MANAGEMENT BOARD REPORT ON THE OPERATIONS OF ROBYG S.A. FOR THE YEAR ENDED 31 DECEMBER 2013

Transcription

1 MANAGEMENT BOARD REPORT ON THE OPERATIONS OF ROBYG S.A. FOR THE YEAR ENDED 31 DECEMBER 2013 Warsaw, 19 March

2 1. BASIC INFORMATION ABOUT THE COMPANY ROBYG S.A., a joint-stock company (the Company ) is the dominant entity of the ROBYG S.A. Capital Group (the Group ). ROBYG S.A. was established on the basis of a Notarial Deed dated 14 March The Company has been established for an indefinite period of time. According to the Articles of Association, the Company s core business activity is: 1. Holding activities (PKD Z). 2. Carrying out general construction work related to building construction (PKD A). The Company is a dominant entity of the ROBYG S.A. Capital Group. The Group was created in April 2008 as a result of a reorganization process that included contribution in kind of a number of entities to the Company as well as purchase or setting up of some entities by ROBYG S.A. The Group is operating primarily in the property development sector and it is engaged mainly in the construction and sale of residential real estate. Key corporate information about ROBYG S.A.: ROBYG S.A. has its registered office in, Warsaw (01-793), at ul. L. Rydygiera 15. ROBYG S.A. was established based on its Articles of Association of 14 March ROBYG S.A. was entered in the Register of Business Entities maintained by the District Court for the Capital City of Warsaw in Warsaw, XII Commercial Department of the National Court Register, Entry No. KRS ROBYG S.A. was assigned statistical REGON number Subsidiaries of ROBYG S.A. The Company has stakes in the following subsidiaries and jointly controlled entities: Name of subsidiary or jointly controlled entity ROBYG Development 1 ROBYG Development 1 spółka z ograniczoną odpowiedzialnością Sp. k. ROBYG Development 2 ROBYG Park ROBYG Morena ROBYG City Apartments ROBYG City Apartments 2 ROBYG Marina Tower Registered office Business activities % held by the Company in share capital of subsidiaries or jointly controlled entities as at 31 December 2013 % held by the Company in share capital of subsidiaries or jointly controlled entities as at 31 December 2012 Holding activities % % Real estate development and sales of units on its own behalf % (1) % Real estate development and sales of units on its own behalf % (2) % Real estate development and sales of units on its own behalf % % Real estate development and sales of units on its own behalf % % Real estate development and sales of units on its own behalf % % Real estate development and sales of units on its own behalf % (3) % Real estate development and sales of units on its own behalf % % 2

3 Name of subsidiary or jointly controlled entity ROBYG Osiedle Zdrowa 1 ROBYG Osiedle Zdrowa 1 spółka z ograniczoną odpowiedzialnością Sp. k. M3 ROBYG Osiedle Zdrowa 1 spółka z ograniczoną odpowiedzialnością Sp. k. (former name: ROBYG Osiedle Zdrowa 2 Sp. z o.o.) Królewski Park ROBYG Jabłoniowa ROBYG Jabłoniowa 2 ROBYG Ogród Jelonki ROBYG Osiedle Kameralne FORT Property ROBYG Young City ROBYG Marketing i Sprzedaż ROBYG Zarządzanie ROBYG Construction ROBYG Construction ROBYG Kameralna P-Administracja Wilanów Office Center ROBYG Business Park Jagodno Estates Buforowa ROBYG Osiedle Królewskie Registered office Business activities % held by the Company in share capital of subsidiaries or jointly controlled entities as at 31 December 2013 % held by the Company in share capital of subsidiaries or jointly controlled entities as at 31 December 2012 Holding activities % % Real estate development and sales of units on its own behalf. Real estate development and sales of units on its own behalf % (4) % % (5) % Real estate development and sales of units on its own behalf % (6) n/a Real estate development and sales of units on its own behalf % % Real estate development and sales of units on its own behalf % (7) % Holding activities % (8) % Real estate development and sales of units on its own behalf % (9) % Real estate development and sales of units on its own behalf % (10) % Real estate development and sales of units on its own behalf % (11) % Organization of the selling process for the units built by the Group companies. Project management and supporting services. Construction and building activities % % % % % (12) % Holding activities % % Real estate development and sales of units on its own behalf % % Real estate management services % (13) % Real estate development, offices and commercial space management, sales of units on its own behalf % % Holding activities % % Real estate development and sales of units on its own behalf % % Real estate development and sales of units on its own behalf % (14) % Real estate development and sales of units on its own behalf % (15) % 3

