Tritax Polska No.1 Fund Limited

Transcription

1 Tritax Polska No.1 Fun Limite Annual Report an Auite Consoliate Financial Statements For the year ene 5 April 2012 Company registration number: 46273

2 Contents 02 Officers an Professional Avisers Chairman s Statement Fun Manager s Report 11 Boar of Directors Directors Report 15 Inepenent Auitor s Report 16 Consoliate Statement of Comprehensive Income 17 Consoliate Statement of Financial Position 18 Consoliate Statement of Cash Flows 19 Consoliate Statement of Changes in Equity Notes to the Consoliate Financial Statements Tritax Polska No.1 Fun Limite Page 01 Annual report an auite consoliate financial statements for the year ene 5 April 2012

3 Officers an Professional Avisers Directors Anrew Howat Michael McKean Mark Shaw (Chairman) Aministrator, Company Secretary, Designate Manager an Registrar Praxis Fun Services Limite Sarnia House Le Truchot St Peter Port Guernsey GY1 3NA Asset Manager Stanmark Asset Management Polska Sp. z o.o. Nowy Swiat 61 apt. 3 Warsaw Polan Auitor Saffery Champness La Tonnelle House Les Banques St Sampson Guernsey GY1 3HS Fun Manager Tritax Financial Services (Polska 1) Limite The Loge, Oell Befor MK43 7BB Promoter, Sponsor an Distributor Tritax Securities 1 Limite The Loge, Oell Befor MK43 7BB Banker Royal Bank of Scotlan International Legal an Tax Avisers Carey Olsen (Guernsey) Oostvogels Pfister Roemers (Luxembourg) Warynski & Partners (Polan) Registere Office Sarnia House Le Truchot St Peter Port Guernsey GY1 3NA Company Registration Number Tritax Polska No.1 Fun Limite Page 02 Annual report an auite consoliate financial statements for the year ene 5 April 2012

4 Chairman s Statement Dear Investor Introuction I am please to announce the full year results for the Tritax Polska No.1 Fun Lt for the perio to 5 April The perio has witnesse a number of asset management an letting successes, which have unfortunately been set against a weakening of the economic situation in Polan an a commercial property market characterise by low transaction volumes an ownwar pressure on rents. The effect this situation has ha on the property valuations, which are own by 9%, has been the main contributing factor to a fall in the NAV per share for the Fun to 0.84 from 1.12 in April Economic Backrop Whilst a recovery is consiere to be on the horizon for Europe as a whole, it is likely to be some time before this is consiere sustaine growth. The situation remains fragile, an the risk of a renewe crisis is ever present. Against this backrop, growth in Polan has continue, but at a slower pace. GDP growth in Q was estimate at 2.4%, slowing for a secon straight quarter an at a faster than expecte rate. Polan is still set to register the highest economic growth in the EU in 2012 espite this moerate slowown, an projecte to continue in Domestic eman continues to be the main river of growth. The continue volatility of the Euro currency means Polan has pause in their pursuit of aopting the single currency. By retaining the Zloty, Polan has the ability to efen its economy in the case of a market upheaval, instea of relying on the embattle ECB. Historically this woul have been consiere a negative, but because the financial health of Polan is stronger than so many Euro zone states, this can now be consiere a positive. Property Markets Despite the majority of commentators reporting last year that they expecte a significant weight of investment into the Polish commercial property market, the reality has been a perio of historically low transaction volumes an a polarisation in the values an liquiity of prime an non-prime property. Of the transactions taking place, the majority have been very large ( 50 million +), concentrate preominantly on prime shopping centres an Warsaw offices. The market for smaller properties has been limite, ue in a large part to a lack of finance for new purchases, blocking woul-be buyers in the market. Three properties were ientifie for sale uring the perio, but unfortunately the only buyers present in the market were preatory purchasers seeking istresse situations. These properties were therefore withrawn, though the Fun an Asset Managers continue to closely monitor active purchasers in the market. The Fun has successfully retaine a significant majority of existing tenants uring the perio an attracte new tenants to vacant space. However this has been one against a backrop of falling rents an increasing incentives being offere to tenants, making value creation through these events increasingly challenging. A further challenge has been the collection of rents an service charge from tenants. Increasingly tenants are going to extreme measures to elay or withhol payments ue uner their lease obligations. Appropriate an robust systems are in place to recover all ebts, but Polan is a very litigious society an increasingly many tenants are opting to refer matters to court to elay payments. This is having a significant impact on cashflow. To actively try to resolve this, Estate Fellows were appointe as the new Property Manager in August In aition to a cost saving for the Fun, the incoming manager has significant experience in ebt recovery from such tenants. Changes to Tax Legislation The Polish Ministry of Finance has publishe a proposal that woul make Polish Joint Stock Limite Partnerships ( SKAs ) subject to corporation tax. The Fun s investment properties are owne by separate SKAs which at present are tax transparent with the tax liability falling on the partners. Since the Close Ene Fun CC1 is a tax exempt vehicle, the profits attributable to it in respect of its irect holing in the SKAs are not at present subject to tax. Only the profits attributable to the intermeiate general (unlimite) partner are at present taxable income of the general partner. The Ministry has not as yet publishe proposals for any transitional relief or the basis on which the isposal of assets acquire prior to the change woul be taxable. The Boar is actively looking at a number of possible solutions which woul legally minimise any future tax exposure in Polan. The Boar notes that the bulk of any potential tax liability woul arise on the future isposal of the investment properties. Fun Performance The combine value of the investment properties at April 2012 was recore at 70,280,518. This represente an overall fall in values of 9% on those recore at April Consistent with the market commentary, the office properties in Warsaw saw the smallest rop in value of 2.5%, unerpinne by a stronger occupational market. The retail, inustrial an regional office markets, however, saw a larger fall of 13.7% on 2011 values. The lack of transactional ata upon which to establish market trens has mae the exercise of valuing properties a much more subjective an acaemic exercise. The largest rop in value was witnesse at the Foron Gallery, Bygoszcz, where tenant eman has been limite. To ensure the commercialisation of the centre, replacement tenancies have been at well below market rental levels. The rop of 27% in Euro terms is exaggerate by the conversion rate of PLN to Euro, the actual value ifference in PLN being 20% (this property s leases are preominantly enominate in PLN, so it is value in PLN an converte). With the groun an first floors now largely fully let, the Asset Manager is now able to start builing rents back towars market levels. Tritax Polska No.1 Fun Limite Page 03 Annual report an auite consoliate financial statements for the year ene 5 April 2012

5 The property valuations have been the biggest contributor to the rop in NAV per share from 1.12 to A further negative influence on the NAV has been the revaluation of the interest rate swaps (fixe rate elements of the bank loans). It was a requirement of the bank that these were taken out an the continue low interest rate environment means that these are categorise as losses in the financial statements. The Boar regularly scrutinises the costs of the service proviers to the Fun an one of the ecisions mae has been to terminate the agreement with Praxis Fun Services Limite as aministrator in favour of a more cost effective solution to be provie by Arel Fun Services Limite. This change will become effective not later than 19 January In conclusion we expect the property market will remain challenging for the next 2 years or so an as such, the Fun must aopt a iligent focus on implementation of asset management initiatives to preserve an enhance value, in the anticipation that liquiity will return to the market to enable realisation of the assets with effect from Yours sincerely Mark Shaw Tritax Polska No.1 Fun Limite Page 04 Annual report an auite consoliate financial statements for the year ene 5 April 2012

6 Fun Manager s Report In this fifth report, TFS (Polska 1) Lt as Fun Manager to the Tritax Polska No.1 Fun is please to provie investors with an upate in respect of the portfolio. Macroeconomic Overview After a sharp reboun in 2010 from the trough of the economic an financial crisis, economic growth in Polan strengthene further in 2011, reaching 4.3%. All components of omestic eman supporte this performance, but private investment was particularly strong, on the back of growing profitability an easy access to creit. Private consumption was robust, although its growth was somewhat lower than in 2010, while public investment benefite from a large inflow of EU structural funs. However, uring the secon half of 2011, Polan felt the repercussions of the Global slowown. External eman suffere an consumer an proucer confience wane. At the same time, a consierable epreciation of the zloty partially offset the negative impact of weakening external eman. Real GDP growth is projecte to slow own consierably to 2.7% in 2012 on the back of eteriorating global eman. It is set to remain at a similar level in the following year. Domestic eman is projecte to remain the main river of growth, but the focus is expecte to continue to shift from consumption to investment. Growth in private consumption is likely to ecelerate constraine by a slowown in real wage evelopments an by eclining consumer creit. Both government consumption an investment are planne to stabilise in Public investment peake prior to the European football championship in June 2012, an is expecte to ecrease sharply thereafter in line with the completion of major infrastructure projects by the en of The main risks to the stability of the financial sector an sustaine creit supply to the economy stem from the uncertain international environment through large foreign ownership of the banking sector an continue, but iminishing, reliance on foreign funing for liquiity provision. The general government ebt increase notably in 2011, mainly ue to a significant epreciation in the Polish currency, raising concerns about exceeing the legally bining threshol of 55% of GDP. However, in 2012, thanks to the slight increase in the zloty s exchange rate, further reuction in the healine eficit an pruent government s ebt management strategy, the general government ebt is expecte to start ecreasing for the first time since (Souce: European Economic Forecast 2012 European Commission) Commercial Property Market The total estimate property investment volume in Polan remains high an in Q the volume was close to 800 million. In 2011 the total investment volume was circa 2.5 billion which was the highest number since Number of transactions st H 2012 Total Office Warehouse Retail Hotel (Souce: Polish Investment Market Overseas Polish Properties) The largest share of investment volumes in Q were retail transactions which constitute 76% of total volume. The share of office an warehouse properties in the total investment volume was the same an accounte for circa 10%. The largest transaction in Polan in Q was a share eal of Złote Tarasy shopping centre in Warsaw for 475 million. This transaction constitute 59% of the total investment volume in Q Tritax Polska No.1 Fun Limite Page 05 Annual report an auite consoliate financial statements for the year ene 5 April 2012

