5. Basis of Consolidation
    These consolidated financial statements comprise the financial statements of the Company and its subsidiaries (the Group) at 31 December
    2017 and 2016. Subsidiaries are fully consolidated (refer to Note 29) from the date of acquisition, being the date on which the Group obtains
    control (refer to Note 29), and continue to be consolidated until the date when such control ceases. The financial statements of the subsidiaries
    are prepared for the period from the date of obtaining control till 31 December 2017 and 2016, using consistent accounting policies. All
    intra-group balances, transac tions and unrealised gains and losses resulting from intra-group transac tions are eliminated in full.
    Measurement of items denominated in foreign currencies
    The Group’s Consolidated Financial Statements are presented in euro (“EUR”) being the presentation currency of the Group. Based
    on the primar y economic environment in which the entities operate, the currency that mainly influences costs of providing ser vices,
    the currency in which funds from financing ac tivities and the currency in which receipts from operating ac tivities are usually retained,
    the Group determined that the func tional currency for each entit y, including Grif fin Premium RE.. N.V., is PLN and items included in
    the financial statements of the Entities and Grif fin Premium RE.. N.V. are measured using that func tional currency. The Group's
    intention is, however, to change the func tional currency to EUR since 2018 as described in Note 36.
    a) Transactions and balances
    Transac tions in foreign currencies are initially recorded by the Entities at their respec tive func tional currency spot rates at the date
    the transac tion first qualifies for recognition. Monetar y assets and liabilities denominated in foreign currencies are translated at the
    func tional currency spot rates of exchange at the repor ting date.
    Differences arising on settlement or translation of monetary items are recognised in profit or loss.
    Non-monetar y items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates
    prevailing at the dates of the initial transac tions. Non-monetar y items measured at fair value in a foreign currency are translated
    using the exchange rates at the date when the fair value is determined. The gain or loss arising on translation of non-monetar y items
    measured at fair value is treated in line with the recognition of gain or loss on change in fair value of the item (i.e. translation
    dif ferences on items whose fair value gain or loss is recognised in Other Comprehensive Income (“OCI”) or profit or loss are also
    recognised in OCI or profit or loss, respec tively).
    b) Group Entities
    On consolidation, the assets and liabilities of foreign operations are translated into euros at the rate of exchange prevailing at the
    repor ting date and their statements of profit or loss are translated at average exchange rates for the year. The exchange dif ferences
    arising on translation for consolidation are recognised in OCI. On disposal of a foreign operation, the component of OCI relating to
    that par ticular foreign operation is recognised in profit or loss.
    Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carr ying amounts of assets and
    liabilities arising on the acquisition are treated as assets and liabilities of the foreign operation and translated at the spot rate of
    exchange at the repor ting date.
    c) Exchange rates used
    Exchange rates used to recalculate transac tions and balances are as follows:
    Year ended 31 December 2 0 17 2 016
    PLN/EUR 4 .17 0 94.4240
    Average for the year 2 0 17 2 016
    PLN/EUR 4.2583 4.3637
    2. Significant Accounting Judgements, Estimates and Assumptions The preparation of financial statements in conformit y with IFRS requires management to make cer tain judgements, estimates and
    assumptions that affect reported amounts of revenue, expenses, assets and liabilities, and the accompanying disclosures and the
    disclosures of contingent liabilities.
    Fur ther additional significant accounting judgements, estimates and assumptions are disclosed in the following notes to the financial
    statements:
    ¡ Investment Proper t y, see Note 3 and Fair value measurement and related estimate and judgements, see Note 4;
    ¡ Commitments (operating leases commitments – Group as lessor), see Note 6;
    ¡ Taxation, see Note 12;
    ¡ Trade and other receivables, see Note 23;
    ¡ Func tional currency, see Note 1.5;
    ¡ Debentures (For ward Purchase Agreement), see Note 17;
    ¡ Available for sale financial assets (ROFO), see Note 18.
    1. Basis of Preparation continued GPRE Management Sp. z o.o. issued bonds acquired by IB 14 FIZ AN in Januar y 2017. Payment for the bonds was set of f with the price
    for the loans toward the Entities sold by IB 14 FIZ AN to GPRE Management Sp. z o. o.
    In summar y, the amounts contributed in kind to Grif fin Premium RE.. N.V. in Januar y and Februar y 2017 were:
    ¡ Loans toward Entities in amount of EUR 134,426 thousands,
    ¡ Investments in Entities in amount of EUR 35,488 thousands.
    The result of Reorganisation, presented in equit y is calculated as follows:
    Contribution of loans receivable from:  
     
    Grif fin Topco II S.á r.l. 86,854
    Grif fin Topco III S.á r.l. 19,78 7
    Grif fin Finance II Sp. z o.o. 8,732
    Grif fin Finance III Sp. z o.o. 21, 328
    To t a l 13 6 ,70 1
    Share capital and share premium increase in GPRE (169,9 14 )
    Result on Reorganisation ( 3 3 , 2 13 )
    Movements in share capital and share premium:
    Share capital increase due to Reorganisation 171, 5 5 7
    Initial Public Of fering 2 9, 8 11
    Initial Public Of fering fees (1, 25 4)
    Increase in share capital and share premium 2 0 0 ,114
    Af ter the Reorganisation, the Company holds investments in IB 14 FIZ AN, Akka RE Sp. z o.o., Charlie RE Sp. z o.o., December RE Sp. z o.o. and
    Grif fin Premium RE Lux S.à r.l. and those entities hold (direc tly or indirec tly) shares in all remaining Entities. The Reorganisation was conduc ted
    under common control and accounted for using the pooling of interest method. Net assets of companies were compared to value of mutual
    investments in subsidiaries – dif ference was presented in equit y.
    The acquired entities already repor ted their figures in accordance with IFRS for the last 3 years.
    Other transac tions with related par ties are decribed in Note 31.
    1.4. Basis of Preparation and Compliance
    The Consolidated Financial Statements of the Group have been prepared in accordance with International Financial Reporting Standards
    (“IFRS”) as adopted by the European Union. Accounting books and records underlying these financial statements are maintained in
    accordance with Polish Accounting Standards.
    The Direc tors believe that it is appropriate to adopt the going concern basis in preparing the consolidated financial statements. The Direc tors
    based their assessment on the Group’s detailed cash flow projec tions for the period up to 31 December 2018. These projec tions take into
    account the latest contracted rental income, anticipated additional rental income from new lease agreements to be concluded during the
    period covered by the projec tions, as well as contrac ted debt financing, CAPEX, and other commitments. The projec tions show that, in the
    period up to 31 December 2018, the Company has suf ficient resources to continue and to fund ongoing operations and asset development.
    As of 31 December 2017 the Group’s working capital is negative mainly as a results of the shor t-term borrowings of EUR 191,615 thousand.
    Nonetheless the Direc tors consider that Group’s plans for 2018, which include refinancing of the par t of the por tfolio and share capital
    increase, ef fec tively secure its abilit y to adopt the going concern basis.
    These consolidated financial statements have been prepared on a historical cost basis, except for:
    ¡ investment property;
    ¡ financial instruments available for sale.
    The significant accounting policies adopted are set out in the relevant notes to the financial statements and consistently applied throughout
    the periods presented except for the new and amended IFRS, see Note 32, which were adopted on 1 Januar y 2017.
    These consolidated financial statements are prepared in Euro (EUR or €), rounded to the nearest thousand unless other wise indicated, being
    the presentation currency of the Company.
    For further information regarding the functional and presentation currency please refer to Measurement of items denominated in foreign
    currencies.
    NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS COnTinueD
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    Investment proper t y is derecognised when it has been disposed of or permanently withdrawn from use and no future economic
    benefit is expec ted from its disposal. Gains and losses on disposals are determined by comparing the net disposal proceeds with the
    carr ying amount and transac tion costs, and are recognised within Fair value movement on investment proper t y in the Consolidated
    Statement of Profit or Loss.
    Land acquired for development and future use as investment proper t y is initially presented as investment proper t y under
    construc tion and accounted for at cost. This includes all plots of land held by the Group on which no construc tion or development
    has star ted at the balance sheet date. If the Company begins to redevelop an existing investment proper t y for continued future use
    as investment proper t y, the proper t y remains an investment proper t y and is not reclassified as owner-occupied proper t y during the
    redevelopment.
    Investment property under construc tion
    Investment proper ties under construc tion are proper ties that are being construc ted, extended or redeveloped for future use as an
    investment proper t y. Investment proper t y under construc tion are stated at fair value. If the Group determines that the fair value of
    an investment proper t y under construc tion is not reliably measurable but expec ts the fair value of the proper t y to be reliably
    measurable when construction is complete or more advanced, then Group measures that investment property under construction at
    cost until either its fair value becomes reliably measurable or construc tion is completed (whichever is earlier).
    The Group has adopted the following criteria to assess reliabilit y of the fair value measurement:
    ¡ agreement with general contractor is signed;
    ¡ building permit is obtained;
    ¡ at least 20% of the rentable area is leased to tenants (based on the signed lease agreements and let ters of intents).
    Capital expenditures relating to planned redevelopment comprise direc tly at tributable expenditures borne by the Group prior to
    star t of the construc tion phase. Expenditures such as costs of architec tural design, building permits and initial works associated with
    the planned process of redevelopment of existing investment proper ties are capitalised by the Group only when it is probable that
    future economic benefits associated with the item will flow to the Group, the cost of the item can be measured reliably and the
    Group has an intention to redevelop a proper t y. Capital expenditure on future redevelopment of investment proper ties are
    recognized at cost less accumulated impairment loss in case fair value cannot be determined reliably.
    Costs of development projec ts comprise acquisition costs, purchase taxes, and any direc tly at tributable costs to bring the asset to
    working order for its intended use. Administrative expenses are not included unless these can be direc tly at tributed to specific
    projec ts. Related borrowing costs are capitalised up to completion date.
    Investment proper ties under redevelopment are reclassified to investment proper t y upon completion, i.e. on the date on which the
    property is available for operation.
    Significant accounting judgements, estimates and assumptions
    Investment proper ties are buildings rented by Entities, grouped together because of the risks and valuation method in t wo classes of
    investment proper t y (high-street mixed-use proper ties and of fice buildings). The fair value of investment proper t y is classified at
    Level 3 of the fair value hierarchy.
    The fair value of yielding fixed income proper ties is determined by appraisers. Whereas most of the lease agreements entered into
    by the Group are denominated in EUR, the valuation of investment proper ties has been prepared in EUR and conver ted into PLN as
    with exchange rate prevailing at the balance sheet date. Fur ther details of the judgements and assumptions made are described in
    Note 4.
    Completed investment property € ‘000 Investment
    property under
    construction € ‘000
    At 1 Januar y 2017 470,380 –
    Asset deal 163,635 –
    Capital expenditures 12 , 0 5 6 –
    Agent fees 892 –
    Rental guarantee 13 3 –
    Rent free period incentive 110 –
    Fair value movement on investment property 3 ,19 9 –
    Foreign currency translation 2 9,72 5 –
    At 31 December 2017 6 8 0 ,13 0 –
    SECTION II: INVESTMENT PROPERT Y
    3. Investment property Policy
    Investment property
    Proper t y that is held for long-term rental yields or for capital appreciation or both, and that is not occupied by the companies in the
    Group, is classified as investment proper t y. Investment proper t y comprises freehold land, freehold buildings and land held under
    perpetual usufruc t (approach is the same as for freehold proper ties).
    Investment proper t y is measured initially at cost, including related transac tion costs. Af ter initial recognition, investment proper t y is
    stated at fair value.
    The basis for determining the fair value of Group’s proper t y por tfolio is the market-based measurement, which is the estimated
    amount for which a proper t y could be exchanged on the date of valuation, under current market conditions bet ween market
    par ticipants in an arm’s length transac tion, af ter proper marketing wherein the par ties had each ac ted knowledgeably, prudently and
    without compulsion, i.e. ac ted in their economic best interest.
    Fair value calculated using cash flow projec tions is based on the terms of the lease agreements and, in case of vacancy on the rent
    that is considered would be obtainable on an open market let ting as at the date of valuation. Valuation fees are not related to the
    proper t y value and valuation results. The valuation by the professional appraiser takes account of lease incentives, agent fees,
    proper t y interests, financial leasing related to perpetual usufruc t of land compensations and let ting fees. The fair value of investment
    proper t y reflec ts, among others, rental income from current leases and assumptions about rental income from future leases in the
    light of current market conditions. The fair value also reflec ts, on a similar basis, any cash outflows that could be expec ted in respec t
    of the proper t y.
    Subsequent expenditure is recognised as addition to the carr ying amount of the asset only when it is probable that future economic
    benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and
    maintenance costs are charged to the Consolidated Statement of Profit or Loss (Operating expenses) during the financial period in
    which they are incurred.
    Fair value of the investment proper ties is also determined by the Rental Guarantee Agreements (“RGA”) and NOI Guarantee
    Agreement (“NOIGA”) concluded bet ween respec tive Group's entities ("Beneficiares") and GT II and GT III ("Guarantors") on
    9 March 2017 in respec t of cer tain assets. Pursuant to RGA budgeted fit-out costs and outstanding general capex works regarding
    premises that were not leased or preleased by 13 April 2017 (the “Of fering”) are covered by the guarantees. Moreover in accordance
    with the agreements each holder of title to the asset will receive the headline rent and the average amount of ser vice charges for
    of fice par t of the building that is not leased to third par ties within a period of 5 years from the date of the Of fering, receive the rent
    under the signed lease agreement in the full amount (without rent free ef fec t) and receive the leasing and agent fees related to the
    leasing of the proper t y as well as agent fees related to the new leases in the negotiations of which the guarantor was not involved.
    Additionally, the entit y recognises annual revenue resulting from the NOIGA, according to which the Guarantor is obliged to pay to
    the Beneficiaries an amount equal to dif ference bet ween the Assumed NOI, amounting to EUR 11.5 million p.a. and the ac tual NOI,
    calculated on the basis of rental income, operating expenses, overdue payments provision and refundable tenants incentives. As a
    result RGA and NOIGA are included in the valuation as they are par t of entities future cashflows. In the current financial year Group
    received the income from the RGA and NOIGA agreements in the amount of EUR 6.9 million.
    Grif fin TopCo II S.á r.l. and Grif fin TopCo III S.á r.l. which are the Guarantors in accordance with all the agreements specified above,
    belong to the Oak tree Capital Management, a leading global alternative investment management firm with assets under
    management wor th of USD 10 0 billion as of September, 2017. Fur thermore a Suppor t Let ter was signed by Oak tree European
    Principal Fund III, LP and Oak tree European Principal Fund III (Parallel), LP (“Oak tree Funds”) on 2 Oc tober 2017 (the “Let ter”).
    In accordance with the Let ter Grif fin Topco III S.à r.l and Grif fin Topco II S.à r.l, Guarantors of the RGA and NOIGA, were obliged to
    open and maintain a bank account with an initial amount of EUR 15 million exclusively for the purposes of making payments due by
    any Guarantor to any beneficiary under and in accordance with the terms of Rental Guarantee Agreements and NOI Guarantee
    Agreement. The Guarantors obligation was executed on 23 Januar y 2018 by signing of an Escrow Agreement resulting in opening of
    an escrow account with EUR 15 million deposit. Additionally, pursuant to the Let ter, Oak tree funds are obliged to provide financial
    suppor t to the Guarantors in case they fail to make guaranteed payments, following reduc tion of the escrow account to zero.
    All terms of the Let ter remain in full force and ef fec t until 2 April 2020.
    In the face of the reputation of ultimate parent of the Guarantors as well as the Let ter, the Group regards there is no risk with respec t
    to the credit wor thiness of the Guarantors and its impac t on the investment proper t y valuation.
    Changes in fair values are recorded in the Consolidated Statement of Profit or Loss within "Fair value movement".
    Transfers are made to investment proper t y when, and only when, there is a change in use, evidenced by the end of owner occupation
    or commencement of an operating lease. Transfers are made from investment proper t y when, and only when, there is a change in
    use, evidenced by commencement of owner occupation or commencement of development with a view to sale. If an investment
    proper t y becomes owner-occupied, it is reclassified to proper t y, plant and equipment the deemed cost for subsequent accounting
    is the fair value at the date of change in use.
    NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS COnTinueD
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    Highest and best use
    For all investment proper t y that is measured at fair value, the current use of the proper t y is considered the highest and best use.
    Discount rate
    Discount rates used to estimate the fair value as at 31 December 2017 ranged from 5.85% to 8.58% (as at 31 December 2016 ranged
    from 5.92% to 8.62%).
    Fair value hierarchy
    The following tables show an analysis of the fair values of investment proper t y recognised in the statement of financial position by
    level of the fair value measurement hierarchy:
    31 December 2017
    Fair value measurement using Quoted
    prices in active
    markets
    (Level 1) Significant
    observable
    inputs (Level 2)Significant
    unobservable inputs
    (Level 3) To t a lTotal gain or
    (loss) in the
    period in the
    statement of profit or loss
    Completed investment properties ––6 8 0 ,13 0 6 8 0 ,13 0 3 ,19 9
    To t a l ––6 8 0 ,13 0 6 8 0 ,13 0 3 ,19 9
    31 December 2016
    Fair value measurement using Quoted
    prices in ac tive
    markets
    (L evel 1) Significant
    observable inputs
    (Level 2) Significant
    unobservable inputs
    (Level 3) To t a lTotal gain or
    (loss) in the
    period in the statement of profit or loss
    Completed investment properties ––470,38 0 470,38 0 16 , 8 93
    Properties under construction ––––4 , 514
    To t a l ––470,38 0 470,38 0 21, 4 07
    Sensitivity analysis on Significant Inputs
    The Group has conduc ted the sensitivit y analysis of the significant unobser vable inputs used to fair value measurement, the details
    to the analysis for each repor ting period are presented in the tables below:
    As of 31 December 2017 
    €0.5 change in rental value
    per month, per sqm 25 bps change in market yield
    Increase
    €’000 Decrease
    €’000 Increase
    €’000 Decrease
    €’000
    Completed Investment property 16 ,14 8 ( 16 ,18 4 ) (28,237) 2 6 ,12 8
    To t a l 16 ,14 8 ( 16 ,18 4 ) (28,237) 2 6 ,12 8
    As of 31 December 2016
    €0.5 change in rental value
    per month, per sqm 25 bps change in market yield
    Increase
    €’000 Decrease
    €’000 Increase
    €’000 Decrease
    €’000
    Completed Investment property 15, 0 0 2 (15,002) (18, 0 01) 18,0 01
    To t a l 15, 0 0 2 (15,002) (18, 0 01) 18,0 01
    Transfers between hierarchy levels
    There were no transfers bet ween Levels 1, 2 or 3 during 2017 and 2016.
    Gains recorded in the Consolidated Statement of Profit or Loss for the year ended 31 December 2017 for recurring fair value
    measurements categorised within Level 3 of the fair value hierarchy amounted to 64 and were presented in the Consolidated
    Statement of Profit or Loss in line Fair value movement on investment proper t y. Gains recorded in the Consolidated Statement of
    Profit or Loss for the year ended 31 December 2016 for recurring fair value measurements categorised within Level 3 of the fair value
    hierarchy amounted to 21,407 and were presented in the Consolidated Statement of Profit or Loss in line Fair value movement on
    investment property.
    All gains and losses recorded in the Consolidated Statement of Profit or Loss for recurring fair value measurements categorised
    within Level 3 of the fair value hierarchy are at tributable to changes in unrealised gains or losses relating to investment proper t y
    (completed and under construction) held at the end of the reporting period.
    3. Investment property continued
    Completed investment property € ‘000 Investment
    property under
    construction € ‘000
    At 1 Januar y 2016 385,825 36,850
    Capital expenditures 12,715 25, 672
    Capitalised borrowing costs (including amortised cost) –1, 8 81
    Received grant –12 8
    Agent fees 1, 5 73 –
    Rent free period incentive 728 –
    Fair value movement on investment property 16 , 8 93 4 , 514
    Transfer to completed investment property 68,182 (68,182)
    Foreign currency translation (15, 5 3 6)(863)
    At 31 December 2016 470,38 0 –
    3.1. Other operating lease commitment
    In the repor ting period ended 31 December 2017 and 31 December 2016 Group had no operating lease commitments other than
    resulting from shor t-term of fices rent.
    4. Fair Value Measurement and Related Estimates and Judgements Fair value is the price that would be received to sell an asset or paid to transfer a liabilit y in an orderly transac tion bet ween market
    par ticipants at the measurement date. The fair value measurement is based on the presumption that the transac tion to sell the asset
    or transfer the liabilit y takes place either:
    ¡ On the principal market for the asset or liabilit y; or
    ¡ In the absence of a principal market, in the most advantageous market for the asset or liabilit y.
    The Group must be able to access the principal or the most advantageous market at the measurement date. The fair value of an
    asset or a liabilit y is measured using the assumptions that market par ticipants would use when pricing the asset or liabilit y, assuming
    that market par ticipants ac t in their economic best interest.
    A fair value measurement of a non-financial asset takes into account a market par ticipant’s abilit y to generate economic benefits by
    using the asset in its highest and best use or by selling it to another market par ticipant that would use the asset in its highest and
    best use.
    The Group uses valuation techniques that are appropriate in the circumstances and for which suf ficient data are available to measure
    fair value, maximising the use of relevant obser vable inputs and minimising the use of unobser vable inputs.
    All assets and liabilities, for which fair value is measured or disclosed in the Consolidated Financial Statements are categorised within
    the fair value hierarchy (described as follows), based on the lowest level input that is significant to the fair value measurement as a
    whole:
    ¡ Level 1 — Quoted (unadjusted) market prices in ac tive markets for identical assets or liabilities;
    ¡ Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is direc tly or
    indirectly observable;
    ¡ Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobser vable.
    For assets and liabilities that are recognised in the Consolidated Financial Statements at fair value on a recurring basis, the Group
    determines whether transfers have occurred bet ween levels in the hierarchy by reassessing categorisation (based on the lowest level
    input that is significant to the fair value measurement as a whole) at the end of each repor ting period.
    Fair value measurement – investment property and investment property under construc tion
    The current proper t y market situation is analyzed on an ongoing basis by the Group. At each repor ting date, the Group analyses the
    movements in each proper t y’s value. The professional appraisers provide the independent valuation repor ts suppor ted with
    detailed proper t y analysis. Each proper t y is considered a separate asset class based on its unique nature, charac teristics and risks.
    For each proper t y, the latest valuation is compared to previous valuations. If fair value changes (positive or negative) the impac t is
    included in the value of investment proper t y.
    Changes in valuation techniques
    In 2016 the valuation technique of investment proper ties under construc tions i.e. Hala Koszyki has been changed from residual
    method to the income method due to their completeness. Except for the above there were no changes in valuation techniques
    during 2017 and 2016.
    NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS COnTinueD
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    5. Advances for Investment property In the repor ting periods ended 31 December 2017 and 31 December 2016 there were no advances to contrac tors for investment
    properties under development and advances for land and other property acquisitions.
    6. CommitmentsCommitments for Investment Property Under Construction
    As at 31 December 2017 the Group had agreed construc tion contrac ts with third par ties and is consequently commit ted to future
    capital expenditure in respec t of investment proper t y completed EUR 2.9 million (2016: EUR 14.5 milion) and had commit ted with
    tenants to incur fit-out works of EUR 7.3 million (2016: EUR 13.5 million).
    Operating Leases Commitments – Group as Lessor
    Policy
    The determination of whether an arrangement is, or contains, a lease, is based on the substance of the arrangement at inception
    date, whether fulfilment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a right
    to use the asset, even if that right is not explicitly specified in an arrangement. Leases in which the Group does not transfer
    substantially all the risks and benefits of ownership of an asset are classified as operating leases; see Note 7 for policies on revenue
    recognition for properties under operating leases and related costs.
    Judgements Made for Properties Under Operating Leases
    The Group has determined, based on an evaluation of the terms and conditions of the arrangements, that it retains all the significant
    risks and rewards of ownership of the investment proper ties leased to third par ties, therefore, accounts for these leases as
    operating
    leases.
    The Group adopted a standard of lease agreement including following provisions:
    ¡ rental payments denominated in EUR, with rent adjustments following annual inflation index;
    ¡ fixed lease term, up to 10 years with an extension option;
    ¡ rent payment secured by a deposit or a guarantee.
    The commercial proper t y leases t ypically have lease terms bet ween 5 and 10 years and include clauses to enable periodic upward
    revision of the rental charge according to prevailing market conditions. Some leases contain options to break before the end of the
    lease term.
    Lease agreements with a rent-free period or a reduced rent period are required to have the rent expense to a tenant or rental income
    to a landlord recognised on a straight-line basis over the lease term based on the total rental payments. This condition does not
    apply to the agreements with rent-free periods covered by the Rental Guarantee Agreement.
    The future aggregate minimum rentals receivable under non-cancellable operating leases are as follows:
    Year ended 31 December 2 0 17
    € ‘000 2 016
    € ‘000
    Within 1 year 4 4 ,7152 7, 2 3 6
    Af ter 1 year, but not more than 5 years 140,43311 0 , 8 2 8
    More than 5 years 2 7, 7 7 02 9, 2 13
    212 ,9 18 167,277
    NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS COnTinueD
    SECTION III: FINANCIAL RESULTS This sec tion includes the results and per formance of the Group, including the net asset value and EPRA net asset value. This sec tion
    also includes details of the Group’s tax credits in the year and deferred tax assets and liabilities held at the year end. The sec tion
    quantifies the financial impac t of the operations for the year. Fur ther analysis on operations is described in the Financial Review
    sec tion on page 26 of the Annual Repor t.
    7. RevenueRevenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be
    reliably measured, regardless of when the payment is being received. Revenue is measured at the fair value of the consideration
    received or receivable, taking into account contrac tually defined terms of payment and excluding taxes or dut y. The Group has
    concluded that it is the principal in most of its revenue arrangements since it is the primar y obligor, it has pricing latitude and is also
    exposed to credit risks. Revenues from elec tricit y, heating and water reinvocing are presented net of corresponding cost.
    The specific recognition criteria described below must also be met before revenue is recognised.
    Revenues include also headline rent and the average amount of ser vice charges for each par t of the building that was not leased to
    third par ties within a period of 5 years from the date of the Of fering and the coverage of the rent-free periods under the signed lease
    agreements which are secured by RGA. Revenue from RGA is recognised on a monthly basis. Additionally, the entit y recognises
    annual revenue resulting from the NOIGA, according to which the Guarantor is obliged to pay to the Beneficiaries an amount equal
    to dif ference bet ween the assumed NOI, amounting to EUR 11,50 0,0 0 0 p.a. and the ac tual NOI, calculated on the basis of rental
    income, operating expenses, overdue payments provision and refundable tenants incentives.
    Policy
    a) Rental Income
    Rental income is measured at the fair value of the consideration received or receivable, except for contingent rental income which is
    recognised when it arises. The value of rent-free periods and all similar lease incentives is spread on a straight-line basis over the
    term of the lease (on condition that the rent-free period stated in the agreement is not covered by the Rental Guarantee Agreement).
    Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease unless another
    systematic basis is more representative of the time pat tern in which the benefit derived from the leased asset is diminished. If the
    annual lease rent increases as a result of a price index to cover inflationar y cost, then the policy is not to spread the amounts but to
    recognise them when the increase takes place (applied prospec tively when the right to receive it arises). The amount received from
    tenants to terminate non-cancellable operating leases are recognised in the statement of profit or loss when the right to receive
    them arise.
    b) Service Charge Income
    Income arising from ser vice charges and expenses recoverable from tenants is recognised in the period in which the compensation
    becomes receivable.
    c) Rendering of Services
    Revenue from proper t y and asset management fees is recognised at the time the ser vice is provided. Revenue from rendering
    proper t y development ser vices is recognised by reference to the stage of completion.
