Eastern Property : SEMI-ANNUAL REPORT 2020 EPH EUROPEAN PROPERTY HOLDINGS

September 29, 2020 at 07:35 pm

SEMI-ANNUAL

REPORT 2020

EPH EUROPEAN PROPERTY HOLDINGS

MANAGEMENT REPORT

STATEMENT OF THE BOARD OF DIRECTORS

PROPERTY REVIEW

CORPORATE GOVERNANCE

EXTERNAL REPORTS

INDEPENDENT AUDITOR'S REPORT
EVALUATORS

FINANCIAL REPORT

24 CONSOLIDATED FINANCIAL STATEMENTS

30 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

GENERAL INFORMATION 56 CORPORATE DETAILS

STATEMENT OF THE BOARD OF DIRECTORS	01
MANAGEMENT REPORT

DEAR

SHAREHOLDERS

We are proud to say that in the first six months of 2020 EPH European Property Holdings ("EPH" or the "Group) has made considerable progress with the implementation of its expansion strategy and to further expand its portfolio in Europe. Our portfolio has grown by additional first-class, high quality properties in outstanding locations in German and Austrian metropolises.

Going back to 2016, EPH set the sails for a change in geographic focus. After many years of investing very successfully in the volatile but high yield Rus- sian real estate market, EPH was looking for calmer waters. The high-class11-floor office building "City Gate" in Stuttgart set the first anchor in the western sphere. In 2017, the acquisition was followed by "Work Life Center" close to Hamburg city centre, and in 2019, by the office building "QBC 4" in the attractive Belvedere quarter in Vienna.

In 2020, EPH is still staying at its course of expanding to Europe but added a new real estate class to its portfolio. The Group acquired an 89.9 percent stake of the trendy hotel property "STRAL 3" in Berlin-Friedrichshain. The building was erected in 2010 in the epic centre of music, fashion and culture. It embraces the dynamic and energy of a new generation of hotels appealing to the cosmopolitan travellers. Europe´s first hotel dedicated to music is an upbeat mix of 304 rooms, an art gallery, a music studio, a terraced bar and restaurant overlooking the river Spree. The hotel property is fully leased to NH Hotel Group, the third-largest hotel operator in Europe.

Only recently, after the end of the reporting period, EPH acquired a second hotel property in Germany which is beyond the ordinary. The hotel property "SALZ 4" with 180 rooms in Dresden's historic centre is right next to the Church of Our Lady and home to the award-winning international Twist Bar on the 6th floor which offers a great view over the city. It is leased to Meliá Hotels International, one of the largest Spanish hotel operators with a strong global presence in 40 countries.

The hotel sector is one of the segments most affected by the coronavirus pandemic. However, the sector has seen attractive opportunities for acquisi- tions. Naturally fundamental factors which define the quality of the asset for the long-term remain most important - for instance a consistent and future- viable hotel concept, the creditworthiness of the tenant, an excellent hotel location and the construction quality of the building itself. These factors play a decisive role in whether a hotel can survive the recession of the coronavi- rus crisis and be successful in the long term. The modern city hotels which we have acquired in Berlin and Dresden fulfil these criteria. EPH is convinced that these assets supplement our portfolio in an excellent manner.

Although the pandemic has left its mark on the office real estate market, there is still a shortage of space at in-demand locations in Europe - for EPH reason enough to acquire another office property in Vienna. The property "Lass One", originally built in 1993, is currently undergoing a full refurbishment to create an intelligent and future-oriented workspace over 9 floors

with a total area of approx. 29,000 sqm - expected finalization of refurbishment in mid-2022. Quartier Lassalle is next to Praterstern which is one of Vienna's largest inner-city urban development area with an excellent infrastructure and upscale local supply. As of today, there are already more than 50% of the property leased with an average term of more than 10 years to reputable tenants and public authorities.

The Group's strategy "From East to West" is clearly observable through the latest investments associated with the shift in our focus from Russia to Europe. The renaming of the Group's holding company to "EPH European Property Holdings" in June was not only a major symbolic step but also a commitment to further enlarge the European asset portfolio.