7 Fun Manager s Report (continue) 2012 Q1 Investment Activity by Location 9 Prime yiels in Polan st H 2012 Office Warehouse Retail (Souce: Polish Investment Market Overseas Polish Properties) The property market ata, whilst encouraging in its overall outlook, oes contain items of concern. The key risks to the recovery an stabilisation of the market are continue polarisation of the market between Warsaw an the regional cities an continue low transaction volumes. The occupational markets in Warsaw, particularly the office market have prove relatively resilient to the ownturn, largely ue to a lack of new evelopment. This is in contrast to the less mature regional markets which have seen a more significant fall in rents as supply of moern accommoation is more reaily available. This contrast in supply an unerlying tenant eman has cause investors to focus on the more establishe Warsaw market. The total volume of transactions which compares well against previous years is istorte by a number of very large transactions, some commentators estimate there to have been only 12 investment transactions in Polan uring the first half of 2012, evience of the stark lack of activity outsie the bigger eals. A lack of available finance is a contributing factor to the low transaction volumes. As the economic commentary suggests, foreign ownerships of many of the banks in Polan means that issues outsie of Polan are riving the lening appetite of some of the largest an traitionally most active banks. Appetite for properties owne by the Fun, where the average lot size is circa 7.5 million, is particularly limite by the lack of ebt finance. Likely purchasers such as private iniviuals an omestic an overseas property companies typically seek to utilise ebt finance to enhance returns. The outlook for realisation of the properties within the portfolio against this backrop is uncertain. Investor appetite will be reliant on a combination of improve appetite for lening by the banks an from a stabilisation of the occupational markets. From a macro perspective, Polan remains a target for new capital an a frontrunner in the region, however this nees to be translate into transactions. Tritax Polska No.1 Fun Limite Page 06 Annual report an auite consoliate financial statements for the year ene 5 April 2012

8 Fun Manager s Report (continue) Portfolio S.K.A. (*) Property Sector Total Lettable Area (m 2 ) Purchase Price (excluing purchase costs) Valuation April 2011 Valuation April Piekna, Warsaw 3 Szajnochy, Bygoszcz 4 Ratajczaka, Poznan 5 Dwor Hamburski, Poznan 6 Wola Plaza, Warsaw Office (Retail) Warehouse (Office) Office (Retail) Office (Retail) Office (Retail) 1,500 3,340,000 4,800,000 4,300,000 2,200 2,600,000 2,400,000 1,942,518 2,370 7,500,000 6,180,000 6,000,000 3,409 8,300,000 9,930,000 9,100,000 8,500 17,100,000 18,600,000 18,400,000 7 City Park, Poznan Retail 3,409 6,500,000 7,090,000 6,300,000 8 Okecie (Builing B), Warsaw Okecie (Builing A), Warsaw Warehouse (Office) Warehouse (Office) 5,562 2,939 8,513,000 8,500,000 7,600,000 9 Foron Gallery, Bygoszcz 11 Jasna, Warsaw Retail (Supermarket) Office (Restaurant) 5,041 10,000,000 11,273,452 8,368,000 2,427 6,000,000 8,350,000 8,270,000 TOTAL: 69,853,000 77,123,452 70,280,518 (*) S.K.A. is the property owning vehicle. The scheule above etails the properties owne by the Fun as at April It is evient from the scheule that there has been a rop in the values of the portfolio since April 2011, the overall result being a 9% reuction. As the market ata supports, the office properties in Warsaw have prove to be the most resilient, falling 2.5% uring the perio. The portfolio weighting base on the acquisition costs is 38% in favour of Warsaw offices. The regional offices in Poznan where occupational an investor eman are currently less prevalent have seen a larger fall of 6%. This reflects the reucing rents/increasing voi perios an uncertainty ue to the lack of transactions as to where yiels/pricing is in these markets. The two warehouses fell by 12.5% ue to a combination of vacancy an short term income in Dzialkowa, Warsaw which has since been let. There has also been a reuction in value of the evelopment site at Szajnochy, Bygoszcz ue to the lack of appetite for speculative evelopment. The two retail assets have been worst hit, falling by 20%. This has been riven by an exceptionally tough occupier market where tenants are seeking short term, flexible leases at reuce rental levels. Tritax Polska No.1 Fun Limite Page 07 Annual report an auite consoliate financial statements for the year ene 5 April 2012

9 Fun Manager s Report (continue) Portfolio (continue) Valuation (r) Millions ,400,000 1,200,000 1,000, , , , ,000 Net Operating Income(r) Wola Jasna Piekna Dzialkowa City Park Dzialkowa Rajtaczaka Foron Szjanochy 2011 Value ( ) 2011 Rental income ( ) 2012 Value ( ) 2012 Rental income ( ) The chart above confirms that the Fun successfully improve the net income in 6 out of 9 properties. The own valuation is therefore a reflection of the uncertainty aroun capitalisation rates ue to a lack of transactional evience an the aoption of more pessimistic voi perios an lower rental levels. Overall the property values still represent a small premium against the net purchase cost. Portfolio summary Portfolio Value by Property Portfolio Value by Region 24% 9% 13% City Park Gallery Dwor Hamburski Dzialkowa 18% Foron Galleria Bygoszcz 3% 8% 6% 11% 15% 11% Jasna 24 Piekna 68 Ratajczaka 19 Szjanochy Wola Plaza 52% 30% Poznan Warsaw Tritax Polska No.1 Fun Limite Page 08 Annual report an auite consoliate financial statements for the year ene 5 April 2012

10 Fun Manager s Report (continue) Portfolio summary (continue) Portfolio Vacancy Rate 7% Occupie Vacant Some of the highlights in the perio between April an the ate of this report inclue: Ratajczaka, Poznan LEASE RE-GEAR 386 sq m 1st Floor. Let to ING. Re-geare prior to existing lease expiry at: psm per month on a new 3 year lease with 3 months rent free. Previous rent was psm pm. (April 2012) 93% The vacancy rate of 7% across what is a mixe portfolio in respect of asset class an location compares favourably with recent research inicating the vacancy rate in Warsaw CBD (offices), one of the best performing sectors, is 9%. Asset Management The illiquiity of the investment market means that a sale of the three properties ientifie for isposal at anything other than istresse prices has not been possible. The Asset Manager continues to monitor closely all new entrants an active participants in the market to try an establish appropriate exit scenarios for the Fun properties. In the interim, the focus has been on the retention of existing tenants an the securing of new tenants for the vacant space. Against a ifficult market backrop of falling rents an increasing incentives, SAMP have been successful in securing a number of new lettings an some significant lease re-gears with existing tenants. Wola Plaza LEASE RE-GEAR 420 sq m 3r Floor. Let to ING. Re-geare prior to existing lease expiry at: psm per month on a new 3 year lease with 3 months rent free. Previous rent was psm pm. (April 2012) Maintaining an improving value with these lease events remains ifficult. The availability of alternative space in most markets makes the tenants negotiation position very strong. As such they are requiring short term, flexible leases, lower rents an larger incentive packages. One of the greatest challenges facing the Fun is that of tenant arrears. Whilst there are establishe systems in place an inee the property manager has been replace to try an improve results, there remains a reluctance of many tenants to honour their lease obligations in a timely manner. Furthermore Polan has become an increasingly litigious society, with tenants often challenging in the courts their obligations uner their lease agreements. This is a time consuming an costly process, but one which is ultimately unavoiable. The Asset Manager continues to work through ways to improve this, but in the interim this will impinge on the surplus cashflows within the structure. Tritax Polska No.1 Fun Limite Page 09 Annual report an auite consoliate financial statements for the year ene 5 April 2012

11 Fun Manager s Report (continue) Asset Management (continue) Dzialkowa, Warsaw NEW LETTING 720 sq m warehouse/office. Let to Bank Komórek Macierzystych on a new 10 year lease (warehouse) an (offices), 20 months rent free sprea over the term. (August 2012) Strategy The priorities of the Fun Manager an Asset Manager over the next 12 months are: Continue pro-active pursuit of all arrears in the portfolio; Continue interaction with existing tenants to renew an exten existing leases; Active marketing of any vacant space in the portfolio; Monitoring of investor eman for the Fun properties. TFS (Polska 1) Lt September 2012 Piekna, Warsaw NEW LETTING sq m 4th Floor. Let to Reinhol Polska on a new 3 year lease psm pm, 4.5 months rent free sprea over the term. (May 2012) Tritax Polska No.1 Fun Limite Page 10 Annual report an auite consoliate financial statements for the year ene 5 April 2012

12 Boar of Directors Anrew Howat has over 25 years experience within the financial services arena. Anrew was Managing Director of Butterfiel Fulcrum (Guernsey), having previously been Managing Director of Capita Financial Group in the Channel Islans an Investec Aministration Services in Guernsey. Prior to this he spent over a ecae living an working in Asia, base in Hong Kong. During this perio Anrew was Operations Director for ING Financial Markets, responsible for activities across the Asia Pacific region, before completing his Asian tour at UBS. Anrew has extensive experience acting as a Director of a number of offshore funs an management companies specialising in investments across a variety of sectors. Anrew is a Chartere Member of the Chartere Institute for Securities an Investments. Michael McKean is an English solicitor who, after many years of practice in Englan, establishe Welake Bell McKean in Guernsey. He retire from that firm in He has been involve in a number of major town centre an other significant property evelopments an also has extensive experience both as a solicitor an irector of several funs. In aition he hols a number of acaemic appointments. Mark Shaw is a Chartere Accountant who has a backgroun in property evelopment investment, merchant banking an investment management. Mark became involve in tax base property investments in 1985, working uner the umbrella of Lonon & Einburgh Trust Plc ( LET ), in eveloping an popularising the investment market for Enterprise Zone Property Unit Trusts. In 1990, LET was sol to a Sweish institution an Mark forme Tritax (formerly CIL) to continue with this activity an to evelop other property base investment proucts. Tritax Polska No.1 Fun Limite Page 11 Annual report an auite consoliate financial statements for the year ene 5 April 2012

13 Tritax Polska No.1 Fun Limite Page 12 Annual report an auite consoliate financial statements for the year ene 5 April 2012