4 Name of subsidiary or jointly controlled entity OVERKAM 7 QUBE OVERKAM 7 QUBE spółka z ograniczoną odpowiedzialnością S.K.A. mklegal Inwestycje MKLI spółka z ograniczoną odpowiedzialnością SPV 11 S.K.A mklegal Inwestycje MKLI spółka z ograniczoną odpowiedzialnością SPV 12 S.K.A mklegal Inwestycje MKLI spółka z ograniczoną odpowiedzialnością SPV 13 S.K.A ROBYG Property ROBYG Wola Investment MZM Properties under liquidation Registered office Business activities % held by the Company in share capital of subsidiaries or jointly controlled entities as at 31 December 2013 Holding activities. Holding activities. Aleje Jerozolimskie 56C Warsaw, Aleje Jerozolimskie 56C Warsaw, Aleje Jerozolimskie 56C Warsaw, Holding activities. Holding activities % % % (16) % % (17) n/a % (18) n/a Holding activities % (19) n/a Space rental services % (20) n/a Real estate development and sales of units on its own behalf % (21) n/a Holding activities. n/a (22) % % held by the Company in share capital of subsidiaries or jointly controlled entities as at 31 December 2012 Source: the Company (1) ROBYG S.A. holds a 99.90% direct stake in the company and 0.10% indirectly, through ROBYG Development 1 ; (2) indirect stake through ROBYG Development 1 spółka z ograniczoną odpowiedzialnością sp. k.; (3) indirect stake through ROBYG City Apartments ; (4) ROBYG S.A. a holds 99.5% direct stake in the share capital of ROBYG Osiedle Zdrowa 1 spółka z ograniczoną odpowiedzialnością Sp. k. and the remaining 0.5% indirectly, through ROBYG Osiedle Zdrowa 1 ; (5) indirect stake through ROBYG Osiedle Zdrowa 1 spółka z ograniczoną odpowiedzialnością sp. k.; during 2Q 2013 ROBYG Osiedle Zdrowa 2 was converted from a limited liability company to a limited partnership and as a result, it has changed its name to M3 ROBYG Osiedle Zdrowa 1 Spółka z ograniczoną odpowiedzialnością Sp. k.; (6) this company was set up by the Group in 3Q 2013, with share capital of PLN 50 thousand, entity being under the joint control of the Group and NCRE Investments Ltd, ROBYG S.A. holds 51.00% indirectly through ROBYG Osiedle Zdrowa 1 spółka z ograniczoną odpowiedzialnością Sp. k.; (7) indirect stake through ROBYG Jabłoniowa ; (8) entity being under the joint control of the Group and Wildetio Limited; (9) entity being under the joint control of the Group and Wildetio Limited; indirect stake through ROBYG Ogród Jelonki ; (10) entity being under the joint control of the Group and NCRE Investments Ltd.; (11) entity being under the joint control of the Group and NCRE Investments Ltd.; indirect stake through FORT Property Sp. z o.o; (12) ROBYG S.A. holds a 99.9% direct stake in share capital of the company and the remaining 0.1% indirectly, through ROBYG Construction ; (13) ROBYG S.A. holds a 17% direct stake in that company and 83% indirectly, through ROBYG Marina Tower ; (14) indirect stake through Jagodno Estates ; (15) in 2Q 2013 ROBYG S.A. sold 49% of shares in that company and set up a joint venture with a partner - NCRE Investments Ltd. (16) ROBYG S.A. holds a 99.50% direct stake in the company and 0.50% indirectly, through OVERKAM 7 QUBE ; (17)ROBYG S.A. acquired this company in 4Q 2013, with its share capital of PLN 50 thousand; ROBYG S.A. holds a 99.01% direct stake in the company and 0.99% indirectly, through OVERKAM 7 QUBE, (18) ROBYG S.A. acquired this company in 4Q 2013, with its share capital of PLN 50 thousand; ROBYG S.A. holds a 99.01% direct stake in the company and 0.99% indirectly, through OVERKAM 7 QUBE, (19) ROBYG S.A. acquired this company in 4Q 2013, with its share capital of PLN 50 thousand; ROBYG S.A. holds a 99.01% direct stake in the company and 0.99% indirectly, through OVERKAM 7 QUBE, (20) a company set up by ROBYG S.A. in 2Q 2013, with share capital of PLN 50 thousand; (21)a company set up by ROBYG S.A. in 3Q 2013, with share capital of PLN 50 thousand, entity being under the joint control of the Company and NCRE Investments Ltd.; (22) on 1 October 2012 the Group has started the procedure of liquidation in relation to this entity, the process was completed in December As at 31 December 2013 and as at 31 December 2012, the percentage share in the total number of votes held by the Company in the subsidiaries corresponds to the percentage held in the share capital of those entities. 4