The Group's rental income in the first half year 2020 as well as the market values across the entire portfolio faced a moderate decrease due to the coronovirus pandemic and potential risks arising from it have been reflected in the valuations. The valuations of the Russian properties with RUB-based income were further affected by the substantial RUB depreciation since the beginning of the year. However, due to active and efficient management, the Company successfully continued sales of Arbat premises in Moscow and, in particular, sold the whole office space in Arbat 24 of 2,600 square meters with significant profit which overlapped the temporary decline of the rental income.

As of today, the future potential negative impact of Covid-19 on the global economy and major financial markets as well as on EPH properties is difficult to judge but EPH is repeatedly analysing the impact of Covid-19 on the Group's performance. As per the most recent assessment - also based on the good relationship management with tenants in order to find valuable solutions for both parties to overcome this crisis together - impacts on the Group are only considered short-term with no material impact expected for the long-term. For the second half of 2020 and beyond, we will advance with our growth plans based on our investment criteria.

We would like to thank all of our shareholders for the trust they have placed in us and would be pleased if you were to continue to accompany us on our growth path. We would also like to thank our business partners for their good cooperation and their commitment.

For the Semi Annual Report we have opted to only focus on what has changed during the period under review. If you are looking at EPH European Property Holdings the first time, or perhaps for the first time in some years, please be sure to also have the 2019 Annual Report on hand. You find it on the Company's website, or a printed copy will be sent to you at request.

Sincerely,

The Board of Directors

September 2020

02 KEY PERFORMANCE INDICATORS

MANAGEMENT REPORT

KEY PERFORMANCE INDICATORS

for six months ended

in US$	30.06.2020	30.06.2019	30.06.2018
Net rental income	29,045,637	37,765,239	35,055,082
Administrative and selling expenses	- 3,902,594	- 4,335,127	- 2,434,755
Net gain arising from the sales of properties	12,454,837	3,082,737	-
Net other operating income/(expenses)	- 1,057,934	- 611,236	- 1,094
Operating Income	36,539,946	35,901,613	32,619,233
Finance costs	- 18,257,788	- 16,255,147	- 15,650,833
Current tax expense	- 3,940,729	- 4,922,078	- 4,360,415
Earnings from operational activity	14,341,429	14,724,388	12,607,985
Valuation movements	21,151,198	- 24,378,667	24,938,476
Deferred tax (expense)/benefit	2,492,898	- 1,157,173	- 6,098,602
Other extraordinary items	-	-	- 134,496
Total before foreign exchange movements	37,985,525	- 10,811,452	31,313,363
Net foreign exchange (loss)/gain	- 28,134,006	38,219,125	- 28,583,146
Net Profit/(Loss) for period	9,851,519	27,407,673	2,730,217
Earnings from operational activity per share	1.45	1.49	1.27
		as of
in US$	30.06.2020	31.12.2019	31.12.2018
Number of investment properties	12	10	9
Investment properties, incl.	1,138,277,378	1,007,516,128	841,451,779
Europe	47%	35%	28%
Russia	53%	65%	72%
Total Assets	1,476,608,971	1,268,555,787	1,073,143,730
Borrowings	923,224,627	659,359,016	553,507,629
Loan-to-value	63%	52%	52%

MANAGEMENT

REPORT

04 PROPERTY REVIEW MANAGEMENT REPORT

EPH

EUROPEAN

PROPERTY HOLDINGS

REAL ESTATE

As of 30 June 2020 our property holdings consist of:

- 100% of shareholdings in four mixed-use commercial properties: Berlin House, Geneva House, Polar Lights and Magistal'naya in Moscow

- 99.98% shareholding in a mixed-use office and retail building Hermitage Plaza in Moscow

- 94% of two mixed-use office and retail properties: City Gate in Stuttgart and Work Life Center in Hamburg

- 89.9% shareholding in a hotel property STRAL 3 in Berlin (acquired in the first half of 2020)

- 100% shareholding in an office property QBC4 in Vienna

- 100% shareholding in an office property LASS 1 under refurbishment in Vienna (acquired in the first half of 2020)

- Apartments, retail premises and parking lots in two mixed-use properties in Moscow: Arbat Multi-use Complexes

- 100% stake in raw land plot: 55 hectare "Scandinavia" site near St. Petersburg

The Company's strategy is to diversify its portfolio across major Western European markets, adding attractive real estate investments in stable markets with a strong long-term economic outlook.