    Year ended 31 December 2 0 17
    € ‘000 2 016
    € ‘000
    Rental income 32,27824,0 45
    Service charge and marketing income 13 , 52 79, 8 5 6
      45,8053 3 ,9 01
    The total contingent rents and income from NOI and rental guarantees recognised as income during the year amount to 7,658 (2016: 199).
    In order to determine if the Group is ac ting as principal or agent, it assesses the primar y responsibilit y for providing the goods or
    ser vices, inventor y risk, discretion in establishing prices, and who bears the credit risk. The Group has concluded that it is ac ting as a
    principal in all of the abovementioned revenue arrangements.
    d) Sale of completed property
    A proper t y is regarded as sold when the significant risks and rewards of ownership of the real estate have been transferred to the
    buyer, which is normally on unconditional exchange of contrac ts. For conditional exchanges, sales are recognised only when all the
    significant conditions are satisfied.
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    8. Operating Expenses Policy
    a) Service Costs
    Ser vice costs paid, as well as those borne on behalf of the tenants, are included under direc t proper t y expenses. Reclaiming them
    from tenants is presented separately under revenue.
    b) Works Carried Out on Properties
    Works carried out which are the responsibilit y of the building’s owner and which do not add any extra func tionalit y to, or enhance
    significantly, the standard of comfor t of the building are considered as current expenditure for the period and recorded in the
    income statement as expenses.
    Year ended 31 December 2 0 17
    € ‘000 2 016
    € ‘000
    Utilities (5,148)(3 ,9 96)
    Property administration (5,488)(3,985)
    Real estate taxes (2,322)(1, 8 3 2 )
    Marketing services ( 1,117 )(992)
    (14 , 0 75 )(10,8 05)
    Operating expenses analysis by revenue and non-revenue generating properties
    Year ended 31 December 2 0 17
    € ‘000 2 016
    € ‘000
    Property expenses arising from investment property that generated rental income (14 , 0 75 )(10,8 05)
    Total property expenses (14 , 0 75 )(10,8 05)
    9. Administrative Expenses Policy
    Administrative expenses are expensed as incurred with the exception of expenditure on long-term developments and direc t
    investment proper t y purchase transac tion costs, see Note 3. Subsidiar y acquisition costs are presented within legal and consulting
    costs. An increase in the Administrative Expenses compared to the previous year mainly results from the number of non-recurring
    items like IPO, tender of fer, acquisitions.
    Administrative expenses
    Year ended 31 December   2 0 17
    € ‘000 2 016
    € ‘000
    Legal and consulting costs (5,634)(1, 8 2 5 )
    Asset management services (532)(2,032)
    Other (1, 6 55 )(645)
    Total administrative expenses (7,821)(4,502)
    10. Fi n a n ce income Interest income
    Interest income is recognised as it accrues using the ef fec tive interest rate method. Interest income is included in finance income in
    the Consolidated Statement of Profit or Loss. Significant increase in Foreign exchange dif ferences is a result of PLN strengthening
    against EUR which af fec ted valuation of the EUR-denominated bank debt.
    Year ended 31 December  2 0 17
    € ‘000 2 016
    € ‘000
    Bank interest 8632
    Interest from loans to related par ties 19330
    Available for sale financial assets interest 342–
    Debentures interest 387–
    Foreign exchange differences 24,633–
    Other financial income 12 60
    25,479 422
    11. F i n a n c e Cost Policy
    Borrowing costs associated with direct expenditure on properties under development or undergoing major refurbishment are
    capitalised. When borrowings are associated with specific developments, the amount capitalised is the gross interest less finance
    income (if any) incurred on those borrowings. Interest is capitalised as from the commencement of the development work until the
    date of prac tical completion. Arrangement fees are amor tised over the term of the borrowing facilit y. All other borrowing costs are
    expensed in the period in which they occur.
    Year ended 31 December  2 0 17
    € ‘000 2 016
    € ‘000
    Interest: (8,820)(13 , 6 8 2 )
    Bank borrowings ( 7, 6 7 9 )( 9,10 8 )
    Loans from related parties ( 1,10 3 )(4,566)
    Other interest expenses (38)(8)
    Foreign exchange differences –( 11, 6 4 8 )
    Bank charges (563)(4 4)
    Other financial costs (176)(10)
    Fair value gains/(losses) on financial instruments: –1,277
    Interest rate swap –1,277
    ( 9, 5 59 )( 24 ,10 7 )
    Capitalised costs and foreign exchange dif ferences  1, 4 3 2
    ( 9, 5 59 )(22,675)
    Fair value gains/(losses) on financial instruments relate to interest rate swap used to mitigate risks associated with fluc tuation of
    interest rates.
    12. TaxationThe Group is subjec t to income and capital gains taxes in dif ferent jurisdic tions. Significant judgement is required to determine the
    total provision for current and deferred taxes.
    Where the final tax outcome of these mat ters is dif ferent from the amounts that were initially recorded, such dif ferences will impac t
    the income and deferred tax provisions in the period in which the determination is made.
    Current income tax
    Policy
    Current income tax assets and liabilities are measured at the amount expec ted to be recovered from or paid to taxation authorities.
    The tax rates and tax laws used to compute the amount are those that are enac ted or substantively enac ted at the repor ting date in
    the countries where the Group operates and generates taxable income. Current income tax relating to items recognised direc tly in
    equit y is recognised in equit y and not in the Consolidated Statement of Profit or Loss. Management periodically evaluates positions
    taken in tax returns with respec t to situations in which applicable tax regulations are subjec t to interpretation and establishes
    provisions where appropriate.
    Deferred income tax
    Policy
    Deferred income tax is provided using the the temporar y dif ference approach, which focuses on the dif ference bet ween the carr ying
    amount of an asset or liabilit y in the financial statements and its tax base.
    Deferred tax liabilities are recognised for all taxable temporar y dif ferences, except:
    ¡ when the deferred tax liabilit y arises from the initial recognition of goodwill or of an asset or liabilit y in a transac tion that is not a
    business combination and, at the time of the transac tion, af fec ts neither accounting profit nor taxable profit or loss;
    ¡ in respec t of taxable temporar y dif ferences associated with investments in subsidiaries and interests in joint arrangements, when
    the timing of the reversal of the temporar y dif ferences can be controlled and it is probable that the temporar y dif ferences will not
    reverse in the foreseeable future.
    Deferred income tax assets are recognised for all deduc tible temporar y dif ferences, the carr y for ward of unused tax credits and any
    unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against
    which deduc tible temporar y dif ferences, carried for ward of unused tax credits or unused tax losses can be utilised, except:
    ¡ when the deferred tax asset relating to the deduc tible temporar y dif ference arises from the initial recognition of an asset or
    liabilit y in a transac tion that is not a business combination and, at the time of the transac tion, af fec ts neither the accounting profit
    nor taxable profit or loss;
    ¡ in respec t of deduc tible temporar y dif ferences associated with investments in subsidiaries, associates and interests in joint
    arrangements, deferred tax assets are recognised only to the extent that it is probable that the temporar y dif ferences will reverse
    in the foreseeable future and taxable profit will be available against which the temporar y dif ferences can be utilised.
    NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS COnTinueD
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    12. Taxation continued The amount of deferred tax provided is based on the expec ted manner of realisation or set tlement of the carr ying amount of assets
    and liabilities. In determining the expec ted manner of realisation of an investment proper t y measured at fair value a rebut table
    presumption exists that its carr ying amount will be recovered through sale.
    Deferred income tax assets and liabilities are measured at the tax rates that are expec ted to apply in the year when the asset is
    realised or the liabilit y is set tled, based on tax rates (and tax laws) that have been enac ted or substantively enac ted at the
    reporting date.
    Deferred income tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are
    recognised in correlation to the underlying transac tion either in OCI or direc tly in equit y.
    Deferred tax assets and deferred tax liabilities are of fset if a legally enforceable right exists to set of f current tax assets against
    current income tax liabilities and the deferred taxes relate to the same taxable entit y and the same taxation authorit y.
    Tax benefits acquired as par t of a business combination, but not satisf ying the criteria for separate recognition at that date, are only
    recognised subsequently when new information about fac ts and circumstances require this. If that new information is revealed
    during the measurement period the adjustment is treated as a reduc tion in goodwill (as long as it does not exceed goodwill).
    Otherwise, it is recognised in profit or loss.
    Significant accounting judgements, estimates and assumptions
    Uncer tainties exist with respec t to the interpretation of complex tax regulations, changes in tax laws, and the amount and timing of
    future taxable income. Given the wide range of transac tions and the long-term nature and complexit y of existing contrac tual
    agreements, dif ferences arising bet ween the ac tual results and the assumptions made, or future changes to such assumptions, could
    necessitate future adjustments to tax income and expenses already recorded. The Group establishes provisions, based on
    reasonable estimates, for possible consequences of audits by the tax authorities. The amount of such provisions is based on various
    fac tors, such as experience of previous tax audits and dif fering interpretations of tax regulations by the taxable entit y and the
    responsible tax authorit y.
    Such dif ferences in interpretation may arise for a wide variet y of issues depending on the conditions prevailing in the respec tive
    Group Company’s domicile.
    The major components of income tax expense for the years ended 31 December 2017 and 2016 are:
    Year ended 31 December  2 0 17
    € ‘000 2 016
    € ‘000
    Income tax expense  
    Current income tax expense 4 (223)
    Deferred income tax expense ( 11, 2 75 )(5,449)
    ( 11, 2 7 1)(5,672)
    Reconciliation of tax expense and the accounting profit multiplied by Poland’s tax rate for 2017 and 2016 is, as follows:
    Year ended 31 December  2 0 17
    € ‘000  2 016
    € ‘000
    Profit/(loss) before income tax 42,591 1 7, 9 1 0
    Expec ted taxation charge at the tax rate 25%/19% ( 9,712 )(3,403)
    Effect of:  
    Income not subjec t to tax 15 6 292
    Expenses not deduc tible for tax purposes ( 1,114 )(12 3 )
    Adjustments relating to dif ferences on tax rates applicable for the Group Companies 2,524 –
    Adjustments for companies not obliged to calculate income tax (1, 474 )(3,066)
    Tax losses from prior years from which no deferred tax asset was recognised – 204
    Reversal of impairment deferred tax asset on not expired tax losses (1, 6 51)424
    Tax (charge)/credit ( 11, 2 7 1)(5,672)
    Due to restruc turing in 2017 the Dutch company has become the parent company of the Group and under Dutch Tax Law the
    corporate income tax amounts to 25%.
    Deferred Tax Asset
    Consolidated statement
    of financial position Consolidated statement
    of comprehensive income Acquired under asset acquisition
    2 0 17
    € ‘000 2 016
    € ‘000 2 0 17
    € ‘000 2 016
    € ‘000 2 0 17
    € ‘000 2 016
    € ‘000
    Valuation of investment proper t y at fair value 64 1,211 ( 1,14 6 ) 918 – –
    Other deductible temporary differences 409 204 158 178 47 –
    Interest and exchange rate differences accrued 74 3 4,660 (4 ,9 98) 3,398 1,0 8 0 –
    Valuation of financial instruments at fair value 15 37 (21) – – –
    Recognised unutilised tax losses 2,250 1, 5 6 2 688 1, 0 8 4 – –
    3,481 7, 6 74 (5,319) 5,578 1,12 7 –
    Deferred Tax Liability
    Consolidated statement
    of financial position Consolidated statement
    of comprehensive income Acquired under asset acquisition
    2 0 17
    € ‘000 2 016
    € ‘000 2 0 17
    € ‘000 2 016
    € ‘000 2 0 17
    € ‘000 2 016
    € ‘000
    Valuation of investment proper t y at fair value 19, 3 6 8 15, 3 0 9 3, 675 10,837 385 –
    Other taxable temporary differences 118 250 (155 ) 13 9 23 –
    Interest and exchange rate differences accrued 2 ,94 4 99 2,480 (12 0 )364 –
    Valuation of financial instruments at fair value 71 – 71 – – –
    22,501 15, 6 5 8 6,071 10,856 772 –
    Net-Deferred tax liability 19, 0 2 0–––––
    As at 31 December 2016 the Group has tax losses that arose in Poland that are available for 5 years for of fset ting against future
    taxable profits of the companies in which the losses arose. Deferred tax assets have not been recognised in respec t of tax losses in
    amount of 3,074 (2016: 27) as they are not probable to be used to of fset taxable profits in the Group, they have arisen in subsidiaries
    that have been loss-making for some time, and there are no other tax planning oppor tunities or other convincing evidence of
    recoverabilit y in the near future.
    Expir y year 20182 0192020 20212022TOTAL
    Fiscal year 2 0132 014 2 015 2 016 2 017  
    Available tax losses (€m) 7911, 2 0 2 74 473611,1 0 4 14 , 57 7
    13. Earnings per share (EPS)Basic EPS amounts are calculated by dividing the Profit /(loss) for the year at tributable to ordinar y equit y holders of the parent by the
    number of ordinar y shares outstanding at the end of the financial year. Diluted EPS is calculated by dividing the profit at tributable to
    ordinar y equit y holders of the parent by the number of ordinar y shares outstanding at the end of the financial year plus the number
    of ordinar y shares that would be issued on conversion of all the dilutive potential ordinar y shares into ordinar y shares. As there are no
    dilutive instruments outstanding, basic and diluted earnings per share are identical.
    For the purpose of these consolidated financial statements the number of ordinar y shares of Grif fin Premium RE.. N.V. issued
    as of 3 March 2017 was used for EPS calculation for 2016.
    From the date of incorporation of the Grif fin Premium RE.. N.V., i.e. from 21 December 2016 until 29 March 2017 the number of shares
    increased from 45,0 0 0 shares to 156,133,179 shares.
    NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS COnTinueD
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    13. Earnings per share (EPS) continuedThe following table reflec ts the Profit /(loss) for the year and number of shares outstanding used in the basic and diluted EPS
    computations:
    Date Event NoteNumber of
    shares issued (‘000’) % of the
    period Weighted
    average (‘000’)
    2016 - 01- 01 At the beginning of the year – – –
    2016 -12-21 Shares issued for cash 4510 0 45
    2016 -12-31 Shares in issue at year end (basic and diluted) 4510 0 45
    2017- 01- 01 At the beginning of the year  45 10 0 45
    Shares issued for:
    2017- 01-27 Contribution 3A 6 7, 6 0 4 5062,603
    2017- 01-27 Contribution 3B 66,270 4961,368
    2 017- 0 2-2 8 Contribution 6A 11 – 9
    2 017- 0 2-2 8 Contribution 6B 1 – 1
    2017-03-03 Contribution 4 1 – 1
    2 017- 0 3 -2 9 Issue 22,201 1416 , 8 49
    2 0 17-12 - 31 Shares in issue at year end (basic)  156,133  14 0 , 876
    2 0 17-12 - 31 Shares in issue at year end (diluted)  156,133  14 0 , 876
    14. Profit sharing In 2016 the Group has paid out the dividend in the amount of EUR 56 million to GT II FIZ AN.
    The general meeting of shareholders of the Company will be asked to approve the following appropriation of the 2017 profit af ter
    tax: an amount of EUR 20,020 thousand to be added to the other reser ves and the remaining amount of EUR 11,30 0 thousand to be
    paid out as dividend.
    15. A u d i t fee In the year ended 31 December 2017 the audit fee expenses amounted to:
    Ernst &
    Yo u n g
    Accountants LLP
    (‘000’) Associated
    E r n s t &Yo u n g
    Companies (‘000’) To t a
    (‘000’)
    Audit fees Annual Repor t 7810 4 182
    Other audit fees 18147 16 5
    To t a l 96251 347
    16. Employment structure As of 31 December 2017 the employment struc ture was as follows:
    Management Board of the parent company 10
    Management Board of the subsidiaries 5
    Other employees and coworkers 27
    To t a l 42
    SECTION IV: FINANCIAL ASSETS AND LIABILITIES This sec tion focuses on financial instruments, together with the working capital position of the Group and financial risk management
    of the risks that the Group is exposed to at year end.
    Financial instruments Policy
    Financial assets are classified into one of the following categories:
    ¡ financial assets held to maturit y;
    ¡ financial assets at fair value through profit or loss;
    ¡ loans and receivables;
    ¡ financial assets available for sale.
    Financial assets are recognized on the transac tion date, and derecognised upon the expir y of the contrac tual rights to cash flows
    from the financial asset or where a financial asset is transferred along with all risks and benefits of ownership thereof.
    Financial assets held to maturity
    Financial assets held to maturit y are quoted in an ac tive market non-derivative financial assets with fixed or determinable payments
    and fixed maturities, which the Group has the positive intention and abilit y to hold until maturit y, other than:
    ¡ those that upon initial recognition are designated as at fair value through profit or loss;
    ¡ those that are designated as available for sale; and
    ¡ those that meet the definition of loans and receivables.
    Financial assets held to maturit y are measured at amor tised cost using the ef fec tive interest rate. Financial assets held to maturit y
    are classified as non-current assets if they are falling due within more than 12 months from the repor ting date.
    Financial assets at fair value through profit or loss
    A financial asset at fair value through profit or loss is a financial asset that meets either of the following conditions:
    a) it is classified as held for trading. A financial asset is classified as held for trading if it is:
    ¡ acquired principally for the purpose of selling it in the near term;
    ¡ par t of a por tfolio of identified financial instruments that are managed together and for which there is evidence of a recent ac tual
    pattern of short-term profit-taking; or
    ¡ a derivative (except for a derivative that is a financial guarantee contrac t or a designated and ef fec tive hedging instrument).
    b) in accordance with IAS 39, upon initial recognition it is designated as at fair value through profit or loss.
    Financial assets at fair value through profit or loss are measured at fair value, which takes into account their market value as at the
    repor ting date, but no sale transac tion costs. Any change in the fair value of these instruments is taken to finance income (positive
    changes in the fair value) or finance costs (negative changes in the fair value) in the income statement /statement of comprehensive
    income. Where a contrac t contains one or more embedded derivatives, the entire contrac t may be designated as a financial asset at
    fair value through profit or loss, except where the embedded derivative does not significantly modif y the underlying cash flows or it
    is clear, with or without high level review, that had similar hybrid instrument been considered in the first place, separation of the
    embedded derivative would be expressly forbidden. Financial assets may be designated at initial recognition as at fair value through
    profit or loss if the following criteria are met: (i) the designation eliminates or significantly reduces the inconsistent treatment or
    valuation (accounting mismatch); or (ii) the assets are par t of a group of financial assets which are managed and their per formance
    evaluated on a fair value basis, in accordance with a documented risk management strategy; or (iii) the financial asset contains an
    embedded derivative that would need to be separately recorded. As at 31 December 2017 and 2016, no financial assets were
    designated as at fair value through profit or loss.
    Derivatives
    Derivatives are recognised in the books at the time when the Entities become a par t y to a binding agreement.
    The Group does not apply hedge accounting.
    At the balance sheet date, derivatives are measured at fair value. Whereas derivatives with fair value greater than zero are financial
    assets, those with negative fair value are financial liabilities.
    The Group recognises profit /loss from valuation and realisation of derivative instruments that fail to meet the requirements of hedge
    accounting as income/expense on operations, income/expenses on financial transactions or profit/loss on derivative instruments in
    foreign currency. In case of the profit /loss on valuation and realization of the relevant IRS, the change in fair value in financial
    instrument is recognised in finance cost.
    In the Consolidated Statement of Cash Flows, cash flows of this nature are disclosed respec tively as Financing ac tivities.
    NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS COnTinueD
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    Loans, trade receivables and other receivables
    Loans and receivables are non derivative financial assets with fixed or determinable payments that are not quoted in an ac tive
    market. These are classified as current assets, provided their maturit y does not exceed 12 months af ter the repor ting date. Loans and
    receivables with maturities exceeding 12 months from the repor ting date are classified under non-current assets.
    Loans, trade receivables and other receivables which are financial assets come under the categor y of "Long term loans", "Shor t-term
    loans". They are initially recognised at fair value (plus transac tion costs if any) and subsequently measured at amor tised cost less the
    accumulated impairment losses.
    Rent and other receivables are recognised at their original invoiced value except where the time value of money is material, in which
    case receivables are recognised at fair value and subsequently measured at amor tised cost. The value of receivables is based on the
    probabilit y of their payment by revaluation allowance.
    Revaluation allowance on trade and other receivables are created at the end of each quar ter, where there is objec tive evidence that
    the Group will not be able to collec t all amounts arising under the original terms of receivables. The following fac tors suggest that
    the receivable is impaired: serious financial problems of the debtor or delay in payments. The amount of the provision is the
    dif ference bet ween the carr ying value of the receivable and the present value of estimated future cash flows arising thereunder and
    discounted with the original ef fec tive interest rate. The amount of loss is recognised in the Consolidated Statement Profit or Loss as
    "Other expenses". Subsequent repayment of previously writ ten-of f receivables is recognised in "Other income" in Consolidated
    Statement Profit or Loss.
    Advances to suppliers are valued at cash expenditure and according to received VAT invoices in evidence of granting an advance.
    Available-for-sale financial assets
    Available-for-sale financial assets are those non-derivative financial assets that are designated as available-for-sale or are not classified in any
    of the three preceding categories. Available-for-sale financial assets are measured at fair value, increased by transac tion costs that may be
    direc tly at tributable to the acquisition or issue of financial assets. Where no quoted market price is available and there is no possibilit y to
    determine their fair value using alternative methods, available-for-sale financial assets are measured at cost, adjusted for any impairment
    losses. Positive and negative dif ferences bet ween the fair value (if quoted market price determined in regulated market is available or if the fair
    value can be determined using other reliable method) and acquisition cost, net of deferred tax, of financial assets available for sale are taken
    to other comprehensive income. Any decrease in the value of financial assets available for sale resulting from impairment losses is taken to the
    statement of comprehensive income as finance cost.
    If there is objec tive evidence that an impairment loss has been incurred on an available-for-sale financial asset, then the amount of
    the difference between the acquisition cost (net of any payment of instrument principal and amortisation) and current fair value, less
    any impairment loss on that financial asset previously recognised in the profit or loss, is removed from equit y and is reclassified to
    profit or loss. Reversals of impairment losses on equit y instruments classified as available for sale cannot be recognised in the profit
    or loss. If, in a subsequent period, the fair value of a debt instrument classified as available-for-sale increases and the increase can be
    objec tively related to an event occurring af ter the impairment loss was recognised in the profit or loss, the impairment loss is
    reversed, with the amount of the reversal recognised in the profit or loss.
    Purchase and sale of financial assets is recognised at the transac tion date. Initially, financial assets are recognized at acquisition cost,
    i.e. at fair value plus, for financial assets other than classified as financial assets at fair value through profit or loss, transac tion costs
    that may be direc tly at tributable to the purchase.
    Financial assets are derecognised if the Group loses its control over contrac tual rights at tached to those assets, which usually takes
    place upon sale of the asset or where all cash flows at tributed to the given asset are transferred to an independent third par t y.
    Where the Group:
    ¡ has a legally enforceable right to set of f the recognised amounts; and
    ¡ intends either to set tle on a net basis, or to realise the asset and set tle the liabilit y simultaneously;
    a financial asset and financial liability are offset, and the net amount is presented in the statement of financial position.
    The master net ting arrangement referred to in IAS 32.50 is not the basis for the set-of f, if the above t wo set-of f criteria are
    not
    fulfilled.
    Cash and cash equivalents
    Cash and cash equivalents in the statement of financial position comprise cash at bank, restric ted cash and shor t-term deposits with
    an original maturit y of 3 months or less, which are subjec t to an insignificant risk of changes in value.
    Restric ted cash is cash on separate bank accounts held for a specific purpose and therefore not available to the Group for immediate
    or general business use. As restric ted cash Group presents mainly the debt ser vice reser ve accounts held as the obligation resulting
    from bank loans agreements, deposits from tenants and amounts blocked to cover capital expenditures. For the purpose of the Consolidated Statement of Cash Flows, cash and cash equivalents consist of cash, shor t-term deposits, as
    defined above, net of outstanding bank overdraf ts as they are considered an integral par t of the Group’s cash management.
    Short-term trade payables
    Shor t-term trade payables are carried at the amount due and payable.
    Financial liabilities at fair value through profit or loss
    Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated
    upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are acquired
    for the purpose of selling in the near term. Derivatives, including separated embedded derivatives are also classified as held for
    trading unless they are designated as ef fec tive hedging instruments. Financial liabilities may be designated at initial recognition as
    at fair value through profit or loss if the following criteria are met: (i) the designation eliminates or significantly reduces the
    inconsistent treatment or valuation or recognition of gains or losses that would otherwise arise from the measurement on a different
    basis; or (ii) the liabilities are par t of a group of financial liabilities which are managed and their per formance is evaluated on a fair
    value basis, in accordance with a documented risk management strategy; or (iii) financial liabilities contain embedded derivatives
    which need to be recorded separately.
    Financial liabilities at fair value through profit or loss are re-measured to fair value, af ter considering their market value at the
    repor ting date, without transac tion costs. Any changes in the fair value of these liabilities are recognised in the profit or loss as
    finance income or finance cost.
    Other financial liabilities
    Other financial liabilities which are not financial instruments at fair value through profit or loss are measured at amor tised cost using
    the effective interest rate method.
    A financial liabilit y is derecognised by the Group when the obligation under the liabilit y is discharged or cancelled or expires. An
    exchange bet ween an existing borrower and lender of debt instrument with substantially dif ferent terms is accounted for by the
    Group as an extinguishment of the original financial liabilit y and the recognition of a new financial liabilit y. Similarly, significant
    modifications to the terms and conditions of an existing financial liabilit y are treated as an extinguishment of the original financial
    liabilit y and the recognition of a new financial liabilit y with any resultant dif ferences in the respec tive carr ying amounts taken to profit
    or loss.
    Other non-financial liabilities include, in par ticular, liabilities to the tax of fice in respec t of value added tax and advance payment
    liabilities which will be set tled by way of deliver y of goods or ser vices, or fixed assets. Other non-financial liabilities are recognised at
    the amount due and payable.
    Interest bearing loans, borrowings and debentures
    All loans, borrowings and debentures are initially recognised at fair value less direc tly at tributable transac tion costs. Af ter initial
    recognition, they are subsequently measured at amor tised cost using the ef fec tive interest rate method (“EIR”). The EIR is the rate
    that exac tly discounts the estimated future cash receipts over the expec ted life of the financial instrument or a shor ter period, where
    appropriate, to the net carrying amount of the financial asset/liability.
    17. DebenturesIn June 2017 Group acquired fixed-rate debentures from Forum 60 Fundusz Inwest ycyjny Zamknięt y.
    The debentures have been acquired in connec tions with For ward Purchase Agreements described below. The value of the financial
    instruments as at 31 December 2017 was as follows:
    Debentures
    As at 31 December 2017
    Issuer Interest rate
    MaturityTo t a lLong-term Short-term
    Forum 60 Fundusz Inwest ycyjny Zamknięt y fixedDecember 2018 18, 3 89–18, 3 89
        18, 3 89 – 18, 3 89
    Forward Purchase Agreement
    On 9 March 2017, an entit y controlled by the Company, i.e. IB 14 Fundusz Inwest ycyjny Zamknięt y Ak t y wów Niepublicznych ac ting as
    the purchaser (the “Purchaser ”), and subsidiaries of Echo Investment S.A. (“ Echo”) ac ting as the sellers (the “ Sellers”) concluded
    the preliminar y for ward purchase agreement for West Link of fice building in Wroclaw with GL A of 14,362 under construc tion to be
    completed in April 2018 by Echo (“ S PA”). The par ties to the SPA agreed to under take ac tions to complete the acquisition of the
    rights and obligations of the company owning the For ward Purchase Asset by the buyer by way of the acquisition by the buyer of
    10 0% of the shares in the limited par tner and general par tner of the company owning the For ward Purchase Asset (the “ Projec t
    Companies ”) af ter the satisfac tion or waiver of the conditions precedent specified therein.
    NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS COnTinueD
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    17. Debentures continued The consideration payable by the Purchaser for the shares under the SPA shall amount to the sum of: (i) the quotient of NOI (the sum
    of money equal to the annual rental income from the lease of the For ward Purchase Asset minus non-recoverable operating costs)
    and a yield of 6.873%, which, as of the date of the execution of the SPA, amounts to EUR 36 million; (ii) the working capital of the
    companies being purchased; and (iii) the cash held by such companies, which sum shall be decreased by the amount of debt
    (primarily comprised of external bank financing) of such companies.
    Segment City/townStreet Project name
    Office WroclawNa Ostatnim Groszu West Link
    On 12 June 2017 par ties of the SPA concluded annex No. 2 (“ Annex No. 2”) to the SPA. Moreover, in connec tion with the execution
    of Annex No. 2, the Purchaser subscribed for bonds with a total nominal value of EUR 18 million issued by a subsidiar y of Echo (the
    “ West Link Bonds ”).
    Pursuant to Annex No. 2, the par ties agreed that the preliminar y purchase price for the shares in the Projec t Companies amounts to
    EUR 18 million.
    Pursuant to Annex No. 2, in exchange for the subscription for the West Link Bonds and the payment of EUR 18 million by the
    Purchaser to one of the Sellers, the Sellers granted the Purchaser irrevocable powers of at torney authorising the Purchaser to
    conclude the final agreement concerning the purchase of 10 0% of the shares in the Projec t Companies (the “ Final Agreement”) in
    per formance of the SPA (the “ Powers of Attorney”). The Purchaser will be authorised to use the Powers of At torney: (i) if the Final
    Agreement is not concluded despite the conclusion thereof being requested; and (ii) in the event of a breach of the terms included in
    the documentation regarding the West Link Bonds.
    Pursuant to the West Link Bonds, one of the Sellers conduc ted a private placement of bonds with a total value and an issue price of
    EUR 18 million. The West Link Bonds have been subscribed for by the Purchaser. The redemption date for the West Link Bonds is 31
    December 2018 and the West Link Bonds will be redeemed by way of the payment of the amount equal to the nominal value of each
    of the bonds. The West Link Bonds accrue interest at a fixed interest rate. The West Link Bonds were issued as unsecured bonds.
    The payment of the price for the shares in the Projec t Companies will be conduc ted by way of remit tances bet ween the Sellers and
    the Purchaser and a set-of f of a receivable of one of the Sellers on account of the payment of the price for the shares in the Projec t
    Companies against the Purchaser’s receivable in respec t of the redemption of the West Link Bonds.
    Debentures are valued at amor tised cost using ef fec tive interest rate method through profit and loss.
    18. Available for sale financial assets In June 2017 Group acquired following financial instruments, which have been classified as available for sale financial assets. In
    December 2017 the additional series of these financial instruments have been acquired. The value of these instruments as at 31
    December 2017 was as follows:
    ROFO debentures
    As at 31 December 2017
    Issuer Interest rate MaturityTo t a lLong–term Short–term
    Pudsey Sp. z o.o. fixedDecember 2018 4,346–4,346
    Projek t Beethovena – Projek t Echo – 122 SP. Z O.O. S.K.A. (Stage 1) fixedMarch 2019 3,0023,002 –
    Projek t Beethovena – Projek t Echo – 122 SP. Z O.O. S.K.A. (Stage 2) fixedJu n e 2 019 2,8952,895 –
     10,243 5,897 4,346
    Debentures acquired in connec tions with Right of First Of fer Agreements (" ROFO Debentures") are described below. The fair value
    of debentures is individually determined taking into account number of fac tors e.g.: PoC, leasing progress.
    The maturit y dates presented in the table above are stated in the agreements, however the planned repayment dates of debentures
    would take place upon completion of ROFO projec t. Expec ted repayments of the projec ts are as follows:
    ¡ Pudsey Sp.o.o. – 30 December 2018;
    ¡ Projek t Beethovena – Projek t Echo – 122 SP. Z O.O. S.K.A. (Stage 1) – 31 March 2019;
    ¡ Projek t Beethovena – Projek t Echo – 122 SP. Z O.O. S.K.A. (Stage 2) – 30 June 2019. Right of First Offer Agreements
    On 9 March 2017, the Company signed the preliminar y agreement for the acquisition of 25% stakes in ROFO projec ts being
    developed by Echo. Total of fice GL A of these projec ts to be completed in 2018/2019 is 49,20 0 sqm.
    On 9 March 2017 an agreement was concluded bet ween Echo, the Company and GPRE Management sp. z o.o. (the “
    Bondholder”)
    that Bondholder will purchase bonds to be issued by the respec tive limited par tners of all of the respec tive ROFO SPVs (the “ ROFO
    Agreement ”). The ROFO Agreement covers all of the ROFO Assets. Echo indirec tly holds 10 0% of the shares or interest in the ROFO
    SPVs and the ROFO SPVs are developing the ROFO Assets. The Company intended to invest (indirec tly through the Bondholder), on
    the terms and conditions set out in the ROFO Agreement, in each of the ROFO Assets the amount of 25% of the funds required by
    each of the ROFO SPVs (less the external construc tion bank financing at a loan to construc tion ratio of 60%) to complete the
    development of each respec tive ROFO Asset. Based on the construc tion budget presented by Echo to the Issuer in connec tion with
    the execution of the ROFO Agreement, the amount of the contribution (the investment) to be made by the Company under the
    ROFO Agreement amounts to EUR 9.8 million.
    The investment of the Company under the ROFO Agreement were made solely from the proceeds from the Of fering and no fur ther
    debt funding is required by the Company for this purpose.
    Segment Cit y/town Street Projec t name
    officeWarsawBeethovenaBeethovena I
    office WarsawBeethovenaBeethovena II
    office WarsawGrzybowskaBrowar y Stage J
    On 12 June 2017 the Bondholder, subscribed for bonds of several series with a total nominal value of EUR 6.4 milion issued by cer tain
    subsidiaries of Echo (” ROFO Bonds”). On 22 December 2017 the additional series of bonds in the amount of EUR 3.5 milion have
    been subscribed for. The ROFO Bonds were subscribed for in per formance of the ROFO Agreement which relates to an investment
    of 25% of the equit y which had already been invested and future equit y required to complete the construc tion and to finalise
    commercial of fice projec ts currently in progress in Warsaw, i.e. the Beethovena projec t (stage I and II) and the Browar y Warszawskie
    projec t (stage J). The redemption date for all the series of the ROFO Bonds is 12 June 2032, and the ROFO Bonds will be redeemed
    by way of the payment of a sum equal to the nominal value of each of the bonds. The ROFO Bonds accrue interest at a fixed interest
    rate in the amounts of and on the conditions provided in the terms and conditions of the ROFO Bonds. Final amount of interest will
    be adjusted by accompanied option agreement so that it reflec ts ac tual development profit realised on each of the projec ts. The
    ROFO Bonds have been issued as unsecured bonds.
    19. Loans granted At the end of 2017 the Group had loans receivable from Grif fin Topco II S.á r.l.
    At the end of 2016 the Group had loans receivable from Apenon Sp. z o.o. and Grif fin Topco II S.á r.l.
    Year ended 31 December 2017
    Borrower To t a l Below 1 year Af ter 1 year
    but no more than 5 years More than
    5 years
    Grif fin Topco II S.á r.l. 6060 ––
    6060 ––
    Year ended 31 December 2016
    Borrower To t a l Below 1 year Af ter 1 year
    but no more than 5 years More than
    5 years
    Apenon Sp. z o.o. 152–152 –
    Apenon Sp. z o.o. 406–406 –
    Grif fin Topco II S.á r.l. 232–232 –
    790–790 –
    NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS COnTinueD
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    20. Interest-Bearing Loans and Borrowings
    As at 31 December 2017 To t a l Long-term Short-term
    Bank loans 304,892278,690 26,202
    Other borrowings 16 5 , 413–16 5 , 413
    Interest-bearing loans and borrowings 470,305 278,690 19 1, 615
    As at 31 December 2016
    To t a l Long-term Short-term
    Bank loans 3 01, 5 8 5252,535 4 9, 0 5 0
    Other borrowings 1 3 7, 9 3 51 3 7, 9 1 9 16
    Interest-bearing loans and borrowings 4 3 9, 5 2 0 390,454 49,066
    Bank loans
    The majorit y of the Group’s bank loans are at floating interest rates. Interest costs may increase or decrease as a result of changes in
    the interest rates. Only Loan 2 has been secured by interest rate option cap, that has not been executed due to negative EURIBOR
    interest rates.
    As at 31 December 2017
    Bank Interest rate Maturity To t a lLong-term Short-term
    Loan 1EURIBOR 3M + margin A p r il 2 0193 4,6 4733,843 804
    Loan 2 EURIBOR 3M + margin March 202044,84642,225 2,621
    Loan 3 EURIBOR 3M + margin Febr uar y 20186 , 216–6 , 216
    Loan 4 EURIBOR 3M + margin January 20347, 2 8 46 ,9 51 333
    Loan 5 EURIBOR 3M + margin Febr uar y 20187,1 7 1–7,1 7 1
    Loan 6 EURIBOR 3M + margin July 203413 , 4 6 612,464 1, 0 0 2
    Loan 7 NBP reference rate less social indicator June 20344,3203,869 4 51
    Loan 8 WIBOR 1M + margin Febr uar y 20182 51–2 51
    Loan 9 EURIBOR 1M + margin August 2026*5 2 ,14 85 0 ,769 1, 379
    Loan 10 EURIBOR 1M + margin June 202695,65091, 2 59 4,391
    Loan 13 EURIBOR 3M + margin June 2027 38,8933 7, 3 1 0 1, 5 8 3
    304,892 278,690 26,202
    As at 31 December 2016
    Bank Interest rate Maturity To t a lLong-term Short-term
    Loan 1EURIBOR 3M + margin A p r il 2 01934,53033,722 808
    Loan 2 EURIBOR 3M + margin June 202046,29443,635 2,659
    Loan 3 EURIBOR 3M + margin Febr uar y 20186,3826,023 359
    Loan 4 EURIBOR 3M + margin January 20347, 5 6 47,1 0 1 463
    Loan 5 EURIBOR 3M + margin Febr uar y 20187, 3 6 36 ,949 414
    Loan 6 EURIBOR 3M + margin July 203414 ,11713 , 0 9 2 1, 0 2 5
    Loan 7 NBP reference rate less social indicator June 20343 ,95 83 , 815 14 3
    Loan 8 WIBOR 1M + margin Febr uar y 20181, 215–1, 215
    Loan 9 EURIBOR 1M + margin August 2026*4 4,75944,577 182
    Loan 10 EURIBOR 1M + margin June 202698,06293,621 4, 4 41
    Loan 11 EURIBOR 3M + margin J u n e 2 0173 7,1 7 7–3 7,1 7 7
    Loan 12 WIBOR 3M + margin J u n e 2 01716 4–16 4
    3 01, 5 8 5 252,535 49,050
    * The construc tion loan will be conver ted into investment loan until March 2018. The maturit y of investment loan is August 2026.
    The undrawn bank facilities as of 31 December 2017 amounted to 2,711, whereas as at the end of 2016 the undrawn facilities amount
    to 12, 812.
    In 2014 Hala Koszyki Sp. z o.o. received the financing under JESSICA initiative. JESSICA initiative is a par t of the Regional Operational
    Programme of the Masovian Distric t under which the entit y is granted with the financing under favourable conditions in terms of
    interests. The interest rates under JESSICA loan are lower than the market ones. This grant has been recognised in the books
    resulting in recognition of loan at a fair value being lower than the nominal value and resulting in a decrease of the proper t y
    capitalised cost (in the amount of the grant being the dif ference bet ween loan nominal value and loan fair value at the inception
    date. As of 31 December 2017 the amount of grant recognised amounted to 1,602 (31 December 2016: 1,671).
    NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS COnTinueD
    Other borrowings
    As a result of the reorganisation described in the Note 1 in Sec tion I to the Financial Statements, the vast majorit y of the other
    borrowings, presented in the Consolidated Financial Statements at the year ended 31 December 2016 have been contributed to the
    Group in exchange for shares. On December 2017 the Group received a loan at fixed interest rate from Globalwor th Finance
    Guernsey Limited, the entit y related with the major shareholder. The loan was granted in order to acquire 3 new projec ts – i.e. Tr y ton
    Business House, A4 Business Park and West Gate. Loan has the conver tible option embedded – the entire principal amount, interest
    accrued and other sums due from the Borrower to the Lender can be conver ted into shares to be issued by the Grif fin Premium RE..
    N.V. The loan can be conver ted based on 60 -day volume weighted average price of the shares of GPRE at the Stock Exchange as of
    the date of conversion. Conversion is subjec t to notice from the lender and approval by the general meeting of shareholders.
    At the year ended 31 December 2017 and 2016 the balance of the other borrowings was as follows:
    As at 31 December 2017
    Lender To t a lBelow 1 year Af ter 1 year
    but no more than 5 years More than
    5 years
    Globalworth Finance Guernsey Limited 16 5 , 413  16 5 , 413    
    16 5 , 41316 5 , 413 ––
    As at 31 December 2016
    Lender To t a l Below 1 year Af ter 1 year
    but no more than 5 years More than
    5 years
    GT II FIZ Ak t y wów Niepublicznych 1, 6 0 8–1, 6 0 8 –
    Grif fin Topco II S.á r.l. 86,653835,024 51, 6 21
    Grif fin Topco III S.á r.l. 19, 72 1818, 320 1, 3 9 3
    Grif fin Finance II Sp. z o.o. 8,693––8,693
    Grif fin Finance III Sp. z o.o. 21, 2 6 0–10 42 1,15 6
    1 3 7, 9 3 51655,056 82,863
    21. Derivative financial instruments In previous years (i.e. 2014 and 2015) to manage its interest rate risk, the Group entered into interest rate swaps, in which it agreed to
    exchange, at specified inter vals, the dif ference bet ween fixed and variable rate interest amounts calculated by reference to an
    agreed-upon notional principal amount. These swaps were designated to mitigate risk associated with underlying debt obligations.
    As at 31 December 2017 and 31 December 2016 the loans have not been hedged by interest rate swaps.
    As at 31 December 2017 and 31 December 2016 one bank loan (as decribed in the Note 20) has been secured with interest rate cap
    option, however the option has not been executed due to favourable market interest rates. Only premium has been paid and it is
    included in the amor tised cost valuation of the loan. As at 31 December 2017 the value of the cap option is nil.
    2 0 17
    € ‘000 2 016
    € ‘000
    As at 1 Januar y –1,308
    Amounts received/(paid) –(1, 317 )
    Net changes in fair value through profit or loss –39
    Foreign currency translation –(30)
    As at 31 December ––
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    Rent and other receivables impaired and provided for
    As at 31 December 2017, receivables with nominal value 898 (2016: 739) were impaired and provided for in the amount of 891 (2016:
    722) due to tenant defaults. Movements in the provision for impairment of receivables were, as follows:
    As at 31 December   2 0 17
    € ‘000 2 016
    € ‘000
    At 1 Januar y 722445
    Charge for the year 402297
    Foreign currency translation 52(20)
    At 31 December 1,176722
    As at 31 December 2017 and 2016, the analysis of rent and other receivables and classification of provisions for impairment of
    receivables is set out below:
    As at 31 December  To t a l Neither
    past due nor impaired <30 days 30-60 days 60-90 days 90-120 days >120 days
    2 0 17 8,6974,624 790923 71661, 223
    2 016 3,3276431, 6 3 0 17011412 3 6 47
     
     
    As at 31 December
    2 0 17Impaired rent and other receivables 1118 351,13 1
    Provision for impairment (1)(1)(12) (34)( 1,12 8 )
      Total provision ( 1,176 )
    2 016 Impaired rent and other receivables 26 54 56 425 61
    Provision for impairment (26) (54) (56)(33)(553)
      Total provision (722)
    24. Cash and cash equivalents Cash and short-term deposits
    Cash at bank earns interest at floating rates based on daily bank deposit rates. Shor t-term deposits are made for var ying periods of
    bet ween 1 day and 3 months, depending on the immediate cash requirements of the Group, and earn interest at the respec tive
    short-term deposit rates.
    Blocked (restricted) cash
    The blocked (restric ted) cash comprises of:
    ¡ presented as long-term debt service reserve accounts;
    ¡ deposits from tenants and amounts blocked to cover capital expenditures presented as shor t-term as they can be utilised to
    cover tenants’ obligation due or current liabilities for capital expeditures;
    ¡ cash on the bank accounts with restric tions over the use of the funds.
    As at 31 December 2 0 17
    € ‘000 2 016
    € ‘000
    Unblocked  
    Cash at bank and on hand 14 , 4 817, 2 4 4
    Short-term deposits 1,1762 ,76 6
    Cash and cash equivalents as per Consolidated Statement of Cash Flows 15, 6 5710,010
    Blocked  
    Short-term:  
    Tenant deposits 9,3095,062
    Capex accounts 797224
    Rent accounts 8,6631, 215
    Other 25962
    Long-term  
    Debt service reserve account 2 ,9582,550
    21,9869,113
    Cash and cash equivalents as per Consolidated Statement of Financial Position 3 7, 6 4 319,12 3
    22. Trade and other payables, deposits from tenants and other deposits Deposits from tenants and other deposits received
    Policy
    Deposits from tenants and other deposits liabilities are initially recognised at fair value and subsequently measured at amor tised
    cost. Any dif ference bet ween the initial fair value and the nominal amount is included as a component of operating lease income and
    recognised on a straight-line basis over the lease term.
    Trade and other payables, deposits from tenants and other deposits are non-interest bearing and have set tlement dates within one
    year, except for tenant deposits which are payable on lease termination.
    For explanations on the Group’s liquidit y risk management processes, refer to Note 25.
    As at 31 December   2 0 17
    € ‘000 2 016
    € ‘000
    Current  
    Trade payables 5,932 2 ,18 5
    Capex payables 5,501 3,323
    VAT p a y a b l e 407 103
    Deposits from tenants 270 343
    Guarantees retained from contractors 508 13 3
    Deferred income 415 537
    Amounts due to related par ties 1, 5 0 016
    Consideration payable 1, 22 0 –
    Other payables 263 419
    16 , 016 7, 0 5 9
    Non-current  
    Deposits from tenants 5,834 2,991
    Guarantees retained from contractors 537 357
    22,387 10,4 07
    Consideration payable is mainly obligation arising from asset deal (Note 28).
    23. Trade and other receivables
    As at 31 December  2 0 17
    € ‘000 2 016
    € ‘000
    Current  
    Rent and ser vice charge receivables 6,3803,327
    RGA and NOIGA rent and ser vice charge receivables 2 , 317–
    Less: Provision for impairment of receivables ( 1,176 )(722)
    Rent receivables – net 7, 5 2 12,605
    VAT receivables 672826
    Deferred expenses 12489
    Receivables from related parties –266
    RGA and NOIGA capex receivables 1, 53 8–
    Other 77927
    10,6343 , 813
    Non-current  
    Deferred expenses 69–
    Other – 10
    10,7033,823
    Rent and ser vice charge receivables are non-interest bearing and are t ypically due within 30 days.
    NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS COnTinueD
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    ii. Interest rate risk
    Interest rate risk is the risk that the future cash flows of a financial instrument will fluc tuate because of changes in market interest
    rates. The Group’s exposure to the risk of changes in market interest rates relates primarily to its long-term debt obligations with
    floating interest rates.
    The analysis below describes reasonably possible movements in interest rates with all other variables held constant, showing the
    impac t on Profit /(loss) before tax and equit y. It should be noted that the impac t of movement in the variable is not necessarily linear.
    The sensitivit y analyses have been prepared on the basis that the amount of net debt, the ratio of fixed-to-floating interest rates of
    the debt and derivatives are all constant:
    ¡ The sensitivit y of the statement of profit or loss is the ef fec t of the assumed changes in interest rates on finance income less
    finance expense for one year, based on the floating rate financial liabilities held at the repor ting date, including the ef fec t
    of derivatives.
    ¡ The sensitivit y of equit y is calculated by revaluing derivatives for the ef fec ts of the assumed changes in interest rates.
    Increase/
    (decrease) in percentage points Effect on
    Profit/(loss) before tax
    2 0 17
    EURIBOR +1 (3,022)
    EURIBOR -1 3,022
    WIBOR +1 -
    WIBOR -1 -
    NBP reference rate +1 (59)
    NBP reference rate -1 59
    Increase/
    (decrease) in percentage points Effect on
    Profit/(loss) before tax
    2 016
    EURIBOR +1 (2,978)
    EURIBOR -1 2,978
    WIBOR +1 (243)
    WIBOR -1 243
    NBP reference rate +1 (56)
    NBP reference rate -1 56
    b) Credit risk
    Credit risk is the risk that a counterpar t y will not meet its obligations under a financial instrument or customer contrac t. The Group is
    exposed to credit risks from both its leasing ac tivities and financing ac tivities, including deposits with banks and financial
    institutions, debentures, available for sale financial assets and derivatives.
    Rent receivables
    Rents are assessed according to Group criteria prior to entering into lease arrangements. Credit risk is managed by securit y deposits
    or bank guarantees provided by tenants. Outstanding tenants’ receivables are regularly monitored. An impairment analysis is
    per formed at each repor ting date on an individual basis for major tenants. The maximum exposure to credit risk at the repor ting
    date is the carr ying value of each class of financial asset. At the Group level there is no significant concentration of risk in relation to
    any of the customers of the Group. The relation of revenue from sales to major tenants to Group’s total rental income has been
    analysed in the following table, the revenue from rent from a major tenant currently does not exceed 8% of the Group’s rental
    income.
    Concentration of credit risk
    Share in total
    rental income
    2 0 17 2 016
    Te n a n t A 8%7%
    Te n a n t B 5%7%
    Te n a n t C 4%2%
    Grif fin Topco II/Grif fin Topco III (as Guarantors under RGA and NOIGA) 15%0%
    25. Financial risk management Financial risks are risks arising from financial instruments to which the Group is exposed during or at the end of the repor ting period.
    Financial risk comprises market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidit y risk. The
    primar y objec tives of the financial risk management func tion are to establish risk limits, and then ensure that exposure to risks stays
    within these limits.
    The Group’s principal financial liabilities, other than derivatives, are loans and borrowings. The main purpose of the Group’s loans
    and borrowings is to finance the acquisition and development of the Group’s proper t y por tfolio.
    The Group has rent and other receivables, trade and other payables and cash and shor t-term deposits that arise direc tly from
    its operations.
    The Group’s senior management oversees the management of these risks. The Management Board reviews and agrees policies for
    managing each of these risks which are summarised below.
    It is the Group’s policy that no trading in derivatives for speculative purposes may be under taken.
    a) Market risk
    Market risk is the risk that the fair value or future cash flows of a financial instrument will fluc tuate because of changes in market
    prices. The Group’s market risks arise from open positions in (a) foreign currencies and (b) interest-bearing assets and liabilities, to
    the extent that these are exposed to general and specific market movements. Management sets limits on the exposure to currency
    and interest rate risk that may be accepted. However, the use of this approach does not prevent losses outside of these limits in the
    event of more significant market movements.
    Sensitivities to market risks included below are based on a change in one fac tor while holding all other fac tors constant. In prac tice,
    this is unlikely to occur, and changes in some of the fac tors may be correlated – for example, changes in interest rate and changes in
    foreign currency rates.
    i. Foreign exchange risk
    Currency risk results from the fac t, that the func tional currency of the Group is PLN. Therefore the positions originally in EUR must be
    denominated in PLN. In Consolidated Statement of Financial Position main EUR positions are investment proper ties, which are
    valued in EUR by external appraisers, loans and borrowings, whereas in Consolidated Statement of Profit and Loss main EUR
    positions are rental revenue and financial expenses relating to loans and borrowings. The Group does not apply hedge accounting in
    accordance with IAS 39. The Group manages foreign currency risk by using natural hedging. In case of the cash flow the Group
    matches its principal cash outflows to the currency in which the principal cash inflows (such as rental revenue) are denominated. This
    is generally achieved by obtaining financing in the relevant currency.
    The following table presents sensitivities to reasonably possible changes in EUR at the Consolidated Financial Position with all other
    variables held constant. Star ting from 1 Januar y 2018, func tional currency of the Group will be changed to EUR, in result foreign
    exchange risk will be minimised.
    Increase/
    (decrease) in percentage points Effect on
    Profit/(loss) before tax
    2 0 17
    EUR/PLN +1 2,585
    EUR/PLN -1 (2,585)
    2 016
    EUR/PLN +1 629
    EUR/PLN -1 (629)
    NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS COnTinueD
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    25.2. Fair value measurements – financial assets and financial liabilities
    Set out below is a comparison by class of the carr ying amounts and fair value of the Group’s financial instruments presented in the
    Consolidated Financial Statements:
     
    As at 31 December Carrying amount Fair value 2 0 17 2 0162 0 17 2 016
    Financial assets    
    Long-term loans –790 –790
    Debentures 18, 3 89–18, 3 89 –
    Available for sale financial assets 10, 24 3–10, 24 3 –
    Shor t-term loans 60–60 –
    Trade and other receivables 10,7033,82310,703 3,823
    Cash and cash equivalents 3 7, 6 4 319,12 33 7, 6 4 3 19,12 3
    Financial liabilities    
    Bank loans 304,8923 01, 5 8 5304,892 3 01, 5 8 5
    Other borrowings 16 5 , 4131 3 7, 9 3 516 5 , 413 1 3 7, 9 3 5
    Deposits from tenants 6 ,10 43,3346 ,10 4 3,334
    Guarantees retained from contractors 1,0454901,045 490
    Trade and other payables 15, 23 86,58315, 23 8 6,583
    Management has assessed that the fair values of cash and shor t-term deposits, rent and other receivables, trade payables and other
    current liabilities approximate their carr ying amounts largely due to the shor t-term maturities of these instruments. The fair value of
    the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transac tion
    bet ween willing par ties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the
    fair values:
    ¡ Receivables are evaluated by the Group based on parameters such as individual credit wor thiness of the customer and the risk
    charac teristics of the financed projec t. Based on this evaluation, allowances are taken into account for the expec ted losses of
    these receivables. As at 31 December 2017 and 2016, the carr ying amounts of such receivables, net of allowances, were not
    materially different from their calculated fair values;
    ¡ The fair value of obligations under finance leases and deposits from tenants is estimated by discounting future cash flows using
    rates currently available for debt on similar terms, credit risk and remaining maturities;
    ¡ Derivatives valued using valuation techniques which employ the use of market obser vable inputs are mainly interest rate swaps.
    The Group enters into derivative financial instruments with financial institutions with investment;grade credit ratings;
    ¡ Fair values of the Group’s interest-bearing borrowings and loans are determined by using the DCF method using a discount rate
    that reflec ts each of the Entit y's borrowing rates including its own non-per formance risk as at 31 December 2017 and at
    31
    December 2016 appropriately.