14 Directors Report The Directors present their annual report an auite consoliate financial statements ( the financial statements ) for the year ene 5 April Company status an principal activity Tritax Polska No.1 Fun Limite ( the Company ) was incorporate in Guernsey on 23 January 2007 an was grante Guernsey exempt company status for taxation purposes. In accorance with the Articles of the Company, the Company has an initial life of 7 years from the closing ate of 31 March At any time on or prior to 31 March 2014 (an, if appropriate, every 2 years thereafter), an extraorinary resolution, requiring a 75% majority of those voting, will be put to shareholers proposing to exten the life of the Company for a further 2 years. The Company is a Guernsey authorise close-ene investment scheme an is subject to the Authorise Close-Ene Investment Schemes Rules The principal activity of the Company an its subsiiaries (together the Group ) is investing in property in Polan. Results an iviens The results of the Group are state on page 16. The Company eclare an pai an interim ivien of 1p per share uring the year (2011: interim ivien of 3p per share) an the Boar of Directors has not recommene a final ivien for the year (2011: final ivien of 1.5p per share). Directors The Directors who hel office uring the year an to ate are shown on page 2. All Directors are inepenent an non-executive. Directors interests Mark Shaw is a shareholer in an serve throughout the year as a irector of Tritax Securities 1 Limite, the promoter, sponsor an istributor of the Company. Statement of Directors responsibilities The Directors are responsible for keeping proper accounting recors, which isclose with reasonable accuracy at any time the financial position of the Company an of the Group, for safeguaring the assets of the Company, for taking reasonable steps for the prevention an etection of frau an other irregularities an for the preparation of a Directors Report, which complies with the requirements of The Companies (Guernsey) Law, The Directors are responsible for preparing the Annual Report an consoliate financial statements in accorance with The Companies (Guernsey) Law, 2008 an The Protection of Investors (Bailiwick of Guernsey) Law, The Directors have chosen to prepare consoliate financial statements for the Group in accorance with International Accounting Stanars (IFRSs) as aopte for use in the European Union. International Accounting Stanar 1 requires that consoliate financial statements present fairly for each financial year the Group s financial position, financial performance an cash flows. This requires the faithful representation of the effects of transactions, other events an conitions in accorance with the efinitions an recognition criteria for assets, liabilities, income an expenses set out in the International Accounting Stanars Boar s Framework for the preparation an presentation of consoliate financial statements. In virtually all circumstances, a fair presentation will be achieve by compliance with all applicable IFRSs. A fair presentation also requires the Directors to: consistently select an apply appropriate accounting policies; present information, incluing accounting policies, in a manner that provies relevant, reliable, comparable an unerstanable information; an provie aitional isclosures when compliance with the specific requirements in IFRSs is insufficient to enable users to unerstan the impact of particular transactions, other events an conitions on the entity s financial position an financial performance. The Directors confirm that they have complie with the above requirements in preparing the financial statements. The Directors further confirm that: so far as each Director is aware, there is no relevant auit information of which the Company s auitor is unaware; each Director has taken all the steps he ought to have taken as a Director to make himself aware of any relevant auit information an to establish that the Company s auitor is aware of that information; an the financial statements give a true an fair view an have been prepare in accorance with International Financial Reporting Stanars (as aopte by the European Union), The Companies (Guernsey) Law, 2008 an The Protection of Investors (Bailiwick of Guernsey) Law, Corporate governance Following the publication by the GFSC of the Finance Sector Coe of Corporate Governance in September 2011 (the Coe ), the Directors have consiere the effectiveness of their corporate governance practices with regar to the principles set out in the Coe. Subsequently, the Directors are satisfie with their egree of compliance with the principles set out in the Coe in the context of the nature, scale an complexity of the business. Tritax Polska No.1 Fun Limite Page 13 Annual report an auite consoliate financial statements for the year ene 5 April 2012

15 Directors Report (continue) Anti-bribery an corruption The Company aheres to the requirements of the Prevention of Corruption (Bailiwick of Guernsey) Law, In consieration of the recently enacte UK Bribery Act 2010 which came into force on 1 July 2011, the Boar abhors bribery an corruption of any form an expects all the Company s business activities to be unertaken, whether irectly by the Directors themselves or on the Company s behalf by thir parties to be transparent, ethical an beyon reproach. On iscovery of any activity or transaction that breaches the requirements of the Prevention of Corruption (Bailiwick of Guernsey) Law, 2003 or the UK Bribery Act 2010, such iscovery will be reporte to the relevant authorities in accorance with prescribe proceures. The Company is committe to regularly reviewing its policy an proceures to uphol goo business practice. Auitor The auitor of the Company, Saffery Champness, has expresse its willingness to continue in office an a resolution giving authority to the Boar of Directors to fix its remuneration will be propose at the Annual General Meeting. Approve on behalf of the Boar Michael McKean Director 3 October 2012 Tritax Polska No.1 Fun Limite Page 14 Annual report an auite consoliate financial statements for the year ene 5 April 2012

16 Inepenent Auitor s Report to the Shareholers We have auite the consoliate financial statements of Tritax Polska No. 1 Fun Limite ( the financial statements ) on pages 16 to 35. The financial reporting framework that has been applie in their preparation is applicable law an International Financial Reporting Stanars (as aopte by the European Union). This report is mae solely to the Company s members, as a boy, in accorance with section 262 of The Companies (Guernsey) Law, Our auit work has been unertaken so that we might state to the Company s members those matters we are require to state to them in an auitor s report an for no other purpose. To the fullest extent permitte by law, we o not accept or assume responsibility to anyone other than the Company an the Company s members, as a boy, for our auit work, for this report, or for the opinions we have forme. Respective responsibilities of Directors an Auitor As explaine more fully in the Statement of Directors Responsibilities set out on page 13, the Directors are responsible for the preparation of the financial statements an for being satisfie that they give a true an fair view. Our responsibility is to auit an express an opinion on the financial statements in accorance with applicable law an International Stanars on Auiting (UK an Irelan). Those stanars require us to comply with the Unite Kingom Auiting Practices Boar s Ethical Stanars for Auitors. Scope of the auit of the financial statements An auit involves obtaining evience about the amounts an isclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether cause by frau or error. This inclues an assessment of: whether the accounting policies are appropriate to the Company s circumstances an have been consistently applie an aequately isclose; the reasonableness of significant accounting estimates mae by the Directors; an the overall presentation of the financial statements. In aition, we rea all the financial an non-financial information in the annual report to ientify material inconsistencies with the auite financial statements. If we become aware of any apparent material misstatements or inconsistencies, we consier the implications for our report. Opinion on financial statements In our opinion the financial statements: give a true an fair view; are in accorance with International Financial Reporting Stanars (as aopte by the European Union); an comply with The Companies (Guernsey) Law, Matters on which we are require to report by exception We have nothing to report in respect of the following matters where The Companies (Guernsey) Law, 2008 requires us to report to you if, in our opinion: proper accounting recors have not been kept by the Company; the financial statements are not in agreement with the accounting recors; or we have faile to obtain all the information an explanations, which, to the best of our knowlege an belief, are necessary for the purposes of our auit. Saffery Champness Chartere Accountants, Guernsey 3 October 2012 Tritax Polska No.1 Fun Limite Page 15 Annual report an auite consoliate financial statements for the year ene 5 April 2012

17 Consoliate Statement of Comprehensive Income For the year ene 5 April 2012 Notes Year ene 5 April 2012 Year ene 5 April 2011 Revenue 5 7,405,835 7,517,719 Property operating expenses 7 (2,700,646) (2,763,966) Operating profit before aministrative expenses 4,705,189 4,753,753 Aministrative expenses 7 (1,597,535) (2,012,132) Operating profit before loss on change in fair value of investment property 3,107,654 2,741,621 Loss on change in fair value of investment property 10 (6,056,297) (291,350) Loss on change in fair value of investment property uner construction 11 (493,421) (29,181) Operating (loss)/profit (3,442,064) 2,421,090 Finance income 32,401 76,571 Finance costs (2,399,495) (2,504,698) Operating loss after net finance costs (5,809,158) (7,037) (Losses)/gains on erivatives 16 (852,759) 1,074,653 Losses on foreign exchange (117,218) (174,547) Other (losses)/ gains (969,977) 900,106 (Loss)/profit for the year before taxation (6,779,135) 893,069 Taxation (charge)/creit 8 (23,757) 2,245,379 (Loss)/profit for the year after taxation (6,802,892) 3,138,448 Basic an ilute (loss)/earnings per share 9 y(0.243) y0.112 Other comprehensive (loss)/income Exchange ifferences on translation of foreign operations (112,984) 181,324 Total comprehensive (loss)/income for the year (6,915,876) 3,319,772 The accompanying notes are an integral part of these financial statements. Tritax Polska No.1 Fun Limite Page 16 Annual report an auite consoliate financial statements for the year ene 5 April 2012

18 Consoliate Statement of Financial Position As at 5 April 2012 Notes 5 April April 2011 Non-current assets Investment property Investment property uner construction Deferre tax asset Plant an equipment Derivative assets ,710, ,479 2,062 76,059,552 1,063, , ,378 70,282,580 77,397,310 Current assets Trae an other receivables Cash an cash equivalents 15 2,468,045 2,083,007 1,729,519 3,159,502 4,197,564 5,242,509 Total assets 74,480,144 82,639,819 Non-current liabilities Bank loans Derivative liabilities Current liabilities Bank loans Derivative liabilities Trae an other payables ,547, ,700 48,077,061 20,441 42,261,541 48,097,502 6,351, ,398 8, ,347 2,245,539 2,162,941 8,605,762 3,206,686 Total liabilities 50,867,303 51,304,188 Net assets 23,612,841 31,335,631 Equity Share capital Share premium Retaine earnings Translation reserve The financial statements on pages 16 to 35 were approve by the Boar of Directors an signe on its behalf on 3 October 2012 by: Michael McKean Director ,078,224 (10,481,397) (1,983,986) 36,078,224 (2,871,591) (1,871,002) Total equity 23,612,841 31,335,631 Net asset value per share y0.84 y1.12 The accompanying notes are an integral part of these financial statements. Tritax Polska No.1 Fun Limite Page 17 Annual report an auite consoliate financial statements for the year ene 5 April 2012