PROPERTY REVIEW 05

MANAGEMENT REPORT

SELECTED PROPERTY REVIEW

QBC 4 (BDO HEADQUARTERS)

STRAL 3 (HOTEL NHOW)

20,000	EUR 102,980,000
BUILDING AREA	APPRAISED VALUE

17,430	0%
RENTABLE AREA	VACANCY RATE

100%	2019
OWNERSHIP	YEAR OF CONSTRUCTION

20,160	EUR 92,100,000
BUILDING AREA	APPRAISED VALUE

20,160	0%
RENTABLE AREA	VACANCY RATE

89.9%	2010
OWNERSHIP	YEAR OF CONSTRUCTION

QBC 4 is a newly constructed Class A office property in the attractive and sought- after Quartier Belvedere in Vienna close to the main station. EPH acquired 100% of QBC 4 in February 2019. The major tenant is the global accounting firm BDO. The vacancy rate as of 30 June 2020 is 0%.

STRAL 3 is ideally located in the popular, upcoming area of Friedrichshain in Berlin. The property is leased in its entirety to NH Hotel Group, the third largest business hotel group in Europe, until November 2035. The hotel property STRAL 3 was completed in 2010 and is notable for its extraordinary, very modern construction. EPH acquired 89.9% of interest in the property in April 2020.

06 PROPERTY REVIEW MANAGEMENT REPORT

WORK LIFE CENTER

12,070	EUR 88,200,000
BUILDING AREA	APPRAISED VALUE

12,070	1.2%
RENTABLE AREA	VACANCY RATE

94%	2017
OWNERSHIP	YEAR OF CONSTRUCTION

CITY GATE

26,450	EUR 123,800,000
BUILDING AREA	APPRAISED VALUE

17,260	0%
RENTABLE AREA	VACANCY RATE

94%	2016
OWNERSHIP	YEAR OF CONSTRUCTION

Work Life Center is a Class A property complex with office, retail complex and fitness centre premises, located very close to the Hamburg city center and near train station. EPH acquired 94% of Work Life Center at the end of 2017. The major tenants are Performance Media Deutschland, Germany Centre Company No.29 GmbH and Fitness First Germany. The vacancy rate as of 30 June 2020 is 1.2%.

City Gate is a Class A office and retail complex constructed in 2014 and perfectly located in the center of Stuttgart, in close proximity to the main railway station. EPH acquired 94% of CityGate in November 2016. The major tenants are Land Baden-Württemberg, Rödl&Partner GmbH and DREISS Patentanwälte. As of 30 June 2020 CityGate is fully rented.

PROPERTY REVIEW 07

MANAGEMENT REPORT

BERLIN HOUSE

GENEVA HOUSE

13,380	US$ 151,100,000
BUILDING AREA	APPRAISED VALUE

10,100	13.5%
RENTABLE AREA*	VACANCY RATE

100%	2002
OWNERSHIP	YEAR OF CONSTRUCTION

*in accordance with BOMA standard

16,460 US$ 145,202,000

BUILDING AREAAPPRAISED VALUE

11,970	8.9%
RENTABLE AREA*	VACANCY RATE

100%	2010
OWNERSHIP	YEAR OF CONSTRUCTION

*in accordance with BOMA standard

Berlin House is a prime class A office/retail property which is exclusively located in the heart of Moscow - approximately 500 meters from the Kremlin, on one of the most prominent shopping streets - and was completed and leased in 2002. In August 2014 EPH re-acquired the 90% stake in Berlin House, becoming its 100% owner. The vacancy rate as of 30 June 2020 is 13.5%. The major tenants are Richemont Group and Thomson Reuters.