5 In 2013, the Company concluded the following transactions related to shares held in subsidiaries and jointly controlled entities: the creation of Królewski Park together with NCRE Investments Limited (the Company holds 51% of the shares with a value of PLN 26 thousand), the creation of ROBYG Wola Investment together with NCRE Investments Limited (the Company holds 51% of the shares with a value of PLN 26 thousand), the creation of ROBYG Property (with a total value of shares is PLN 55 thousand), the purchase of shares in mklegal Inwestycje MKLI spółka z ograniczoną odpowiedzialnością SPV 11 S.K.A (for the purchase price of PLN 57 thousand), the purchase of shares in mklegal Inwestycje MKLI spółka z ograniczoną odpowiedzialnością SPV 12 S.K.A (for the purchase price of PLN 57 thousand), the purchase of shares in mklegal Inwestycje MKLI spółka z ograniczoną odpowiedzialnością SPV 13 S.K.A (for the purchase price of PLN 57 thousand), the sale of 49% of shares (with a book value of PLN 25 thousand) in ROBYG Osiedle Królewskie Sp. z o.o. to NCRE Investments Limited, the sale of all shares (with a book value of PLN 26 thousand) in Królewski Park to ROBYG Osiedle Zdrowa 1 spółka z ograniczoną odpowiedzialnością Sp. k., liquidation of MZM Properties w likwidacji (with a book value of PLN 64 thousand). Impairment write-offs of shares in 2013 amounted to PLN thousand. Additional information regarding these write-offs can be found in Note 12.2 to the Company s standalone financial statements for the year ended 31 December In addition, registered pledges were established on shares held by the Company in the Company s subsidiaries and co-subsidiaries (ROBYG Morena, ROBYG Marina Tower, ROBYG Osiedle Królewskie, ROBYG Kameralna, ROBYG City Apartments ) and shares in the Company s indirect subsidiaries and indirect co-subsidiaries (ROBYG Development 2, ROBYG City Apartments 2, ROBYG Jabłoniowa 2, ROBYG Osiedle Kameralne ; ROBYG Young City Sp. z o.o.) in favour of banks financing the investment in individual SPVs in relation to the bank credit facilities granted to these companies. As at 31 December 2013, the carrying amount of shares indicated in the Company s books on which the registered pledge was established totals PLN thousand. Additionally, in relation to the court case brought by Marysieńka Homeowner Association against ROBYG Development 1 Spółka z ograniczoną odpowiedzialnością Sp. k. which is the subsidiary of the Company, the District Court secured the claim up to the amount of PLN thousand by making an attachment of shares in ROBYG Development 2 held by ROBYG Development 1 Spółka z ograniczoną odpowiedzialnością Sp. k. (what equals to 13% of ROBYG Development 2 Sp. z o.o. share capital). Moreover, in relation to the court case brought by Villa Nova Homeowner Association in Warsaw against ROBYG Development 1 Spółka z ograniczoną odpowiedzialnością Sp. k. which is the subsidiary of the Company, the District Court secured the claim of the Association up to the amount of PLN thousand by attachment of shares in ROBYG Development 2 held by ROBYG Development 1 Spółka z ograniczoną odpowiedzialnością Sp. k. (what equals to 8% of ROBYG Development 2 share capital); following an appeal, the execution of District Court s decision has been arrested. Share capital and shareholders of ROBYG S.A. as at 31 December 2013 The share capital of ROBYG S.A. as at 31 December 2013 was PLN and was composed of 260,521,999 ordinary bearer shares with a nominal value of PLN 0.10 each, entitling the holders to one vote per share at the General Meeting of the Issuer. 5

6 As at 31 December 2013, the shareholding structure of the Company's share capital was as follows: Shareholder Total number of shares kept by the given Shareholder (*) % share in the share capital (**) LBPOL William II S.A.R.L % Nanette Real Estate Group N.V % ING Otwarty Fundusz Emerytalny i ING Dobrowolny Fundusz Emerytalny (***) 7.44% (***) Other shareholders % Total % (*) The number of shares kept by the particular Shareholders equals to the number of votes they have. (**) The share in the share capital is equal to the share in the total number of votes at a General Shareholders Meeting. (***) Information based on the notification received on 28 March Changes in the structure of the Company s equity have been described in Note 4.10 to this report. 2. STATEMENT OF THE MANAGEMENT BOARD As at the date of the approval of this report, the Company s Management Board did not find any circumstances that indicated a threat to the continuation of business activities of the Company or the companies constituting the Group. 3. INFORMATION ABOUT THE COMPANY S OPERATIONS IN THE PERIOD OF 12 MONTHS ENDED 31 DECEMBER General information The subject of the Group's business is development operations related to residential projects, whereas the core operation of ROBYG S.A., according to the REGON system entry, is the activity of financial holdings, the purchase and sale of real property on its own account, and operations related to managing and directing the conducted business activity. In the period of 12 months ended 31 December 2013, ROBYG S.A. implemented a strategy which complied with the core type of operations, that is, with operations specified above. In the period of 12 months ended 31 December 2013, the Company implemented tasks related to organisational and ownership supervision over its subsidiaries, and it also organised the financing of their investment activity. The subsidiaries of ROBYG S.A. conducted activities on the property development market by continuing investments or preparing to start them. 3.2 The Company s subsidiaries property development projects Completed stages of property development projects in the period of 12 months ended 31 December 2013 The table below presents summary of the information regarding the completed stages of property development projects in the period of 12 months ended 31 December 2013: Project name project stages No. of units constructed Total usable area of units constructed in sq.m. Total No. of contracted units Sales revenues recognized Sales revenues not recognized Nowa Rezydencja Królowej Marysieńki - Stage VII *) Osiedle Zdrowa - Stage III **) 194****)

7 City Apartments - Stage III Lawendowe Wzgórza Stage V Lawendowe Wzgórza Stage VII Lawendowe Wzgórza Stage VIII ***) Słoneczna Morena Stage IV Słoneczna Morena Stage V Słoneczna Morena Stage VI Słoneczna Morena Stage VII Albatross Towers - Stage I TOTAL Source: the Company *) The eighth stage built as part of the Nowa Rezydencja Królowej Marysieńki project. **) The fifth stage built as part of the Zdrowa project. ***) Commercial and office project. ****) The number includes three commercial units that the Group has rent an external entity In addition, in the period of 12 months ended 31 December 2013, the Group completed the implementation of the first stage of the ROBYG Business Center office and commercial project, with a useable floor space of approximately 10,500 square metres Stages of property development projects under implementation In the period of 12 months ended 31 December 2013, the Group launched the following stages of property development projects: Project name project stages No. of units to be constructed Total usable area of units to be constructed in sq. m. No. of contracted units Start of construction Planned completion of construction City Apartments - Stage VI *) Osiedle Kameralne Stage II Q Q Q Q 2014 Young City - Stage II Q Q 2014 Osiedle Królewskie - Stage I Q Q