    25.3. Fair value hierarchy
    Quantitative disclosures of the Group’s financial instruments in the fair value measurement hierarchy as at 31 December 2017
    and 2016:
    As at 31 December 2017 Level 1 Level 2 Level 3 To t a l
    Investment property ––6 8 0 ,13 0 6 8 0 ,13 0
    Debentures –18, 3 89 –18, 3 89
    Available for sale financial assets ––10, 24 3 10, 24 3
    Shor t-term loans –60 –60
    Bank loans –304,892 –304,892
    Other borrowings –16 5 , 413 –16 5 , 413
    Deposits from tenants –6 ,10 4 –6 ,10 4
    Guarantees retained from contractors –1,045 –1,045
    Trade and other payables ––15, 23 8 15, 23 8
    As at 31 December 2016 Level 1 Level 2 Level 3 To t a l
    Investment property ––470,38 0 470,38 0
    Long-term loans –790 –790
    Bank loans –3 01, 5 8 5 –3 01, 5 8 5
    Other borrowings –1 3 7, 9 3 5 –1 3 7, 9 3 5
    Deposits from tenants –3,334 –3,334
    Guarantees retained from contractors –490 –490
    Trade and other payables ––6,583 6,583
    25. Financial risk management continued Financial instruments and cash deposits
    Credit risk from balances with banks and financial institutions as well as with other real estate entities is managed in accordance with
    the Group’s policy.
    Investments of surplus funds from operating ac tivities are made only with reputable institutions. The Group places only shor t-term
    deposits, which are highly liquid and of cer tain rates of return.
    In relation to investments for the longer term the Group places funds in financial instruments (debentures and available for sale
    financial assets) issued by the reputable real estate companies with high credit wor thiness. The Group’s maximum exposure to credit
    risk for the components of the Consolidated Statement of Financial Position at 31 December 2017 and 2016 is the carr ying amounts
    of each class of financial instruments.
    c) Liquidity risk
    Grif fin Premium RE.. N.V. and Entities’ objec tive is to maintain a balance bet ween continuit y of funding and flexibilit y through the use
    of bank deposits and loans. The table below summarises the maturit y profile of the Group’s financial liabilities based on contrac tual
    undiscounted payments (including interest payments):
    Liquidity risk
    As at 31 December 2017
    Contractual payments
    On demand Less than
    3 months 3 to 12
    months 1 to 5 years > 5 years To t a l Difference
    to carrying amount Carrying
    amount
    Bank loans 8817, 2 0 2 10,310119, 3 2 9 201,494 348,423 (4 3, 531)304,892
    Other borrowings ––17 1,113 ––17 1,113 (5,700)16 5 , 413
    Deposits from tenants 25172282 ,7 74 3,060 6 ,10 4 –6 ,10 4
    Guarantees retained from contractors 250149109 536 11,045 –1,045
    Trade and other payables 1, 4 6112 , 59 3 1,18 4 ––15, 23 8 –15, 23 8
    1, 8242 9,9 61182 ,94 4 12 2 , 6 39204,555 541,923 (49, 2 31)492,692
    As at 31 December 2016
    Contractual payments
    On demand Less than
    3 months 3 to 12
    months 1 to 5 years > 5 years To t a l Difference
    to carr ying amount Carrying
    amount
    Bank loans –4,583 4 4,97113 0 ,12 7 16 3 , 619343,300 (41,715 )3 01, 5 8 5
    Other borrowings ––1655,056 82,8631 3 7, 9 3 5 –1 3 7, 9 3 5
    Deposits from tenants 66131 14 61, 8 2 0 1,1713,334 –3,334
    Guarantees retained from contractors –119 14346 11490 –490
    Trade and other payables 3,6542,9 2 9 –––6,583 –6,583
    3,7207, 7 6 245,147 1 8 7, 3 4 9 2 4 7, 6 6 4491, 6 42 (41,715 )4 4 9,9 2 7
    Loans presented as shor t-term as at 31 December 2017 and 2016 relate to a par t of loans payable within 1 year from the balance
    sheet date.
    25.1. Changes in financial liabilities arising from financing ac tivities
      Non cash changes  
    2 016 Cash flows Interest
    accrued Restructuring FX
    valuation Fair value
    changes 2 0 17
    Financial liabilities  
    Bank loans 3 01, 5 8 5 (4,941)(6,888) –15,9 27 ( 791)304,892
    Other borrowings 1 3 7, 9 3 5 16 3 , 076 (1,10 2 )(13 6 ,701) 2,205 –16 5 , 413
    Total liabilities from financing activities 4 3 9, 5 2 0 15 8 ,13 5* ( 7, 9 9 0 )(13 6 ,701) 18 ,13 2 ( 791)470,305
    * This amount consists of 'Bank loan proceeds', 'Bank loan repayments', 'Proceeds from borrowings', 'Repayment of borrowings' and 'Interest paid' from the
    Consolidated Statement of Cash Flows for the year ended 31 December 2017.
    NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS COnTinueD
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    SECTION V: SHARE CAPITAL AND RESERVES The disclosures in this sec tion focus on the issued share capital, the share schemes in operation and the associated share-based
    payment charge to profit or loss. Other mandator y disclosures, such as details of capital management, can also be found here.
    26. Issued capital Authorised shares
    According to the information available to Grif fin Premium RE.. N.V., the shareholding struc ture of the Company as at 31 December
    2017 was as follows:
    Shareholders Number of shares Par value per
    share [EUR] Value of share
    capital [EUR] %
    Globalwor th Asset Managers SRL 111, 8 9 0 ,9 3 31111, 8 9 0 ,9 3 3 71. 6 6
    Nationale Nederlanden OFE 15,600,000115,600,000 9.9 9
    European Bank for Reconstruction and Development 14,807,000114,807,000 9.48
    Other shareholders 13 , 8 3 5 , 2 4 6113 , 8 3 5 , 2 4 6 8.87
    To t a l 15 6 ,13 3 ,17 9 15 6 ,13 3 ,17 9 100.00
    Changes during the repor ting period in the issued share capital have been presented in the table below:
    2 0 17 2 016
    € ‘000 Number
    (‘000) € ‘000Number
    (‘000)
    Opening balance 4545 – –
    Shares issued for cash 156,088156,088 4545
    Closing balance 156,133156,133 4545
    The following Non-Executive Direc tors: Przemysław T. Kr ych (resigned on 21 December 2017), Maciej Dyjas and Nebil Senman (both
    resigned on 27 Febreuar y 2018) through SO SPV 117 Sp. z o.o. purchased 5,649,123 shares (1,883,041 shares each) with an aggregate
    value of PLN 32,20 0,0 01.10 through Of fering.
    From the balance sheet date till the Consolidated Financial Statements publication date there were no changes in the
    ownership structure.
    Net assets attributable to shareholders
    Net assets at tributable to shareholders represents total equit y of the Entities which form par t of the financial statements, but were
    not legally owned by Grif fin Premium RE.. N.V.
    The below table, shows the movements in the net assets at tributable to the shareholders.
    Total net assets attributable to shareholders as at 1 January 2016 86,349
    Profit/(loss) for the year 2016 12,238
    Dividend from Charlie SCSp ( 5 6 ,112 )
    Lenna Investments Sp. z o.o. share capital increase 463
    Elimination of common shares (1, 6 0 4)
    Operations with shareholders (1,141)
    Total net assets attributable to shareholders as at 31 December 2016 41, 3 3 4
    Restructuring (41, 3 3 4)
    Total net assets attributable to shareholders as at 31 December 2017 –
    Foreign currency translation reserve
    The foreign currency translation reser ve is used to record exchange dif ferences arising from the translation of the financial data from
    functional currency to presentation currency.
    25. Financial risk management continued 25.3. Fair value hierarchy continued
    On 27 November 2017 the amendment of Poland’s Corporate Income Tax Law has been introduced, ef fec tive from 1 Januar y 2018.
    One of the changes refers to implementation of a so-called “minimum lev y” on the owners of shopping malls, large shops, of fice
    buildings (wor th more than PLN 10 m), at the level of 0.035% per month (ca.0.42% per year) of the excess of the initial tax value of the
    building over PLN 10 m. The abovementioned change is new and has no precedence in Polish taxation regime.
    On 30 Januar y 2018 the President of Poland signed a bill gradually introducing Sunday retail trade ban, star ting with t wo working
    Sundays per month as of 1 March 2018. As of Januar y 2019 retail trade will be possible on one Sunday a month, while as of 2020 retail
    trade will be fully banned on Sundays.
    Above mentioned changes are not reflec ted in value of investment proper ties as the potential impac t is unknown as of the date of
    these financial statements.
    NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS COnTinueD
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    SECTION VI: ASSETS ACQUISITION AND OTHER DISCLOSURES This sec tion includes details about Grif fin Premium RE.. N.V.’s subsidiaries acquisition and related impac t on the income statement
    and cash flows.
    28. Asset acquisition Policy
    On 22 December 2017, the Group acquired 10 0% of the shares of a group of entities holding a por tfolio of of fice buildings let under
    operating leases and the acquisition was made to give the Group access to those assets. The existing strategic management
    func tion and associated processes were not acquired with the proper t y and, as such, the Direc tors consider this transac tion as an
    asset acquisition.
    The purchase price for the assets was EUR 162.7 million, value of acquired investment proper ties as at 31 December 2017
    is EUR 166.7
    million.
    Purchase price presented in cash flow statement is as follows:
    Acquisition price 16 2, 6 8 0
    less: –
    Cash of acquired entities (7,529)
    155,151
    The revenue and profit contributed by each subsidiar y, since acquisition date, and the impac t on the Group’s results had these
    companies been acquired at the beginning of the year, are disclosed below:
    West Gate € ‘000 Tr y t o n
    € ‘000 A4
    € ‘000 To t a l
    € ‘000
    Subsidiary’s contribution
    Revenue 102 12 5 197 424
    Profit/(loss) after tax 668 2,057 810 3,535
    Annualised subsidiary’s results  
    Revenue 4,339 2,587 6,092 13 , 0 18
    Profit/(loss) after tax 3, 318 6,253 364 9,9 3 5
    Unaudited pro-forma Group’s results Total of the
    Group Already
    included
    results of the new entities Annual
    results of the new entities To t a l
    pro-forma of the Group
    Revenue 45,805 (424)13 , 018 58,399
    Profit/(loss) after tax 31, 3 2 0 (3,535) 9,9 3 5 3 7, 7 2 0
    The transactional costs of EUR 610 thousand incurred in connection with the acquisition are included in fair value movement.
    2 7. C a p i t a l management The primar y objec tive of the Group’s capital management is to ensure that it remains within its quantitative financial covenants and
    maintains a strong credit rating.
    While managing the capital, the Group makes decisions regarding the level of financial leverage, dividend policy, issuance of new
    shares or purchasing and subsequent redemption or resale of previously issued shares and the possible sale of assets to
    reduce debt.
    Like other companies in the industr y, the Group monitors its capital by such methods as loan-to-value ratio.
    During the repor ting periods, the Group did not breach any of its loan covenants and borrowings nor did it default on any other of its
    obligations under its loan and borrowings agreements.
    As at 31 December 2 0 17
    € ‘000 2 016
    € ‘000
    Total loans granted (60)(790)
    Total Interest-bearing loans and borrowings 304,892 3 01, 5 8 5
    Less: Cash (34,685)(16,573)
    Net debt 2 7 0 ,147 284,222
    External valuation of completed investment property 6 8 0 ,13 0 470,38 0
    Total external valuation of investment property and investment property under construction 6 8 0 ,13 0 470,38 0
    Loan to value ratio 40%60%
    Loan to value ratio (bank loans) 40%60%
    Loan to value ratio (other borrowings) 19 %26%
    NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS COnTinueD
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    Moreover the Group distinguishes the Unallocated and Consolidation eliminations positions. The first position comprises of GPRE
    Management Sp. z o.o., IB14 Fundusz Inwest ycyjny Zamknięt y Ak t y wów Niepublicznych, Grif fin Premium RE.. N.V. HQ figures (loans
    granted to SPVs, Asset management fee revenues, HQ administrative/human resources costs) as well as unallocated operations.
    Bonds issued by GPRE Management Sp. z o.o. and purchased by IB14 are presented per net, as both entities belong to the
    Unallocated position. All other transactions between individual segments are eliminated in the Consolidation eliminations position
    – mainly intercompany loans and asset management fee.
    Income, expenses, measurement of segment profit /(loss), valuation of assets and liabilities of the segment are determined in
    accordance with the accounting policies adopted for the preparation and presentation of the Consolidated Financial Statements, as
    well as the accounting policies that relate specifically to segment repor ting. The measure of segment profit /(loss) is the Operating
    Profit/(loss) before tax.
    As at 31 December 2017
     
    Segments
    High-street mixed-use
    properties € ‘000 Office
    properties € ‘000 Unallocated
    € ‘000 Consolidation
    eliminations € ‘000 To t a l
    € ‘000
    Segments non-current assets including:      –
    Investment property 3 0 9,10 0371, 0 3 0 ––680,130
    Investment in subsidiaries ––535,389 (535,389) –
    Long-term loans –3892 6 4 , 876 (265,265) –
    Available for sale financial assets ––5,897 –5,897
    Other non-current assets 1, 6 4 51, 415 14–3 , 0 74
    310 ,74 5372,834 8 0 6 ,176(800,654) 6 8 9,10 1
    Segments current assets including:       
    Short-term loans ––55 560
    Debentures ––18, 3 89 –18, 3 89
    Available for sale financial assets ––4,346 –4,346
    Other current assets 20,78516 ,9 2 0 8 , 214(599)45,320
    20,78516 ,9 2 031,0 0 4 (594)6 8 ,115
    Total assets 331, 53 03 8 9,75 4 8 3 7,1 8 0(801,248) 7 5 7, 2 16
    Segments non-current liabilities including:       
    Bank loans 183, 20795,483 ––278,69 0
    Other borrowings 55,555195, 416 14, 24 6(265,217) –
    Deferred tax liability 6 , 0151, 2 5111, 7 5 4 –19, 0 2 0
    Guarantees retained from contractors 84453 ––537
    Deposits from tenants 2,8942,94 0 ––5,834
    2 4 7, 7 5 5295,543 26,000(265,217) 304,081
    Segments current liabilities including:       
    Bank loans 8,05618 ,14 6 ––26,202
    Other borrowings ––16 5, 424 ( 11)16 5 , 413
    Guarantees retained from contractors 15 8350 ––508
    Deposits from tenants 17199 ––270
    Other current liabilities 7,0893,326 6 ,15 5 (599)15,971
    15 , 47421,921171, 5 7 9 (610 )208,364
    Total liabilities 263,229317,46419 7, 5 7 9(265,827) 512 , 4 4 5
    29. Consolidation of subsidiaries Policy
    Subsidiaries are all entities over which the Group has control. The Group controls an entit y when the Group is exposed to, or has
    rights to, variable returns from its involvement with the entit y and has the abilit y to af fec t those returns through its power over the
    entit y. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from
    the date that control ceases.
    The Consolidated Financial Statements comprise the financial statements of the Group and its subsidiaries as at 31 December 2016
    and as at 31 December 2017. Specifically, the Group controls an investee if, and only if, it has:
    ¡ Power over the investee (i.e. existing rights that give it the current abilit y to direc t the relevant ac tivities of the investee);
    ¡ Exposure, or rights, to variable returns from its involvement with the investee;
    ¡ The abilit y to use its power over the investee to af fec t its returns.
    Generally, there is a presumption that a majorit y of voting rights results in control. To suppor t this presumption and when the Group
    has less than a majorit y of the voting or similar rights of an investee, the Group considers all relevant fac ts and circumstances in
    assessing whether it has power over an investee, including:
    ¡ The contrac tual arrangement with the other vote holders of the investee;
    ¡ Rights arising from other contractual arrangements;
    ¡ The Group’s voting rights and potential voting rights.
    The Group re-assesses whether or not it controls an investee if fac ts and circumstances indicate that there are changes to one or
    more of the three elements of control. Consolidation of a subsidiar y begins when the Group obtains control over the subsidiar y and
    ceases when the Group loses control of the subsidiar y. Assets, liabilities, income and expenses of a subsidiar y acquired or disposed
    of during the year are included in the Consolidated Financial Statements from the date the Group gains control until the date the
    Group ceases to control the subsidiar y.
    Profit or loss and each component of Other Comprehensive Income are at tributed to the equit y holders of the parent of the Group
    and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. When necessar y,
    adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group’s
    accounting policies. All intra-group assets and liabilities, equit y, income, expenses and cash flows relating to transac tions bet ween
    members of the Group are eliminated in full on consolidation.
    A change in the ownership interest of a subsidiar y, without a loss of control, is accounted for as an equit y transac tion.
    If the Group loses control over a subsidiar y, it derecognises the related assets (including goodwill), liabilities, non-controlling interest
    and other components of equit y, while any resultant gain or loss is recognised in profit or loss. Any investment retained is recognised
    at fair value.
    Details on all direc t and indirec t subsidiaries of the Company, over which the Group has control and consolidated as of 31 December
    2017 and 2016, are disclosed in sec tion Struc ture of the Group of the Note 1 in the Sec tion I. There are no other subsidiaries which
    were not consolidated.
    30. Reporting by segments Segments of the Group business are presented in accordance with data from internal management repor ting and analysed by the
    key decision maker, responsible for allocating resources and assessing performance of operating segments.
    For investment proper t y, discrete financial information is provided on a proper t y-by-proper t y basis to members of executive
    management, which collec tively comprise the chief operating decision maker. The information provided is net of Rental income
    (including gross Service charge and marketing income and Property operating expenses), Valuation gains/(losses) from investment
    proper t y, Net gains/(losses) on investment proper t y. The individual proper ties are aggregated into segments with similar economic
    charac teristics such as the nature of the proper t y and the occupied market it ser ves. Management Board considered to aggregate
    high-street mixed-use and of fice into segments.
    Consequently, the Group is considered to have t wo repor table segments, as follows:
    ¡ High-street mixed-use – acquires, develops and leases shopping malls and of fice space in these malls;
    ¡ Of fice – acquires, develops and leases of fices.
    NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS COnTinueD
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    Segments
    Year ended 31 December Restated 2016* High-street
    mixed-use
    properties € ‘000 Of fice
    properties € ‘000 Unallocated
    € ‘000 Consolidation
    eliminations € ‘000 To t a l
    € ‘000
    Revenue 17,172 16 ,72 9 – – 3 3 ,9 01
    Operating expenses (5,982)(4,823) – – (10,8 05)
    Segment NOI 11,19 0 11,906 – – 23,096
    Asset management expense (252)(1,78 0 ) – – (2,032)
    Other administrative expenses (1,13 3 )(1, 2 3 6) (101) – (2,470)
    Fair value movement 15,96 6 5 , 4 41 – – 21,407
    Other expenses (457)(267) (7)– ( 731)
    Other income 710 183 – – 893
    Foreign exchange losses ( 5 , 817 )(6,095) 891 (649)( 11, 6 7 0 )
    Finance costs (excl. foreign exchange losses) (4,492)(5, 8 91)(22,606) 21,984 ( 11, 0 0 5 )
    Finance income 76 52 45,195 (4 4,9 01) 422
    Segment results 15,791 2 , 313 23,372 (23,566) 1 7, 9 1 0
    Profit/(loss) before tax 15,791 2 , 313 23,372 (23,566) 1 7, 9 1 0
    * for details of the changes in presentation of prior year data please refer to Note 34.
    Geographical information
    Rental income
    City of Investment Property location
     
    2 0 17
    € ‘000
    2 016
    € ‘000
    Gdansk 106–
    Katowice 4 ,1113,069
    Krakow 4,6894,075
    Lodz 5,2265,239
    Warsaw 10,0543 , 74 3
    Wroclaw 8,0927, 9 1 9
    To t a l 32,27824,0 45
    Carrying amount of investment property (including under construction):
     
    City of Investment Property location 2 0 17
    € ‘000 2 016
    € ‘000
    Gdansk 56,350–
    Katowice 130,05056,020
    Krakow 70,66064,830
    Lodz 71, 2 7069,650
    Warsaw 170 , 76 0142,970
    Wroclaw 181,04013 6 ,9 10
    To t a l 6 8 0 ,13 0470,38 0
    30. Reporting by segments continued
    Segments
    As at 31 December Restated 2016* High-street mixed-use
    properties € ‘000 Of fice
    properties € ‘000 Unallocated
    € ‘000 Consolidation
    eliminations € ‘000 To t a l
    € ‘000
    Segments non-current assets including: –
    Investment property 2 81, 49 018 8, 89 0 ––470,38 0
    Investment in subsidiaries ––51, 873 ( 51, 873 ) –
    Long-term loans 5584737,1 3 6 ( 7, 3 7 7 ) 790
    Deferred tax assets 3,8943,389 355367, 6 74
    Other non-current assets 1,15 01, 410 ––2,560
    2 8 7, 0 9 2194,16 2 5 9, 3 6 4( 5 9, 2 14 ) 4 81, 4 0 4
    Segments current assets including:
    Short-term loans 22,775––(22,775) –
    Other current assets 12,8917, 4 2 45 6 , 215 ( 5 6 ,112 ) 2 0, 418
    35,6667, 4 2 45 6 , 215 ( 78,887) 2 0, 418
    Total assets 322,7582 01, 5 8 6 115 , 5 7 9(13 8 ,10 1) 5 01, 8 2 2
    Segments non-current liabilities including:
    Bank loans 142,01311 0 , 5 2 2 ––252,535
    Other borrowings 50,29852,05942,93 9 ( 7, 3 7 7 )1 3 7, 9 1 9
    Deferred tax liability 8,3257,333 ––15, 6 5 8
    Guarantees retained from contractors 185172 ––357
    Deposits from tenants 1, 0 111,9 8 0 ––2,991
    2 01, 8 3 2172 , 0 6 6 42,93 9( 7, 3 7 7 )409,460
    Segments current liabilities including:
    Bank loans 43,3215,729 ––4 9, 0 5 0
    Other borrowings ––16 –16
    Guarantees retained from contractors 12 76––13 3
    Deposits from tenants 23510 8 ––343
    Other current liabilities 4,2032 ,141 309( 70)6,583
    4 7, 8 8 67, 9 8 4 325( 70)5 6 ,12 5
    Total liabilities 24 9, 71818 0,0 5 0 43,264( 7, 4 4 7 )465,585
    * for details of the changes in presentation of prior year data please refer to Note 34.
    Segments
    Year ended 31 December 2017 High-street
    mixed-use
    properties € ‘000 Of fice
    properties € ‘000 Unallocated
    € ‘000 Consolidation
    eliminations € ‘000 To t a l
    € ‘000
    Revenue 2 5 , 742 20,063 – – 45,805
    Operating expenses ( 8,771)(5,304) ––(14,075)
    Segment NOI
    Asset management income –
    – 1, 313 (1, 313 ) –
    Asset management expense ( 742 )(999) (10 4)1, 313 (532)
    Other administrative expenses (1, 4 41)(1, 4 3 3 ) (4 , 612 ) 197 ( 7, 2 8 9 )
    Fair value movement ( 2 ,175 )2,239 – 3 ,13 5 3 ,19 9
    Other expenses (386)(323) (12 ) – ( 721)
    Other income 202 82 – – 284
    Foreign exchange gains 12, 8 5 4 14,72 8 (3,436) 486 24,632
    Finance costs (8,360)( 7, 9 4 5 )(1,060) 7, 8 0 6 ( 9, 5 5 9 )
    Finance income (excl. foreign exchange gains) 90 35 8 445 (7 723) 8 47
    Segment results 17, 0 13 2 1,14 3 534 3,9 01 42,591
    Gain on sale of subsidiar y – – ( 3 61) 3 61 –
    Profit/(loss) before tax 17, 0 13 2 1,14 3 17 3 4,262 42,591
    NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS COnTinueD
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    Entity  
    Nature of transactions
    Consolidated Statment
    of Profit or Loss Consolidated Statment
    of Financial Position
    Income/(expense) Amounts owing (to)/from 2 0 17
    € ‘000 2 016
    € ‘000 2 0 17
    € ‘000 2 016
    € ‘000
    Apenon Sp. z o.o.* Loans granted 432 –558
    Grif fin Topco II S.á r.l. * Loans granted 115–232
    15 37 –790
    GT II FIZ Ak t y wów Niepublicznych* Loan received –4 –1, 6 0 8
    Grif fin Topco II S.á r.l. * Loan received 1953 ,176 –86,653
    Grif fin Topco III S.á r.l. * Loan received 161, 6 01 –19, 72 1
    Grif fin Finance II Sp. z o.o.* Loan received 161, 0 2 9 –8,693
    Grif fin Finance III Sp. z o.o.* Loan received 891,949 –21, 2 6 0
    Globalwor th Finance Guernsey Limited Loan received 297–16 5 , 413 –
    613 7, 7 5 916 5 , 413 1 3 7, 9 3 5
    *from 6 December 2017, the date of the Group acquisition by the Globalwor th Group, Entities ceased to be related par ties to the GPRE Group.
    Expenses relating to key management personel are presented below:
    Amounts in €‘0 0 0 Base Salar y Short Term
    Incentives Dividends Other
    benefits To t a l
    emoluments
    Małgorzata Turek 67–––67
    Rafał Pomorski 7570 ––14 5
    Dorota Wysokińska-Kuzdra 80–––80
    Przemysław Kr ych 17–––17
    Maciej Dyjas 22–––22
    Nebil Senman 22–––22
    Ioanis Papalekas 1–––1
    Dimitris Raptis 1–––1
    Andreas Segal 18–––18
    Marcus M.L.J. Van Campen 18–––18
    Thomas Martinus De Witte 22–––22
    Karim Khairallah 16–––16
    Claudia Pendred 6–––6
    East Management Slovakia s.r.o. as a related party company
    On 2 Oc tober 2017 Grif fin Premium RE. N.V. and East Management Slovakia s.r.o. entered into a consulting ser vices agreement
    regarding provision to the Company of consulting and advisor y ser vices in connec tion with the ongoing business of the Company.
    In accordance with the provisions of the agreement East Management Slovakia s.r.o. has engaged Lof thouse Limited (whose
    ultimate legal and beneficial owner is Mr Maciej Dyjas) and Silma Real Estate Nebil Senman (whose ultimate legal and beneficial
    owner is Nebil Senman) to provide some of the abovementioned ser vices as a subcontrac tor. The Company treats East
    Managements Slovakia s.r.o. as a related par t y due to the fac t that Maciej Dyjas and Nebil Senman being Non-Executive Direc tors
    rendered consulting ser vices to this company. Total fee payable to East Management Slovakia s.r.o. for the ser vices rendered in 2017
    is EUR 1,50 0 thousand.
    32. Changes in accounting policies applicable for 2017 Financial Statements The Group applied all standards and amendments, which are ef fec tive for annual periods beginning on or af ter 1 Januar y 2017.
    The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet ef fec tive.
    ¡ Amendments to IAS 12 Recognition of Deferred Tax Assets for Unrealised Losses
    The changes clarif y issues related to deduc tible temporar y dif ferences associated with debt instruments measured at fair value,
    estimation of probable future taxable profits and assessment of whether taxable profits will be available against which the
    deduc tible temporar y dif ferences can be utilised. The changes are applied retrospec tively.
    ¡ Amendments to IAS 7 Disclosure Initiative
    The changes require the entit y to disclose information that enable users of financial statements to evaluate changes in liabilities
    arising from financing activities. Entities need not provide comparative information when they first apply the amendments.