Geneva House is a Prime Class A office/retail property located next to Berlin House. It was completed by EPH in 2010. In August 2014 EPH re-acquired the 90% stake in Geneva House, becoming its 100% owner. The vacancy rate as of 30 June 2020 is 8.9%. The major tenants are S7 Airlines, Merrill Lynch, Akin Gump and Chanel.

08 PROPERTY REVIEW MANAGEMENT REPORT

HERMITAGE PLAZA

POLAR LIGHTS

40,220	US$ 185,002,000
BUILDING AREA	APPRAISED VALUE

32,900	3.5%
RENTABLE AREA*	VACANCY RATE

99.98%	1937/2006
OWNERSHIP	YEAR OF CONSTRUCTION

*in accordance with BOMA standard

Hermitage Plaza is an A-class office building constructed/renovated in 2006. The property is beneficially located in proximity to the Kremlin area and is fronting the Moscow Garden Ring. EPH acquired 99.98% of Hermitage Plaza in December 2014. The anchor tenants are VimpelCom, one of the leading Russian telecommunication companies, and Ingrad. The vacancy rate as of 30 June 2020 is 3.5%.

37,820	US$ 99,720,000
BUILDING AREA	APPRAISED VALUE

30,750	2.9%
RENTABLE AREA*	VACANCY RATE

100%	2006
OWNERSHIP	YEAR OF CONSTRUCTION

*in accordance with BOMA standard

Polar Lights, a B+ class business center, has a beneficial location in one of the most developed business districts in the North of Moscow, inside the Third Transport Ring Road, and an efficient tenant mix of international and Russian companies: Setelem bank, Rosagroleasing and Monex Trading. The building has been constructed in 2006 with 14 above ground levels and was fully renovated in 2012. The vacancy rate as of 30 June 2020 is 2.9%. EPH acquired 100% of Polar Lights in September 2014.

STATEMENT OF BOARD OF DIRECTORS 09

MANAGEMENT REPORT

DEVELOPMENT PROJECTS

LASS 1

ARBAT PROJECTS

29,000	UNDER
BUILDING AREA	REFURBISHMENT

	APPRAISED VALUE

N/A	EUR 73,481,370
RENTABLE AREA	COST

100%	1993
OWNERSHIP	YEAR OF CONSTRUCTION

36,000	US$ 127,710,000
BUILDING AREA	APPRAISED VALUE

10,400

REMAINING RENTABLE/SELLABLE AREA

139	2016
REMAINING	YEAR OF CONSTRUCTION
PARKING LOTS

EPH's LASS 1 is a prominent office property located near Vienna's city centre in the most promising and upcoming 2nd district with excellent transport links. The mixed-use building was originally built in 1993 and is currently undergoing a refurbishment that is expected to be completed in 2022. Tenants of the building will include City of Vienna, the State Police and the supermarket Merkur. EPH acquired 100% of the property in June 2020.

The Company owns premises in two mixed-use complexes in the historic Arbat district of Moscow, the principal pedestrian street in the historical centre of the city. The first property located at Arbat Street 24, includes office and luxury apartment space. The second property, located near the first at Arbat Street 39, consists of retail space and luxury apartments. The development is finished in 2018 and now the Company is actively marketing the project. Due to the high profile location, and the design of the projects, which does feature large well-lit living areas and sizeable terraces, the apartment premises in the buildings will be of elite standing. In the first half of 2020, the Group sold all office premises in Arbat 24 to a third party and continued to sell apartments and parking lots in both Arbat properties. Also some part of retail premises in Arbat 39 has been leased out.

CORPORATE

GOVERNANCE

CORPORATE GOVERNANCE 13

MANAGEMENT REPORT

This section contains parts of the annual corporate governance report focusing on significantly changed matters since 31 December 2019.