19 Consoliate Statement of Cash Flows For the year ene 5 April 2012 Notes Year ene 5 April 2012 Year ene 5 April 2011 Cash flows from operating activities Operating (loss)/profit Ajustments for: Loss on change in fair value of investment property Loss on change in fair value of investment property uner construction Depreciation Increase in operating trae an other receivables Increase/(ecrease) in operating trae an other payables Taxation pai (3,442,064) 6,056, , (387,497) 88,125 (28,380) 2,421, ,350 29, (104,812) (201,052) (31,289) Net cash inflow from operating activities 2,780,475 2,404,727 Cash flows from investing activities Capitalise investment property costs Bank interest receive 10 (79,930) 34,860 (52,281) 80,473 Net cash (outflow)/inflow from investing activities (45,070) 28,192 Cash flows from financing activities Diviens pai Repayments of interest bearing loans Finance costs 20 (806,914) (943,319) (2,399,495) (989,212) (277,220) (2,504,698) Net cash outflow from financing activities (4,149,728) (3,771,130) Net ecrease in cash an cash equivalents (1,414,323) (1,338,211) Effect of foreign exchange rate movements Opening cash an cash equivalents (15,660) 3,159, ,326 4,331,387 Closing cash an cash equivalents 1,729,519 3,159,502 The accompanying notes are an integral part of these financial statements. Tritax Polska No.1 Fun Limite Page 18 Annual report an auite consoliate financial statements for the year ene 5 April 2012

20 Consoliate Statement of Changes in Equity For the year ene 5 April 2012 Notes Share Premium Retaine Earnings Translation Reserve Total For the year ene 5 April 2011 Balance brought forwar 36,078,224 (5,020,827) (2,052,326) 29,005,071 Total comprehensive income for the year 3,138, ,324 3,319,772 Divien pai 20 (989,212) (989,212) At 5 April ,078,224 (2,871,591) (1,871,002) 31,335,631 For the year ene 5 April 2012 Total comprehensive loss for the year (6,802,892) (112,984) (6,915,876) Diviens pai 20 (806,914) (806,914) At 5 April ,078,224 (10,481,397) (1,983,986) 23,612,841 The accompanying notes are an integral part of these financial statements. Tritax Polska No.1 Fun Limite Page 19 Annual report an auite consoliate financial statements for the year ene 5 April 2012

21 Notes to the Consoliate Financial Statements For the year ene 5 April Incorporation an principal activity Tritax Polska No.1 Fun Limite ( the Company ) was incorporate in Guernsey on 23 January The principal activity of the Company an its subsiiaries (together the Group ) is investing in property in Polan. The Company s subsiiaries are etaile in note Significant accounting policies Basis of preparation The financial statements have been prepare in accorance with International Financial Reporting Stanars ( IFRS ) as aopte by the European Union an IFRIC Interpretations that remain in effect, The Companies (Guernsey) Law, 2008 an the Protection of Investors (Bailiwick of Guernsey) Law, 1987 as amene. New, revise an amene stanars At the ate of authorisation of these financial statements, the following stanars an interpretations, which have not been applie in these financial statements, were in issue but not yet effective: IAS 1 (amene), Presentation of Financial Statements (effective for perios commencing on or after 1 July 2012); IAS 12 (amene), Income Taxes (effective for perios commencing on or after 1 January 2012); IAS 27 (revise), Separate Financial Statements (revise version effective for perios commencing on or after 1 January 2013 on aoption of IFRS 10, IFRS 11 an IFRS 12); IAS 28 (revise), Investments in Associates an Joint Ventures (revise version effective for perios commencing on or after 1 January 2013 on aoption of IFRS 10, IFRS 11 an IFRS 12); IAS 32 (amene), Financial Instruments: Presentation (effective for perios commencing on or after 1 January 2014); IFRS 7 (amene), Financial Instruments: Disclosures (various amenments effective for perios commencing on or after 1 July 2011, 1 January 2013 an 1 January 2015); IFRS 9, Financial Instruments - Classification an Measurement (effective for perios commencing on or after 1 January 2015); IFRS 10, Consoliate Financial Statements (effective for perios commencing on or after 1 January 2013); IFRS 11, Joint arrangements (effective for perios commencing on or after 1 January 2013); IFRS 12, Disclosure of Interest in Other Entities (effective for perios commencing on or after 1 January 2013); IFRS 13, Fair Value Measurement (effective for perios commencing on or after 1 January 2013). In aition the IASB complete its most recent annual improvements project in May This project amene a number of existing stanars an interpretations effective for accounting perios commencing 1 January The Directors anticipate that the aoption of these stanars an interpretations in future perios (except for IAS 12 (amene)) will not have a material impact on the financial statements of the Group. A formal assessment has not been unertaken by the Directors to assess if the aoption of IAS 12 in future perios will or will not have a material impact on the financial statements of the Group. New accounting policies effective an aopte The following new stanar, which has ha no material effect on the Group, has been applie for the first time in these financial statements. IAS 24 (amene), Relate Party Disclosures has revise the efinition of relate parties. Basis of consoliation The consoliate financial statements of the Group incorporate the financial statements of the Company an the entities controlle by the Company (ie its subsiiaries) mae up to 5 April each year. Control is achieve where the Company has the power to govern the financial an operating policies of an investee company so as to obtain benefits from its activities. On acquisition, the assets, liabilities an contingent liabilities of a subsiiary are measure at their fair values at the ate of acquisition. Any excess of the cost of acquisition over the fair values of the ientifiable net assets acquire is recognise as goowill. Any eficiency of the cost of acquisition below the fair values of the ientifiable net assets acquire (ie iscount on acquisition) is creite to the Consoliate Statement of Comprehensive Income in the perio of acquisition. The results of subsiiaries acquire or ispose of uring the perio are inclue in the Consoliate Statement of Comprehensive Income from the effective ate of acquisition or up to the effective ate of isposal, as appropriate. Where necessary, ajustments are mae to the financial statements of subsiiaries to bring the accounting policies use into line with those use by the Group. All intra-group transactions, balances, income, expenses, profits an losses are eliminate on consoliation. Revenue recognition Rental revenues are accounte for on a straight line basis. Amenments to rental revenues ue to rent reviews are recognise once the rent reviews have been formally agree. Service charge revenues are bille in avance an then allocate to the perio to which they relate. Revenue is recognise when it is probable that the economic benefits associate with the transaction will flow to the Group an the amount of revenue can be measure reliably. Tritax Polska No.1 Fun Limite Page 20 Annual report an auite consoliate financial statements for the year ene 5 April 2012

22 Notes to the Consoliate Financial Statements (continue) For the year ene 5 April Significant accounting policies (continue) Leases Leases are classifie as finance leases whenever the terms of the lease transfer substantially all the risks an rewars of ownership to the lessee. All other leases are classifie as operating leases. Rental income from operating leases is recognise on a straight-line basis over the term of the relevant lease. Foreign currency translation The Directors consier that the Group s functional currency is Euro, as this is the currency in which the majority of the Group s assets an liabilities an significant transactions are enominate. The Directors have selecte Euro as the Group s presentation currency. Foreign currency transactions Transactions in currencies other than the Euro are recore at the rates of exchange prevailing on the ates of the transactions. At each year en ate, monetary assets an liabilities that are enominate in foreign currencies are revalue at the rates prevailing at the year en ate. Non-monetary assets an liabilities carrie at fair value that are enominate in foreign currencies are revalue at the rates prevailing at the ate when the fair value was etermine. Gains an losses arising on revaluation are recognise in the Consoliate Statement of Comprehensive Income. On consoliation, the assets an liabilities of the Group s overseas operations are translate at exchange rates prevailing on the year en ate. Income an expenses are translate at the average exchange rates for the perio unless exchange rates fluctuate significantly, in which case items of income an expeniture are translate at the rate ruling on the ate of the transaction. Exchange ifferences arising, if any, are recognise as other comprehensive income in the Consoliate Statement of Comprehensive Income an are transferre to the Group s translation reserve. Such translation ifferences are inclue in profit or loss in the perio in which the operation is ispose of. Taxation During the year the Company was exempt from Guernsey taxation on income erive from outsie of Guernsey. The tax expense represents the sum of the tax currently payable an eferre tax for the Group. The tax currently payable is base on taxable profit for the year. Taxable profit iffers from net profit as reporte in the Consoliate Statement of Comprehensive Income because it exclues items of income an expense that are taxable or euctible in other perios or that are never taxable or euctible. The Group s liability for current tax is calculate using tax rates that have been enacte by the year en ate. Deferre tax is the tax arising on ifferences on the carrying amounts of assets an liabilities in the financial statements an the corresponing tax bases use in the computation of taxable profit, an is accounte for using the liability metho. Deferre tax liabilities are generally recognise for all taxable temporary ifferences an eferre tax assets are recognise to the extent that it is probable that taxable profits will be available against which euctible temporary ifferences can be utilise. Such assets an liabilities are not recognise if the temporary ifference arises from goowill or from the initial recognition (other than in a business combination) of other assets an liabilities in a transaction that affects neither the tax profit nor the accounting profit. Deferre tax liabilities are recognise for taxable temporary ifferences arising on investments in subsiiaries, except where the Group is able to control the reversal of the temporary ifference an it is probable that the temporary ifference will not reverse in the near future. The carrying amount of eferre tax assets is reviewe at each year en ate an reuce to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovere. Deferre tax is calculate at the tax rates that are expecte to apply in the perio when the liability is settle or the asset realise. Deferre tax is charge or creite in the Consoliate Statement of Comprehensive Income, except when it relates to items charge or creite irectly to equity, in which case the eferre tax is also ealt with in equity. Investment property Investment property, which is property hel to earn rentals an/ or for capital appreciation, is state at its fair value at the year en ate. Fair value is etermine as the market value as etermine by professionally qualifie inepenent external valuers. Gains or losses arising from changes in fair value of investment property are inclue in profit or loss for the perio in which they arise. Investment property uner construction Property that is in the process of being constructe or evelope for future use as investment property is classifie as investment property uner construction an state at its fair value as at the year en ate, where this can be reliably measure. On completion of construction or evelopment it is reclassifie an subsequently accounte for as investment property. All costs irectly associate with the purchase an construction of a property an all subsequent capital expeniture for the evelopment are capitalise as part of the cost. Fair value is etermine as the market value as etermine by professionally qualifie external valuers. Gains or losses arising from changes in fair value of investment property are inclue in profit or loss for the perio in which they arise. Tritax Polska No.1 Fun Limite Page 21 Annual report an auite consoliate financial statements for the year ene 5 April 2012

