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NEW EUROPE PROPERTY INVESTMENTS PLC - Audited condensed consolidated financial results for the year ended 31 December 2013

Release Date: 05/02/2014 17:00
Code(s): NEP     PDF:  
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Audited condensed consolidated financial results for the year ended 31 December 2013

NEW EUROPE PROPERTY INVESTMENTS PLC
(Incorporated and registered in the Isle of Man with registered number 001211V)
(Registered as an external company with limited liability under the laws of South Africa,
registration number 2009/000025/10)
AIM share code: NEPI JSE share code: NEP BVB share code: NEP
ISIN: IM00B23XCH02
(“NEPI” or “the Group” or “the Company”)


AUDITED CONDENSED CONSOLIDATED FINANCIAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2013

DIRECTORS’ COMMENTARY

DISTRIBUTABLE EARNINGS

The Group has achieved distributable earnings of 13.92 euro cents per share for the second half of the financial year ended
31 December 2013, which is in line with the earnings guidance issued on 6 August 2013. This result, combined with the 11.87
euro cents per share for the first half of the financial year, represents a 23.5% improvement in recurring income per share when
compared to 2012.

This improvement is due to the continued strong performance of the Group’s assets and the favourable impact of acquisitions and
developments completed during the financial year, which are detailed below.

DISTRIBUTION

The Board of Directors has resolved to set the 2013 full year distribution to 26.79 euro cents per share, an improvement of 15%
over the 23.29 euro cents distribution declared in relation to 2012. Accordingly, the Board has declared a final distribution of
13.86 euro cents per share for the six months ended 31 December 2013.

OPTION TO RECEIVE CAPITAL RETURN

Consistent with the practice introduced in 2012, the Board has resolved to offer shareholders the option to receive their
distribution as either cash or an issue of fully-paid shares up at a ratio of 2.742 new shares for each 100 held.
A circular that contains details of this resolution, accompanied by announcements on the Stock Exchange News Service (SENS)
of the Johannesburg Stock Exchange (JSE), the Regulatory News Service (RNS) of the London Stock Exchange (LSE) and the
Bucharest Stock Exchange (BVB), will be issued in due course.

RETAINED DISTRIBUTABLE EARNINGS

In recent years the Board has adopted a policy of retaining non-recurring distributable earnings and considering them for
distribution as the Group increasingly pursued various property developments that are expected to have a positive impact on per
share distributions once complete, but that are earnings dilutive during construction. This policy was devised during the 2011
financial year to maintain a constant growth profile in per share distributions during the construction phase at an annualised target
rate of 15% over a three-year period (from the 2010 base). In the second half of the 2013 financial year, the Group achieved its
three year growth target in distribution per share without making use of retained distributable earnings. The balance of retained
distributable earnings carried forward from prior financial periods on 31 December 2013, after the final period distribution of
2013, is €6.7 million.

This amount will be considered for distribution during 2014 and 2015. The Group will continue to focus on maximising long-term
distribution per share by investing in further development opportunities with acceptable risk profiles, even if these lead to a short-
term reduction in year-on-year distribution growth. As a result the growth in distributable earnings per share could be irregular in
the future.

ACQUISITIONS AND DEVELOPMENTS

The Group completed the acquisition and development of a number of properties during 2013. The effective date of an
acquisition, or opening date of a development, is detailed in brackets after the property name. Further information is available in
previous announcements. All figures relating to populations are estimates.
RETAIL PROPERTY ACQUISITIONS AND DEVELOPMENTS

Aupark Zilina (31 July 2013): The Group has acquired Aupark Zilina, a regional mall with 21,958m2 of retail Gross Leasable
Area (GLA), situated in the historic centre of Zilina, Slovakia, 200 km from the capital Bratislava and close to the Czech and
Polish borders. Zilina, with a population of 85,000 is the country’s third largest city, an important industrial hub and the capital of
a region with 700,000 residents. Within 30-minute drive of the shopping centre are 380,000 citizens. Major tenants include
international brands such as Billa, C&A, Deichmann, H&M and New Yorker.

City Park (31 October 2013): The Group has acquired City Park, a mall of 29,284m2 GLA situated in Constanta, Romania. It is
located on a busy intersection close to the centre and a short distance from Mamaia, the country’s most popular seaside resort. The
Constanta metropolitan area has 425,000 residents, while Mamaia attracts large numbers of visitors each summer holiday. City
Park hosts a wide range of global fashion brands such as Bershka, Koton, LC Waikiki, Mango, Marks & Spencer, Orsay, Oysho,
Pull & Bear, Stradivarius and Zara, as well as a Cora hypermarket, several international fast food brands like KFC, McDonalds
and Pizza Hut, and various other international and national tenants. City Park has existing, approved building rights, which NEPI
intends to utilise to develop a substantial fashion and leisure extension.