1. BOARD OF DIRECTORS

1.1 ELECTIONS AND TERMS OF OFFICE

The Board Members are elected individually by a resolution of shareholders or by a resolution of directors. According to the Articles of Association of the Company the maximum term for election is three years. Upon expiration of a Board Member's term re-election is allowed. Gustav Stenbolt has been re-elected for a term of three years as per General Meeting 2020 (first appointment July 2003). In June 2020, Mr. Christodoulos Vassiliades has resigned as Board Member of EPH with immediate effect. As his replacement the Board of Directors has appointed Mrs. Annamaria Vassiliades as Director of the Board.

2. MANAGEMENT

2.1 MANAGEMENT COMMITTEE

In June 2020, Mr. Christodoulos Vassiliades has resigned as Management Committee Member of EPH with immediate effect. As his replacement the Board of Directors has appointed Mrs. Annamaria Vassiliades as Member of the Management Committee.

14 CORPORATE GOVERNANCE MANAGEMENT REPORT

SIGNIFICANT GROUP COMPANIES
Significant group companies fully consolidated in the financial statements of	the Company are:
Full company name	Registered office	Issued Share Capital	Ownership %
Andorian Beteiligungsverwaltungs GmbH	Am Belvedere 4,	EUR 35,000	100% held by Lexworth Finance Limited
	1100 Vienna, Austria
Asura Holding S.a.r.l.	7, route d'Esche	EUR 12,000	100% held by EPH
	L-1470 Luxembourg, Luxembourg

Bluestone Investments Limited	Koumandarias&Spyrou Araouzou,	EUR 21,375 (10,000 Class A shares,
(sold in July 2020)	7th Floor, Tonia Court II	par EUR 1.71; 2,500 Class B
	3036 Limassol, Cyprus	non-voting shares, par EUR 1.71)

EPH holds 50% Class A shares and 100% Class B shares

Capital Estate Group (C.E.G.) Limited	Menandrou 12, office 207, Eleona Tower,	US$ 94,000 (94,000 ordinary	100% held by EPH
	1066 Nicosia, Cyprus	shares, par US$ 1)
City Gate Stuttgart GmbH	Westendstrasse 28	EUR 25,000	94% held by Ferran Limited
	60325 Frankfurt am Main, Germany
Connecta Beratungsgesellschaft im	Herzog-Heinrich-Strasse 22,	DM 50,000	100% held by EPH
Ost-West-Wirtschaftsverkehr mbH	80336 Munich, Germany
Connecta Beratungsgesellschaft im	Herzog-Heinrich-Strasse 22,	EUR 8,757,044.81	100% held by EPH
Ost-West-Wirtschaftsverkehr	80336 Munich, Germany
mbH&Co. Erste Grundstücks KG
EPH One, LLC	5 Petrovka St.,	RUB 10,000	100% held by EPH Real Estate Limited
	107031 Moscow, Russia

EPH Real Estate Limited	Menandrou 12, office 207, Eleona Tower,	EUR 17,100
	1066 Nicosia, Cyprus

99.9999% held by EPH and 0.0001% held by T&A Services Ltd.

Ferran Limited	Menandrou 12, office 207, Eleona Tower,	EUR 21,000 (21,000 ordinary	100% held by EPH
	1066 Nicosia, Cyprus	shares of EUR 1 each)
Geneva House LCC	5 Petrovka St.,	RUB 10,000	99.85% helb by Bluestone Investments Ltd.,
(sold in July 2020)	107031 Moscow, Russia		0.075% held by Whiterock Investments ltd.,
			0.075% held by a third party

Housefar Limited	Menandrou 12, office 207, Eleona Tower,
	1066 Nicosia, Cyprus

EUR 3,420 (1,000 ordinary shares, par EUR 1.71, 1,000 non-voting preferred shares, par EUR 1.71)