8 Osiedle Królewskie - Stage II Lawendowe Wzgórza Stage X Słoneczna Morena Stage VIII Albatross Towers - Stage II Q Q Q Q Q Q Q Q 2015 TOTAL Source: the Company *) The fifth stage built as part of City Apartments project. In the period of 12 months ended 31 December 2013, the Group continued the implementation of the following stages that were started in 2012: Project name project stages No. of units to be constructed Total usable area of units to be constructed in sq. m. No. of contracted units Start of construction Planned completion of construction Nowa Rezydencja Królowej Marysieńki - Stage V *) Q Q 2014 City Apartments - Stage IV Q Q 2014 Young City - Stage I Q Q 2014 Lawendowe Wzgórza Stage IX Q Q 2014 TOTAL Source: the Company *) The ninth stage built as part of Nowa Rezydencja Królowej Marysieńki project. Planned stages of the property development projects to be launched in 2014 The table below presents a summary of the information regarding the stages of property development projects that the Group plans to launch in 2014 and in 2013 the Group started presale: Project name project stages No. of units to be constructed Total usable area of units to be constructed in sq. m. No. of contracted units Planned start of construction Planned completion of construction City Apartments - Stage V *) Q Q 2015 Young City - Stage III Q Q 2015 Young City - Stage IV Q Q 2015 Osiedle Królewskie - Stage III Q Q 2015 Osiedle Królewskie - Stage IV Q Q 2015 Albatross Towers - Stage III Q Q 2015 TOTAL Source: the Company *) The sixth stage built as part City Apartments projects. 8

9 The table below presents a summary of the information regarding the stages of property development projects that the Group plans to launch in 2014 and in 2013 units from that stages are not available for purchase until 31 December 2013: Project name project stages No. of units to be constructed Total usable area of units to be constructed in sq. m. Planned start of construction Planned completion of construction Osiedle Kameralne Stage III Q Q 2015 Osiedle Kameralne II Stage I Q Q 2015 Young City - Stage V Q Q 2015 Osiedle Królewskie - Stage V Q Q 2016 Osiedle Królewskie - Stage VI Q Q 2016 Wola City- Stage I Q Q 2016 Lawendowe Wzgórza Stage XI Q Q 2015 Słoneczna Morena Stage IX Q Q 2015 Słoneczna Morena Stage X *) Q Q 2015 Słoneczna Morena Stage XI Q Q 2016 Słoneczna Morena Stage XII Q Q 2015 Albatross Towers - Stage IV Q Q 2016 TOTAL Source: the Company *) Commercial and office project. 3.3 Information about markets, clients, and sources of production materials In the year ended 31 December 2013, the Company implemented tasks related to organisational and ownership supervision over subsidiaries and also organised financing for their investment and operating activities. The subsidiaries of ROBYG S.A. conducted activities on the property development market by continuing investments or preparing to start them. Due to the nature of its business, the Company generates sales revenues mainly from recipients in the Capital Group, that is, its subsidiaries, and is not dependent on any external recipients. 4. EVENTS MATERIALLY AFFECTING THE COMPANY S OPERATIONS AND THE FINANCING OF THE COMPANY S OPERATIONS IN THE CURRENT PERIOD. 4.1 Concluded credit facility agreements and material changes to the credit facility agreements concluded by the Company in the period of 12 months ended 31 December On 23 January 2013 the Company has signed a bank loan agreement with Bank Millennium S.A. The bank loan initially amounted to PLN thousand and it was granted for financing of the current activities of the Company, in particular for the financing of development activities of the Company s subsidiary - ROBYG 9

10 Osiedle Królewskie The bank loan was granted until 22 January The interest rate applicable to the loan is based on the floating interest rate WIBOR 1M increased by the margin of the bank. Major securities established in connection with the said agreement were as follows: o a joint mortgage on the plots of land of ROBYG Osiedle Królewskie up to the amount of PLN thousand On 26 April 2013 the Company signed an amendment to the said loan agreement with Bank Millennium S.A. allowing for the prolongation of the maturity date of the bank loan until 25 April The amount of the loan available was changed from PLN thousand to PLN thousand. As a result of the said amendment, the joint mortgage on the plots of land of ROBYG Osiedle Królewskie was removed. On 18 February 2013 ROBYG S.A. repaid the loan to Getin Noble Bank S.A. in the amount of PLN thousand. 4.2 Drawdowns and repayments of credit facilities in the period of 12 months ended 31 December 2013: Credit facilities borrowed and repaid in the year ended 31 December 2013 are presented in the table below: Lending bank Borrower Credit facility Getin Noble Bank S.A. ROBYG S.A. investment credit facility Drawdowns (in PLN thousands) Repayments (in PLN thousands) Millennium Bank S.A. ROBYG S.A. overdraft facility Total Source: the Company 4.3 Information about loans from related parties received and repaid by the Company in the period of 12 months ended 31 December 2013 The Company did not receive and did not repay any loans from related parties in the period of 12 months ended 31 December Information about related party loan agreements terminated in the period of 12 months ended 31 December 2013 The Company did not terminate any related party loan agreements existing in Information about loans granted by the Company to related parties in the period of 12 months ended 31 December 2013 Borrower Availability date of a loan or a tranche Repayment date The amount of loan or a tranche in PLN thousands Currency Manner of interest calculation Buforowa 04/01/ /12/ PLN Floating interest rate Buforowa 04/07/ /12/ PLN Floating interest rate MZM Properties (*) 27/05/ /12/ PLN Fixed interest rate MZM Properties (*) 12/09/ /12/ PLN Fixed interest rate Overkam 7 Qube 24/07/ /09/ PLN Floating interest rate Overkam 7 Qube 16/12/ /09/ PLN Floating interest rate Królewski Park 26/11/ /12/ PLN Floating interest rate 10