Deva Shopping Centre (31 July 2013): The Group has acquired a regional shopping centre with 42,180m2 GLA in Deva,
Romania, the capital of Hunedoara county. In addition to Deva’s population of 56,000, the catchment area includes 220,000
residents within a 45-minute drive of the centre. Major tenants include Metro Cash & Carry, Real Hypermarket (in the process of
being re-branded as an Auchan Hypermarket), Praktiker DIY, dm, Domo, Jysk and Takko. The acquisition includes 29,000m2 of
land intended for extensions.

Severin Shopping Center (1 May 2013): The Group has acquired Severin Shopping Center in Drobeta-Turnu Severin, Romania,
which has 16,546m2 GLA and 23,000m2 of additional land intended for extensions. Major tenants include Altex, Carrefour,
Deichmann, Lee Cooper, New Yorker, Orsay and Takko.

Shopping City Galati (21 November 2013): The Group has completed the development of Shopping City Galati in Romania. The
completed shopping centre, which has 27,206m2 of GLA, houses various international brands, including Carrefour, CCC, C&A,
Deichmann, dm, H&M, Intersport, KFC and New Yorker. It was completed in six months from the issue of the building permit
and the Group owns enough land for a substantial future extension.

Strip mall developments: The Group opened four Kaufland extensions in Romania: Alexandria (2 May 2013), Petrosani (24
October 2013), Sighisoara (14 November 2013) and Sfantu Gheorghe (21 November 2013).

OFFICE PROPERTY ACQUISITIONS

The Lakeview (1 January 2013): The Group has acquired The Lakeview in north-east Bucharest, Romania, a landmark A-grade
building, including office space and ground-floor retail. The building comprises a total GLA of 25,564m2 and 485 parking spaces.
It is located close to NEPI’s Floreasca Business Park in the emerging office corridor between Floreasca and Barbu Vacarescu
streets. Tenants include Alcon, Colgate-Palmolive, Huawei, Philips, PricewaterhouseCoopers and Royal Bank of Scotland.

DISPOSALS

Retail Park Pitesti (29 April 2013): As announced in August 2012, the hypermarket section of Retail Park Pitesti was sold to the
Auchan Group for a total consideration of €29.4 million.

DEVELOPMENT PIPELINE

The Group has steadily been increasing its exposure to developments in the past few years. Developments and redevelopments of
a number of properties in 2011, 2012 and 2013 have made significant contributions to growth in recurring income per share. The
Group’s development pipeline, including redevelopment opportunities and extensions of secured acquisitions, has increased to
€386 million (estimated at cost), of which €91 million had been incurred by 31 December 2013. This represents an increase of
€179 million compared to the position on 31 December 2012.

RETAIL PROPERTY DEVELOPMENTS AND EXTENSIONS

Mega Mall: The Group has acquired a 70% interest in a permitted development on the former Electroaparataj factory site in
Bucharest, and in conjunction with Austrian development group Real4You commenced construction of a 70,000m2 GLA mall.
The 51,000m2 site is located close to the national football stadium, in the city’s densely populated east area which currently lacks
retail space. Mega Mall is visible from a major vehicle artery and has excellent access to public transport, including trams, buses
and trolley buses. A metro station is planned in front of the mall and the centre is expected to connect to it. Leasing efforts are
progressing well and the opening is planned for the second quarter of 2015.
Shopping City Targu Jiu: The Group has secured a series of adjoining plots of land with a total area of 40,000m2 in Targu Jiu,
Romania, and has commenced construction of a regional shopping centre with 27,000m2 GLA. Targu Jiu is the capital of Gorj
county, and with its population of 78,000 is its largest city. Employment levels in the county are high, it has one of the highest per
capita income levels in the country, and purchasing power is relatively high. A series of large industrial developments are
anticipated to occur in the area, which could stimulate further economic growth. Currently there are no major retail developments
in Targu Jiu. The site is located in the most densely populated area of the city, near the existing Kaufland hypermarket, and there
are an additional 150,000 residents within a 30-minute drive. Lease agreements have been signed with tenants for 50% of the
GLA, including Carrefour, the anchor hypermarket. The target opening date is October 2014.

Vulcan Value Centre: The Group owns a 78,000m2 former factory site, located in an under-serviced and densely populated area
of Bucharest, where it is developing a value centre with 24,900m2 GLA, anchored by a hypermarket and other value tenants. The
site has good vehicular access to two major boulevards, excellent access to trams and buses, and should attract many pedestrians
from the surrounding densely populated area. A building permit has recently been issued after an unplanned delay which was
outside the Group’s control, and construction commenced. The targeted opening date is September 2014. More than 65% of the
development has been let to international and national tenants, including a Carrefour hypermarket, dm, C&A, Domo, H&M,
Takko and KFC.

Strip mall developments: Further to the four Kaufland value centres opened during 2013, the Group expects to open a similar
centre in Vaslui in the second quarter of 2014, and intends to pursue other opportunities in similar sized Romanian cities which
are under-serviced by modern retail facilities.