    The nature and the ef fec t of the amendments that are of relevance to a real estate investor are disclosed below. Although these
    amendments were applied for the first time in 2017, they did not impac t the annual Consolidated Financial Statements of the Group.
    31. Related party disclosures Sales and purchases from related par ties are concluded at arm’s length conditions. The entit y monitors the completeness of the
    identified related par ties on a regular basis during the process of transac tions recignition. Additionally a list of the related par ties is
    confirmed by the Executive and Non-Executive Direc tors.
    Terms and conditions of transac tions with related parties
    Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. For the years ended
    31 December 2017 and 2016, the Group has not recorded any impairment of receivables relating to amounts owed by related par ties.
    This assessment is under taken each financial year through examining the financial position of the related par t y and the market in
    which the related par t y operates.
    As at 31 December
    Receivables to related parties 2 0 17
    € ‘000 2 016
    € ‘000
    Grif fin Advisors Sp. z o.o.* – 222
    Blue Gas N’R’G Sp. z o.o.* – 24
    E-Toto Zakłady Bukmacherskie Sp. z o.o.* – 11
    Fundacja Edukacyjna Jana Karskiego* – 9
    –266
    As at 31 December
    Payables to related parties 2 0 17
    € ‘000 2 016
    € ‘000
    Grif fin Advisors Sp. z o.o.* – 2
    Grif fin Finance II Sp. z o.o.* – 1
    Grif fin Real Estate Sp. z o.o.* – 13
    East Management Slovakia s.r.o. 1, 5 0 0–
    1, 5 0 016
    Year ended 31 December
    Sales of ser vices 2 0 17
    € ‘000 2 016
    € ‘000
    Fundacja Edukacyjna Jana Karskiego* 19 31
    Blue Gas N’R’G Sp. z o.o.* 18 35
    Blue Gas N’R’G Holding Sp. z o.o.* –25
    E-Toto Zakłady Bukmacherskie Sp. z o.o.* 35 23
    Cit y Space – SPV 1 sp. z o.o.* 15 –
    Grif fin Topco II S.à r.l.* 6,230–
    Grif fin Topco III S.à r.l.* 3 , 0 13 –
    MultiMedia Polska S.A.* 9 –
    9. 3 3 9 114
    Year ended 31 December
    Costs 2 0 17
    € ‘000 2 016
    € ‘000
    Grif fin Advisors Sp. z o.o.* 78 –
    Apenon Sp. z o.o.* 29 –
    Grif fin Real Estate Sp. z o.o.* 525 2,032
    AMV Consulting* – 11 0
    Grif fin Finance III Sp. z o.o.* 3 –
    MultiMedia Polska S.A.* 2 –
    Proser vice Agent Transferow y Sp. z o.o.* 1–
    Echo Investment S.A.* 14 3–
    EPP PROPERT Y MANAGEMENT * 241 –
    Ventr y Investments Spółka z ograniczoną odpowiedzialnością Sp. k.* 3–
    Grif fin Finance II Sp. z o.o.* 2 8
    1,02 7 2 ,15 0
    *from 6 December 2017, the date of the Group acquisition by the Globalwor th Group, Entities ceased to be related par ties to the GPRE Group.
    NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS COnTinueD
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    As of December 31, 2017, the Group has analyzed impac t of implementation of IFRS 9 on the accounting principles applied by the
    Group with respec t to the Group’s operations or its financial results.
    (a) Classification and measurement
    The Group has per formed an impac t assessment of IFRS 9 implementation on the presentation of its financial instruments af ter
    1 Januar y 2018 and concluded, that it will ef fec t in changing the accounting for the ROFO bonds. Presented as assets available for
    sale and measured at fair value through other comprehensive income as of December 31, 2017, ROFO bonds will be valued at fair
    value through profit or loss under IFRS 9, which may increase volatilit y in recorded profit or loss. Dual business model applied
    towards ROFO bonds as well as developer profit margin embedded will not allow the entit y to sustain present presentation of the
    bonds, as they fail IFRS 9 SPPI test. The impac t as of 1 Januar y 2018 will be nil as the instruments was and will be valued to fair value.
    The Group considers that IFRS 9 regulations will not af fec t presentation of neither West Link Bonds nor interest-bearing borrowings
    and other financial instruments.
    (b) Impairment
    IFRS 9 requires the Group to record expec ted credit losses on all of its debt securities, loans and trade receivables, either on a
    12-month or lifetime basis. The Group does not expec t any significant impac t of the IFRS 9 on entit y's impairment – there should be
    no significant change in amount of the impairments and impac t as of 1 Januar y 2018 will be immaterial for the Group.
    (c) Hedge accounting
    IFRS 9 does not change the general principles of how an entit y accounts for ef fec tive hedges so the Group does not expec t that
    applying the hedging requirements of IFRS 9 will have any significant impac t on the financial statements.
    34. Changes in presentation of prior year data Due to becoming a par t of the Globalwor th Group, GPRE Group adjusted the presentation of current and prior year Consolidated
    Financial Statements to the Globalwor th’s policy.
    The following changes have been introduced:
    Consolidated Statement of Financial Position
    Adjustments
    As at 31 December 2016 Approved
    € ‘000 1 2 3 4 Amended
    € ‘000
    ASSETS
    ASSETS
    Non-current assets Non-current assets
    Completed investment property 470,38 0 470,38 0 Investment property
    *
    Investment property under
    construction –
    Long-term loans 790 790 Long-term loans
    Other receivables 10 10 Other receivables
    Long-term restricted cash 2,406 14 4 2,550 Long-term restricted cash
    Deferred tax assets 7, 6 74 7, 6 74 Deferred tax assets
    4 81, 2 6 0 14 4 – – – 4 81, 4 0 4
    Current assets Current assets
    Rent and other receivables 3 , 813 3 , 813 Trade and other
    receivables
    Income tax receivable 32 32 Income tax receivable
    Restricted cash 6,707 (6,707)
    Cash and shor t-term deposits 10,010 6,563 16 , 573 Cash and cash
    equivalents
    20,562 (14 4) – – – 2 0, 418
    Total assets 5 01, 8 2 2 – – – – 5 01, 8 2 2 Total assets
    33. New standards and announcements effective after 1 January 2 018 New standards and announcements after 1 January 2018:
    ¡ IFRS 9 Financial Instruments (issued on 24 July 2014) – ef fec tive for financial years beginning on or af ter 1 Januar y 2018;
    ¡ IFRS 14 Regulator y Deferral Accounts (issued on 30 Januar y 2014) – The European Commission has decided not to launch the
    endorsement process of this interim standard and to wait for the final standard – not yet endorsed by EU at the date of approval of these
    financial statements – ef fec tive for financial years beginning on or af ter 1 Januar y 2016;
    ¡ IFRS 15 Revenue from Contrac ts with Customers (issued on 28 May 2014), including amendments to IFRS 15 Ef fec tive date of IFRS 15
    (issued on 11 September 2015) - ef fec tive for financial years beginning on or af ter 1 Januar y 2018;
    ¡ Amendments to IFRS 10 and IAS 28 Sale or Contribution of Assets Bet ween an Investor and its Associate or Joint Venture (issued on
    11 September 2014) – the endorsement process of these Amendments has been postponed by EU – the ef fec tive date was deferred
    indefinitely by IASB;
    ¡ IFRS 16 Leases (issued on 13 Januar y 2016) – ef fec tive for financial years beginning on or af ter 1 Januar y 2019;
    ¡ Amendments to IFRS 4 Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contrac ts (issued on 12 September 2016) – ef fec tive for
    financial years beginning on or af ter 1 Januar y 2018;
    ¡ Clarifications to IFRS 15 Revenue from Contrac ts with Customers (issued on 12 April 2016) – ef fec tive for financial years beginning on or
    af ter 1 Januar y 2018;
    ¡ Amendments to IFRS 2 Classification and Measurement of Share-based Payment Transac tions (issued on 20 June 2016) – not yet endorsed
    by EU at the date of approval of these financial statements – ef fec tive for financial years beginning on or af ter 1 Januar y 2018;
    ¡ Amendments to IAS 28 Investments in Associates and Joint Ventures which are par t of Annual Improvements to IFRS Standards 2014-2016
    Cycle (issued on 8 December 2016) – ef fec tive for financial years beginning on or af ter 1 Januar y 2018;
    ¡ Amendments to IFRS 1 First-time Adoption of International Financial Repor ting Standards which are par t of Annual Improvements to IFRS
    Standards 2014-2016 Cycle (issued on 8 December 2016) – ef fec tive for financial years beginning on or af ter 1 Januar y 2018;
    ¡ IFRIC Interpretation 22 Foreign Currency Transac tions and Advance Consideration (issued on 8 December 2016) – not yet endorsed by EU
    at the date of approval of these financial statements – ef fec tive for financial years beginning on or af ter 1 Januar y 2018;
    ¡ Amendments to IAS 40: Transfers of Investment Proper t y (issued on 8 December 2016) – not yet endorsed by EU at the date of approval of
    these financial statements – ef fec tive for financial years beginning on or af ter 1 Januar y 2018;
    ¡ IFRS 17 Insurance Contrac ts (issued on 18 May 2017) – not yet endorsed by EU at the date of approval of these financial statements -
    ef fec tive for financial years beginning on or af ter 1 Januar y 2021;
    ¡ IFRIC 23 Uncer taint y over Income Tax Treatments (issued on 7 June 2017) - not yet endorsed by EU at the date of approval of these financial
    statements – ef fec tive for financial years beginning on or af ter 1 Januar y 2019;
    ¡ Amendments to IFRS 9: Prepayment Features with Negative Compensation (issued on 12 Oc tober 2017 ) – not yet endorsed by EU at the
    date of approval of these financial statements – ef fec tive for financial years beginning on or af ter 1 Januar y 2019;
    ¡ Amendments to IAS 28: Long-term Interests in Associates and Joint Ventures (issued on 12 Oc tober 2017) - not yet endorsed by EU at the
    date of approval of these financial statements – ef fec tive for financial years beginning on or af ter 1 Januar y 2019;
    ¡ Annual Improvements to IFRS Standards 2015 -2017 Cycle (issued on 12 December 2017) – not yet endorsed by EU at the date of approval
    of these financial statements – ef fec tive for financial years beginning on or af ter 1 Januar y 2019;
    ¡ Amendments to IAS 19: Plan Amendment, Cur tailment or Set tlement (issued on 7 Februar y 2018) – not yet endorsed by EU at the date of
    approval of these financial statements – ef fec tive for financial years beginning on or af ter 1 Januar y 2019.
    The ef fec tive dates are dates provided by the International Accounting Standards Board. Ef fec tive dates in the European Union may dif fer
    from the ef fec tive dates provided in standards and are published when the standards are endorsed by the European Union.
    The Group has analysed the potential impac t of the amendments of following standards, ef fec tive from 1 Januar y 2018 on the Group’s
    Consolidated Financial Statements:
    ¡ IFRS 15 Revenue from Contrac ts with Customers (issued on 28 May 2014), including amendments to IFRS 15 Ef fec tive date of IFRS 15
    (issued on 11 September 2015) – ef fec tive for financial years beginning on or af ter 1 Januar y 2018.
    The core principle of IFRS 15 is that an entit y will recognise revenue to depic t the transfer of promised goods or ser vices to customers in an
    amount that reflec ts the consideration to which the entit y expec ts to be entitled in exchange for those goods or ser vices.
    The standard provides a single, principles based five-step model to be applied to all contrac ts with customers.
    1. Identif y the contrac t with a customer
    2. Identif y all the individual per formance obligations within the contrac t
    3. Determine the transaction price
    4. Allocate the price to the per formance obligations
    5. Recognise revenue as the per formance obligations are fulfilled
    Relative to previous accounting guidance, IFRS 15 may cause revenue to be recognised earlier in some cases, but later in others.
    The main implementation of the IFRS 15 will not af fec t presentation of financial revenue in material way.
    ¡ IFRS 9 Financial Instruments (issued on 24 July 2014) – ef fec tive for financial years beginning on or af ter 1 Januar y 2018;
    NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS COnTinueD
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    Consolidated Statement of Profit or Loss
    Adjustments
    Year ended 31 December 2016 Approved
    € ‘000 5 6 7 8 9 Amended
    € ‘000
    Rental income
    23,688 9, 8 5 6 357 3 3 ,9 01 Revenue
    Service charge and marketing income 9, 8 5 6 ( 9, 8 5 6 )
    Property operating expenses ( 11,13 5 ) 330 (10,8 05) Operating expenses
    Net rental income 22,409 – 357 – 330 – 23,096 Net operating income
    Administrative expenses (4 , 013 ) 30 ( 519 ) (4,502)Administrative
    expenses
    Valuation gain/(loss) from investment property 21,737 (330) 21,407 Fair value movement
    (357) ( 3 74 ) ( 731)Other expenses
    893 893 Other income
    1 7, 7 2 4 – (357) 30 (330) – 1 7, 0 6 7
    Operating profit 4 0 ,13 3 – – 30 – – 4 0 ,16 3 Profit/(loss) before net
    financing costs
    Net financing costs
    Finance cost (22,645) (30) (22,675) – Finance cost
    Finance income 422 422 – Finance income
    (22,223)– – (30) – – (22,253)
    Profit/(loss) before tax 1 7, 9 1 0 – – – – – 1 7, 9 1 0 Profit/(loss) before tax
    Income tax (expenses)/ gain (5,672) (5,672) Income tax (expenses)/
    gain
    Profit/(loss) for the year 12,238 – – – – – 12,238 Profit/(loss) for the year
    5) Combining "Rental income" and "Service charge and marketing income" into one position i.e. "Revenue";
    6) Changing the presentation of bad debt allowance from "Rental income" (as a diminishing position) to "Other expenses";
    7) Changing the presentation of bank charges from "Administrative expenses" to "Finance cost";
    8) Changing the presentation of agent fees from "Property operating expenses" to "Fair value movement";
    9) Transfer of other income and other expenses from "Administrative expenses" to "Other income" and "Other expenses" line;
    34. Changes in presentation of prior year data continued
    Adjustments
    As at 31 December 2016 Approved
    € ‘000 1
    2
    3
    4
    Amended
    € ‘000
    EQUITY AND LIABILITIES
    EQUITY AND LIABILITIES
    Total equity
    Issued share capital 45 45 Issued share capital
    Foreign currency translation reserve (5,142) (5,142) Foreign currency
    translation reserve
    Net assets at tributable to shareholders 41, 3 3 4 41, 3 3 4 Net assets at tributable to
    shareholders
    Equit y at tributable to equit y holders of the parent 36,237 – – – – 36,237 Equit y at tributable to
    equit y holders of the
    parent
    Non-current liabilities Non-current liabilities
    Bank loans 252,535 252,535 Bank loans
    Other borrowings 1 3 7, 9 1 9 1 3 7, 9 1 9 Other borrowings
    Deferred tax liability 15, 6 5 8 15, 6 5 8 Deferred tax liability
    357 357 Guarantees retained from
    contractors
    Deposits from tenants and other deposits 3,348 (357) 2,991 Deposits from tenants
    409,460 – – – – 409,460
    Current liabilities Current liabilities
    Bank loans 49,050 49,050 Bank loans
    Other borrowings 16 16 Other borrowings
    13 3 13 3 Guarantees retained from
    contractors
    Trade and other payables 3,260 3,323 6,583 Trade and other payables
    Capex payables 3,323 (3,323)
    Deposits from tenants and other deposits 476 (13 3 ) 343 Deposits from tenants
    5 6 ,12 5 – – – – 5 6 ,12 5
    Total equity and liabilities 5 01, 8 2 2 – – – – 5 01, 8 2 2 Total equity and liabilities
    1) Combining "Cash and shor t-term deposits" and "Shor t-term restric ted cash" into one position i.e. "Cash and cash equivalents", reclassification of bank
    accounts according to the new reporting categories;
    2) Separating the guarantees retained from contrac tors from deposits from tenants (previously all deposits was presented under the same line "Deposits from
    tenants and other deposits");
    3) Transfer of "Capex payables" from the separate line into the aggregated position of "Trade and other payables";
    4) Combining "Completed investment property" and "Investment property under construction" into one position i.e. "Investment property". As at 31 December
    2016 there were no investments under construction;
    NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS COnTinueD
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    35. Contingencies and commitments As at 31 December 2017 the Group had mor tgages on investment proper ties in the amount of EUR 596,630. As at 31 December 2016
    the Group had mor tgages on investment proper ties in the amount of EUR 728,170.
    In addition to mor tgages on investment proper ties, the Group had in 2016 and 2017 the following contingent liabilities and commitments:
    1. Granted by the borrowers towards the financing banks:
    ¡ Financial and registered pledges over bank accounts of the borrowers;
    ¡ Registered and civil pledges over the shares of the borrowers being limited liabilit y par tnerships;
    ¡ Registered and civil pledges over the general and limited par tner’s rights in the borrowers being limited par tnerships;
    ¡ Registered and civil pledges over the shares of selec ted limited par tners and general par tners holding rights in the borrowers
    being limited partnerships;
    ¡ Registered pledges over collec tion of movable assets and proper t y rights of the borrowers;
    ¡ Power of at torney to bank accounts of the borrowers;
    ¡ Securit y assignment in relation to rights under existing and future contrac ts including, but not limited to insurance agreements,
    lease agreements, lease guarantees, agreement with general contrac tor and other relevant contrac ts;
    ¡ Securit y assignment in relation to rights under subordinated debt;
    ¡ Subordination of the existing intercompany debts;
    ¡ Blank promissory notes with promissory note declarations;
    ¡ Statements on voluntary submission to execution.
    2. Established towards other third par ties:
    ¡ Amended agreement regarding terms of one of the investment implementation describing contrac tual penalt y – payment in case
    of disposal of the investment proper t y without transferring commitments resulting from Agreement, including the payment of
    compensation, to new entity;
    ¡ Amended agreement regarding terms of one of the investment implementation, describing compensation resulting from
    permission to implement the investment and establishment of the right of way – payment af ter entering the right of way into the
    land and mortgage register;
    ¡ Agreement – notarial deed, resulting in obligation of contrac tual penalt y payment for a breach of agreement in terms of
    information obligation, complaints withdrawal etc. – payment in case of failure to fulfil the commitments resulting from agreement
    and receiving request for payment;
    ¡ Amended agreement requiring compensation payment resulting from establishment of the right of way and permission to
    implement the one of investments;
    ¡ Amended agreement, which results in obligation of covering par t of land lot renovation costs on condition that the right of way is
    established and invoices are provided by The Building Works and Proper t y Agency;
    ¡ Appendix to Agreement concerning one of the investments design preparation – single premium payment after completed investment, if
    the design solutions used by the Architec t with their final optimization allow the Investor to achieve investment budgetar y objec tive;
    ¡ Cost overruns guarantee agreement;
    ¡ Transmission service easement for investment property regarding transformer station.
    36. Events after the reporting period 1. Extension of the bank loan
    On 8 Februar y 2018 Lamantia Sp. z o.o. Sp. k. and Dolfia Sp. z o.o. (as borrowers) and Bakalion Sp. z o.o. (as guarantor) agreed with
    Aareal Bank AG to amend the Facilit y Agreement (Amendment no. 5 to the Facilit y Agreement Dated Februar y 12,2013) and
    extend the final maturit y date until 13 June 2018.
    2. Appointments and resignation of Direc tors
    ¡ Mr. Maciej Dyjas and Mr. Nebil Senman voluntarily resigned from the func tions of non-executive direc tors of the Company with
    ef fec t from 27 Februar y 2018;
    ¡ At the same date the Board resolved to nominate Mr. George Muchanya and Mr. Norber t Sasse for appointment as non-executive
    direc tor of the Company to be approved by the general meeting of shareholders.
    3. New composition of Board Commit tees
    ¡ Following the resignations of Mr. Dyjas and Mr. Senman as well as nominations of Mr. Sasse and Mr. Muchanya, the composition of
    the Board Commit tees will be as follows (subjec t to the approval of nominees by general meeting of shareholders;
    ¡ Audit Commit tee: Mr. Andreas Segal (Chairman), Mr. Thomas Mar tinus de Wit te and Mr. George Muchanya;
    ¡ Investment Commit tee: Mr. Ioannis Papalekas (Chairman), Mr. Dimitris Raptis and Mr. Norber t Sasse;
    ¡ Nomination and Remuneration Commit tee: Mr. Dimitris Raptis (Chairman), Mr. Marcus M.L.J. van Campen and Ms. Claudia Pendred.
    4. Additional loan for future acquisitions
    On 27 Februar y 2018 the Board of Direc tors of Grif fin Premium RE.. N.V. resolved that the Company as borrower will sign
    amendment to the loan agreement with subsidiar y of Globalwor th Asset Managers S.R.L., i.e. Globalwor th Finance Guernsey
    Limited and extend the availabilit y period for additional loan from t wo to three months from the date of the loan agreement.
    34. Changes in presentation of prior year data continued
    Adjustments
    Year ended 31 December 2016 Approved
    € ‘000 78 10 Amended
    € ‘000
    Profit/(loss) before tax 1 7, 9 1 0 – 1 7, 9 1 0 Profit/(loss) before tax
    Adjustments to reconcile profit before tax to net cash flows Adjustments to reconcile profit before
    tax to net cash flows
    Valuation (gain)/loss on investment proper t y and
    impairment ( 21,737 ) 330 422( 21, 4 07 ) Fair value movement on investment
    property
    Finance income (422)
    Finance expense 22,645 30 (422) 22,253 Net financing costs
    18, 396 30 330 18,75 6 Operating profit before changes in
    working capital
    Working capital adjustments
    Decrease/(increase) in rent and other receivables (14) (14)Decrease/(increase) in trade and other
    receivables
    (Decrease)/increase in trade and other payables 45 45 (Decrease)/increase in trade and other
    payables
    Movements in deposits from tenants and other deposits (806) (806)Movements in deposits from tenants and
    guarantees retained from contractors
    VAT settlements 2,086 2,086 VAT settlements
    Other Items (535) (330) (865)Other items
    Income tax paid ( 2 11) ( 2 11)Income tax paid
    Net cash flow from operating activities 18 ,9 61 30 – – 18,9 91 Cash flows from operating activities
    Investing activities Investing activities
    Capital expenditure on investment property (14, 49 9 ) (14, 49 9 ) Capital expenditure on investment
    property
    Expenditure on investment property under construction (24,96 6) (24,96 6) Expenditure on investment property
    under construction
    Interest received 17 17 Interest received
    Net cash flow from investing activities ( 3 9, 4 4 8 ) – – ( 3 9, 4 4 8 ) Cash flows from investing activities
    Financing activities Financing activities
    Bank loan proceeds 13 8 ,9 9 0 13 8 ,9 9 0 Bank loan proceeds
    Bank loan repayments (87,996) (87,998) Bank Repayments
    Proceeds from borrowings 4, 316 (4, 316) Proceeds from borrowings
    Repayment of borrowings (24, 281) (24, 281) Repayment of borrowings
    (30) (30)Payment of other financing costs
    Interest paid (8,498) (8,498) Interest paid
    Change in restric ted cash (1,388) (1,388) Change in restric ted cash
    Net cash flow from financing activities 21,143 (30) –21,113 Cash flows from financing activities
    Net increase in cash and cash equivalents 656 – 656Net increase/(decrease) in cash and
    cash equivalents
    Cash and cash equivalents at the beginning of the period 9,9 61 9,9 61 Cash and cash equivalents at the
    beginning of the period
    Translation differences (607) (607)Translation differences
    Cash and cash equivalents at the end of the period 10,010 – 10,010 Cash and cash equivalents at the end
    of the period
    10) Combining "Finance income" and "Finance expenses" into one position i.e. "Net financing costs".
    NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS COnTinueD
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    Notes 31/12/17 31/12/16
    Assets
    Financial fixed assets 4 0 9, 0 10–
    Investment in subsidiaries 24 0 9, 0 10 –
    Related party loans receivable 3––
    Current assets 45 ,14 2 45
    Short-term receivables 29–
    Cash at banks & cash equivalents 5 ,11345
    Total Assets 414 ,15 245
    Liabilities
    Current liabilities 516 9,13 8 35
    Conver tible shor t term loan facilit y 16 5 , 413–
    Trade and other payables 3,72535
    Total assets less liabilities 2 4 5 , 0 1410
    Shareholders’ equity 6
    Issued and paid-up share capital 156,13345
    Share premium 44,026–
    Legal Reser ve for restric tion of distribution of results of subsidiaries 9,16 0–
    Translation reserve for results from subsidiaries with foreign reporting currencies 8,395–
    Translation reserve resulting from translation of functional currency to presentation currency (327)
    Retained earnings / (accumulated deficit) 27,627(35)
    Total shareholders’ equity 2 4 5 , 0 1410
    COMPANY BALANCE SHEET AS AT 31 DECEMBER 2017
    (AfTer P rOPOS eD APP rOP riAT iO n O f ne T reSu LT A nD e XPre SSeD in eur THO uSA nDS)
    36. Events after the reporting period continued The loan in the amount of EUR 55 million shall be used for fur ther acquisitions. The loan will bear fixed interest from the date of its
    utilization at market rate. The loan agreement provides for a list of under takings, representations and events of default standard for
    financings of such t ype. The loan agreement also provides that the lender shall have an option to conver t the loan (including interest
    and related fees) into shares of the Company to be issued by Grif fin Premium RE.. N.V., subjec t to the approval of the general
    meeting of the Company.
    5. Change of the Company's business name
    The Board of Direc tors proposes to the General Meeting of Shareholders change of the Company’s name from Grif fin Premium
    RE.. N.V. to Globalwor th Poland Real Estate N.V.
    6. Private placement of EUR 40 0,0 0 0,0 0 0
    On 27 Februar y 2018 the Board of Direc tors of Grif fin Premium RE.. N.V. decided to propose to the general meeting of the
    Company the approval of a private placement of EUR 40 0,0 0 0,0 0 0 (with an over-allotment option in the case of significant investor
    demand) at an expec ted pricing at or around prevailing EPRA NAV per share (a net asset value per share calculated in accordance
    with European Public Real Estate Association methodology) of fered to selec ted investors, including, among others, the major
    shareholders of the Company and the major shareholders of Globalwor th Real Estate Investments Limited.
    7. Change of the Company’s func tional currency
    From 1 Januar y 2018 the Group is changing the func tional currency from PLN to EUR, due to the following reasons:
    ¡ The Group plans to refinance par t of its por tfolio including recently acquired proper ties. All new loans will be denominated in EUR;
    ¡ Previously, the Group had loans denominated both in EUR and PLN, while af ter transfer of all receivables to GPRE Management
    Sp. z o.o. during 2017, the loans were conver ted to EUR and now the Group has solely loans denominated in EUR;
    ¡ EUR is the currency of real estate business in Europe. Rents are usually denominated in EUR although in Poland albeit determined
    in EUR they are usually invoiced and paid in PLN. Valuations of commercial real estates are prepared in EUR and debt financing is
    also maintained in EUR;
    ¡ All cash flow projec tions are prepared only in EUR and majorit y of planned transac tions will be per formed in EUR.
    NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS COnTinueD
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    Principal activities Grif fin Premium RE.. N.V. (the “Company”) is a public limited liabilit y company ("naamloze vennootschap met beperk te aansprakelijkheid"),
    having its statutor y seat in Amsterdam, and its registered address at Claude Debussylaan 15, 1082 MC Amsterdam, the Netherlands.
    Registered with the Chamber of Commerce with registration number: 67532837.
    The Company was incorporated on 21 December 2016 as Grif fin Premium RE.. B.V. On 23 March 2017 the Company conver ted its legal form.