11 Królewski Park 20/12/ /12/ PLN Floating interest rate ROBYG Property 17/07/ /09/ PLN Floating interest rate ROBYG Wola Investment 24/09/ /09/ PLN Floating interest rate P-Administracja 31/01/ /12/ PLN Fixed interest rate ROBYG Business Park 19/07/ /09/ PLN Floating interest rate ROBYG Development 2 24/01/ /12/ PLN Fixed interest rate ROBYG Jabłoniowa 2 26/06/ /06/ PLN Floating interest rate ROBYG Jabłoniowa 2 26/07/ /09/ PLN Floating interest rate ROBYG Jabłoniowa 2 26/09/ /09/ PLN Floating interest rate ROBYG Jabłoniowa 25/02/ /12/ PLN Fixed interest rate ROBYG Jabłoniowa 26/02/ /12/ PLN Fixed interest rate ROBYG Kameralna 31/05/ /12/ PLN Fixed interest rate ROBYG Kameralna 12/07/ /09/ PLN Floating interest rate ROBYG Kameralna 27/11/ /09/ PLN Floating interest rate ROBYG Marketing i Sprzedaż 06/05/ /06/ PLN Floating interest rate ROBYG Marketing i Sprzedaż 03/07/ /09/ PLN Floating interest rate ROBYG Marketing i Sprzedaż 04/07/ /09/ PLN Floating interest rate ROBYG Marina Tower 25/04/ /06/ PLN Floating interest rate ROBYG Marina Tower 06/06/ /06/ PLN Floating interest rate ROBYG Marina Tower 26/09/ /06/ PLN Floating interest rate ROBYG Marina Tower 19/11/ /12/ PLN Floating interest rate ROBYG Morena 20/05/ /01/ PLN Floating interest rate ROBYG Morena 19/11/ /12/ PLN Floating interest rate ROBYG Ogród Jelonki 06/08/ /12/ PLN Floating interest rate ROBYG Osiedle Kameralne 06/02/ /12/ PLN Fixed interest rate ROBYG Osiedle Kameralne 09/05/ /12/ PLN Fixed interest rate ROBYG Osiedle Kameralne 27/05/ /12/ PLN Fixed interest rate ROBYG Osiedle Kameralne 11/07/ /12/ PLN Floating interest rate ROBYG Osiedle Królewskie 03/01/ /12/ PLN Fixed interest rate ROBYG Osiedle Królewskie 27/03/ /12/ PLN Fixed interest rate ROBYG Young City 04/07/ /09/ PLN Floating interest rate ROBYG Young City 17/07/ /09/ PLN Floating interest rate ROBYG Zarządzanie 03/07/ /09/ PLN Floating interest rate Wilanów Office Center 18/01/ /12/ PLN Fixed interest rate Wilanów Office Center 15/02/ /12/ PLN Fixed interest rate Wilanów Office Center 19/02/ /12/ PLN Fixed interest rate Wilanów Office Center 25/03/ /12/ PLN Fixed interest rate Wilanów Office Center 29/03/ /12/ PLN Fixed interest rate Wilanów Office Center 06/06/ /12/ PLN Total (*) The company was liquidated on 20 December (**)The manner of interest calculation is provided as at 31 December Source: the Company Fixed interest rate 11

12 4.6 Issue and buyback of bonds During the period of 12 months ended 31 December 2013, the Company issued four series of bonds and three of the series bought back. The main terms of those transactions are described below: Series A Bonds On 15 January 2013 the Company adopted the resolution on the earlier buyback of series A Bonds which was finalized in February The nominal amount of the repaid bonds was PLN thousand. Series B and C Bonds On 20 June 2013 the Company adopted the resolution on the earlier buyback of series B and C Bonds, which was carried out in July The total nominal amount of the repaid bonds was PLN thousand. The series B and C bonds were redeemed on 18 November Series D Bonds On 9 October 2013 the Company adopted the resolution on the earlier buyback of a part of series D bonds. The payment day was set for 18 January The nominal value of the bonds to be earlier bought out amounts to PLN thousand. The buyback of these bonds is related to the plan to release a mortgage established on a separate part of a real property that is held in perpetual usufruct by Wilanów Office Center, the Company's subsidiary, on which the first stage of the ROBYG Business Center office and commercial investment was implemented. On 18 December 2013 the Company adopted a resolution on an earlier buyback of the remaining part of series D bonds with the nominal value of PLN thousand. The payment day of this partial buyback was also set for 18 January The early buy-out was made on 18 January 2014 in the nominal value of PLN thousand. Series G and H Bonds In January 2013, by way of a private offering, the Company issued unsecured series H bonds with the total nominal value PLN thousand. Additionally, in January 2013, by way of a public offering, the Company issued series G bonds with the total nominal value PLN thousand. These two series of bonds have been issued with a buyback period of 36 months, and the Company has the possibility of an early buyback. The buyback of these bonds shall be made at the nominal value. The bonds bear variable interest rate and the interest shall be paid every six months. The first interest period for series H bonds shall be calculated starting from 14 January 2013, whereas for series G bonds starting from 15 January Series G bonds shall be secured with a mortgage to be established on the perpetual usufruct right of land held by ROBYG Morena Bonds issuance terms also specify some covenants that must be met by the Company, which are described in section Covenants related to issued bonds. Both of the above series of bonds have been introduced to the alternative system of trading on the Catalyst market. On 2 October 2013 the Company adopted a resolution on the earlier buyback of a part of the series G bonds. The payment day for a partial buyback was set for 15 January The nominal value of the bonds to be earlier bought out amounts to PLN thousand. The buyback of these bonds is connected with the intention to 12