23 Notes to the Consoliate Financial Statements (continue) For the year ene 5 April Significant accounting policies (continue) Impairment Assets that have an inefinite useful life are not subject to amortisation an are teste annually for impairment. Assets that are subject to amortisation or epreciation are reviewe for impairment whenever events or changes in circumstance inicate that the carrying amount may not be recoverable. An impairment loss is recognise for the amount by which the asset s carrying amount excees its recoverable amount. The recoverable amount is the higher of an asset s fair value less costs to sell an value in use. For the purposes of assessing impairment, assets are groupe at the lowest levels for which there are separately ientifiable cash flows (cash generating units). Borrowing costs Borrowing costs are recognise in the Consoliate Statement of Comprehensive Income in the perio in which they are incurre. Interest bearing bank loans an borrowings Interest bearing bank an other loans are recore at the procees receive, net of irect issue costs. Finance charges, incluing premiums payable on settlement or reemption an irect issue costs, are accounte for on an accruals basis in the Consoliate Statement of Comprehensive Income using the effective interest metho an are ae to the carrying amount of the instrument to the extent that they are not settle in the perio in which they arise. Expenses Expenses are accounte for on an accruals basis. The Group s property management an aministration fees, finance costs an all other expenses are charge through the Consoliate Statement of Comprehensive Income. Segmental reporting The Directors are of the opinion that the Group is engage at 5 April 2012 in a single segment of business being property investment business, an in one geographical area being Polan. Financial instruments Financial instruments are recognise in the Consoliate Statement of Financial Position when the Group becomes party to the contractual provisions of the instrument. Financial instruments are initially measure at acquisition cost, which inclues transaction costs. Subsequent to initial recognition, they are measure as set out below. Derivative financial instruments The Group uses interest rate swaps to manage its exposure to movements in interest rates on a portion of each ebt incurre to acquire investment property. Such erivative financial instruments are initially recognise as assets or liabilities at fair value an subsequently revalue on each year en ate accoring to market conitions. Changes in the fair value of erivatives which have not been esignate as heges for hege accounting purposes are taken irectly to the Consoliate Statement of Comprehensive Income as part of finance income or expenses. The Group oes not use erivative financial instruments for speculative purposes. The use of erivative instruments is subject to limits an the positions are regularly monitore an reporte to senior management. Trae an other receivables Trae receivables an other short-term monetary assets are initially recognise at fair value an subsequently carrie at amortise cost using the effective interest rate metho, less any provisions for oubtful ebts. The effect of iscounting on these financial instruments is not consiere to be material. Cash an cash equivalents Cash an cash equivalents consist of cash in han, balances with banks an investments in money market instruments, which are reaily realisable. Financial liabilities Non-erivative financial liabilities are recognise at amortise cost, comprising original ebt less principal repayments an amortisations. Trae payables Trae payables an other short-term monetary liabilities are initially recognise at fair value an subsequently carrie at amortise cost using the effective interest rate metho. The effect of iscounting on these financial instruments is not consiere to be material. The Group has not classifie any of its financial liabilities as at fair value through profit or loss. Equity instruments Equity instruments issue by the Company are recore at the procees receive, net of irect issue costs. Use of estimates in the preparation of the financial statements In preparing the financial statements, management is require to make estimates an assumptions which affect reporting income, expenses, assets, liabilities an isclosure of contingent assets an liabilities. Use of available information an application of jugement are inherent in the formation of estimates. Actual results in the future coul iffer from such estimates. Tritax Polska No.1 Fun Limite Page 22 Annual report an auite consoliate financial statements for the year ene 5 April 2012

24 Notes to the Consoliate Financial Statements (continue) For the year ene 5 April Financial instruments The Group is expose to creit risk, currency risk, liquiity risk, capital risk an interest rate risk arising from the financial instruments it hols. The risk management policies employe by the Group to manage these risks are iscusse below. The Group s principal financial liabilities comprise bank loans an trae payables. The main purpose of these financial liabilities is to raise finance for the Group s acquisitions of assets an investments in subsiiaries. The Group has various financial assets such as cash an cash equivalents an receivables. Creit risk Creit risk arises when a failure by counterparties to ischarge their obligations coul reuce the amount of future cash flows from financial assets on han at the year en ate. Rent receivables are ue from iverse government an corporate tenants with strong creit ratings. Accoringly, the Directors o not anticipate losses in respect of these receivables. In the event of a efault by a tenant in occupation, the Group will suffer a rental shortfall an incur aitional costs, incluing legal expenses in maintaining, insuring an reletting the property until it is relet. The Group utilises property managers to monitor the tenants in orer to anticipate, an minimise the impact of, efaults by tenants in occupation. The maximum exposure relating to efault by tenants an other ebtors at the year en ate was 130,109 (2011: 186,276). Cash, cash equivalents an bank eposits are investe with major banks. The Directors believe that the financial institutions that hol the Group s investments are financially soun an, accoringly, minimal creit risk exists with respect to these investments. Derivative instruments hel for heging purposes are unertaken with the banks proviing the ebt finance. The Directors believe that these financial institutions are financially soun, an, accoringly, minimal creit risk exists in respect of these contracts. Currency risk Currency risk is the risk that the value of financial instruments will fluctuate ue to changes in foreign exchange rates. Currency risk arises when future commercial transactions an recognise assets an liabilities are enominate in a currency that is not the Group s reporting currency. The Group s subsiiaries finance the acquisition of property assets in the currency in which the asset is enominate so that the Group s exposure to changes in the Euro value of its assets is minimise. The Group is expose to foreign exchange risk arising from currency exposures with respect to the Polish Zloty an Sterling. The Group s management monitors exchange rate fluctuations on a continuous basis an, if appropriate, may use forwar foreign exchange contracts to hege the currency exposure. The tables below summarise the Group s exposure to foreign currency risk at the year en ate. The Group s assets an liabilities are shown at their Euro carrying amounts, categorise by their currency of enomination. Currency of enomination Euro Polish Zloty Sterling Total As at 5 April 2012 Investment property 59,970,000 9,740,039 69,710,039 Investment property uner construction 570, ,479 Plant an equipment 2,062 2,062 Trae an other receivables 86,094 2,354,443 27,508 2,468,045 Cash an cash equivalents 912, , ,080 1,729,519 Total assets 60,968,577 13,017, ,588 74,480,144 Bank loans 42,589,152 5,310,664 47,899,816 Derivative liabilities 713,700 8, ,948 Trae an other payables 156,289 1,932, ,612 2,245,539 Total liabilities 43,459,141 7,251, ,612 50,867,303 Net assets 17,509,436 5,766, ,976 23,612,841 Tritax Polska No.1 Fun Limite Page 23 Annual report an auite consoliate financial statements for the year ene 5 April 2012

25 Notes to the Consoliate Financial Statements (continue) For the year ene 5 April Financial instruments (continue) Currency risk (continue) Currency of enomination Euro Polish Zloty Sterling Total As at 5 April 2011 Investment property 63,440,000 12,619,552 76,059,552 Investment property uner construction 1,063,900 1,063,900 Deferre tax assets Plant an equipment 2,725 2,725 Derivative assets 270, ,378 Trae an other receivables 73,000 1,980,125 29,882 2,083,007 Cash an cash equivalents 1,084,847 1,005,019 1,069,636 3,159,502 Total assets 64,868,225 16,672,076 1,099,518 82,639,819 Bank loans 43,532,471 5,480,988 49,013,459 Derivative liabilities 107,347 20, ,788 Trae an other payables 158,982 1,856, ,985 2,162,941 Total liabilities 43,798,800 7,358, ,985 51,304,188 Net assets 21,069,425 9,313, ,533 31,335,631 The sensitivity analyses below are base on a change in assumption while holing all other assumptions constant. In practice this is unlikely to occur an changes in some of the assumptions may be correlate - for example, change in interest rate an change in foreign exchange rates. The Group manages foreign currency risk on an overall basis. The sensitivity analysis prepare by management for foreign currency risk illustrates how changes in the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign currency rates. If the Euro weakene/strengthene by 10% against the Polish Zloty with all other variables hel constant, the net asset value at the year en ate woul be 524,221 higher/lower (2011: 846,698 higher/lower). If the Euro weakene/strengthene by 10% against Sterling with all other variables hel constant, the net asset value at the year en ate woul be 30,634 higher/lower (2011: 86,594 higher/lower). No other currencies have a material effect upon the profitability of the Group. Liquiity risk Liquiity risk is the risk that arises when the maturity of assets an liabilities oes not match. An unmatche position potentially enhances profitability, but can also increase the risk of losses. The Group has proceures with the object of minimising such losses, such as maintaining sufficient cash an other highly liqui current assets an by having available an aequate amount of committe creit facilities. The Group s liquiity position is monitore on a weekly basis by the Fun Manager an is reviewe on a quarterly basis by the Boar of Directors. A summary table with maturity of financial assets an liabilities presente below is use by key management personnel to manage liquiity risks. Tritax Polska No.1 Fun Limite Page 24 Annual report an auite consoliate financial statements for the year ene 5 April 2012