Retail extensions: Various retail extensions are planned to commence subject to obtaining the necessary authorisations, permits
and tenant commitments. These include extensions to NEPI’s retail assets in Brasov, Braila, Constanta, Deva and Drobeta-Turnu
Severin.

OFFICE PROPERTY DEVELOPMENTS

City Business Centre: The Group owns City Business Centre in Timisoara, Romania, a city that is home to a growing back-office
activities and services market that offers a skilled labour force, low costs and proximity to Western Europe. The Group also has a
forward purchase agreement for two additional buildings in City Business Centre, with 20,000m2 GLA, the second is still under
development. An initial early payment of €8 million was made to the vendor in February 2013 through a secured loan.

The Office Cluj-Napoca: In February 2013 the Group commenced the first of three phases of a joint venture office development
situated in the city centre of Cluj-Napoca. This will include up to 54,400m2 of A-grade office GLA. Cluj is in the north-west of
Romania and is the country’s second largest city by population. The first phase of 19,600m2 GLA is planned to be completed and
delivered in April 2014. Significant tenant interest has been generated for what will be Cluj’s first A-grade office development.

Piata Victoriei Office Development: Permits should soon be available for a landmark office development on land owned by NEPI
in a prime location in central Bucharest.

OTHER HIGHLIGHTS

The Group has grown significantly during 2013 and as a result NEPI has been included in the JSE mid-cap index. The total
number of shareholders increased from 3,479 at the end of 2012 to 6,011 at the end of 2013; the daily trade in shares also
increased.

On 31 December 2013, the Adjusted Net Asset Value (NAV) was 28.5% higher than it was at the end of the previous year.
Vacancy level is decreasing: calculated as a portion of available rentable area (excluding the rentable areas covered by earn-out
arrangements in City Business Centre, Timisoara) at the end of 2013 it was 2.33% compared to 4.8% the previous year (3.56% on
a like-for-like basis). Non-recoverable tenant income for 2013 amounted to €87,963, equivalent to 0.14% of contractual rental
income and expense recoveries for the year.

Due to the growth in activity, the Group increased its focus on corporate governance to ensure that adequate internal controls are
in place to manage risks.

Two new directors joined the Board in September 2013, Alexandru Morar and Tiberiu Smaranda. The Group also augmented its
management team by recruiting additional experienced asset management, leasing, project development and finance professionals.

SIBIU SHOPPING CITY DEBT ACQUISITION

Further to the previous announcements regarding Argo Real Estate Opportunities Fund Limited (Argo), an AIM listed company,
which was suspended from trading on 30 August 2013 and had commenced unsubstantiated and vexatious legal proceedings
against NEPI and Volksbank in relation to the Sibiu Shopping City debt acquisition by the Group, the Board has decided not to
pursue the acquisition of the debt any further due to the refusal of KBC bank (the lead arranger and agent for a consortium o f
banks) to approve the transfer of debt from Volksbank to NEPI. The Group is considering available legal remedies.
CASH MANAGEMENT AND DEBT

Throughout the financial year the Company raised €253 million via the issue of new ordinary shares, €84 million in new third-
party debt facilities and €63 million in extended secured third-party debt facilities. On 31 December 2013 the Group’s gearing
ratio (interest bearing debt less cash divided by investment property and listed property shares) decreased to 22.5%, compared to
25% at 31 December 2012. The average interest rate (including hedging costs) of the debt was approximately 4.6% during the
financial year. The weighted-average margin may increase further in the coming financial periods as further loans are taken, while
the impact of a potential increase in the base rate (Euribor) has been limited by extending or concluding new interest rate hedges
to five years or more, mostly by means of acquiring interest rate caps.

The Group ended the year with €117 million in cash and listed property shares, and will continue to hold relatively large cash and
liquid resources to fund its development pipeline and take advantage of new investment opportunities, as and when they arise.

In addition to the cash balances, the Group has an undrawn, secured revolving facility with UniCredit Tiriac Bank for €9.5
million. Further secured debt facilities will be considered during the current financial year.

PROSPECTS

NEPI has maintained high levels of growth in recurring distributable earnings per share over the course of the past six years, and
as a result has achieved a nominal average compounded annual growth rate of 12.7% in distribution per share from 2008 to 2013.

The development pipeline detailed above ensures that the Group is well placed to pursue further attractive investment
opportunities and grow its recurring distributable earnings in 2014 and beyond. In addition, the Group will continue to explore
further acquisitions and development opportunities in Romania and other central-eastern European countries, with initiatives
already underway. Relevant announcements will be made as and when appropriate.

EARNINGS GUIDANCE

The Board is confident that recurring distributable earnings per share for the first half of 2014 will range from 13.90 to 14.20 euro
cents per share (compared to 11.87 euro cents per share for the six months ended on 30 June 2013) based on the assumptions that
a stable macroeconomic environment prevails, no major corporate failures occur and no further shares will be issued during the
period.