EPH holds 100% of ordinary shares and 85% of preferred shares

Idelisa Limited	TONIA COURT ll, 7th Floor	EUR 2,000 (2,000 ordinary	100% held by EPH
	3036 Limassol, Cyprus	shares, par EUR 1.00)
Inspetsstroy, LLC	11/2 bldg.1, 1st Magistralnaya	RUB 50	100% held by Housefar Limited
	St., 123290 Moscow, Russia

Intrustcom JSC	11/2 bldg.1, 1st Magistralnaya	RUB 500,000 (100 ordinary shares,	100% held by Geneva House
(sold in July 2020)	St., 123290 Moscow, Russia	par RUB 5,000)

CORPORATE GOVERNANCE 15

MANAGEMENT REPORT

Full company name	Registered office	Issued Share Capital	Ownership %
Lexworth Finance Limited	Menandrou 12, office 207, Eleona Tower,	EUR 2,000	99.95% held by EPH and
	1066 Nicosia, Cyprus		0.05% held by T&A Services Ltd.
Norpexal Investments GmbH	Westendstrasse 28,	EUR 25,000	100% held by SG4 Holding GmbH
(acquired in July 2020)	60325 Frankfurt, Germany
Obewan Beteiligungsverwaltungs GmbH	Esslinger Hauptstraße 188B/Haus 4	EUR 35,000	100% held by Lexworth Finance Ltd.
	1220 Vienna, Austria
Obewan GmbH&Co KG	Esslinger Hauptstraße 188B/Haus 4	EUR 500	100% held by Ophuchus
	1220 Vienna, Austria		Beteiligungsverwaltungs GmbH
Ophuchus Beteiligungsverwaltungs GmbH	Esslinger Hauptstraße 188B/Haus 4	EUR 35,000	100% held by Obewan
	1220 Vienna, Austria		Beteiligungsverwaltungs GmbH
Otdelstroy, JSC	6/1/2 str.3 pom.37 Kadashevskaya	RUB 10,000	100% held by Geneva House LLC
(sold in July 2020)	nab.,119016 Moscow, Russia	(1,000 ordinary shares, par RUB 10)
Philadelphia, LLC	5, Petrovka Street,	RUB 10,000	99.99% held by Idelisa Limited
	107031 Moscow, Russia
PNL Media Limited	Menandrou 12, office 207,	EUR 2,001 (2,001 ordinary	99.95% held by EPH and 0.05%
	Eleona Tower, 1066 Nicosia, Cyprus	shares, par EUR 1.00)	held by T&A Services Ltd.
Primary TIZ Limited	Griva Digeni 115, Trident Center,	US$ 102,540 (102,540	100% held by TP Invest Ltd.
	P.C. 3101 Limassol, Cyprus	ordinary shares, par US$1)
QBC BT IV Alpha GmbH	Esslinger Hauptstraße 188B/Haus 4	EUR 120,000	100% held by Andorian Beteiligungs-
	1220 Vienna, Austria		verwaltungs GmbH
QBC BT IV Beta GmbH	Esslinger Hauptstraße 188B/Haus 4	EUR 60,000	100% held by Andorian Beteiligungs-
	1220 Vienna, Austria		verwaltungs GmbH
QBC BT IV Epsilon GmbH	Esslinger Hauptstraße 188B/Haus 4	EUR 60,000	100% held by Andorian Beteiligungs-
	1220 Vienna, Austria		verwaltungs GmbH
QBC Immobilien GmbH&Co Delta KG	Esslinger Hauptstraße 188B/Haus 4	Limited Partnership	100% held by QBC BT IV Alpha GmbH,
	1220 Vienna, Austria		QBC BT IV Beta GmbH (Limited Partners) and
			QBC BT IV Epsilon GmbH (General Partner)
QBC 1,2,7 Holding GmbH	Esslinger Hauptstraße 188B/Haus 4	EUR 35,000	100% held by Lexworth Finance Ltd.
	1220 Vienna, Austria
Ramses Immobilien Gesellschaft	Esslinger Hauptstraße 188B/Haus 4	EUR 36,500	89.9% held by Ophuchus Beteiligungs-
mbH&Co OG	1220 Vienna, Austria		verwaltungs GmbH
			10.1% held by Obewan Gmb&Co KG