    Through a deed of conversion & amendment the Company changed from a B.V. ("besloten vennootschap") into a N.V. ("naamloze
    vennootschap"). The principal ac tivit y of the Company is the holding of interests in and financing of Group Companies. As per the beginning
    of the financial year under review the Company was a 67.65% subsidiar y of Grif fin Netherlands II B.V. and a 32.35% subsidiar y of GT
    Netherlands III B.V (together the “Former Shareholders”). The Former Shareholders are Dutch limited liability companies registered at the
    Barbara Strozzilaan 201, 1083 HN Amsterdam, The Netherlands. As per the end of the year, Globalwor th Asset Managers SRL, a Romanian real
    estate corporation listed on the London Stock Exchange (“Globalwor th”), holds 71.66% of the issued share capital of the Company. Please be
    referred to Note 6 of the notes to the Company financial statements for more information on the various changes in the ownership struc ture of
    the Company.
    ReorganisationDuring the period from December 2016 to 3 March 2017, a reorganisation took place where, through a number of steps comprising sales and
    in-kind contributions of shares and loans (the “Reorganisation”), the Company became the holding company for the entities as further
    specified under Note 1.2 to the consolidated financial statements. Specifically, the Reorganisation began with the establishment of the
    Company by the Former Shareholders and proceeded with the contribution of loans and shares to the Company, thereby substantially
    increasing the Company’s shareholders’ equit y. Reference is also made to Note 1.3 of the consolidated financial statements.
    The transaction is performed under common control. All assets are transferred at market value.
    The accounting policy for this Reorganisation in the standalone financial statements differs from the consolidated financial statements. In the
    standalone financial statements this transaction is accounted for applying the carry-over accounting method. In the consolidated financial
    statements this transaction is accounted for applying the pooling-of-interest accounting method.
    NotesIf there is no fur ther explanation provided to the items in the Company’s balance sheet and the Company statement of income, please refer to
    the notes in the consolidated statement of financial position and statement of income.
    Related par t y transac tions bet ween subsidiaries, equit y accounted investees, investments, and with members of the management board of
    the Company (the “Board of Direc tors”) and the Company are conduc ted at an arm’s length basis with terms comparable to transac tions with
    third parties.
    Summary of principal accounting policies Basis of presentation
    The Company financial statements have been prepared in accordance with Par t 9 of Book 2 of the Dutch Civil Code. For set ting the principles
    for the recognition and measurement of assets and liabilities and determination of the result for its Company financial statements, the
    Company makes use of the option provided in sec tion 2:362(8) of the Dutch Civil Code. This means that the principles for the recognition and
    measurement of assets and liabilities and determination of the result are the same as those used in the notes to the consolidated financial
    statements, prepared under IFRS as adopted by the European Union (“IFRS”), unless stated other wise below. Please be referred to Note 1.4 of
    the consolidated financial statements for a description of these accounting policies.
    Participating interests in Group Companies
    Investments in subsidiaries are measured at net asset value. Net asset value is based on the measurement of assets, provisions and
    liabilities and determination of profit based on the principles applied in the consolidated financial statements. Investments with a
    negative net value asset are valued at 0. A provision is made if the company warrants all or par t of the liabilities of the associated
    company concerned, primarily at the expense of the claims against this associated company and, for the rest, under the provisions
    for the amount of the share in the losses of the associated company for the payments expec ted to be made by the company for
    these associated companies. It is not expec ted that the Company will pay such amounts in the foreseeable future.
    Change in accounting policy
    For establishing the principles for the recognition and measurement of assets and liabilities and determination of the result for its Company
    financial statements, the Company makes use of the option provided in Sec tion 362, Par t 9, of Book 2 of the Dutch Civil Code.
    The Company changed its accounting policy by adapting its policy to the policy applied in the consolidated financial statements.
    The previous standalone financial statements (as per December 31, 2016) of the Company were prepared under Dutch GA AP. The
    t wo accounting policies dif fer in terms of measurement and recognition policies. However, as per the end of the previous period
    under review, the Company, under Dutch GA AP, merely accounted for cash, accrued expenses, a foreign currency translation reser ve
    and issued and paid-up share capital the change in accounting policy did not have impac t on the equit y and net income on the
    comparative figures. Since the conversion in accounting principles does not affect these particular accounting items, the
    shareholders' equit y has not been changed retroac tively. During the year under review, the Company acquired various subsidiaries
    which applied IFRS.
    NOTES TO THE COMPANY FINANCIAL STATEMENTS FOR THE YEAR 2017
    (e XP re SSeD in eur THO uSA nDS)
    Notes 2 0 1721/12/16 –
    31/12/16
    Operating income 23–
    Net turnover 723 –
    Operating expenses (3,834)(35)
    Other operating expenses 8(3, 677 ) (35)
    Wages and salaries 9(15 4) –
    Social securit y charges 10(3) –
    Financial income and expenses (1,707 )
    Interest income 116 41 –
    Interest expenses 12(435) –
    Foreign exchange result (1,9 13 )–
    Net result before taxation (5,518)(35)
    Income taxes 13––
    Share in the result of subsidiaries 1442,340 –
    Net result 36,822(35)
    COMPANY PROFIT AND LOSS ACCOUNT FOR THE YEAR 2017
    (e XP re SSeD in eur THO uSA nDS)
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    Corporate income tax expense comprises current and deferred tax. Current tax is the expec ted tax payable on the taxable income for the
    year and any adjustment to tax payable in respec t of previous years. Corporate income tax expense is recognised in profit or loss except to
    the extent that it relates to items recognised direc tly in equit y.
    1. ReorganisationDuring the period from December 2016 to 3 March 2017, a reorganisation took place where, through a number of steps comprising sales and
    in-kind contributions of shares and loans (the ”Reorganisation”), the Company became the holding company for the entities. The values
    brought in plus the amount of funds obtained through an IPO valued EUR 20 0,114 million. At the same event loans issued to IB 14 FIZ amount
    to EUR 136,032 thousands and the investments in entities are contributed to IB 14 FIZ. The transac tion is per formed under common control.
    All assets are transferred at market value. The accounting policy for this Reorganisation in the standalone financial statements dif fers from the
    consolidated financial statements. In the standalone financial statements this transaction is accounted for applying the carry-over accounting
    method. In the consolidated financial statements this transaction is accounted for applying the pooling-of-interest accounting method.
    ¡ Loans toward Entities in amount of EUR 136,032 thousands; (refer to Note 2)
    ¡ Investments in Entities in amount of EUR 35,491 thousands.
    Movements in share capital & share premium related to the period of 1 Januar y 2017 up to 31 December 2017
    Date # SharesShare Capital
    Contributed Share Premium
    contributed To t a l
    Balance at 1
    January 2017 45,000
    45–45
    27/01/2017 1133,873,912 13 3 , 8 74 –13 3 , 8 74
    30/01/2017 2– –35 35
    2 8 / 0 2 / 2 017 312,000 1236,027 36,039
    03/03/2017 41,000 11, 6 0 8 1,609
    13 / 0 4 / 2 017 522,201,267 22,2016,35628,557
    To t a l i n c r e a s e 15 6 , 0 8 8 ,17 915 6 , 0 8 844,0262 0 0 ,114
    Closing Balance 15 6 ,13 3 ,17 915 6 ,13 344,0262 0 0 ,15 9
    NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR 2017
    (e XP re SSeD in eur THO uSA nDS)
    Summary of principal accounting policies continued Accounting policy for change in presentation currency
    Compared to previous year, the Company changed the presentation currency of its financial statements from Polish Zlot y’s (PLN) to
    EURO’s (EUR). The presentation of the comparative figures is changed accordingly from Zlot y’s (PLN) to EURO’s (EUR). The 1 Januar y
    2016 exchange rate of 4.424 has been used for the opening values, the P&L values have been conver ted using the average exchange
    rate of 4.3637, and the 31 December 2016 exchange rates of 4.1709 has been used to conver t the ending values. Dif ferences resulted
    from the change, if any, have been recorded in the translation reser ve.
    Financial instruments
    Financial instruments are initially recognised at fair value, including directly attributable transactions costs. After initial recognition, financial
    instruments are carried at amor tised cost using the ef fec tive interest method unless explained other wise in the notes. Due to the shor t-term
    nature of the financial instruments included in these financial statements, the estimated fair value for these financial instruments approximates
    the book value.
    Other assets and liabilities
    The shor t term receivables and the trade and other payables are stated at fair value at initial recognition and subsequent measured
    at amor tized cost except where a dif ferent basis of valuation has been indicated in the financial statements.
    Share premium reserve
    The share premium concerns the contribution in kind from the issuing of shares in so far as this exceeds the nominal value of the shares (above
    par income). Costs, which are direc tly related to capital raised are charged to share premium reser ve.
    Reserve for restric tion of distribution of results of subsidiaries
    The revaluation reser ve has been formed as a result of gains on investment proper ties owned by the subsidiaries. As the subsidiaries cannot
    distribute these unrealized gains, until these are realized, the Company recorded a legal reser ve.
    Foreign currencies
    The standalone financial statements are presented in EURO’s (EUR). However, since the func tional currency of the Company is Polish Zlot y
    (PLN), assets and liabilities have been translated into the repor ting currency at exchange rates prevailing at the balance sheet date. In
    addition, profit and loss items have been translated into the repor ting currency at the average exchange rate for the year. Any resulting
    exchange dif ferences have been recorded in the foreign currency translation reser ve and the change in amounts from func tional currency into
    presentation currency may not influence the amount of the legal reser ve as originally determined in the func tional currency.
    The exchange rates used in the annual accounts are:
    2 0 17 2 016
    Year-end exchange rate EUR:PLN4 .17 0 94.4240
    Average exchange rate EUR:PLN4.25834.3637
    Change of presentation currency
    Compared to previous year, the Company changed the presentation currency of its financial statements from Polish Zlot y’s (PLN) to EURO’s
    (EUR). The underlying rationale for this change per tains, amongst other reasons, to the following:
    ¡ These standalone financials statements are presented in EUR as the consolidated financial statements of the Company are also presented
    in EUR;
    ¡ Presenting both the consolidated financial statements and the standalone financial statements in EUR will make the financial statements
    more understandable for the users.
    Accounting policies for the income statement General information
    Gains or losses on transac tions are recognised in the year in which they are realised; losses are taken as soon as they are foreseeable.
    Result of participating interests
    The share in the result of par ticipating interests consists of the share of the Company in the result of these par ticipating interests. In so far as
    gains or losses on transac tions involving the transfer of assets and liabilities bet ween the Company and its par ticipating interests or bet ween
    par ticipating interests themselves can be considered unrealised, they have not been recognised.
    Ta x a t i o n
    Corporate income tax is calculated at the applicable rate on the result for the financial year, taking into account calculation according to
    the financial statements and profit calculated for taxation purposes. Temporary differences between the reporting for tax purposes and the
    financial statements are recognised as deferred taxes based on the current tax rate. Deferred tax assets and liabilities are net ted.
    Net deferred tax assets will be included in the balance sheet if ac tual realisation is assumed probable by the Company’s management.
    Temporar y dif ferences bet ween the repor ting for tax purposes and the financial statements are recognised as deferred taxes based on the
    current tax rate. Deferred tax assets and liabilities are net ted, if the requirements for net ting are complied with. Net deferred tax assets will
    be included in the balance sheet if ac tual realisation is assumed probable by the Company’s management.
    NOTES TO THE COMPANY FINANCIAL STATEMENTS FOR THE YEAR 2017 COnTinue D
    (e XP re SSeD in eur THO uSA nDS)
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    Transactions Contributed Assets Fair Market
    Value
    #3 In-kind contribution by the Former Shareholders:
    10 0% of the share capital in Hala Koszyki Sp. z o.o.
    (formerly Hala Koszyki Grayson Investments Sp. z o.o.) 28
    10 0% of the share capital in Hala Koszyki Sp. z o.o. (formely Lenna Investments Sp. z.o.o.) 13 5
    One loan on Dom Handlow y Renoma Sp. z o.o. 10
    One loan Dom Handlow y Renoma Sp. z o.o. Sp.k. 15,454
    One loan on Hala Koszyki Sp. z o.o. (formerly Grayson Investments Sp. z o.o.) 8
    Three loans on Hala Koszyki Sp. z o.o. (formerly Hala Koszyki Grayson Investments Sp. z o.o. Sp.k.) 18,43 8
    One loan on Hala Koszyki Sp. z o.o. (formerly Lenna Investments Sp. z o.o.) 991
    One loan on Lamantia Sp. z o.o. Sp.k. 466
    One loan on Dolfia Sp. z o.o. 233
    One loan on Nordic Park Of fices Sp. z o.o. Sp.k. 2 76
    Subtotal 36,039
    #4 In-kind contribution by the Former Shareholders (Charlie RE Sp. z o.o. bonds) 1,609
    Subtotal 1,609
    #5 IPO transaction:
    The amount consists of the amount raised by the total issue of new shares
    (22,201,267) at the tender of fer price PLN 5.70 (EUR 29,811 thousand) minus direc tly
    at tributable costs of EUR 1,254 thousand. 28,557
    Total Increase in share capital and share premium 2 0 0 ,114
    1. Reorganisation continued
    TransactionsContributed Assets Fair Market
    Value
    #1 In-kind contribution by Former Shareholders
    10 0% of the share capital of Dolfia Sp. z o. o. 1, 0 5 2
    10 0% of the share capital of DH Supersam Katowice Sp. z o.o. 7, 7 6 8
    One loan on December SCSp 33,277
    Three loans on DH Supersam Katowice Sp. z o.o. 15, 0 3 5
    Three loans on Dolfia Sp. z o.o. 2,495
    Two loans on Ebgaron Sp. z o.o. 4 ,19 8
    One loan on Lamantia Sp. z.o.o. 6
    Three loans on Lamantia Sp. z o.o. Sp.k. 3,772
    10 0% of the share capital of Centren Sp. z.o.o. 5,824
    10 0% of the share capital of Bakalion Sp. z.o.o. 13 , 7 74
    10 0% of the share capital with IB 14 FIZ 6 ,9 07
    10 0% of the share capital of Charlie RE Sp. z.o.o. 1
    10 0% of the shares in December RE Sp. z.o.o. 1
    10 0% of the share capital in Akka RE Sp. z.o.o. 1
    One loan on Bakalion Sp. z o.o. 18 ,131
    Two loans on Centren Sp. z o.o. 18 ,175
    Three loans on Nordic Park Of fices Sp. z o.o. Sp.k. 3,448
    Loan on Nordic Park Of fices Sp. z o.o 9
    Subtotal 13 3 , 8 74
    #2 Contribution in cash by the Former Shareholders 35
    Subtotal 35
    NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR 2017 COnTinueD
    (e XP re SSeD in eur THO uSA nDS)
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    3. Related party loans receivable The related par t y loans receivable are comprised as follows:
    Name 2 0 17 2 016
    Balance per 1 Januar y ––
    Contributions from shareholders 13 6 , 0 32–
    FX on restructuring (2,269)
    In-kind contribution to IB14 FIZ Ak t y wów Niepublicznych (13 3 ,76 3 )–
    Closing balance at 31 December ––
    Over the period since Januar y till March 2017 the Former Shareholders contributed the following related par t y loans receivables (the
    “Receivables”) to the Company respectively:
    Loan receivable Principle amount Amortised
    cost Maturity date Interest rate
    Centren Sp. z o. o. 21721731 December 2020 5%
    Centren Sp. z o. o. 1 7, 9 611 7, 9 6131 December 2020 5%
    Bakalion Sp. z o.o. 18 ,13118 ,13131 December 2025 5%
    December SCSp 33,27733,27731 December 2025 5.5%
    DH Supersam Katowice Sp. z o.o. 4 ,1414 ,14130 April 2023 6%
    DH Supersam Katowice Sp. z o.o. 10,29610,29630 April 2020 Wibor 3m
    +1.5% margin
    DH Supersam Katowice Sp. z o.o. 59959930 April 2023 6%
    Dolfia Sp. z o.o. 13 913 915 Februar y 2023 5%
    Dolfia Sp. z o.o. 2,0102,01015 Februar y 2023 6%
    Dolfia Sp. z o.o. 34634620 Februar y 2018 5%
    Ebgaron Sp. z o.o. 3 ,94 63 ,94 65 December 2023 6%
    Ebgaron Sp. z o.o. 25225217 January 2034 5%
    Lamantia Sp. z o.o. Sp.k. 2,3012,3014 Februar y 2023 6%
    Lamantia Sp. z o.o. Sp.k. 1, 3 3 21, 3 3 220 Februar y 2018 5%
    Nordic Park Of fices Sp. z o.o. Sp.k. 1,9591,95923 December 2023 5%
    Nordic Park Of fices Sp. z o.o. Sp.k. 1, 3 8 61, 3 8 627 June 2034 5%
    Nordic Park Of fices Sp. z o.o. Sp.k. 10310331 December 2023 5%
    Dom Handlow y Renoma Sp. z o.o. 101031 December 2020 5%
    Dom Handlow y Renoma Sp. z o.o. Sp.k. 15,45015,45031 December 2020 Wibor 1Y
    +1.5% margin
    Hala Koszyki Sp. z o.o. (formerly Hala Koszyki Grayson Investments Sp. z o.o. Sp.k.) 12, 3 3 812, 3 3 823 May 2022 6%
    Hala Koszyki Sp. z o.o. (formerly Lenna Investments Sp. z o.o.) 9929927 May 2022 6%
    Lamantia Sp. z o.o. Sp.k. 46646631 December 2023 5%
    Dolfia Sp. z o.o. 23323331 December 2023 5%
    Nordic Park Of fices Sp. z o.o. Sp.k. 2 762 7631 December 2023 5%
    Lamantia Sp. z o.o. Sp.k. 13 913 916 January 2033 5%
    Lamantia Sp. z o.o. 6631 December 2020 5%
    Nordic Park Of fices Sp. z o.o. 9931 December 2020 5%
    Hala Koszyki Sp. z o.o. (formerly Hala Koszyki Grayson Investments Sp. z o.o. Sp.k.) 3,8993,89931 December 2019 5%
    Hala Koszyki Sp. z o.o. (formerly Hala Koszyki Grayson Investments Sp. z o.o. Sp.k.). 2,2022,20231 December 2019 5%
    Hala Koszyki Sp. z o.o. (formerly Grayson Investments Sp. z o.o.) 887 May 2022 6%
    Charlie RE Sp. z.o.o. Bonds 1,6091,60931 December 2020 8%
    The Company contributed in kind the Receivables to its subsidiar y IB 14 FIZ Ak t y wów Niepublicznych ("IB 14") against the issuance of
    additional certificates.
    2. Investments in subsidiaries The investments in subsidiaries are comprised as follows:
    Name Legal seat Owned31/12/17 31/12/16
    IB 14 FIZ Ak t y wów Niepublicznych Warsaw, Poland10 0%4 0 9, 0 10 –
    Grif fin Premium RE Lux S.à r.l. Luxembourg, Luxembourg10 0%––
    Nordic Park Of fices Sp. z o.o. Warsaw, Poland10 0%––
    Lamantia Sp. z o.o. Warsaw, Poland10 0%––
    Dom Handlow y Renoma Sp. z o.o. Warsaw, Poland10 0%––
    To t a l 4 0 9, 0 10–
    The movements in investment in Group Companies have been as follows:
    Name 2 0 17 2 016
    Balance per 1 Januar y ––
    Additions / (decreases) 358,275–
    Foreign currency translations 8,395–
    Share of subsidiary results 42,340–
    Closing balance at 31 December 4 0 9, 0 10–
    Investments in indirect subsidiaries
    As at 31 December 2017 the Company holds interests in the following indirec t subsidiaries:
    Name Legal seat Owned
    Bakalion Sp. z o.o.Warsaw, Poland10 0 %
    Centren Sp. z o.o. Warsaw, Poland10 0 %
    Dolfia Sp. z o.o. Warsaw, Poland10 0 %
    Ebgaron Sp. z o.o. Warsaw, Poland10 0 %
    Hala Koszyki Sp. z o.o. Warsaw, Poland10 0 %
    Lamantia Sp. z o.o. Sp. k. Warsaw, Poland10 0 %
    Dom Handlow y Renoma Sp. z o.o. Sp. k. Warsaw, Poland10 0 %
    Nordic Park Of fices Sp. z o.o. Sp. k. Warsaw, Poland10 0 %
    Akka SCSp Luxembourg, Luxembourg10 0 %
    Charlie SCSp Luxembourg, Luxembourg10 0 %
    December SCSp Luxembourg, Luxembourg10 0 %
    Akka RE Sp. z o.o. Warsaw, Poland10 0 %
    Charlie RE Sp. z o.o. Warsaw, Poland10 0 %
    December RE Sp. z o.o. Warsaw, Poland10 0 %
    GPRE Management Sp. z o.o. Warsaw, Poland10 0 %
    Lima Sp. z o.o. Warsaw, Poland10 0 %
    Emfold Investments Sp. z o.o. Sp. k. Warsaw, Poland10 0 %
    Emfold Investments Sp. z o.o. Warsaw, Poland10 0 %
    Ormonde Sp. z o.o. Warsaw, Poland10 0 %
    Iris Capital Sp. z o o Kielce, Poland10 0 %
    Wetherall Investments Sp. z o.o. Warsaw, Poland10 0 %
    A4 Business Park - Iris Capital Sp. z o.o. Sp.k. Warsaw, Poland10 0 %
    Wagstaf f Investments Sp. z o.o. Warsaw, Poland10 0 %
    West Gate Wroc
    ław Sp. z o.o. Warsaw, Poland10 0 %
    Echo – West Gate Sp. z o.o. Sp.k. Kielce, Poland10 0 %
    NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR 2017 COnTinue D
    (e XP re SSeD in eur THO uSA nDS)
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    Trade and other payables
    The trade and other payables are comprised as follows:
    Name 31/12/17 31/12/16
    Payable to Group Company 14–
    Accounts payable 18 635
    Wage tax payable 2–
    Wages and salaries payable 14 5–
    Accrued expenses 3,378–
    To t a l 3,72535
    The amount payable to Group Companies relate to an interest free liabilit y to Grif fin Premium RE Lux S.à r.l., which is payable at request.
    Fur ther details about the information to be included on liabilities can be found in Note 22 of the consolidated financial statements.
    6. Shareholders’ equityThe authorised share capital amounts to EUR 60 0,0 0 0,0 0 0 divided into 60 0,0 0 0,0 0 0 authorised shares. All shares have a nominal
    value of EUR 1. As per 31 December, 2017, 156,133,179 shares have been placed and fully paid up. The share capital is considered fully
    paid-up for tax purposes.
    Equity attributable to shareholders
    The total equit y at tributable to the shareholders of the Company is comprised as follows:
    Name 2 0 17 2 016
    Balance per 1 Januar y 10–
    Appropriated results –(35)
    Issue of ordinar y shares 2 0 0 ,11445
    Net result for the year 36,822–
    Translation results 8,068–
    Closing balance at 31 December 2 4 5 , 0 1410
    As per the beginning of the year 2017, the standalone shareholders' equit y does not reconcile with the consolidated shareholders' equit y. This
    is because the Reorganisation (as described on page 135) is accounted for using the pooling of interest method.
    As per year-end, the standalone shareholders’ equit y does not reconcile with the consolidated shareholders ‘equit y. As can be seen in the
    table below the dif ference can be at tributed to the results of subsidiaries with a negative net asset value.
    2 0 17 2 016
    Equity as per Consolidated Statement of Financial Position 244,771–
    Dif ference – results of subsidiaries with a negative net asset value 243–
    Equity as per Standalone Statement of Financial Position 2 4 5 , 0 14–
    2 0 172 016
    Net income as per Consolidated Statement of Financial Position 31, 32 0–
    Difference – due to difference accounting method for common control transactions* 5,502–
    Net income as Standalone Statement of Financial Position 36,822–
    * In the standalone financial statement s the ‘reorganisation’ is accounted for applying the carr y-over accounting method. The result s of subsidiaries are included as from the
    moment these subsidiaries are owned by the Company. In the consolidated financial statement s this common control transac tion is accounted for applying the pooling-of-
    interest accounting method.
    4. Current assets Short-term receivables
    The shor t-term receivables are comprised as follows:
    Name 31/12/1731/12/16
    VAT receivable 4–
    Accounts receivable and accrued income 25–
    To t a l 29–
    Fur ther details about the information to be included on receivables can be found in Note 23 of the consolidated financial statements.
    Cash at banks & cash equivalents
    The cash at banks are comprised as follows:
    Name 31/12/17 31/12/16
    Rabobank-EUR currency 5,094–
    Rabobank-PLN currency 19–
    Cash equivalents –45
    To t a l 5 ,11345
    In 2016, cash at banks & cash equivalents was available upon demand, being maintained on a third par t y account held with a Dutch notar y.
    During Januar y 2017 the funds were contributed to a Rabobank account held in the name of the Company and are freely available to the
    C om pany.
    The Rabobank bank balance in EUR represents the ac tual balance in EUR available as per the balance sheet date.
    5. Current liabilities Convertible short-term loan facility
    The conver tible shor t-term loan facilit y is comprised as follows:
    Name 2 0 17 2 016
    Balance per 1 Januar y ––
    Drawdown 165,000–
    Amortisation 116–
    Accrued nominal interest 297
    Closing balance at 31 December 16 5 , 413–
    On 18 December 2017, the Company concluded a loan facilit y agreement with Globalwor th Finance Guernsey Limited ("GF"), a related entit y,
    in the amount of EUR 230,0 0 0,0 0 0, divided into three available tranches (the “Facilit y”). Under the Facilit y, the Company has drawn down an
    net amount of EUR 165,0 0 0,0 0 0. This tranche carries an annual interest rate of 5% and matures on 18 June 2018 (the “Repayment Date”).
    The ef fec tive interest rate amounts to 7.026% and transac tions cost amounted to EUR 1,650,0 0 0, which are deduc ted from the draw down,
    hence the gross draw down amounts to EUR 166,650,0 0 0. Hence, as per year end the amor tised cost of the loan amounts to EUR 165,116,120.
    The Company has agreed with GF to apply the borrowed amounts towards the acquisition of cer tain financial assets.
    Subjec ted to the approval of the general meeting of shareholders of the Company, the Company granted GF an option to conver t the entire
    principal amount (including accrued interest and any other sums) into ordinar y shares of the Company (the “Conversion Option”).
    GF may exercise the Conversion Option at any time during the conversion period, being the period star ting on the date the Company’s
    increases its equit y share capital and has it registered with the relevant registr y and ending on the Repayment Date, by sending a writ ten
    notice to the Company (the “Conversion Notice”).
    GF has an option to conver t entire principal amount, accrued interest, arrangement fee and any other amounts due by the Company to GW
    with respec t to the loan. The option is subjec t to the approval of the general meeting of shareholders. The option can be exercised any time in
    the period star ting on the date the Company increases its share capital and ending on the maturit y of the loan, by sending the notice by GF to
    the Company where the conversion price is indicated (as 60 -day volume weighted average price of the shares of the Company at the stock
    exchange as of the day of the notice).
    If GF exercises the Conversion Option, the Company shall repay the conver ted facilit y by means of issuance of shares (the “Conversion
    Shares”) to GF and discharging the conver ted facilit y by means of set-of f with the Conversion Price of all the Conversion shares.
    Since the documentation concerning the Facilit y is made up in EUR; ac tual amounts received are in EUR; the repayment of the principle sum
    shall be made in EUR, the Facilit y has been presented in ac tual EUR amounts due.
    Due to the shor t-term nature of Facilit y, the estimated fair value for this financial instrument approximates the book value.
    NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR 2017 COnTinue D
    (e XP re SSeD in eur THO uSA nDS)
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    Translation reserve resulting from translation of func tional currency to presentation currency
    This translation reserve relates to translation differences from translation of the functional currency to the presentation currency of
    the company.
    Legal Reserve for restric tion of distribution of results of subsidiaries
    This legal reser ve relates to the (positive) revaluation of investment proper ties, held by Polish subsidiaries, which are valued at fair value.
    As the subsidiaries cannot distribute these unrecognisable gains, until these are revised, the Company recorded a legal reser ve.
    Distributable equity
    Pursuant to Dutch law, limitations exist relating to the distribution of equit y at tributable to equit y holders. Such limitations relate to the
    subscribed capital stock of EUR 156,133 thousand as well as to legal reser ves required by Dutch law as presented above. The total
    distributable reser ves at December 31, 2017 amount to EUR 71,653 thousand. Dutch law also requires that in determining the amount of
    distribution, the Company’s abilit y to continue to pay its debt must be taken into account.
    Proposal for profit appropriation.
    The general meeting of shareholders of the Company will be asked to approve the following appropriation of the 2017 profit af ter
    tax: an amount of EUR 27,662 thousand to be added to the retained earnings, EUR 9,160 thousand to the legal reser ves. These
    financial statements have been prepared in the anticipation that the annual general meeting will be in agreement with this proposal.
    Movements in share capital & share premium related to the period of 1 January 2017 up to 31 December 2017
    Date # SharesShare Capital
    Contributed Share
    Premium
    contributed To t a l
    Balance at 1 January 2017 45,00045–45
    27/01/2017 1133,873,912 13 3 , 8 74 –13 3 , 8 74
    30/01/2017 2––35 35
    2 8 / 0 2 / 2 017 312,000 1236,027 36,039
    03/03/2017 41,000 11, 6 0 8 1,609
    13 / 0 4 / 2 017 522,201,267 22,2016,35628,557
    To t a l i n c r e a s e 156,088,179156,08844,0262 0 0 ,114
    Closing Balance 15 6 ,13 3 ,17 9156,13344,0262 0 0 ,15 9
    The Movements in share capital & share premium are detailed under Note 1.
    7. Net turnoverNet turnover is solely comprised of the income for consulting ser vices rendered to (in-) direc t subsidiaries.
    8. Other operating expenses The other operating expenses are comprised as follows:
    Name 2 0 17 2 016
    Domiciliation fees 17–
    Management fees –1
    Management reimbursements 1–
    Administration and legal services 1, 62 015
    (Tax) advisory services 1, 8134
    Bank charges 4–
    Audit fees 22215
    To t a l 3, 67735
    Audit Fees Group
    Ernst & Yo u n g
    Accountants LLPAssociated
    Ernst & Yo u n g
    Companies To t a l
    Audit fees Annual Repor t 8710 4 191
    Audit fees in relation to the initial public of fering –10 8 10 8
    Other audit fees 1813 8 15 6
    To t a l 105350 455
    Group-wide totals have been presented. The audit fees include the costs for the legal audit of the annual repor t by Ernst & Young
    Accountants LLP, being the ultimate external auditor (EY Netherlands) and Ernst & Young Audy t Polska spółka z ograniczoną
    odpowiedzialnością Sp. k. (EY Poland) (together the “Auditors”) in the total amount of EUR 299 thousand. Fur thermore, the Auditors
    6. Shareholders’ equity continued Movements in shareholders’ equity
    The movements in shareholders’ equit y during the period have been as follows
    Issued and paid-up
    share capital Share
    premium Legal
    Reser ve for
    restriction of distribution of result s of
    subsidiaries Translation
    reserve for
    result s from
    subsidiaries
    with foreign repor ting
    currencies Translation
    reserve
    resulting from
    translation of functional
    currency to
    presentation currency Retained
    earnings /
    Accumulated Deficit To t a l
    Balance at 21 December 2016 –––––––
    Contributions during the year 45–––––45
    Addition (release) retained earnings / (accumulated deficit) –––––––
    (Un)appropriated results –––––(35) (35)
    Balance at 31 December 2016 45––––(35) 10
    Balance at 1 Januar y 2017 45––––(35) 10
    Contributions during the year (note 1) 15 6 , 0 8 844,026
    * ––––2 0 0 ,114
    (Un)appropriated results –––––36,822 36,822
    Translation results from subsidiaries with foreign reporting currencies –––8,395 ––8,395
    Translation results resulting from translation of functional currency to presentation currency ––––(327) (327)
    Addition to legal reser ve due to undistributable results of subsidiaries ––9,16 0 – ( 9,16 0 )–
    Balance at 31 December 2017 156,13344,026 9,16 08,395 (327)27,627 2 4 5 , 0 14
    * The share premium increased resulting from the event as described in note 1 amount s to € 45,28 0 thousand (gross) minus deduc ted IPO cost s amounting to € 1,254 thousand.
    During the year 2017 to date, the Company did not pay any dividends. Please be referred to page 145 for a fur ther breakdown of the
    movements in the shareholders' equit y.
    Revaluation reserve
    The movements in the revaluation reser ve have been as follows:
    Unrealised
    gains on
    investment properties
    Balance at 21 December 2016 –
    Addition (release) –
    Balance at 31 December 2016 –
    Balance at 1 January 2017 –
    Addition (release) 9,16 0
    Balance at 31 December 2017 9,16 0
    Share Premium
    The share premium concerns the contribution from the issuing of shares in so far as this exceeds the nominal value of the shares (above par
    income). Costs, which are direc tly related to capital raised, have been charged to the share premium reser ve. For fiscal purposes, the share
    premium is considered fully paid-up.
    Legal reserves
    The legal reser ves for the Company consist of the foreign currency translation reser ve for results from subsidiaries with foreign
    repor ting currencies and the reser ves related to restric tion of distribution of results of subsidiaries. These reser ved amounts are not
    eligible for distribution.
    Translation reserve for results from subsidiaries with foreign reporting currencies
    The legal foreign currency translation reserve comprises all foreign currency differences arising from the translation of the financial statements
    of foreign operations.
    NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR 2017 COnTinue D
    (e XP re SSeD in eur THO uSA nDS)
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    rendered other audit ser vices in the total amount of EUR 156 thousand. No other ser vices were provided by the Auditors or
    associated companies.
    The aggregate audit fees for the year amount to EUR 455 thousand, of which EUR 233 thousand was charged to the entities other
    than the Company. For the year 2016 the aggregate audit fees can be detailed as follows:
    Audit Fees Group for the year 2016
    Ernst &
    Yo u n g
    Accountants LLPAssociated
    Ernst & Yo u n g
    Companies To t a l
    Audit fees Annual Repor t 15–15
    Audit fees in relation to the initial public of fering –––
    Other audit fees – 82 82
    To t a l 1582 97
    9. Wages and salaries The Company has employed one individual in the Netherlands on a par t-time basis (2016: nil) and as such incurred salar y cost, wage
    tax and social securities.
    Name 2 0 17 2 016
    Non-Executive Directors’ compensation 137 –
    Net salary 8 –
    Wage tax9–
    To t a l 15 4 –
    10. Social security charges The social securit y charges for the salaries for the year amount to EUR 3,053 (previous period: nil)
    11. Interest income Interest income relates to the loans contributed by the shareholders as identified in Note 4 until the assets were sold to IB 14 FIZ.
    12. Interest expensesThe interest expenses relate to (i) credit interest paid to Coöperatieve Rabobank for substantial EUR amounts held at the EUR
    account specified under Note 3 and (ii) nominal interest calculated on the conver tible loan facilit y as specified under Note 5.
    13. Income taxes Due to the tax losses in the year under review, no Dutch income taxes have been recorded. These tax losses can be carried for ward.
    Realisations of these carr y for ward tax losses are dependent upon generating suf ficient taxable in the period that the carr y for ward
    tax losses are realised. Based on all available information, it is not probable that the carr y for ward tax losses are realisable and
    therefore no deferred tax asset is recognised.
    14. Share in the result of subsidiaries
    Name 2 0 17 2 016
    IB 14 FIZ Ak t y wów Niepublicznych 42,340–
    Grif fin Premium RE Lux S.à r.l. ––
    Nordic Park Of fices Sp. z o.o. ––
    Lamantia Sp. z o.o. ––
    Dom Handlow y Renoma Sp. z o.o. ––
    To t a l 42,340–
    15. Commitments & ContingenciesAs per December 1, 2016, the Company has entered into a lease agreement with Tribes Holding B.V. for the lease of of fice space
    in Amsterdam, The Netherlands. The lease entered into for the period of 1 year, commencing on 1 May 2017 and ending on
    30 April 2018 (the “lease period”). Upon expir y of the lease period, the lease will contiguously be extended for the periods of 1 year.
    The annual lease amounts to EUR 18,0 0 0 exclusive 21% value added tax.
    Secondly, IB 14 FIZ signed a share purchase agreement (the "SPA") on March 9, 2017 to ultimately acquire a 10 0% control over West Gate II
    Projec t Echo 114 Sp. z o.o (the “Transac tion”). The Company ac ts as guarantor for cer tain obligations of IB 14 arising from the SPA, such as the
    purchase of the shares. As the guarantor the Company would be responsible for cer tain obligations of IB14 arising from SPA. It is envisaged
    that the transac tion is completed as planned and the remaining par t of the consideration for the shares should amount EUR 18 million.
    16. Board composition The Company is led by a one-tier board, existing of the following current (Non-) Executive Direc tors
    Executive Directors Non-Executive Directors
    Ms M. Turek Mr A. Segal
    Mr R. Pomorski Mr M.M.L.J. van Campen
    Mr T.M. de Wit te
    Mr N. Senman
    Mr M.W. Dyjas
    Ms C. Pendred
    Mr I. Papalekas
    Mr D. Raptis
    Remuneration of (Non-) Executive Direc tors
    The Remuneration Policy is aimed at attracting, motivating and retaining highly qualified executives and rewarding members of the
    Board of Direc tors with a balanced and competitive remuneration package that is focused on sustainable results and is aligned with
    the Company’s long-term strategy.
    The remuneration of the Executive Direc tors is still in the process of being determined. A long-term incentive plan is being considered.
    Fixed annual base salary
    The Executive Direc tors are entitled to a base salar y. The base salar y of the Executive Direc tors is set around the median of
    remuneration levels payable within relevant comparable markets and companies.
    The annual compensation of the Non-Executive Direc tors is as follows:
    ¡ Base salar y: Max. EUR 20,0 0 0 (annually);
    ¡ Membership commit tee of the Board of Direc tors: Max. EUR 5,0 0 0 (annually).
    Short-term variable pay
    The Executive Direc tors might be entitled to a variable remuneration in cash (“Per formance Payment”). The objec tive of the
    Per formance Payment is to ensure that the Executive Direc tors will be focused on realising their shor t-term operational objec tives
    leading to longer term value creation. The Per formance Payment will be paid out when predefined targets are case realised, while
    the maximum Per formance Payment may be paid out in of outper formance of the predefined targets. If realised per formance is
    below a cer tain threshold level, no Per formance Payment will be paid out. Please be referred to sec tion V.4 of the direc tors’ repor t,
    which fur ther specifies the (compliance with) the set targets for variable pay.
    Long-term variable pay
    Af ter 2017, the consolidated group of companies headed by the Company (the “Group”) will introduce a long-term incentive
    program for the Executive Direc tors in connec tion with their employment with, or ser vices rendered to, one or more companies of
    the Group, under which, instead of receiving the Per formance Payment, they will have an option to acquire shares in the Company or
    will be entitled to similar instruments that will allow the Executive Direc tors to obtain the financial result as if they purchased shares
    in the Company. The objec tive of the long-term incentive program in the form of shares in the capital of the Company is to
    encourage the long-term commitment and retention of the Executive Directors. It further drives and rewards sound business
    decisions for the Group’s long-term health, and aligns the Executive Direc tors' and shareholders' interests.
    Fringe benefits
    The Executive Direc tors will be entitled to customar y fringe benefits, such as expense allowances (including for the use of a private
    or leased car) and reimbursement of costs, in connec tion with their employment with, or ser vices rendered to, one or more Group
    Companies. The Executive Direc tors are not entitled to any pension contributions.
    Severance payments
    The ser vice agreements of the Executive Direc tors with the Company provide for non-compete obligations during the term of the
    ser vices agreements, as well as for 12 months following their termination. During the non-compete period following the termination,
    the Executive Direc tors will be entitled to receive monthly base remuneration for each month of the non-compete period.
    Adjustments to variable remuneration
    In line with Dutch law, the variable remuneration of the members of the Board of Direc tors may be reduced or members of the Board
    of Direc tors may be obliged to repay (par t of ) their remuneration if cer tain circumstances apply, which are summarised below:
    (a) Test of reasonableness - pursuant to Dutch law, any variable remuneration (to the extent subjec t to reaching cer tain targets and
    the occurring of cer tain events) awarded to a member of the Board of Direc tors may be adjusted by the Board to an appropriate
    level if payment of the variable remuneration were to be unacceptable according to the criteria of reasonableness and fairness.
    (b) Claw back - in addition, the Board will have the authorit y under Dutch law to recover from a member of the Board of Direc tors any variable remuneration awarded on the basis of incorrec t financial or other data, or other circumstances of which the variable
    remuneration is dependent.
    NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR 2017 COnTinue D
    (e XP re SSeD in eur THO uSA nDS)
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    16. Board composition continued The details of the Direc tors’ Remuneration accrued or paid for the year 2017 are set out in the table below:
    Directors’ Remuneration (Amounts in EUR)
    Director Management
    Remuneration Committee
    Remuneration Bonuses and
    other variable pay To t a l
    Executive Directors
    Ms M. Turek 67,000––67,000
    Mr R. Pomorski 75,000–70,000 145,000
    Subtotal 142,000–70,000 212,000
    (Non-) Executive Directors
    Mr A. Segal 14, 3 5 63,589 –1 7, 9 4 5
    Mr M.M.L.J. van Campen 14, 3 5 63,589 –1 7, 9 4 5
    Mr T.M. de Wit te 14, 3 5 67,1 7 8 –21, 5 3 4
    Mr N. Senman 14, 3 5 67,1 7 8 –21, 5 3 4
    Ms C. Pendred 6,082––6,082
    Mr I. Papalekas 1, 370––1, 370
    Mr D. Raptis 1, 370––1, 370
    Mr M.W. Dyjas 14, 3 5 67,1 7 8 –21, 5 3 4
    Subtotal 80,6022 8 ,712 –10 9, 314
    Former Directors
    Ms. D. Wysokińska-Kuzdra 80,000––80,000
    Mr P.T. Kr ych 13,8083,452 –1 7, 2 6 0
    Mr. K. Khairallah 12,9 8 63,247 –16 , 23 3
    Subtotal 106,7946,699 –113 , 4 9 3
    Grand Total 3 2 9, 3 9 63 5 , 41170,000434,807
    The basic salaries and direc tor’s fees, as outlined in the previous table reflec t periodical payments to the (Non-) Executive Direc tors.
    In addition, during the repor ting period, no costs have been accrued in relation to pension charges and no loans, deposits or
    guarantees have been provided to the (Non-) Executive Direc tors by the Company and its (in) direc t subsidiaries.
    No payments have been made and no shares have been granted to the (Non-) Executive Direc tors under the shor t- and long-term
    incentive plan.
    Reference is also made to sec tion V.3 and V.4 of the Direc tors’ repor t.
    17. TaxationIt is expec ted the Company will not have a payable amount of corporate income tax related to the year 2017. The expec ted amount
    of tax loss for 2017 amounts to: EUR 5,518 thousand and expires af ter 9 years, the potential DTA, not recognised, would be EUR 1,380
    thousand.
    18. Subsequent events Reference is made to Note 36 of the consolidated financial statements.
    Other information Provisions in the Articles of Association governing the appropriation of profit
    Under ar ticle 28 of the Company’s ar ticles of association, the profit is at the disposal of the general meeting of shareholders, which
    can allocate this profit either wholly or par tly to the formation of – or addition to – one or more general or special reser ve funds.
    Profit-sharing certificates and similar rights
    The Company has issued no preference shares, which give priorit y over par t of the distributable profit.
    Independent auditor’s report
    The auditor’s repor t with respec t to the financial statements is set out on the next pages.
    INDEPENDENT AUDITOR’S REPORT
    TO: TH e SHAreHOLD erS AnD A uD iT CO mmiTTee O f Griffin P remium re.. n .V.
    Report on the audit of the financial statements 2017 included in the annual report Our opinion
    We have audited the financial statements 2017 of Grif fin Premium RE.. N.V., based in Amsterdam. The financial statements include the
    consolidated financial statements and the standalone financial statements.
    In our opinion:
    ¡ The accompanying consolidated financial statements give a true and fair view of the financial position of Grif fin Premium RE.. N.V. as at
    31 December 2017, and of its result and its cash flows for 2017 in accordance with International Financial Repor ting Standards (IFRS) as
    adopted by the European Union and with Par t 9 of Book 2 of the Dutch Civil Code;
    ¡ The accompanying standalone financial statements give a true and fair view of the financial position of Grif fin Premium RE.. N.V. as at
    31 December 2017, and of its result for 2017 in accordance with Par t 9 of Book 2 of the Dutch Civil Code.
    The consolidated financial statements comprise:
    ¡ The consolidated statement of financial position as at 31 December 2017;
    ¡ The following statements for 2017: the consolidated statement of profit or loss, the consolidated statement of other comprehensive
    income, the consolidated statement of changes in equit y and the consolidated statement of cash flows;
    ¡ The notes comprising a summary of the significant accounting policies and other explanatory information.
    The standalone financial statements comprise:
    ¡ The company balance sheet as at 31 December 2017;
    ¡ The company income statement for 2017;
    ¡ The notes comprising a summary of the accounting policies and other explanatory information.
    Basis for our opinion
    We conduc ted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. Our responsibilities under those standards
    are fur ther described in the “Our responsibilities for the audit of the financial statements” sec tion of our repor t.
    We are independent of Grif fin Premium RE.. N.V. in accordance with the EU Regulation on specific requirements regarding statutor y audit of
    public-interest entities, the Wet toezicht accountantsorganisaties ( Wta, Audit firms super vision ac t), the Verordening inzake de
    onafhankelijkheid van accountants bij assurance-opdrachten ( ViO, Code of Ethics for Professional Accountants, a regulation with respec t to
    independence) and other relevant independence regulations in the Netherlands. Furthermore we have complied with the Verordening
    gedrags- en beroepsregels accountants ( VGBA, Dutch Code of Ethics).
    We believe the audit evidence we have obtained is suf ficient and appropriate to provide a basis for our opinion.
    Materiality
    Materiality € 2,000,000
    (2016: € 1,350)
    Benchmark applied 1% of Equit y
    Explanation We considered the equit y measurement base to be the most
    appropriate benchmark for materialit y. Equit y of an investment
    entit y is viewed as a measure of impor tance to the primar y users
    as equit y reflec ts the investor’s interest in the investment entit y
    the best.
    The increase of the materialit y is caused by the fac t the company was a dormant entit y in 2016.
    We have also taken misstatements into account and/or possible misstatements that in our opinion are material for the users of the financial
    statements for qualitative reasons.
    We agreed with the audit commit tee that misstatements in excess of € 10 0,0 0 0, being 5% of the materialit y, which are identified during the
    audit, would be repor ted to them, as well as smaller misstatements that in our view must be repor ted on qualitative grounds.
    NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR 2017 COnTinue D
    (e XP re SSeD in eur THO uSA nDS)
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    INDEPENDENT AUDITOR’S REPORT COnTinueD
    99%
    1
    %
    Full scopeReview scope
    99%
    1
    % 99%
    1
    %
    Assets RevenuesNet operating
    proft
    Our key audit matters Key audit mat ters are those mat ters that, in our professional judgment, were of most significance in our audit of the financial
    statements. We have communicated the key audit mat ters to the audit commit tee. The key audit mat ters are not a comprehensive
    reflec tion of all mat ters discussed.
    These mat ters were addressed in the context of our audit of the financial statements as a whole and in forming our opinion thereon,
    and we do not provide a separate opinion on these mat ters.
    Fair value of investment property (Directors report and note 3)
    Risk The investment proper ties of Grif fin Premium RE.. N.V. comprise of income generating assets located in
    Poland. As noted in Sec tion II Note 3 to the Consolidated Financial Statements, the total investment
    proper t y as of 31 December 2017 amounts to € 680 million representing 90% of total assets.
    Fair value is determined by external independent valuation specialists using valuation techniques and
    assumptions as to estimates of projec ted future cash flows from the proper ties and estimates of the suitable
    discount rate for these cash flows. Valuation techniques for real estate are subjec tive by nature and involve
    various assumptions regarding pricing fac tors. Due to the subjec tive nature of these assumptions these are
    more likely being influenced by management. These assumptions include the capitalization rate, market
    rental income, market-derived discount rate, market yield, projected net operating income, vacancy levels,
    estimate of the reversion/terminal value, rent-free period, let ting fee, let ting voids and fit-out allowance for
    vacant space or renewals.
    Because the valuation of investment proper ties is complex and highly dependent on estimates and
    assumptions we consider the valuation of investment proper ties as a key audit mat ter in our audit.
    Our audit
    approach Our audit procedures included, among others, the following:
    ¡ We gained an understanding of the valuation process.
    ¡ We received the valuation repor ts for all proper ties and audited whether the valuation approach for
    these was suitable for use in determining the carr ying value of investment proper ties in the financial
    statements.
    ¡ We involved EY real estate specialists to assist us with the audit of the valuation of the investment
    properties.
    ¡ We evaluated the external valuators exper tise, independence and methodology used for the valuation.
    ¡ We evaluated and challenged the key assumptions included in the valuation (such as capitalization rate,
    market rental income, market-derived discount rate, projected net operating income, vacancy levels,
    estimate of the reversion/terminal value, rent-free periods, let ting fee, let ting voids and fit-out allowance
    for vacant space or renewals).
    ¡ We agreed the significant data applied for the valuation purposes to the suppor ting documentation.
    ¡ We per formed procedures regarding a management override on significant key assumptions and input
    variables by performing procedures on the reliability of supporting documentation underlying the key
    assumptions and input variables.
    ¡ We per formed procedures on the correc tness and completeness of revenue recognition by tracing a
    sample of transac tions to underlying rental contrac ts, assessed the correc t accounting treatment for
    lease incentives and per formed procedures to assess the correc tness and completeness of the rent roll.
    ¡ We have evaluated the appropriateness of the disclosures included in the group financial statements
    relating to the assumptions used in the valuations and sensitivit y analysis in the notes to the financial
    statements.
    ¡ We assessed the impac t of t wo guarantee agreements (Rental Guarantee, Net Operating Income
    Guarantee) on valuation of the investment proper ties.
    Key observations We consider management’s estimates and key assumptions underlying the valuation of investment
    proper ties used to be within the acceptable range and we assessed the disclosures as being appropriate.
    Scope of the group audit Grif fin Premium RE.. N.V. is at the head of a group of entities. The financial information of this group is included in the consolidated
    financial statements of Grif fin Premium RE.. N.V.
    Our group audit mainly focused on significant group entities. We considered entities to be significant based on size or the existence
    of significant risks. We have used the work of other EY firms regarding the audit of the consolidated financial statements of Grif fin
    Premium RE.. N.V. for foreign group entities. Where the work was per formed by component auditors, we determined the level of
    involvement we needed to have in the audit work at those repor ting units to be able to conclude whether suf ficient appropriate audit
    evidence had been obtained as a basis for our opinion on the Group financial statements as a whole.
    The total audit procedures represent 10 0% of the group’s total assets, 10 0% of revenues and 10 0% of gross margin, which consist of
    full scope and review scope audit procedures.
    By per forming these procedures, we have been able to obtain suf ficient and appropriate audit evidence about the group’s financial
    information to provide an opinion about the consolidated financial statements.
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    Financing and covenants compliance (Directors report and note 27)
    Risk Financing and covenants compliance is a key audit mat ter as the group entities’ credit facilities are subjec t
    to several covenants.
    The availability of adequate funding and testing whether the group can continue to meet its financial
    covenants is a significant mat ter for our audit. This test or assessment is largely based on the Board of
    Direc tors expec tations and estimates. The assumptions are af fec ted by subjec tive elements such as the
    estimate of expec ted future cash flows, forecast results and profit from operational ac tivities, and the abilit y
    to meet financial covenants. These estimates are based on the assumptions, including expec tations of
    future economic and market developments. When the company does not comply with covenants the banks
    can reclaim the funds, which can lead to a threat regarding the going concern position of the company.
    Our audit
    approach Our audit procedures included, among others, the following:
    ¡ We gained an understanding of the process of obtaining and securing of the financing.
    ¡ We audited and re-per formed the debt covenant calculation and compliance with applicable debt
    covenants.
    ¡ We audited the Group’s assessment of continued covenants compliance. We audited the assumptions
    used in relation to future rental income and results, including the rent rolls, in order to assess whether
    the entity can continue to meet its financial covenants in the coming year.
    ¡ We have evaluated the appropriateness of the disclosures included in the group financial statements
    regarding the covenants and loans, which are disclosed in notes 27 to the consolidated and standalone
    financial statements.
    Key observations The company complied with all covenants.
    Significant acquisitions and transac tions (Direc tors report and notes: 1.3, 17, 18 and 28)
    Risk In 2017 the company performed 4 significant acquisition transactions. The company acquired loans and
    par ticipations from its parent companies in return of share capital for an amount of € 172 million which is
    accounted for as common control transac tion applying the pooling of interest method as disclosed in note
    1.3. The company acquired three entities for € 155 million each holding one investment proper t y with a total
    wor th of € 167 million which is accounted for as asset deal. This transac tion is financed with a loan from the
    parent. The company acquired For ward Purchase Agreements and Right of First Of fer Agreements (ROFO’s)
    for an amount of respec tively € 18 million and € 10 million, both accounted for as asset deal. The selec tion of
    the accounting treatment is subject to judgement, correct interpretation of the accounting standards and
    correct interpretation of the nature and conditions of these transactions.
    Our audit
    approach Our audit procedures included, among others, the following:
    ¡ We have read and understood the legal agreements entered into by the group in relation to the
    acquisitions and considered the basis of their inclusion in the consolidated financial statements.
    ¡ We tested the consideration paid and the identification and valuation of the identifiable assets and
    liabilities acquired.
    ¡ We involved our valuation specialists in our audit of the fair values of the proper ties included in the
    acquired legal entities.
    ¡ We per formed audit procedures to verif y whether the counterpar ties classif y as related par t y.
    ¡ We have tested that the accounting treatment of the acquisitions does not meet the requirements of
    IFRS 3, for being classified as business combination.
    ¡ We have tested that the measurement and classification of the For ward Purchase Agreements and the
    ROFO’s are in line with IAS 32 and IAS 39.
    ¡ We have evaluated the appropriateness of the disclosures included in the group financial statements
    relating to the acquisitions completed during the year up to the date of this repor t as disclosed in notes
    1.3, 17, 18 and 28.
    Key observations We consider the accounting treatments for the acquisitions are suf ficiently suppor ted. we assessed the
    disclosures regarding the acquisitions as being appropriate.
    Report on other information included in the annual report In addition to the financial statements and our auditor’s repor t thereon, the annual repor t contains other information that consists of:
    ¡ The direc tors repor t;
    ¡ Other information pursuant to Par t 9 of Book 2 of the Dutch Civil Code.
    Based on the following procedures performed, we conclude that the other information:
    ¡ Is consistent with the financial statements and does not contain material misstatements;
    ¡ Contains the information as required by Par t 9 of Book 2 of the Dutch Civil Code.