13 release from the mortgage a separated part of the land (1.2 ha) being subject to the usufruct right of ROBYG Morena, the Company's subsidiary, in order to develop further stages of the Słoneczna Morena project on this part of the land. Series I Bonds In June 2013, by way of a private offering, the Company issued series I bonds with the total nominal value of PLN thousand. The final buyback date of these bonds was set for 23 June 2016 without the possibility of an early buyback by the Company. The buyback of the bonds shall be made at the nominal value. The bonds bear variable interest rate and the interest shall be paid every six months. The first interest period of the bonds shall commence on the date of issuance of the bonds and it shall end on 23 December 2013, whereas the next interest periods shall end respectively after each six months following the date hereof. Bonds issuance terms specify also some covenants that must be met by the Company, which are described in section Covenants related to issued bonds. These bonds have been introduced to the alternative system of trading on the Catalyst market. On 27 June 2013, by way of a private offering, the Company issued and allotted series I2 bonds with the total nominal value of PLN thousand. The final buyback date of the bonds was set for 23 June 2016 without the possibility of an early buyback by the Company. The buyback of the bonds shall be made at the nominal value. The bonds bear variable interest rate and the interest shall be paid every six months. The first interest period of the bonds shall commence on the date of issuance of the bonds and it shall end on 23 December 2013, whereas the next interest periods shall end respectively after every six months following the date hereof. Bonds issuance terms specify also some covenants that must be met by the Company, which are described in section Covenants related to issued bonds. These bonds have been introduced to the alternative system of trading on the Catalyst market. On 30 December 2013 series I and I2 bonds were assimilated. On that date the rights attached to both series of the bonds become identical. Series J Bonds In December 2013, by way of a private offering, the Company has issued series J bonds of with the total nominal value of PLN thousand. The final buyback date of these bonds was set for 20 December 2016 with the possibility of an early buyback by the Company. The buyback of the bonds shall be made at the nominal value. The bonds bear variable interest rate and the interest shall be paid every six months. The first interest period of the bonds shall commence on the date of issuance of bonds and it shall end on 20 June 2014, whereas the next interest periods shall end respectively after every six months following the date hereof. Bonds issuance terms specify also some covenants that must be met by the Company, which are described in section Covenants related to issued bonds. For the details of the bonds issued and repaid by the Company after the balance-sheet date, please refer to Note 8 of these financial statements. Covenants related to issued bonds Bonds issuance terms specify some covenants that must be met by the Company. Covenants relate to, among others, meeting some financial ratios, including the obligation to keep the Group s debt ratio calculated as the consolidated net debt (defined as the total consolidated balance-sheet value of the interest bearing liabilities of 13

14 the Group less the presented in the financial statements liabilities of SPVs towards their shareholders and the entities related to these shareholders not being a part of the Group, less the cash and cash equivalents) to the total consolidated equity at the level not higher than 1.3 and the obligation of ROBYG S.A. or any entity from the Group to limit the repayments of the loans to its significant shareholders and their related parties not being a part of the Group up to PLN thousand in 2014 for bonds series G and series H and up to PLN thousand in 2014, 2015 and 2016 for bonds series I and J. 4.7 Guaranties and warranties granted and received in the period of 12 months ended 31 December 2013 Guarantees granted As at 31 December 2013, the guarantees and warranties granted by the Company for the benefit of its subsidiaries, jointly controlled entities, and associates in relation with bank credit facilities received by these entities were as follows: Related party ROBYG Development 2 ROBYG City Apartments 2 ROBYG City Apartments 2 ROBYG Jabłoniowa 2 ROBYG Jabłoniowa 2 ROBYG Osiedle Kameralne Sp. z o.o. ROBYG Osiedle Kameralne Sp. z o.o. Financing bank Bank Millennium S.A. Nordea Bank Polska S.A. Nordea Bank Polska S.A. Nordea Bank Polska S.A. Nordea Bank Polska S.A. Nordea Bank Polska S.A. Nordea Bank Polska S.A. Subject of the guarantee liabilities in relation to the revolving tranche financing the NRKM project (stages V and VII) liabilities in relation to the revolving tranche financing the City Apartments project (stage III-VI) liabilities in relation to interest on the investment tranche financing the City Apartments project (stages III-VI) liabilities in relation to the revolving tranche financing the Lawendowe Wzgórza project (stages VII-XIII) liabilities in relation to the investment tranche financing the Lawendowe Wzgórza project (stages VII-XIII) liabilities in relation to the revolving tranche financing the Osiedle Kameralne project liabilities in relation to the investment tranche financing the Osiedle Kameralne project Guarantee amount in PLN thousands From Until Repaymen t of the credit facility ROBYG Marina Tower Bank Millennium S.A. liabilities in relation to the revolving tranche financing the AT project (Stage II) ROBYG Construction ROBYG Kameralna Sp. z o.o. ROBYG Young City ROBYG Osiedle Królewskie Sp. z o.o. BRE Bank S.A. Bank Zachodni WBK S.A. Getin Noble Bank S.A. mbank S.A. guarantee of the receivables arising from the revolving credit facility corporate guarantee granted for the purpose of securing the performance of the credit facility agreement no. KKWA corporate guarantee granted for the purpose of securing debt repayment corporate guarantee granted for the purpose of securing debt repayment