Consequently growth in distribution per share of 15% is expected to be achieved for the interim period ending 30 June 2014. This
forecast has not been audited or reviewed by NEPI’s auditors.

By order of the Board of Directors,

Martin Slabbert             Victor Semionov
Chief Executive Officer            Finance Director

5 February 2014

Transfer secretaries and settlement agent
Computershare Investor Services (Proprietary) Limited, 70 Marshall Street, Johannesburg, 2001, South Africa (PO Box 61051,
Marshalltown, 2107, South Africa)

Computershare Investor Services (Jersey) Limited, 2nd floor, Queensway House, Hilgrove Street, St Helier, JE1 1ES, Jersey

Directors
Dan Pascariu (Chairman)*, Martin Slabbert (Chief Executive Officer), Alexandru Morar#, Desmond de Beer**, Dewald Joubert*,
Jeffrey Zidel*, Michael Mills*, Tiberiu Smaranda#, Victor Semionov (Finance Director)
*Independent non-executive director **Non-executive director #Executive director

For further information please contact:

New Europe Property Investments plc
Martin Slabbert                                                               +40 74 432 8882

Nominated Adviser and Broker
Smith & Williamson Corporate Finance Limited
Azhic Basirov/Siobhan Sergeant                                                +44 20 7131 4000

JSE sponsor
Java Capital                                                                  +27 11 283 0042
Romanian advisor
SSIF Intercapital Invest SA
Razvan Pasol                                                                  +40 21 222 8731

All amounts in € unless otherwise stated



CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
                                                                                      IFRS                            IFRS
                                                                  Pro forma       Reported            IFRS         Restated
                                                                 Unaudited         Audited          Audited        Audited
                                                                31 Dec 2013    31 Dec 2012      31 Dec 2013    31 Dec 2012
ASSETS
Non-current assets                                              920 924 337    444 666 197      898 039 548    418 853 914
  Investment property                                           872 465 600    416 674 175      807 465 172    356 732 724
  Investment property at fair value                             758 623 401    393 966 226      703 811 000    339 851 226
  Investment property under development                         113 842 199     22 707 949      103 654 172     16 881 498
  Goodwill                                                       16 217 650     13 188 795       16 217 650     13 134 609
  Investments in joint ventures                                           –                –      5 054 897      3 546 212
  Long-term loans granted to joint ventures                               –                –     37 063 751     30 368 931
  Other long-term assets                                         29 831 099     14 727 635       29 828 090     14 995 846
  Financial assets at fair value through profit or loss           2 409 988         75 592        2 409 988         75 592
Current assets                                                  148 359 320    185 176 059      141 606 515    176 894 494
  Trade and other receivables                                    31 443 288     15 798 975       28 035 680      9 748 620
  Financial investments at fair value through profit or loss     61 078 624     81 865 443       61 078 624     81 865 443
  Cash and cash equivalents                                      55 837 408     87 511 641       52 492 211     85 280 431
Investment property held for sale                                 1 561 080     28 665 158        1 561 080     28 665 158
Total assets                                                   1 070 844 737   658 507 414     1 041 207 143   624 413 566
EQUITY AND LIABILITIES
Equity attributable to equity holders                           712 236 188    393 622 378      712 236 188    393 622 378
  Share capital                                                    1 946 514     1 352 629         1 946 514     1 352 629
  Share premium                                                 611 949 336    355 026 520      611 949 336    355 026 520
  Share-based payment reserve                                    23 851 992     15 491 810       23 851 992     15 491 810
  Currency translation reserve                                   (1 228 783)   (1 228 783)       (1 228 783)    (1 228 783)
  Accumulated profit                                             76 595 473     22 980 202       76 595 473     22 980 202
  Non-controlling interest                                         (878 344)               –       (878 344)             –

Total liabilities                                               358 608 549    264 885 036      328 970 955    230 791 188

Non-current liabilities                                         244 542 953    147 151 095      232 259 858    120 605 636
  Loans and borrowings                                          185 624 100    117 100 152      173 567 674     92 935 525
  Deferred tax liabilities                                       50 160 259     22 321 189       50 677 581     21 567 836
  Other long term liabilities                                      4 059 129               –       4 059 129             –
  Financial liabilities at fair value through profit or loss       4 699 465     7 729 754         3 955 474     6 102 275

Current liabilities                                             114 065 596    117 733 941       96 711 097    110 185 552
  Trade and other payables                                       29 973 879     12 985 200       28 807 208      9 773 420
  Loans and borrowings                                           80 511 506    102 048 042       64 465 953     97 781 406
  Tenant deposits                                                     3 580 211     2 700 699        3 437 936     2 630 726

Total equity and liabilities                                      1 070 844 737   658 507 414    1 041 207 143   624 413 566