    We have read the other information. Based on our knowledge and understanding obtained through our audit of the financial
    statements or otherwise, we have considered whether the other information contains material misstatements. By performing these
    procedures, we comply with the requirements of Par t 9 of Book 2 of the Dutch Civil Code and the Dutch Standard on Auditing 720.
    The scope of the procedures per formed is less than the scope of those per formed in our audit of the financial statements.
    The direc tors are responsible for the preparation of the other information, including the direc tors repor t in accordance with Par t 9 of
    Book 2 of the Dutch Civil Code and other information pursuant to Par t 9 of Book 2 of the Dutch Civil Code.
    Report on other legal and regulatory requirements Engagement
    We were engaged by the audit commit tee as auditor of Grif fin Premium RE.. N.V. on 6 March 2017 as of the audit for the year 2016
    and have operated as statutor y auditor since that date.
    No prohibited non-audit services
    We have not provided prohibited non-audit ser vices as referred to in Ar ticle 5(1) of the EU Regulation on specific requirements
    regarding statutor y audit of public-interest entities.
    Other non-prohibited services provided
    In addition to the statutor y audit of the financial statements we provided the following ser vices:
    ¡ Review of the interim condensed consolidated financial statements for the period ended 30 June 2017
    Description of responsibilities for the financial statements Responsibilities of board of direc tors for the financial statements
    The board of direc tors is responsible for the preparation and fair presentation of the financial statements in accordance with
    International Financial Repor ting Standards as adopted by the European Union and Par t 9 of Book 2 of the Dutch Civil Code.
    Fur thermore, the board of direc tors is responsible for such internal control as the board of direc tors determines is necessar y to
    enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error.
    As par t of the preparation of the financial statements, the board of direc tors is responsible for assessing the company’s abilit y to
    continue as a going concern. Based on the financial reporting frameworks mentioned, the board of directors should prepare the
    financial statements using the going concern basis of accounting unless the board of direc tors either intends to liquidate the
    company or to cease operations, or has no realistic alternative but to do so. The board of direc tors should disclose events and
    circumstances that may cast significant doubt on the company’s abilit y to continue as a going concern in the financial statements.
    The non-executive direc tors are responsible for overseeing the company’s financial repor ting process.
    Our responsibilities for the audit of the financial statements
    Our objec tive is to plan and per form the audit assignment in a manner that allows us to obtain suf ficient and appropriate audit
    evidence for our opinion.
    Our audit has been per formed with a high, but not absolute, level of assurance, which means we may not have detec ted all material
    errors and fraud.
    Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
    expec ted to influence the economic decisions of users taken on the basis of these financial statements. The materialit y af fec ts the
    nature, timing and extent of our audit procedures and the evaluation of the ef fec t of identified misstatements on our opinion.
    We have exercised professional judgment and have maintained professional skepticism throughout the audit, in accordance with
    Dutch Standards on Auditing, ethical requirements and independence requirements. Our audit included e.g.:
    ¡ Identif ying and assessing the risks of material misstatement of the financial statements, whether due to fraud or error, designing
    and per forming audit procedures responsive to those risks, and obtaining audit evidence that is suf ficient and appropriate to
    provide a basis for our opinion. The risk of not detec ting a material misstatement resulting from fraud is higher than for one
    resulting from error, as fraud may involve collusion, forger y, intentional omissions, misrepresentations, or the override of internal
    control.
    ¡ Obtaining an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in
    the circumstances, but not for the purpose of expressing an opinion on the ef fec tiveness of the company’s internal control.
    INDEPENDENT AUDITOR’S REPORT COnTinueD
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    154 155
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    ¡ Evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
    disclosures made by the directors.
    ¡ Concluding on the appropriateness of the board of direc tors use of the going concern basis of accounting, and based on the
    audit evidence obtained, whether a material uncer taint y exists related to events or conditions that may cast significant doubt on
    the company’s abilit y to continue as a going concern. If we conclude that a material uncer taint y exists, we are required to draw
    at tention in our auditor’s repor t to the related disclosures in the financial statements or, if such disclosures are inadequate, to
    modif y our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s repor t. However,
    future events or conditions may cause a company to cease to continue as a going concern.
    ¡ Evaluating the overall presentation, structure and content of the financial statements, including the disclosures.
    ¡ Evaluating whether the financial statements represent the underlying transac tions and events in a manner that achieves fair
    presentation.
    Because we are ultimately responsible for the opinion, we are also responsible for direc ting, super vising and per forming the group
    audit. In this respec t we have determined the nature and extent of the audit procedures to be carried out for group entities. Decisive
    were the size and/or the risk profile of the group entities or operations. On this basis, we selec ted group entities for which an audit or
    review had to be carried out on the complete set of financial information or specific items.
    We communicate with the audit commit tee regarding, among other mat ters, the planned scope and timing of the audit and
    significant audit findings, including any significant findings in internal control that we identif y during our audit. In this respec t we also
    submit an additional repor t to the audit commit tee in accordance with Ar ticle 11 of the EU Regulation on specific requirements
    regarding statutor y audit of public-interest entities. The information included in this additional repor t is consistent with our audit
    opinion in this auditor’s repor t.
    We provide the audit commit tee with a statement that we have complied with relevant ethical requirements regarding
    independence, and to communicate with them all relationships and other mat ters that may reasonably be thought to bear on our
    independence, and where applicable, related safeguards.
    From the mat ters communicated with the audit commit tee, we determine those mat ters that were of most significance in the audit of
    the financial statements of the current period and are therefore the key audit mat ters. We describe these mat ters in our auditor’s
    repor t unless law or regulation precludes public disclosure about the mat ter or when, in extremely rare circumstances, not
    communicating the matter is in the public interest.
    Utrecht, 7 March 2018
    Ernst & Young Accountants LLP
    J.H.A. de Jong
    INDEPENDENT AUDITOR’S REPORT COnTinueD
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    investing Policy 158
    Schedule of Properties 159
    financial Calendar 2018 160
    Glossary 161
    General information GPre 164
    APPENDICES
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    INVESTING POLICY
    Investing strategy The Company’s primar y focus is to invest in a diversified por tfolio of real estate oppor tunities situated in Poland with main focus on
    of fice proper ties. The Direc tors believe its primar y market of investment represents an at trac tive real estate investment proposition
    over the medium to long term.
    By investing in income-generating proper ties, asset repositioning and development oppor tunities, and seeking to derive most of its
    income from multinational corporate groups and institutional financial tenants on long, triple net leases, the Company intends to
    provide investors with an at trac tive, risk-adjusted combination of yield and capital appreciation.
    Assets or companies in which the Company can invest Investments made by the Company may take the form of, but are not limited to, single real estate assets, real estate por tfolios and
    companies, joint ventures, loan por tfolios and equit y and debt instruments.
    Strategy through which the investing policy is achieved The company’s strategy sees expansion of its proper t y por tfolio, which will deliver at trac tive returns to the company’s shareholders
    both from the existing por tfolio and through fur ther acquisitions of projec ts meeting stringent criteria. These will be additional of fice
    or mixed-use buildings in prime locations in major Polish cities. The company expec ts to acquire buildings of high technical qualit y,
    with a diverse tenant base or an anchor tenant with a long-term lease, focusing on fully or nearly fully let proper ties. Each newly
    acquired proper t y will supplement the existing por tfolio, increasing its qualit y in terms of diversification as well as stable income,
    ensuring steady, regular returns for the company’s shareholders.
    Investment approach The Company assumes a proac tive approach to ever y real estate investment in the Company’s por tfolio and pursues various asset
    management initiatives according to the most appropriate business plan for each investment. These initiatives may include:
    repositioning of existing assets (including re-let ting, refurbishment or redevelopment); development of new assets, corporate
    restruc turing and reorganisation; por tfolio break-ups (for example, ‘wholesale’ to ‘retail’ trades); and optimising capital struc ture.
    Holding period for investments The t ypical holding period for any investment is expec ted to be 5 to 10 years. The decision to exit a par ticular investment will be
    taken by the Company’s Board of Direc tors (‘the Board’) and may be less or greater than the expec ted holding period. Such a
    decision may result from a variet y of fac tors, including the need to optimise the risk / return of the investment, responding to asset or
    market dynamics, or taking advantage of unsolicited enquir y, but always with a view to ensuring that returns to shareholders are
    maximised.
    Gearing and cross holdings policies The Company is permit ted, direc tly or indirec tly, to borrow for working capital, investment and any other purpose. Debt financing is
    expec ted to be an impor tant component of the struc turing and execution of the Company’s investments, to improve returns for both
    developmental and income-generating assets. Borrowings may be under taken by the Company itself or by any of its subsidiaries or
    projec t companies. The amount of leverage employed in respec t of an investment is dependent on the nature of the oppor tunit y.
    Hedging instruments In connec tion with third-par t y debt, the Company may enter into one or a series of interest rate hedging produc ts (including, among
    others, swaps, caps, collars or options) to protec t the returns of the relevant investment against adverse interest rate fluc tuations.
    Although it is anticipated that all rentals and debt finance will be in Euro, the Company may also enter into one or a series of currency
    hedging instruments (including, among others, swaps, caps, collars or options) to protec t the returns of the relevant investment
    against adverse currency fluctuations.
    Investing restrictions Unless the Board (at its absolute discretion) approves other wise, the Company will not acquire or invest in commercial proper ties
    which do not satisf y the minimum pre-let ting commitment targets These restric tions will not preclude the Company making
    investments in shor t-dated cash or near-cash equivalent securities, which form par t of its cash management prac tices.
    Nature of returns that the Company seeks to deliver to Shareholders To suppor t shareholder dividends, the Direc tors anticipate that a sustainable cash flow will be generated through stable and
    recurring rental income, increased where appropriate through ac tive asset management. The determination as to whether or not to
    reinvest some of the proceeds of the disposal of an asset, and the declaration of dividends, is at the absolute discretion of the Board.
    It is intended that not less than 90% of the Company’s funds from operations will be distributed to shareholders of the Company
    subjec t to solvency or other legal requirements.
    SCHEDULE OF PROPERTIES
    Property name Location AddressYear of
    completion Ownership
    (%)GL A (sqm) Occupancy
    excl. rental
    guarantees (%)Occupancy
    incl. rental
    guarantees (%)Contrac ted
    rent
    (€ million) WALL
    (years) "A s I s"
    valuation
    (€ million)
    Pure Office
    Bator y Building I Warsaw212A
    Jerozolimskie
    Avenue
    200010 0% 6 , 610 9 0 .1% 91.9 % 0 .9 3.7 11. 4
    Bliski Centrum Warsaw8 Żurawia Street 200010 0% 4,9 2 0 96.5%10 0.0% 1. 0 6.2 13 .7
    CB Lubicz I/II Krakow23, 23A Lubicz
    Street 20 0 0 /
    2009 10 0% 23 ,9 8 6 9 7.1 %10 0.0% 5.0 3.5 70.7
    Green Horizon Lodz106 Pomorska
    Street 2012 /
    2 013 10 0% 3 3 , 510 10 0.0% 10 0.0% 5.2 5.6 71. 3
    Nordic Park Warsaw8 Herber ta
    Street
    200010 0% 9, 0 24 74 . 2 % 9 9.7 % 1.9 3.2 24.0
    Philips House Warsaw195A
    Jerozolimskie
    Avenue
    199910 0% 6,217 9 0 .9 %10 0.0% 1.1 4.4 13 . 3
    A4 Business Park Katowice42- 46 Francuska
    Street 2014 /
    2015 / 2 016 10 0% 30,556 96.4%10 0.0% 5.0 4.5 68.5
    Tr y ton Business
    House Gdansk11 Jana z Kolna
    Street
    2 01610 0% 24, 016 88.3%10 0.0% 3.8 4.0 56.4
    West Gate Wroclaw12 Lotnicza
    Street
    2 01510 0% 16,646 9 9. 4%9 9. 4% 2 .9 5 .1 41.9
    SUB-TOTAL 155, 4 8 3 94.6%9 9. 6% 27 4.5 3 7 1.1
    Mixed-Use
    Hala Koszyki Warsaw61- 65 Koszykowa
    Street
    2 01610 0% 22,24 6 7 7. 7 %10 0.0% 6 .9 5.8 10 8.4
    Renoma Wroclaw40 Swidnicka
    Street
    200910 0% 40,604 94.3%94.3% 7. 8 3.8 13 9.1
    Supersam Katowice6 Piotra Skargi
    Street
    2 01510 0% 24,223 88.9%96.8% 3 .9 4 .9 61. 5
    SUB-TOTAL 8 7, 0 74 88.6%96.5% 18 . 5 4.8 309.1
    TOTAL
    STANDING
    ASSETS 242,558 92.4%98.5% 45.5 4.6 680.2
    For ward
    Purchase (Pure
    Of fice)
    West Link WroclawNa Ostatnim
    Groszu Street
    2018E10 0% 14, 3 6 2 9 7. 7 %10 0.0% 2.5 7.1 36.4
    Right of First
    Offer (Pure
    Offfice)
    Beethovena
    Business Park Stage I
    Stage IIWarsaw
    Beethovena
    Street 2 019E25%1 7, 8 4 5 n/an/a n/a4 2 .1
    16 , 3 8 0 n/a3 6 .9
    Browar y J WarsawGrzybowska
    Street
    2018E25%14,979 n/an/a n/a54.3
    SUB-TOTAL 49, 2 0 4 13 3 . 3
    TOTAL FP /
    ROFO 63,566 169.7
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    FINANCIAL CALENDAR 2018
    7 March 2018 Annual Repor t 2017
    17 April 2018 Annual General Meeting
    30 May 2018 1Q 2 018 Re p o r t ing
    28 September 2018 1H2 018 Re p o r t i ng
    29 November 2018 3Q2018 Reporting AFMThe Netherlands Authority for the Financial Markets (Stichting
    Autoriteit Financiële Markten).
    Articles of Association The ar ticles of association of the Company following its
    conversion into a public limited liabilit y company (naamloze
    vennootschap) as they read from time to time.
    Bargain Purchase Gain Any excess bet ween the fair value of net assets acquired and
    consideration paid, in accordance with IFRS 3 Business
    Combination.
    Batory Building I Bator y Of fice Building I in Warsaw, a pure of fice proper t y.
    Bliski Centrum Bliski Centrum in Warsaw, a pure of fice proper t y.
    Board
    Board of direc tors of the Issuer.
    Board Regulations Regulations dealing with the internal organization on the Board,
    the manner in which decisions thereby are taken and any other
    matters concerning the Board.
    Business Day A day on which banks in Poland are open for business.
    BREEAMBuilding Research Establishment Assessment Method, which
    assesses the sustainabilit y of the buildings against a range of
    criteria.
    CBDCentral Business District.
    CEECentral and Eastern Europe.
    Civil Code Polish Ac t dated 23 April 1964 – the Civil Code (Journal of Laws
    of 1964, No. 16, item 93, as amended).
    Commercial Properties Comprises the of fice, light-industrial and retail proper ties or
    areas of the por tfolio.
    ConversionThe conversion of the Company into a public company with
    limited liabilit y (naamloze vennootschap) pursuant to a notarial
    deed of amendment and conversion to be executed prior to the
    settlement of the Offering.
    Dutch Civil Code The Dutch Civil Code (Burgerlijk Wetboek).
    Dutch Corporate Governance Code The Dutch Corporate Governance Code dated 8 December
    2 016 .
    Earnings Per Share (EPS)Profit af ter tax divided by the basic/diluted weighted average
    number of shares in issue during the year.
    Normalised EBITDA (normalised)Earnings before interest, depreciation, bargain purchase gain,
    fair value movement and other non-operational and/or non-
    recurring income and expense items.
    EchoEcho Investment S.A., with its registered seat in Kielce, Poland;
    a leading Polish real estate developer listed on the WSE; the
    majorit y shareholder in Echo, holding 65.99% of the total number
    of votes at the general meeting of Echo’s shareholders, is Lisala
    Sp. z o.o., which is jointly owned by Grif fin Topco III S.á r.l. and
    PIMCO; therefore, Grif fin Topco indirec tly owns 32.99% in Echo
    with the remaining shares being held by third par ties unrelated
    to the Issuer or the Selling Shareholders (including PIMCO,
    which holds a 32.99% indirec t interest, and cer tain direc t
    minorit y shareholders such as ING and Aviva).
    EPPEPP Proper t y Management – Minster Investments Sp. z o.o. – Sp. k.
    EPRAEuropean Public Real Estate Association.
    EPRA Earnings Profit af ter tax at tributable to the equit y holders of the
    Company, excluding investment proper t y revaluation, gains,
    losses on investment proper t y disposals and related tax
    adjustment for losses on disposals, bargain purchase gain on
    acquisition of subsidiaries, acquisition costs, changes in the fair
    value of financial instruments and associated close-out costs and
    the related deferred tax impac t of adjustments made to profit
    after tax.
    EPRA Earnings Per Share EPRA Earnings divided by the basic or diluted number of shares
    outstanding at the year or period end.
    EPRA N AV Net asset value calculated based on EPRA re commendations.
    EPRA NAV per share EPRA NAV divided by the basic/diluted number of shares
    outstanding at the year or period end.
    EUThe European Union.
    EUR, EurThe law ful currency of the Eurozone.
    EURIBORThe Euro Interbank Of fered Rate: the interest rate charged by
    one bank to another for lending money, of ten used as a
    reference rate in bank facilities.
    EurozoneA currency union of the following member states which have
    adopted the euro as their sole legal tender: Austria, Belgium,
    Cyprus, Finland, Estonia, France, Germany, Greece, Ireland, Italy,
    Lat via, Lithuania, Luxembourg, Malta, the Netherlands, Por tugal,
    Slovakia, Slovenia and Spain.
    Executive Directors The Executive Direc tors of the Board.
    EY Poland Ernst & Young Audy t Polska spółka z ograniczoną
    odpowiedzialnością sp. k. with its registered of fice in Warsaw.
    Fair Value (IFRS)The price that would be received to sell an asset or paid to
    transfer a liabilit y in an orderly transac tion bet ween market
    participants at the measurement date.
    GLOSSARY
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    GLOSSARY COnTinue D
    FFOFree funds from operations, estimated as the EPRA Earnings for
    the relevant period.
    Financial Ye a r Period from 1 Januar y to 31 December.
    Forward Purchase Asset The West Link (i.e. West Gate - Stage II) projec t.
    G AVGross asset value of a proper t y, which is equivalent to the fair
    value.
    GDPGross Domestic Product.
    General Meeting The meeting of shareholders of the Company entitled to vote,
    together with pledgees and usufruc tuaries to whom voting rights
    at tributable to the Shares accrue or the body of the Company
    consisting of persons entitled to vote on the Shares (as applicable).
    GLAGross let table area, being the total area of a proper t y that can
    be rented to a tenant.
    Global Coordinators Bank Zachodni WBK S.A. and Joh. Berenberg, Gossler & Co. KG.
    Green Horizon Green Horizon Of fice Center in Łódź, a pure of fice proper t y.
    GRIGross rental income.
    GriffinA collec tive reference to Grif fin Topco II S.à r.l. and Grif fin Topco
    III S. à r.l. and their respec tive subsidiaries and managed funds
    (excluding, for the avoidance of doubt, the Group).
    GroupGrif fin Premium RE.. N.V. and Subsidiaries.
    Group Companies All consolidated Subsidiaries.
    Hala Koszyki Hala Koszyki in Warsaw, a High-street mixed-use proper t y.
    High-streetReferences to locations of mixed-use proper ties (Hala Koszyki,
    Supersam and Renoma) including office and retail components
    of significant sizes which are located in cit y centres of Warsaw,
    Katowice and Wroclaw, respec tively, along commonly
    recognizable main traf fic routes; for the avoidance of doubt, the
    expression “High-street retail” does not refer to the
    conventional High-street retail asset class.
    IASInternational Accounting Standards as adopted by the EU.
    Institutional Investors Investors, excluding U.S. persons as defined in Regulation S,
    authorized to par ticipate in the bookbuilding process or to
    subscribe for the Of fer Shares who received invitations to
    subscribe for the Of fer Shares and to par ticipate in the
    bookbuilding process, or to subscribe for the Of fer Shares,
    respectively, from the Global Coordinator, additionally satisfying
    the criteria set out in clauses (1)-(4) of Par t I of Annex II to the
    Directive 2004/39/EC of the European Parliament and of the Council of 21 April 20 04 on markets in financial instruments and
    who are: (i) entities which are required to be authorized or
    regulated to operate in the financial markets, including credit
    institutions, investment firms, other authorized or regulated
    financial institutions, insurance companies, collective investment
    schemes and management companies of such schemes, pension
    funds and management companies of such funds, commodity and
    commodity derivatives dealers, locals, other institutional
    investors; (ii) large under takings meeting t wo of the following size
    requirements on a company basis: balance sheet total: EUR
    20,000,000, net turnover: EUR 40,000,000, own funds: EUR
    2,0 0 0,0 0 0; (iii) national and regional governments, public bodies
    that manage public debt, central banks, international and
    supranational institutions such as the World Bank, the
    International Monetary Fund, the European Central Bank, the
    European Investment Bank and other similar international
    organisations; (iv) other institutional investors whose main activity
    is to invest in financial instruments, including entities dedicated to
    the authorization of assets or other financing transac tions as well
    as natural persons with full legal capacit y and legal persons, both
    residents and non-residents within the meaning of the Polish
    foreign exchange regulations, authorized to par ticipate in the
    bookbuilding process or to subscribe for the Of fer Shares who
    received invitations to subscribe for the Of fer Shares and to
    par ticipate in the bookbuilding process, or to subscribe for the
    Of fer Shares, respec tively, from the Global Coordinator.
    IRSInterest rate swap.
    KRS, National Court Register National Cour t Register (Krajow y Rejestr Sądow y).
    LEEDLeadership in Energy & Environmental Design, is a green
    building certification program that recognizes best-in-class
    building strategies and practices.
    Listing Date the date on which trading in the Shares on the WSE has
    commenced.
    LT VLoan to Value.
    Lubicz Office Center Lubicz Of fice Center I & II in Kraków, a pure of fice proper t y.
    Master Lease Master Lease includes various rental guarantees which range
    bet ween 3 and 5 years, covering the majorit y of space which is
    currently vacant in the proper ties owned through GPRE.
    mBankmBank Hipoteczny S.A.
    Net Assets Value (NAV)Equit y at tributable to equit y holders of the Company and/or net
    assets value.
    Net Asset Value (NAV) Per Share Equit y at tributable to equit y holders of the Company divided by
    the number of Ordinar y shares in issue at the period end.
    NOINet operating income.
    NOI Guarantee NOI Guarantee Agreement entered into on 9 March 2017 bet ween
    GT II and Dom Handlow y Renoma Sp. z o.o. Sp.k.,
    Hala Koszyki Sp. z o.o. (formerly Hala Koszyki Grayson Investments
    Sp. z o.o. Sp.k.), and DH Supersam Katowice Sp. z o.o.
    Non-Executive Directors The Non-Executive Direc tors of the Board.
    Nordic Park Nordic Park in Warsaw, a pure of fice proper t y.
    Occupancy Rate The estimated rental value of let sqm as a percentage of the total
    estimated rental value of the por tfolio, excluding development
    proper ties. It includes spaces under of fer or subjec t to asset
    management (where they have been taken back for refurbishment
    and are not available to let as of financial position date).
    Oaktree
    A collec tive reference to Oak tree Capital Management,
    a leading global alternative investment management firm,
    and its subsidiaries.
    OECDOrganization for Economic Co-operation and Development.
    OFEPolish open pension funds (otwarte fundusze emerytalne).
    Offer Price The price per Of fer Share.
    Offering The initial public of fering of the Of fer Shares.
    Philips House Philips House in Warsaw, a pure of fice proper t y.
    PIMCOA collec tive reference to PIMCO, a global investment
    management firm, and its subsidiaries.
    PLN, Polish zloty, zloty PLN, the law ful currency of Poland.
    Polish Institutional Offering the of fering of the Shares to the Institutional Investors in the
    Republic of Poland.
    Property Under Development Proper ties in the development process that do not meet
    all the requirements to be transferred to completed investment
    property.
    Portfolio Open Market Value (OMV)Por tfolio open market value means the fair value of the Group’s
    investment proper ties determined by CBAR Research &
    Valuation Advisors SRL (Coldwell Banker), independent
    professionally qualified valuers who hold a recognised relevant
    professional qualification and have recent experience in the
    locations and segments of the investment proper ties valued,
    using recognised valuation techniques.
    REITReal estate investment trust.
    RenomaRenoma in Wrocław, a High-street mixed-use proper t y.
    Rental Guarantee Rental guarantee agreements entered into on 9 March 2017
    bet ween GN II/GTN III and each holder of title to the
    Existing Asset.
    ROFORight of First Of fer.
    ROFO Agreement The ROFO agreement executed bet ween Echo, the Issuer
    and entit y from the Issuer’s capital group as the Bondholder,
    on 9 March 2017.
    ROFO Assets Collec tive reference to the assets subjec t to the ROFO
    Agreement, i.e. Beethovena projec t (Stage I and II) and Warsaw
    Brewer y projec t (Browar y Warszawskie) (Stage J).
    SQMSquare metres.
    Selling Shareholders Griffin Netherlands II B.V. and GT Netherlands III B.V.
    SharesThe Sale Shares, the New Shares and the Over-Allotment Shares,
    i f any.
    SubsidiariesThe subsidiaries of the Issuer.
    SupersamSupersam in Katowice, a High-street mixed-use proper t y.
    U.S.The United States of America.
    UnderwritersBank Zachodni WBK S.A. and Joh. Berenberg, Gossler & Co. KG.
    Underwriting Agreement The under writing agreement entered into on 13 March 2017 by
    the Issuer, the Selling Shareholders, Bank Zachodni WBK S.A.
    and Joh. Berenberg, Gossler & Co. KG where Bank Zachodni
    WBK S.A. and Joh. Berenberg, Gossler & Co. KG are referred as
    the underwriters.
    WAU LTWeighted average unexpired lease term.
    WSEThe Warsaw Stock Exchange (Giełda Papierów War tościow ych w
    Warszawie S.A.) and, unless the context requires other wise, the
    regulated market operated by such company.
    WSE Best Practices Code of Best Prac tice for WSE listed companies (at tachment
    to Resolution No. 17/1249/2015 of the Exchange Board dated
    19 May 2015 and adopted in accordance with §29.1 of the
    Exchange Rules), being a set of rules and recommendations
    concerning corporate governance prevailing on the WSE.
    WSE Rules The Warsaw Stock Exchange Rules of 4 Januar y 20 06, as
    amended.
    YieldThe distribution available to a holder of a share in any financial
    year divided by the market price of the share.
    aPPenDiceS
    STraTeGicreview PorTFoLiooverview
    FinanciaL
    STaTeMenTS aPPenDiceS


    16 4Griffin Premium re .. AnnuAL rePOrT An D finAn CiAL STAT emenTS 2 017
    GENERAL INFORMATION GPRE
    Registered Office Claude Debussylaan 15
    10 82MC
    Amsterdam
    The Netherlands
    Email: [email protected]
    http://www.en.griffin-premium.com
    AuditorErnst & Young Accountants LLP
    Boompjes 258
    3 0 11 X Z
    Rotterdam
    The Netherlands
    Tel: +31 88 40 710 0 0


    Registered office
    Claude Debussylaan 15
    1082MC Amsterdam,
    The Netherlands
    +31(0)20 238 4000
    www.griffin-premium.com


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