15 Related party ROBYG Zarządzanie Financing bank ING Lease (Polska) Sp. z o.o. Subject of the guarantee guarantee of the liabilities in relation to the lease agreement for offices leased by the subsidiary ROBYG Zarządzanie from ING Lease (Polska) Sp. z o.o. Guarantee amount in PLN thousands From Until Total Source: the Company In addition, in relation to the credit facilities granted by the banks to the Company s subsidiaries and jointly controlled entities, the Company concluded the following agreements: an agreement obliging the Company to grant a subordinated loan of up to PLN thousand to ROBYG City Apartments 2 in the event of exceeding the costs of the project being implemented by ROBYG City Apartments 2, an agreement obliging the Company to grant a subordinated loan of up to PLN 5,000 thousand to ROBYG Jabłoniowa 2 in the event of exceeding the costs of the project being implemented by ROBYG Jabłoniowa 2, an agreement obliging the Company to grant a subordinated loan of up to PLN 10,763 thousand to ROBYG Jabłoniowa 2 in the event that the debt of ROBYG Jabłoniowa 2 arising from the loans granted to ROBYG Jabłoniowa 2 by Nanette Real Estate Group N.V. becomes due and payable, an agreement obliging the Company to conclude a loan agreement between the Company as the lender and ROBYG Osiedle Kameralne as the borrower, obliging the Company to grant a subordinated loan of up to PLN thousand to ROBYG Osiedle Kameralne to ensure funds for the financing of the investment in the cases specified in the bank credit facility agreement, an agreement obliging the Company to conclude a loan agreement between the Company as the lender and ROBYG Osiedle Królewskie as the borrower, obliging the Company to grant a subordinated loan of up to PLN thousand to ROBYG Osiedle Królewskie to ensure funds for the financing of the investment in the cases specified in the bank credit facility agreement, In addition, the Company also granted the following guarantees: Guarantor Contracting Party Subject of the guarantee Maximum amount From Until ROBYG S.A Cemex Polska Sp. z o.o. for the delivery of goods ROBYG S.A Cemex Polska Sp. z o.o. for the delivery of goods ROBYG S.A ROBYG Development 1 Spółka z ograniczoną odpowiedzialności ą Sp. k. (former name: ROBYG Development Sp. z o.o.) Guarantee regarding the performance of any and all financial obligations of ROBYG Construction sp. z o.o., arising from the agreement concluded between ROBYG Construction sp. z o.o., and ROBYG Development 1 Spółka z ograniczoną odpowiedzialnością Sp. k. (former name: ROBYG Development ) * Total Source: the Company 15

16 The final value of the remuneration due to the Company for the grants of collateral securing the payment of the obligations of the Company s affiliates, in particular for the grants of guarantees, depends on the actual duration of the given guarantee and, therefore, is calculated, becomes due and is invoiced at the end of its duration. The remuneration is calculated on the basis of the guarantee amount (hereinafter the Base Remuneration ) and, if the Base Remuneration is modified, then starting from the date of modification of the Base Remuneration, the remuneration is calculated on the basis of the modified Base Remuneration. The remuneration depends on the actual duration of the guarantee and amounts to: a) 0.50% (zero point five percent) of the Base Remuneration if the duration of the guarantee is no longer than one year, b) 0.75% (zero point seven five percent) of the Base Remuneration if the duration of the guarantee is longer than one year but no longer than two years, c) 0.95% (zero point nine five percent) of the Base Remuneration if the duration of the guarantee is longer than two years but no longer than three years, d) 1.20% (one point two percent) of the Base Remuneration if the duration of the guarantee is longer than three years but no longer than four years, e) 1.50% (one point five percent) of the Base Remuneration if the duration of the guarantee is longer than four years but no longer than five years, f) 2.00% (two percent) of the Base Remuneration if the duration of the guarantee is longer than five years but no longer than six years, g) 2.50% (two point five percent) of the Base Remuneration if the duration of the guarantee is longer than six year but no longer than seven years, h) 3.00% (three percent) of the Base Remuneration if the duration of the guarantee is longer than seven years but no longer than eight years, i) 3.50% (three point five percent) of the Base Remuneration if the duration of the guarantee is longer than eight years but no longer than nine years, j) 4.00% (four percent) of the Base Remuneration if the duration of the guarantee is longer than nine years. The total amount of the Company s remuneration for establishing security for the repayment of the credit facilities, in particular, for granting guarantees for the Company s related parties that was due and invoiced in the period of 12 months ended 31 December 2013 totalled PLN 261 thousand (PLN thousand for the 12 months ended 31 December 2012). Guarantees and warranties received The Company did not receive any bank guarantees or warrantees in the period of 12 months ended 31 December Dividend payment for 2012 and dividend payment proposal for 2013 Dividends are paid in accordance with the Polish Commercial Code based on the standalone statutory financial statements of the Company prepared in accordance with IFRS. On 23 April 2013 the Ordinary Shareholders Meeting of the Company approved the payment of the dividend for 2012 amounting to PLN thousand (PLN 0.08 per one ordinary share). The dividend day was set on 30 April 2013 and the dividend was paid on 17 May On 31 May 2012 the Ordinary Shareholders Meeting of the Company approved the payment of the dividend for 2011 amounting to PLN thousand (PLN 0.12 per one ordinary share). The dividend day was set on 11 June 2012 and the dividend was paid on 25 June For 2013 the Management Board of ROBYG S.A. proposes to pay the dividend amounting to PLN 0.08 per share, what as at the date of the Company's stand-alone financial statements for the year ended 31 December 2013 would amount to PLN thousand 16