CONSOLIDATED STATEMENTS OF INCOME
                                                                                         IFRS                           IFRS
                                                                     Pro forma       Reported           IFRS         Restated
                                                                    Unaudited         Audited         Audited        Audited
                                                                   31 Dec 2013    31 Dec 2012     31 Dec 2013    31 Dec 2012
Net rental and related income                                       45 188 418     30 432 771      41 419 968     28 344 410
  Contractual rental income and expense recoveries                  60 926 990     40 176 801      55 322 054     37 312 436
  Property operating expenses                                      (15 738 572)    (9 744 030)    (13 902 086)    (8 968 026)
Administrative expenses                                             (2 452 817)    (2 211 006)     (2 181 193)    (2 103 006)
Acquisition fees                                                    (4 986 222)    (1 594 393)     (4 986 222)     (915 212)
Fair value adjustments of investment property                       19 913 135      6 450 485      19 786 927      1 063 940
Fair value gains of financial investments at fair value through
                                                                       969 595     10 287 980         969 595     10 287 980
  profit or loss
Net result on sale of listed securities investments                    586 421         26 280         586 421         26 280
Dividends received from listed securities investments                2 905 611        796 411       2 905 611        796 411
Share-based payment expense                                           (954 637)     (996 909)        (954 637)     (996 909)
Foreign exchange loss                                                 (289 712)    (2 529 495)       (236 670)    (2 352 634)
Gain on acquisition of subsidiaries                                  5 546 854              –       5 546 854              –
Gain on disposal of investment property held for sale                  527 258              –         527 258              –
Other operating income                                                       –     10 264 266               –     10 264 266
Impairment of goodwill                                                (815 709)             –        (815 709)             –

Profit before net finance (expense)/income                          66 138 195     50 926 390      62 568 203     44 415 526

Net finance (expense)/income                                        (1 815 992)   (12 574 251)       1 783 349    (9 537 659)
  Finance income                                                      5 300 033     1 853 838        7 513 732     4 098 704
  Finance expense                                                   (7 116 025)   (14 428 089)     (5 730 383)   (13 636 363)

Share of profit of joint ventures                                            –              –       1 241 326      2 720 919

Profit before tax                                                   64 322 203     38 352 139      65 592 878     37 598 786
Deferred tax expense                                                (7 736 595)    (5 248 690)     (9 007 270)    (4 495 337)

Profit after tax                                                    56 585 608     33 103 449      56 585 608     33 103 449
Non-controlling interest                                               878 344              –         878 344              –
Profit for the year attributable to equity holders                  57 463 952     33 103 449      57 463 952     33 103 449
Weighted average number of shares in issue                         163 836 991    116 238 121     163 836 991    116 238 121
Diluted weighted average number of shares in issue                 168 827 400    121 391 646     168 827 400    121 391 646
Basic weighted average earnings per share (euro cents)                   35.07          28.48           35.07          28.48
Diluted weighted average earnings per share (euro cents)                 34.04          27.27           34.04          27.27
Distributable earnings per share (euro cents)                            25.79          25.95           25.79          25.95
Headline earnings per share (euro cents)                                 21.58          22.93           21.58          22.93
Diluted headline earnings per share (euro cents)                         20.94          21.96           20.94          21.96
RECONCILIATION OF PROFIT FOR THE YEAR TO DISTRIBUTABLE EARNINGS
                                                                                         IFRS                          IFRS
                                                                     Pro forma        Reported          IFRS        Restated
                                                                     Unaudited         Audited       Audited         Audited
                                                                      31 Dec 13      31 Dec 12      31 Dec 13      31 Dec 12
Profit for the year attributable to equity holders                   57 463 952     33 103 449     57 463 952     33 103 449
  Unrealised foreign exchange loss                                      256 141      2 529 495        256 141      2 352 634
  Acquisition fees                                                    4 986 222      1 594 393      4 986 222        915 212
  Share-based payment expense                                           954 637        996 909        954 637        996 909
  Accrued interest on share-based payments                              562 913        569 597        562 913        569 597
  Fair value adjustments of investment property                     (19 913 135)    (6 450 485)   (19 786 927)    (1 063 940)
  Fair value gains of financial investments at fair value through
                                                                      (969 595)    (10 287 980)     (969 595)    (10 287 980)
    profit or loss
  Financial assets at fair value                                     (2 039 736)     6 328 495     (1 156 248)     5 937 204
  Amortisation of financial assets                                    (475 600)      (572 063)      (475 600)      (572 063)
  Net result on sale of listed securities investments                 (586 421)        (26 280)     (586 421)        (26 280)
  Dividends received from listed securities investments              (2 905 611)     (796 411)     (2 905 611)     (796 411)
  Accrued income from financial investments at fair value
                                                                      4 363 556      3 092 147      4 363 556      3 092 147
   through profit or loss
  Gain on disposal of investment property held for sale               (527 258)              –      (527 258)              –
  Gain on acquisition of subsidiaries                                (5 546 854)             –     (5 546 854)             –
  Deferred tax expense                                                7 736 595      5 248 690      9 007 270      4 495 337
  Impairment of goodwill                                                815 709              –        815 709              –
  Shares issued cum distribution                                      3 577 266      3 156 648      3 577 266      3 156 648
  Non-distributable portion of the vendor settlement income                   –     (3 144 561)             –     (3 144 561)
Adjustments related to joint ventures
  Fair value adjustments of investment property                               –              –      (126 208)     (5 386 545)
  Financial assets at fair value                                              –              –      (883 488)        391 291
  Deferred tax expense                                                        –              –     (1 270 675)       753 353
  Acquisition fees                                                            –              –              –        679 181
  Unrealised foreign exchange loss                                            –              –              –        176 861
Adjustments related to non-controlling interest
  Fair value adjustments of investment property                             584              –            584              –
  Deferred tax expense                                                (106 975)              –       (106 975)             –
  Acquisition fees                                                    (275 480)              –      (275 480)              –
Distributable earnings for the year                                  47 370 910     35 342 043     47 370 910     35 342 043
Distribution from reserves                                            1 573 539              –      1 573 539              –
Less: distribution declared                                         (48 944 449)   (31 497 562)   (48 944 449)   (31 497 562)
  Interim distribution                                              (20 594 618)   (14 101 923)   (20 594 618)   (14 101 923)
  Final distribution                                                (28 349 831)   (17 395 639)   (28 349 831)   (17 395 639)