26 Notes to the Consoliate Financial Statements (continue) For the year ene 5 April Financial instruments (continue) Liquiity risk (continue) Financial assets current Trae an other receivables maturity within one year Cash an cash equivalents maturity within one year ,043,325 1,729, ,676,476 3,159,502 3,772,844 4,835,978 Financial liabilities current Trae an other payables maturity within one year Borrowings maturity within one year 1,599,246 6,351,975 1,984, ,398 7,951,221 2,920,668 Financial liabilities non-current Borrowings Between 1 an 2 years Between 2 an 5 years 41,547,841 6,462,299 41,614,762 Fair value hierarchy The table below analyses instruments carrie at fair value, by valuation metho. The ifferent levels have been efine as follows: Level 1: quote prices (unajuste) in active markets for ientical assets or liabilities Level 2: inputs other than quote prices inclue within Level 1 that are observable for the asset or liability, either irectly (ie as prices) or inirectly (ie erive from prices) Level 3: inputs for the asset or liability that are not base on observable market ata (unobservable inputs) 41,547,841 48,077,061 As at 5 April 2012 Level 1 Level 2 Level 3 Total Derivative financial liabilities (721,948) (721,948) (721,948) (721,948) As at 5 April 2011 Level 1 Level 2 Level 3 Total Derivative financial assets Derivative financial liabilities 270,378 (127,788) 270,378 (127,788) 142, ,590 Tritax Polska No.1 Fun Limite Page 25 Annual report an auite consoliate financial statements for the year ene 5 April 2012

27 Notes to the Consoliate Financial Statements (continue) For the year ene 5 April Financial instruments (continue) Capital risk The Group s objectives when managing capital are to safeguar the Group s ability to continue as a going concern in orer to provie returns for shareholers an benefits for other stakeholers an to maintain an optimum capital structure to reuce the cost of capital. In orer to maintain or ajust the capital structure, the Group may ajust the amount of iviens pai to shareholers, return capital to shareholers, issue new shares or sell assets to reuce ebt. Consistent with others in the inustry, the Group monitors capital on the basis of the gearing ratio. This ratio is calculate as net ebt ivie by total capital. Net ebt is calculate as total borrowings, as shown in the Consoliate Statement of Financial Position, less cash an cash equivalents. Total capital is calculate as equity, as shown in the Consoliate Statement of Financial Position, plus net ebt. The gearing ratio at the year en ate was as follows: Total borrowings Less: cash an cash equivalents ,899,816 (1,729,519) ,013,459 (3,159,502) Net ebt 46,170,297 45,853,957 Total equity 23,612,841 31,335,631 Total capital 69,783,138 77,189,588 Gearing ratio 66% 59% Interest rate risk Interest rate risk is the risk that the value of financial instruments will fluctuate ue to changes in market interest rates. The Group is expose to interest rate risk in relation to its borrowings. Borrowings issue at variable rates expose the Group to cash flow interest rate risk. Borrowings issue at fixe rates expose the Group to fair value interest rate risk. The Group seeks to mitigate cash flow interest rate risk by means of interest rate swap contracts, which effectively fix the interest rates on the Group s variable rate rawn-own borrowings. As a result of this the Group s exposure to cash flow interest rate risk is limite, however this oes expose the Group to fair value interest rate risk. The Group monitors interest rates on an ongoing basis an uses interest rate swaps where appropriate. At 5 April 2012, 28,283,035 (2011: 29,358,656) of the Group s borrowings were at effectively fixe rates of interest an 19,616,781 (2011: 19,654,803) were at variable rates of interest. Ha these balances existe for the whole of the year, the effect on the Consoliate Statement of Comprehensive Income of an increase of 1%/ecrease of 0.5% in short term interest rates woul have been a ecrease of 196,168/increase of 98,084 in post-tax profit for the year (2011: ecrease of 196,548/increase of 98,274) in relation to the Group s variable rate borrowings, an an increase of 391,272/ecrease of 195,636 in post-tax profit for the year (2011: increase of 36,733/ecrease of 18,367) in relation to the Group s fixe rate borrowings. 4. Critical accounting estimates an assumptions Management makes estimates an assumptions concerning the future. The resulting accounting estimates will, by efinition, selom equal the relate actual results. The estimates an assumptions that have a significant risk of causing a material ajustment to the carrying amounts of assets an liabilities within the next financial year are outline below. Estimate of fair value of investment properties The Group has engage Polish Properties Sp. z o.o., Chartere Surveyors as professional valuers of the investment properties, with the exception of Galeria Foron, which has been value by CBRE Sp. z o.o. In forming their opinion on the values of the investment properties, the valuers will be minful of the following factors: The best evience of fair value is current prices in an active market for similar leases an other contracts. In the absence of such information, the amount will be etermine within a range of reasonable fair value estimates. Tritax Polska No.1 Fun Limite Page 26 Annual report an auite consoliate financial statements for the year ene 5 April 2012

28 Notes to the Consoliate Financial Statements (continue) For the year ene 5 April Critical accounting estimates an assumptions (continue) Estimate of fair value of investment properties (continue) In making their jugement, the valuers will consier information from a variety of sources, incluing: current prices in an active market for properties of a ifferent nature, conition or location (or subject to a ifferent lease or other contracts), ajuste to reflect those ifferences; recent prices of similar properties in less active markets, with ajustments to reflect any changes in economic conitions since the ate of the transactions that occurre at those prices; an iscounte cash flow projections base on reliable estimates of future cash flows, erive from the terms of any existing lease an other contracts an (where possible) from external evience such as current market rents for similar properties in the same location an conition, an using iscount rates that reflect current market assessments of the uncertainty in the amount an timing of cash flows. Principal assumptions for the estimation of fair value If information on current or recent prices or assumptions unerlying the iscounte cash flow approach to investment property valuations are not available, then the fair values of investment properties are etermine using iscounte cash flow valuation techniques. Any assumptions use will be mainly base on market conitions existing at the year en ate. The principal assumptions unerlying the estimation of fair value are those relate to: the receipt of contractual rentals; expecte future market rentals; voi perios; maintenance requirements; an appropriate iscount rates. These valuations are regularly compare to actual market yiel ata, an actual transactions in the market. The expecte future market rentals are etermine on the basis of current market rentals for similar properties in the same location an conition. Income taxes The Group is potentially subject to income taxes in ifferent jurisictions. Significant estimates are require in etermining the worlwie provision for income taxes. There are some transactions an calculations for which the ultimate tax etermination is uncertain. The Group recognises liabilities for anticipate tax issues base on estimates of whether aitional taxes will be ue. Where the final tax outcome of these matters is ifferent from the amounts that were originally recore, such ifferences will impact the income tax an eferre tax provisions in the perio in which such etermination is mae. 5. Revenue The Group s revenue erives principally from rental income an lease-relate aministration service charges as follows: Rental income Service charge income Other income ,148,416 1,669, , ,204,338 1,607, ,099 Whilst rental income an total revenue have fallen in Euro terms from the prior year, this is ue to movements in the Euro/Polish Zloty exchange rate. In Zloty terms, rental income an total revenue have risen by 4.0% an 3.6% respectively. 6. Operating lease receivables 7,405,835 7,517,719 Not later than 1 year Between 1 an 5 years Later than 5 years ,419,892 6,890,003 1,329, ,774,148 7,877,388 1,868,386 12,639,169 14,519,922 Tritax Polska No.1 Fun Limite Page 27 Annual report an auite consoliate financial statements for the year ene 5 April 2012

29 Notes to the Consoliate Financial Statements (continue) For the year ene 5 April Aministrative expenses an other operating expenses Direct property operating expenses Auit fees Other aministrative an operating expenses ,700,646 69,602 1,527, ,763,966 64,367 1,947,765 4,298,181 4,776,098 The irect property operating expenses shown above inclue a significant proportion of costs which are rechargeable to tenants. These costs are recovere from tenants through the raising of a service charge (see note 5). 8. Taxation The tax charge for the year comprises: Current tax charge Deferre tax charge/(creit) , ,647 (2,275,026) 23,757 (2,245,379) The tax on the Group s profit before tax iffers from the theoretical amount that woul arise using the weighte average tax rate of the applicable profits of the consoliate companies as follows: (Loss)/profit before tax (6,779,135) 893,069 Tax (creit)/charge calculate at omestic tax rates applicable to profits in the respective countries Ajustment in respect of: Deferre tax write back Deferre tax asset utilise Profits not subject to tax Losses not allowable for tax (24,944) ,975 66,141 (2,275,026) (36,494) 23,757 (2,245,379) The weighte average applicable tax rate was 0.26% (2011: 0.36%). 9. Basic an ilute (loss)/earnings per share (Loss)/profit attributable to the shareholers of the parent (6,802,892) 3,138,448 Weighte average number of shares uring the year 28,029,365 28,029,365 Basic an ilute (loss)/earnings per share t(0.243) t0.112 Tritax Polska No.1 Fun Limite Page 28 Annual report an auite consoliate financial statements for the year ene 5 April 2012

30 Notes to the Consoliate Financial Statements (continue) For the year ene 5 April Investment property Balance brought forwar Capitalise costs uring the year Fair value ajustment in the year Foreign exchange ifferences 76,059,552 79,930 (6,056,297) (373,146) 76,817,300 52,281 (291,350) (518,679) 69,710,039 76,059,552 The Directors have engage Polish Properties Sp. z o.o., Chartere Surveyors, as valuers of the majority of the investment properties. Galeria Foron is value by CBRE Sp. z o.o. The Directors have etermine the fair value of the investment properties with reference to the valuers valuations at the year en ate. As at 5 April 2012 the Group owne the following investment properties: Office builing at ul. Piekna 68, Warsaw Wola Plaza office builing at ul. Mlynarska 8/12, Warsaw Storage/office builing at ul. Szajnochy 11, Bygoszcz Office builing at ul. Ratajczaka 19, Poznan Office builing at ul. Wierzbiecice 1, Poznan City Park shopping centre at ul. Stanislawa Wyspianskiego 26, Poznan Office builing at ul. Jasna 24, Warsaw Warehouse builings at ul. Dzialkowa 85, Warszawa Galeria Foron shopping centre at ul. Skazynskiego, Bygoszcz 11. Investment property uner construction Balance brought forwar Fair value ajustment in the year 1,063,900 (493,421) 1,093,081 (29,181) 570,479 1,063,900 The Directors have etermine the fair value of the investment property uner construction with reference to the valuers valuation at the year en ate. Investment property uner construction comprises a lan site esignate for evelopment at ul. Szajnochy 11, Bygoszcz. Tritax Polska No.1 Fun Limite Page 29 Annual report an auite consoliate financial statements for the year ene 5 April 2012