17 4.9 Dividends, advance payments for dividends, and advance payment for profit sharing received in the period of 12 months ended 31 December Dividends, advance payments for dividends, and advance payment for profit sharing received in the period of 12 months ended 31 December 2013 included: PLN thousand of dividends and advance payments for dividends declared by ROBYG Construction, a subsidiary; PLN thousand of advance payments for dividends declared by FORT Property, a joint subsidiary; PLN thousand of advance payments for dividends declared by ROBYG City Apartments, a subsidiary; PLN thousand of advance payment for profit sharing declared by ROBYG Osiedle Zdrowa 1 Spółka z ograniczoną odpowiedzialnością. Sp. k., a subsidiary; PLN thousand of dividends and advance payments for dividends declared by ROBYG Ogród Jelonki Sp. z o. o., a joint subsidiary; PLN thousand of advance payment for profit sharing declared by ROBYG Development 1 Spółka z ograniczoną odpowiedzialnością Sp. k., a subsidiary Other material events in the period of 12 months ended 31 December 2013 Significant transactions concluded between the shareholders of the Issuer holding at least 5% of the votes at the General Shareholders Meeting: In 2013 there were the following changes in the structure of shareholders having at least 5% of the votes during the shareholders meeting of the Company: In March 2013 Nanette Real Estate Group N.V. sold shares of the Company constituting then 0.36% of its share capital and representing of votes and 0.36% in the total number of votes in the Company. In March 2013 ROBYG B.V. ( a subsidiary of Nanette Real Estate Group N.V.) sold shares of the Company constituting then 5.77% of its share capital and representing of votes and 5.77% in the total number of votes in the Company. In March 2013 ING Otwarty Fundusz Emerytalny and ING Dobrowolny Fundusz Emerytalny notified the Company that they purchased on the Warsaw Stock Exchange the total of shares of the Company constituting then 3.87% of its share capital and representing of votes and 3.87% in the total number of votes in the Company. In May 2013 ROBYG B.V. ( a subsidiary of Nanette Real Estate Group N.V.) sold shares of the Company constituting 3.10% of its share capital and representing then of votes and 3.10% in the total number of votes in the Company. In May 2013 ROBYG B.V. ( a subsidiary of Nanette Real Estate Group N.V.) sold shares of the Company to Nanette Real Estate Group N.V. constituting then 3.14% of its share capital and representing of votes and 3.14% in the total number of votes in the Company. In September 2013 Nanette Real Estate Group N.V. sold shares of the Company constituting 3.42% of its share capital and representing of votes and 3.42% in the total number of votes in the Company. In October 2013 Nanette Real Estate Group N.V. sold shares of the Company constituting then 1.09% of its share capital and representing of votes and 1.09% in the total number of votes in the Company. 17

18 In December 2013 Nanette Real Estate Group N.V. sold shares of the Company constituting then 0.12% of its share capital and representing of votes and 0.12% in the total number of votes in the Company. Conditional increase of the Issuer s share capital and the issue of subscription warrants On 28 February 2013 the share capital of the Company has been increased from PLN to PLN through the issuance of series G ordinary bearer shares of the Company with the nominal value of PLN 0.10 each. These shares were issued as a conditional increase of the Company's share capital, as a result of exercising of the part of subscription warrants granted to the employees and persons cooperating with the Group. On 26 July 2013, the share capital of the Company has been increased from PLN ,00 to PLN ,90 through the issuance of series G ordinary bearer shares of the Company with the nominal value of PLN 0.10 each. These shares were issued as a conditional increase of the share capital of the Company, as a result of exercising of the part of subscription warrants granted to the two Management Board Members of the Company (as it is described in Note 27 of the Company's stand-alone financial statements for the year ended 31 December 2013) and to one other person 1. Following the increase of the Company s share capital, the total number of shares and the total number of votes resulting from all the shares issued by the Company is In accordance with the resolution no. 21 of the Annual General Meeting as of 21 June 2011 regarding the issuance of subscription warrants with the exclusion of the pre-emptive rights of the existing shareholders and the conditional increase of the share capital of the Company with the exclusion of the pre-emptive rights of the existing shareholders, and the amendments to the articles of association of the Company with subsequent amendments (the Resolution ), as well as, pursuant to the by-laws of the incentive program of the Group adopted by the Supervisory Board of the Company with subsequent amendments (the By-law ), on 24 October 2013 the Management Board of the Company allotted D3 series warrants to persons entitled in accordance with the Resolution and the By-laws. The warrants of D3 series entitle to new G series shares of the Company issued pursuant to the Resolution to be taken up for the issue price of PLN 0.10 per one share within three months following 4 November 2013 taking into account in addition the closed periods binding within the Company. Additionally, the warrants of A3, B3 and C3 series, that were allotted on 11 January 2012, entitle to new G series shares of the Company each issued pursuant to the Resolution are to be taken up for the issue price of PLN 1.00 per share within year following 4 November 2013 taking into account in addition the closed periods binding within the Company. At 31 December 2013 the allotted series A3, B3, C3 and D3 have been exercised by the entitled persons Changes in the share capital occurring after 31 December 2013 until the approval of this report were described in Note 8 of this report. Agreements that are material to the Company s business Aside from the agreements related to the transactions described in this Management Board Report on the Operations of ROBYG S.A., in the period ended 31 December 2013, the Company did not conclude any other agreements that are material to the Company s business. The Company recognises agreements to be material to the Company s business if their value exceeds 10% of the value of the Company s equity or if they are considered to be material to the Company for other reasons. 1 who ceased to be the Supervisory Board member of the Company in January 2013, but became a member of the Supervisory Board of one of the subsidiaries of the Group. 18