Earnings not distributed                                                      –      3 844 481              –      3 844 481
Number of shares entitled to distribution                           204 544 236    144 362 152    204 544 236    144 362 152
Distributable earnings per share (euro cents)                             25.79          25.95          25.79          25.95
Distribution from reserves per share (euro cents)                          1.00              –           1.00              –
Less: distribution declared per share (euro cents)                       (26.79)        (23.29)        (26.79)        (23.29)
  Interim distribution per share (euro cents)                            (12.93)         (11.24)          (12.93)             (11.24)
  Final distribution per share (euro cents)                              (13.86)         (12.05)          (13.86)             (12.05)

Earnings per share not distributed (euro cents)                                –              2.66               –               2.66


CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
                                                                                            IFRS                               IFRS
                                                                       Pro forma        Reported           IFRS             Restated
                                                                      Unaudited          Audited         Audited            Audited
                                                                     31 Dec 2013     31 Dec 2012     31 Dec 2013        31 Dec 2012
Profit for the year attributable to equity holders                    57 463 952      33 103 449        57 463 952       33 103 449
Other comprehensive income
– currency translation differences                                             –       1 421 739                 –           1 421 739
Total comprehensive income for the year                               57 463 952      34 525 188        57 463 952       34 525 188


RECONCILIATION OF NET ASSET VALUE TO ADJUSTED NET ASSET VALUE
                                                                                            IFRS                               IFRS
                                                                       Pro forma        Reported           IFRS             Restated
                                                                      Unaudited          Audited         Audited            Audited
                                                                     31 Dec 2013     31 Dec 2012     31 Dec 2013        31 Dec 2012
Net asset value per the Statement of financial position              712 236 188     393 622 378     712 236 188        393 622 378
Loans in respect of the Initial Share Scheme                          11 574 006      12 489 022        11 574 006       12 489 022
Deferred tax liabilities                                              50 160 259      22 321 189        50 677 581       21 567 836
Goodwill                                                             (16 217 650)    (13 188 795)    (16 217 650)       (13 188 795)
Deferred tax liabilities for joint ventures                                    –                 –       (517 322)            753 353
Adjusted net asset value                                             757 752 803     415 243 794     757 752 803        415 243 794

Net asset value per share                                                    3.56             2.83            3.56                2.83
Adjusted net asset value per share                                           3.70             2.88            3.70                2.88

Number of shares for net asset value per share purposes              199 836 882     139 258 914     199 836 882        139 258 914
Number of shares for adjusted net asset value per share
                                                                     204 544 236     144 362 152     204 544 236        144 362 152
 purposes


LEASE EXPIRY PROFILE
                                  2014        2015    2016    2017    2018    2019     2020      2021     2022       >2023       Total
Total based on rental income      7.3%        17.3%   13.0%   8.9%   13.6%    9.5%    5.2%       4.5%     4.1%       16.6%      100%
Total based on rented area        6.5%        14.1%   8.6%    7.5%   14.3%    8.2%    4.6%       4.3%     7.7%       24.2%      100%



RECONCILIATION OF PROFIT FOR THE YEAR TO HEADLINE EARNINGS
                                                                                            IFRS                               IFRS
                                                                       Pro forma        Reported           IFRS             Restated
                                                                      Unaudited          Audited         Audited            Audited
                                                                     31 Dec 2013     31 Dec 2012     31 Dec 2013        31 Dec 2012
Profit for the year attributable to equity holders                    57 463 952      33 103 449        57 463 952       33 103 449
Fair value adjustment of investment property                         (19 913 135)     (6 450 485)    (19 786 927)        (6 450 485)
Gain on sale of investment property held for sale                      (527 258)                 –       (527 258)                  –
Gain on acquisition of subsidiaries                                     (5 546 854)                   –       (5 546 854)                  –
Impairment of goodwill                                                        815 709                 –           815 709                  –
Total tax effects of adjustments                                          3 055 588                   –         3 035 395                  –
Fair value adjustment of investment property for joint ventures                    –                  –         (126 208)                  –
Total tax effects of adjustments for joint ventures                                –                  –            20 193                  –
Headline earnings                                                        35 348 002          26 652 964        35 348 002        26 652 964