31 Notes to the Consoliate Financial Statements (continue) For the year ene 5 April Deferre taxation Deferre tax assets an liabilities arising as follows have been recognise at the year en ate: Deferre tax assets Balance brought forwar Carrie forwar losses Utilise uring the year Foreign exchange ifferences (726) (29) Deferre tax liabilities Balance brought forwar Creit for the year Foreign exchange ifferences 2,373,860 (2,275,026) (98,834) The Group has incurre losses of 7,869,832 (2011: 2,646,592) in respect of which no eferre tax asset has been recognise in the Consoliate Statement of Financial Position. 13. Subsiiaries The financial statements of the Group consoliate the results, assets an liabilities of the subsiiary companies liste below: Jurisiction Ownership Principal activity Direct Tritax Polska No. 1 Investment Company S.à.r.l. Luxembourg 100% Holing company Inirect CC1 Funusz Inwestycyjny Zamknięty Numer 1 Tritax Polska (GP) Sp. z o.o. S.K.A. Numer 2 Tritax Polska (GP) Sp. z o.o. S.K.A. Numer 3 Tritax Polska (GP) Sp. z o.o. S.K.A. Numer 4 Tritax Polska (GP) Sp. z o.o. S.K.A. Numer 5 Tritax Polska (GP) Sp. z o.o. S.K.A. Numer 6 Tritax Polska (GP) Sp. z o.o. S.K.A. Numer 7 Tritax Polska (GP) Sp. z o.o. S.K.A. Numer 8 Tritax Polska (GP) Sp. z o.o. S.K.A. Numer 9 Tritax Polska (GP) Sp. z o.o. S.K.A. Numer 10 Tritax Polska (GP) Sp. z o.o. S.K.A. Numer 11 Tritax Polska (GP) Sp. z o.o. S.K.A. Numer 12 Tritax Polska (GP) Sp. z o.o. S.K.A. Numer 14 Tritax Polska (GP) Sp. z o.o. S.K.A. Numer 15 Tritax Polska (GP) Sp. z o.o. S.K.A. Wola Plaza Sp. z o.o. Jasna Sp. z o.o. * Polan Polan Polan Polan Polan Polan Polan Polan Polan Polan Polan Polan Polan Polan Polan Polan Polan 100% 99% 99% 99% 99% 99% 99% 99% 99% 99% 99% 99% 99% 99% 99% 100% 100% Investment fun Investment property holing Holing company Investment property holing Investment property holing Investment property holing Investment property holing Investment property holing Investment property holing Investment property holing Holing company Investment property holing Dormant Dormant Dormant Holing company Liquiate * Jasna Sp. z o.o. was liquiate on 3 January Tritax Polska No.1 Fun Limite Page 30 Annual report an auite consoliate financial statements for the year ene 5 April 2012

32 Notes to the Consoliate Financial Statements (continue) For the year ene 5 April Plant an equipment Cost: As at 5 April ,981 Foreign exchange ifferences (93) As at 5 April ,888 Depreciation: As at 5 April Charge for the year 573 Foreign exchange ifferences (3) As at 5 April Net book value: As at 5 April ,062 As at 5 April , Trae an other receivables Trae ebtors VAT receivable Accrue income Sunry ebtors an prepayments ,800, ,618 10, , ,451, ,015 12, ,561 The fair values of trae an other receivables ue within one year approximate to their carrying amounts as shown above. 2,468,045 2,083, Derivative assets an liabilities Uner the terms of its bank loan agreements the Group is require to utilise interest rate swaps to hege a fixe proportion of its loan balances against movements in interest rates. Interest rate swap contracts are value by iscounting the anticipate future cash flows, base on the market interest rates applicable for the remaining term of the contract. Changes in the fair value of erivatives are isclose in the Consoliate Statement of Comprehensive Income. At the year en ate the fair value of unsettle contracts was as follows: Non-current erivative assets 270,378 Current erivative liabilities 8, ,347 Non-current erivative liabilities 713,700 20,441 Tritax Polska No.1 Fun Limite Page 31 Annual report an auite consoliate financial statements for the year ene 5 April 2012

33 Notes to the Consoliate Financial Statements (continue) For the year ene 5 April Derivative assets an liabilities (continue) As a result of movements in market interest rates uring the year, principally 3 month EURIBOR, losses have arisen uring the year on the revaluation of these interest rate swap contracts as follows: (Losses)/gains on revaluation of interest rate swaps (852,759) 1,074,653 The following erivative contracts were open at the year en ate: Interest rate swap contracts Various contracts with a total principal amount of 28,283,035. Uner these contracts the Group has agree to make fixe rate interest payments at rates between 2.14% an 2.31% against receipt of 3 month EURIBOR, an at a rate of 5.55% against 1 month WIBOR, plus a specifie margin between 2.45% an 3.5%. The contracts in place at the year en ate have maturity ates between December 2012 an April 2014, fixe to coincie with the repayment ates of the loans to which they relate. 17. Bank loans HSBC Bank Polska S.A. Bank Zachoni WBK S.A ,090,664 39,809, ,320,988 40,692,471 47,899,816 49,013,459 The loans are repayable as follows: Within one year After one year ,351,975 41,547, ,398 48,077,061 47,899,816 49,013,459 The weighte average effective interest rate at the year en ate is % (2011: %). In the opinion of the Directors, the carrying amounts of the loans are materially the same as their fair value. The Group uses interest rate swaps to manage its exposure to interest rate movements on its bank borrowings. At the year en ate the Group hel interest rate swap contracts that convert 28,283,035 (2011: 29,358,656) of floating rate ebt to fixe rate ebt. These arrangements were entere into alongsie the loan agreements with Bank Zachoni WBK an HSBC Bank Polska. The loans payable comprise separate facilities as follows: HSBC Bank Polska S.A. 2,880,000 loan facility at the 3 month LIBOR rate plus 2.75% maturing 31 March The above facility is secure on the assets of the Company s subsiiary Numer 1 Tritax Polska (GP) Sp. z o.o. S.K.A. During the year 60,000 of the loan was repai. The total balance outstaning on the above facility at 5 April 2012 was 2,780,000. Tritax Polska No.1 Fun Limite Page 32 Annual report an auite consoliate financial statements for the year ene 5 April 2012

34 Notes to the Consoliate Financial Statements (continue) For the year ene 5 April Bank loans (continue) HSBC Bank Polska S.A. (continue) PLN 22,062,622 loan facility at the 1 month WIBOR rate plus 3.5%, maturing 14 December The above facility is secure on the assets of the Company s subsiiary Numer 9 Tritax Polska (GP) Sp. z o.o. S.K.A. An interest rate swap expiring on 22 December 2012 was entere into with HSBC Bank Polska capping PLN 10,000,000 of the loan at a rate of 5.55%. The total balance outstaning on the above facility at 5 April 2012 was PLN 22,062,622. Bank Zachoni WBK S.A. Portfolio 1 12,642,000 loan facility at the 3 month EURIBOR rate plus 2.45%, maturing 5 April The above facility is secure on the assets of the Company s subsiiary Numer 6 Tritax Polska (GP) Sp. z o.o. S.K.A. an on the other properties in Bank Zachoni WBK portfolio 1. An amortising interest rate swap expiring 4 April 2014 was entere into with Bank Zachoni WBK capping 65% of the outstaning loan balance at a rate of 4.59%. During the year 252,840 of the loan was repai. The balance outstaning on the above facility at 5 April 2012 was 12,262,740. 1,015,000 loan facility at the 3 month EURIBOR rate plus 2.45%, maturing 5 April The above facility is secure on the assets of the Company s subsiiary Numer 3 Tritax Polska (GP) Sp. z o.o. S.K.A. an on the other properties in Bank Zachoni WBK portfolio 1. An amortising interest rate swap expiring 4 April 2014 was entere into with Bank Zachoni WBK capping 65% of the outstaning loan balance at a rate of 4.59%. During the year 20,300 of the loan was repai. The balance outstaning on the above facility at 5 April 2012 was 984,550. 4,452,000 loan facility at the 3 month EURIBOR rate plus 2.45%, maturing 5 April The above facility is secure on the assets of the Company s subsiiary Numer 4 Tritax Polska (GP) Sp. z o.o. S.K.A. an on the other properties in Bank Zachoni WBK portfolio 1. An amortising interest rate swap expiring 4 April 2014 was entere into with Bank Zachoni WBK capping 65% of the outstaning loan balance at a rate of 4.59%. During the year 89,040 of the loan was repai. The balance outstaning on the above facility at 5 April 2012 was 4,318,440. 6,549,000 investment loan facility at the 3 month EURIBOR rate plus 2.45%, maturing 5 April The above facility is secure on the assets of the Company s subsiiary Numer 5 Tritax Polska (GP) Sp. z o.o. S.K.A. an on the other properties in Bank Zachoni WBK portfolio 1. An amortising interest rate swap expiring 4 April 2014 was entere into with Bank Zachoni WBK capping 65% of the outstaning loan balance at a rate of 4.59%. During the year 130,980 of the loan was repai. The balance outstaning on the above facility at 5 April 2012 was 6,396,190. Portfolio 2 5,108,000 loan facility at the 3 month EURIBOR rate plus 2.45%, maturing 5 April The above facility is secure on the assets of the Company s subsiiary Numer 7 Tritax Polska (GP) Sp. z o.o. S.K.A. an on the other properties in Bank Zachoni WBK portfolio 2. An amortising interest rate swap expiring 4 April 2014 was entere into with Bank Zachoni WBK capping 65% of the outstaning loan balance at a rate of 4.59%. During the year 102,160 of the loan was repai. The balance outstaning on the above facility at 5 April 2012 was 5,005,840. 6,039,691 loan facility at the 3 month EURIBOR rate plus 2.45%, maturing 5 April The above facility is secure on the assets of the Company s subsiiary Numer 8 Tritax Polska (GP) Sp. z o.o. S.K.A. an on the other properties in Bank Zachoni WBK portfolio 2. An amortising interest rate swap expiring 4 April 2014 was entere into with Bank Zachoni WBK capping 65% of the outstaning loan balance at a rate of 4.59%. During the year 134,279 of the loan was repai. The balance outstaning on the above facility at 5 April 2012 was 5,871,112. 5,124,000 loan facility at the 3 month EURIBOR rate plus 2.45%, maturing 5 April The above facility is secure on the assets of the Company s subsiiary Numer 11 Tritax Polska (GP) Sp. z o.o. S.K.A. an on the other properties in Bank Zachoni WBK portfolio 2. An amortising interest rate swap expiring 4 April 2014 was entere into with Bank Zachoni WBK capping 65% of the outstaning loan balance at a rate of 4.59%. During the year 153,720 of the loan was repai. The balance outstaning on the above facility at 5 April 2012 was 4,970,280. As at 5 April 2012 loan portfolio 2 was in breach of its LTV covenants, however Bank Zachoni WBK S.A. has issue a waiver in respect of this breach. Tritax Polska No.1 Fun Limite Page 33 Annual report an auite consoliate financial statements for the year ene 5 April 2012

35 Notes to the Consoliate Financial Statements (continue) For the year ene 5 April Trae an other payables Trae creitors Tenants eposits Deferre income Sunry creitors an accruals , , ,173 1,014, , , , ,689 2,245,539 2,162,941 The fair values of trae an other payables ue within one year approximate to their carrying amounts as shown above. 19. Share capital Authorise share capital: The authorise share capital of the Company is mae up of an unlimite number of shares of no par value, which may be enominate in any currency an issue as voting reeemable participating shares, non-voting non-participating reeemable performance shares or non-voting non participating non-reeemable orinary shares. Issue share capital: 2 orinary shares of no par value 28,029,363 participating shares of no par value 1,000 performance shares of no par value The orinary shares carry no right to iviens or other istributions. Participating shares carry the right to receive istributions at the iscretion of the Directors Share premium Balance brought forwar 36,078,224 36,078,224 Balance carrie forwar 36,078,224 36,078,224 Tritax Polska No.1 Fun Limite Page 34 Annual report an auite consoliate financial statements for the year ene 5 April 2012

36 Notes to the Consoliate Financial Statements (continue) For the year ene 5 April Diviens Interim ivien for the year ene 5 April 2011 of 3p per share pai on 15 December 2010 Final ivien for the perio ene 5 April 2011 of 1.5p per share pai on 28 April 2011 Interim ivien for the year ene 5 April 2012 of 1p per share pai on 23 December , , , , ,212 No final ivien has been eclare or pai for the year ene 5 April Relate party transactions Mark Shaw, a Director of the Company, is a shareholer in an serve as a irector of the promoter, sponsor an istributor Tritax Securities 1 Limite ( TS1L ) throughout the year. All intra-group transactions, balances, income an expenses are eliminate on consoliation. 22. Post year en events On 19 July 2012 the Company serve 6 months notice on the Aministrator to terminate the Aministration Agreement. Tritax Polska No.1 Fun Limite Page 35 Annual report an auite consoliate financial statements for the year ene 5 April 2012

37 Tritax Polska No.1 Fun Limite Page 36 Annual report an auite consoliate financial statements for the year ene 5 April 2012

38 Tritax Polska No.1 Fun Limite Page 37 Annual report an auite consoliate financial statements for the year ene 5 April 2012

39 THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any oubt as to any aspect of this notice, you shoul consult your stockbroker or other registere ealer in securities, bank manager, solicitor, professional accountant or other professional avisor. When consiering what action you shoul take, you are recommene to seek your own personal financial avice from a suitable aviser. If you sell or have sol or transferre all your shares in Tritax Polska No 1 Fun Limite, you shoul han this ocument an the ocuments accompanying it to the purchaser or agent through whom the sale was affecte for transmission to the purchaser. TRITAX POLSKA NO 1 FUND LIMITED (Company Registration Number 46273) NOTICE OF ANNUAL GENERAL MEETING Tritax Polska No.1 Fun Limite Page 38 Annual report an auite consoliate financial statements for the year ene 5 April 2012

40 TRITAX POLSKA NO 1 FUND LIMITED (Company Number: 46273) NOTICE OF ANNUAL GENERAL MEETING NOTICE IS HEREBY GIVEN THAT an Annual General Meeting of shareholers of Tritax Polska No 1 Fun Limite (the Company ) will be hel at Sarnia House, Le Truchot, St Peter Port, Guernsey GY1 4NA on Tuesay 27th November 2012 at a.m. for the purpose of consiering an, if thought fit, passing the following resolutions: ORDINARY BUSINESS 1. To receive an aopt the Financial Statements an Directors Report for the year ene 5th April To re-appoint Mr Michael McKean as a Director of the Company 3. To re-appoint Saffery Champness as auitors of the Company 4. To authorise the Directors to fix the remuneration of the Company s auitors By orer of the boar Praxis Fun Services Limite For an on behalf of Praxis Fun Services Limite Company Registration Number: As Company Secretary Date: 5th August 2012 Registere office: Sarnia House, Le Truchot, St Peter Port, Guernsey GY1 4NA, Channel Islans Notes: 1. Any shareholer entitle to atten an vote at the meeting is entitle to appoint one or more proxies to atten an vote instea of him. A proxy nee not be a shareholer of the Company. 2. The form of proxy, together, if appropriate, with the power of attorney or other authority (if any) uner which it is signe, must be eposite at the office of the Company s registere office not later than forty-eight hours before the time appointe for holing the meeting. 3. Return of a complete form of proxy will not preclue a shareholer from attening an voting personally at the meeting. 4. The notice sets out the resolutions to be propose at the meeting. The meeting will be chaire by a person nominate by the shareholers present in person or by proxy at the meeting. It is anticipate that the chairman of the meeting will be Mr Michael McKean or, in his absence, Mr Anrew Howat. 5. The quorum for a general meeting shall be four members present in person or by proxy. 6. If, within fifteen minutes from the appointe time for the meeting, a quorum is not present, then the meeting will be ajourne for seven ays at the same aress or to such other ay an at such other time an place as the Boar may etermine an no notice of ajournment nee be given. At that meeting, those shareholers present in person or by proxy will form a quorum whatever their number an the number of shares hel by them. Tritax Polska No.1 Fun Limite Page 39 Annual report an auite consoliate financial statements for the year ene 5 April 2012

41 TRITAX POLSKA NO 1 FUND LIMITED (Company Number: 46273) FORM OF PROXY Form of proxy for use by holers of Orinary Shares at the Annual General Meeting of the Company convene for Tuesay 27th November 2012 at am. I/We (Please complete the full name of your investment in block capitals) of (Please complete your full aress in block capitals) hereby appoint/s 1 the chairman of the meeting (see note 1 overleaf) or 2 (Shoul you wish to appoint a representative, please complete the name an aress of proxy/representative in block capitals) as my/our proxy to atten, an on a poll, vote for me/us an on my/our behalf at the Annual General Meeting of the Company to be hel on Tuesay 27th November 2012 at am an at any ajournment thereof. I/We wish my/our proxy to vote as inicate below in respect of the resolutions to be propose at the meeting. Please inicate which way you wish your proxy to vote by ticking the appropriate box alongsie each resolution. (see note 2 overleaf). ORDINARY RESOLUTIONS FOR AGAINST VOTE WITHHELD DISCRETIONARY 1. That the Financial Statements an Directors Report for the year ene 5th April 2012 be receive an aopte. 2. That Michael McKean be re-appointe as a Director of the Company. 3. That Saffery Champness be re-appointe as auitors of the Company. 4. That the Directors be authorise to fix the remuneration of the Company s auitors. Signature... (see note 3 overleaf) Date Tritax Polska No.1 Fun Limite Page 40 Annual report an auite consoliate financial statements for the year ene 5 April 2012

42 TRITAX POLSKA NO 1 FUND LIMITED (Company Number: 46273) FORM OF PROXY Notes: 1. If you wish to appoint as your proxy someone other than the chairman of the meeting, cross out the wors the chairman of the meeting an write on the line the full name an aress of your proxy. The change can be initialle. 2. In the absence of instructions, the person appointe by proxy may vote or abstain from voting as he or she thinks fit on the specifie resolutions an, unless instructe otherwise, the person appointe by proxy may also vote or abstain from voting as he or she thinks fit on any other business (incluing amenments to resolutions) which may properly come before the meeting. 3. This form must be signe an ate by the shareholer or his/her attorney uly authorise in writing. If the shareholer is a company, it may execute uner its common seal or by the signature of a uly authorise officer or attorney. In the case of joint holings, any one holer may sign this form. The vote of the senior joint holer who teners a vote, whether in person or by proxy, will be accepte to the exclusion of the votes of the other joint holers an for this purpose seniority will be etermine by the orer in which the names stan in the register of members in respect of the joint holing. 4. To be vali, this form must be complete an loge with Praxis Fun Services Limite, PO Box 296, Sarnia House, Le Truchot St. Peter Port, Guernsey, Channel Islans GY1 4NA, together with the power of attorney or other authority (if any) uner which it is signe or a copy of such authority certifie notarially, not less than 48 hours before the time fixe for holing the meeting. 5. The vote withhel option is provie to enable you to abstain on any particular resolution however it shoul be note that a vote withhel is not a vote in law an will not be counte in the calculation of the proportion of the votes for an against a resolution. 6. To appoint more than one proxy you may photocopy this form. Please inicate the proxy holer s name an number of shares in relation to which they are authorise to act as your proxy (which, in aggregate, shoul not excee the number of shares hel by you). Please also inicate if the proxy instruction is one of multiple instructions being given. All forms must be signe an shoul be returne together in the same envelope. Tritax Polska No.1 Fun Limite Page 41 Annual report an auite consoliate financial statements for the year ene 5 April 2012

43 Tritax Polska No.1 Fun Limite Page 42 Annual report an auite consoliate financial statements for the year ene 5 April 2012

44 Tritax Securities 1 Lt The Loge, Oell, Befor MK43 7BB t f Authorise an Regulate by the Financial Services Authority. Registere Office: The Loge, Oell, Befor, MK43 7BB. Company No