SEGMENTAL ANALYSIS
                                                                                                   IFRS                                IFRS
                                                                         Pro forma             Reported             IFRS            Restated
                                                                        Unaudited               Audited           Audited           Audited
                                                                       31 Dec 2013          31 Dec 2012       31 Dec 2013       31 Dec 2012
Contractual rental income and expense recoveries
Retail                                                                   31 329 530          18 567 825        26 055 375        15 932 097
Office                                                                   27 643 735          19 715 918        27 312 954        19 487 281
Industrial                                                                1 953 725           1 893 058         1 953 725         1 893 058
Total                                                                    60 926 990          40 176 801        55 322 054        37 312 436
Profit before net finance expense
Retail                                                                   46 846 605          19 067 337        43 734 777        12 750 110
Office                                                                   16 976 981          12 012 525        16 518 818        11 818 888
Industrial                                                                1 339 330           1 501 942         1 339 330         1 501 942
Corporate                                                                     975 279        18 344 586           975 278        18 344 586
Total                                                                    66 138 195          50 926 390        62 568 203        44 415 526


CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (SAME AMOUNTS FOR PRO FORMA AND IFRS)
                                                          Share-based Currency                                        Non-
                                        Share       Share    payment translation Accumulated                    controlling
                                       capital   premium      reserve    reserve      profit                       interest           Total
Balance at 1 January 2012             955 693 227 844 770        7 456 257 (2 650 522)          1 652 742                   –   235 258 940

Transactions with owners              396 936 127 181 750        8 035 553              –     (11 775 989)                  –   123 838 250
– Issue of shares                     391 735 125 943 296                –              –                 –                 –   126 335 031
– Issue cost recognised to equity           –    (332 117)               –              –                 –                 –     (332 117)
– Share-based payment reserve               –              –     9 258 789              –                 –                 –     9 258 789
– Sale of shares issued under the
Initial Share Scheme                    1 110         326 324            –              –                 –                 –       327 434
– Sale of shares issued under the
Current Share Scheme                      530         183 367    (158 795)              –                 –                 –        25 102
– Vesting of shares issued under
the Current Share Scheme                3 561    1 060 880      (1 064 441)             –                 –                 –             –
– Earnings distribution                     –              –             –              –     (11 775 989)                  –   (11 775 989)

Total comprehensive income                  –              –             –      1 421 739      33 103 449                   –    34 525 188
– Other comprehensive income                –              –             –      1 421 739                 –                 –     1 421 739
– Profit for the year                       –              –             –              –      33 103 449                   –    33 103 449

Balance at 31 December 2012 1 352 629 355 026 520               15 491 810 (1 228 783)         22 980 202                   –   393 622 378
Balance at 1 January 2013           1 352 629 355 026 520       15 491 810 (1 228 783)         22 980 202                   –   393 622 378

Transactions with owners              593 885 256 922 816        8 360 182              –      (3 848 681)                  –   262 028 202
– Issue of shares                   578 530 251 690 691                –              –                  –             –    252 269 221
– Share-based payment reserve              –             –    11 388 810              –                  –             –     11 388 810
– Sale of shares issued under the
Initial Share Scheme                    3 959     1 260 256            –              –                  –             –      1 264 215
– Sale of shares issued under the
Current Share Scheme                    1 369      489 590     (490 959)              –                  –             –              –
– Vesting of shares issued under
the Initial Share Scheme                   –             –       954 637              –                  –             –       954 637
– Vesting of shares issued under
the Current Share Scheme               10 027     3 482 279   (3 492 306)             –                  –             –              –
– Earnings distribution                    –             –             –              –      (3 848 681)               –    (3 848 681)
Total comprehensive income                 –             –             –              –      57 463 952        (878 344)     56 585 608
– Profit for the year                      –             –             –              –      57 463 952        (878 344)     56 585 608

Balance at 31 December 2013 1 946 514 611 949 336             23 851 992 (1 228 783)         76 595 473        (878 344)    712 236 188


ABRIDGED CONSOLIDATED STATEMENT OF CASH FLOWS
                                                                                                  IFRS                             IFRS
                                                                         Pro forma                                 IFRS
                                                                                              Reported                          Restated
                                                                        Unaudited                                Audited
                                                                                               Audited                          Audited
                                                                       31 Dec 2013                           31 Dec 2013
                                                                                           31 Dec 2012                      31 Dec 2012
Cash flows from operating activities                                    28 284 508          25 644 072        26 822 655     25 151 416
Cash flows from financing activities                                   293 347 217         139 575 360       293 676 500    125 279 594
Cash flows used in investing activities                               (353 305 958)       (132 603 532) (353 287 375) (119 342 933)

Net (decrease)/increase in cash and cash equivalents                   (31 674 233)         32 615 900       (32 788 220)    31 088 077

Cash and cash equivalents brought forward                               87 511 641          55 065 100        85 280 431     54 361 713
Translation effect on cash and cash equivalents                                  –           (169 359)                 –      (169 359)

Cash and cash equivalents carried forward                               55 837 408          87 511 641        52 492 211     85 280 431

BASIS OF PREPARATION

These audited condensed consolidated financial results for the year ended 31 December 2013 have been prepared in accordance
with the recognition and measurement criteria of the International Financial Reporting Standards (“IFRS”), its interpretations
adopted by the International Accounting Board (“IASB”), the presentation and the disclosure requirements of IAS 34 Interim
Financial Reporting and the Listings Requirements of the JSE.

The accounting policies which have been applied are consistent with those used in the preparation of the annual financial
statements for the year ended 31 December 2012, with the following exceptions:

–      As a result of the adoption of IFRS 11 “Joint Arrangements” effective 1 January 2013, the Group is now accounting for its
       investments in joint ventures under the equity method. The Group has restated the presentation of the Statement of
       Financial Position and Statement of Income starting 1 January 2012, which previously included joint ventures accounted
       for under the proportionate consolidation method.

–      The Group has changed the functional currency to Euro effective 1 January 2013. According to IFRS, previously issued
       financial statements are not restated in this respect.

As the Group is focusing on being consistent on those areas of reporting that are seen to be of most relevance to investors and on
providing a meaningful basis of comparison for users of the financial information, it has prepared unaudited pro forma statement
of financial position and unaudited pro forma statement of income. The main difference between the pro forma statements and the
condensed consolidated financial results prepared in accordance with IFRS is that the pro forma statements are prepared using the
proportionate consolidation method for the investments in joint ventures, consistent with financial statements prepared in
accordance with IFRS reported in prior periods.

The pro forma statement of financial position and pro forma statement of income have been prepared by and are the responsibility
of the Directors of NEPI. Due to its nature, the pro forma statements of financial position and income may not fairly reflect the
financial position and results of the Group after the differences set out above. The directors are not aware of any matters or
circumstances arising subsequent to 31 December 2013 that require any additional disclosure or adjustment to the audited
condensed consolidated financial results.

Ernst & Young have audited the Group’s financial statements for the year ended 31 December 2013. These audited condensed
consolidated financial results have been derived from the Group financial statements and are consistent with these in all material
respects. A copy of their unmodified audit report is available for inspection at the Company’s registered office. The independent
auditor’s report will be included in NEPI’s 2013 Annual Report.

BANK LOANS AND BORROWINGS REPAYMENT PROFILE (SAME AMOUNTS FOR PRO FORMA AND IFRS)
                                               Available
                                Outstanding          for                                                               2018 and
Borrower                            amount    drawdown            2014          2015           2016          2017        beyond
Floreasca Business Park          56 577 248            –     3 920 000     3 920 000      3 920 000     3 920 000    40 897 248
Aupark Zilina                    53 826 669            –     2 973 946     1 953 951    48 898 772               –             –
Promenada Mall Braila            35 688 696            –    35 688 696              –             –              –             –
The Lakeview                     29 824 138            –     2 110 345     2 110 345      2 110 345     2 110 345    21 382 758
City Business Centre             26 887 758            –     1 265 202     1 314 149      1 365 022     1 417 895    21 525 490
Ploiesti Shopping City (joint
                                 15 075 378            –     2 840 799       768 665       768 665        768 665      9 928 584
venture)
German Portfolio (joint
                                 12 862 905            –    12 862 905              –             –              –             –
venture)
Retail Park Pitesti              12 279 140            –     1 042 071    11 237 069              –              –             –
New Europe Property
                                 10 409 281            –    10 409 281              –             –              –             –
Investments plc
Regional Offices Portfolio        6 298 637            –     6 298 637              –             –              –             –
Street Segment Retail
Portfolio and Brasov Strip        6 137 500            –       250 000       250 000      5 637 500              –             –
Mall
Rasnov Industrial Facility
                                         –     9 500 000              –             –             –              –             –
and Otopeni Warehouse
Total                           265 867 350    9 500 000    79 661 882    21 554 179    62 700 304      8 216 905    93 734 080

The weighted average margin for the loans outstanding as at 31 December 2013 was 3.3% paid on top of a reference base rate
(EONIA, 1 month EURIBOR, 3 month EURIBOR) hedged with a weighted average interest rate cap of 2% for 51% of the
outstanding notional amount and a weighted average interest rate swap of 2.1% for 49% of the notional amount.

Date: 05/02/2014 05:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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