16 CORPORATE GOVERNANCE MANAGEMENT REPORT

Full company name	Registered office	Issued Share Capital	Ownership %
	Agiou Andreou, 339
Redhill Investment Limited	Andrea Chambers Court, Flat/Office M103	EUR 8,550 (5,000 ordinary	100% held by EPH
	3035 Limassol, Cyprus	shares, par EUR 1.71)
SA3 Media S.a.r.l.	7, route d'Esche	EUR 3,512,500	89.9% held by Lexworth Finance Limited
	L-1470 Luxembourg, Luxembourg
Setford Limited	Menandrou 12, office 207, Eleona Tower,	EUR 20,000 (20,000 ordinary	100% held by EPH
	1066 Nicosia, Cyprus	shares of EUR 1 each)
Silverlake Limited	Koumandarias&Spyrou Araouzou,	EUR 2,000 (2,000 ordinary	100% held by EPH
	7th Floor, Tonia Court II	shares, par EUR 1.00)
	3036 Limassol, Cyprus
SG4 Dresden GmbH&Co KG	Westendstrasse 28,	Limited Partnership	75% held by SG4 Dresden Management GmbH
(acquired in July 2020)	60325 Frankfurt, Germany		and 25% held by SG4 Dresden Holding GmbH
SG4 Dresden Holding GmbH	Westendstrasse 28,	EUR 25,000	100% held by Asura Holding S.a.r.l.
(acquired in July 2020)	60325 Frankfurt, Germany
SG4 Dresden Management GmbH	Westendstrasse 28,	EUR 25,000	100% held by SG4 Dresden Holding GmbH
(acquired in July 2020)	60325 Frankfurt, Germany
T&A Services Limited	171 Main Street, Road Town,	US$ 5	100% held by EPH
	Tortola VG 1110, British Virgin Islands
Tengri, LLC	Hersonskaya Street, 41A,	RUB 2,019,195,866	100% held by PNL Media Ltd.
	117246 Moscow, Russia
Tizpribor, PJSC	Krasnoproletarskaya, 4	RUB 8,787,500	99.98% held by Capital
	127006 Moscow, Russia		Estate Group (C.E.G.) Ltd.
TP Invest, LLC	Krasnoproletarskaya, 2/4 constr.13	RUB 1,511,710,000	100% held by PJSC Tizpribor
	127006 Moscow, Russia

Vakhtangov Place Limited	Koumandarias&Spyrou Araouzou,	EUR 12,500 (10,000 Class A shares,
(sold in July 2020)	7th Floor, Tonia Court II	par EUR 1.00, 2,500 non-voting
	3036 Limassol, Cyprus	Class B shares, par EUR 1.00)

EPH holds 50% Class A shares and 100% Class B shares

Whiterock Investments Limited	Koumandarias&Spyrou Araouzou,	EUR 2,000 (2,000 ordinary	100% held by EPH
(sold in July 2020)	7th Floor, Tonia Court II	shares, par EUR 1.00)
	3036 Limassol, Cyprus
WLC Hamburg GmbH	Westendstrasse 28	EUR 25,000	94% held by Setford Limited
	60325 Frankfurt am Main, Germany

EXTERNAL REPORTS

INDEPENDENT AUDITOR'S REPORT	19
EXTERNAL REPORTS

Deloitte AG

General-Guisan-Quai 38

8022 Zurich

Switzerland

Phone: +41 (0)58 279 6000

Fax: +41 (0)58 279 6600

www.deloitte.ch

Report on Review of Interim Condensed Consolidated Financial Information

To the Board of Directors of

EPH European Property Holdings Limited, Tortola, British Virgin Islands

Introduction

We have reviewed the accompanying interim condensed consolidated statement of financial position of EPH European Property Holdings Limited and its subsidiaries (together the "Group") as of June 30, 2020 and the related interim condensed consolidated statement of profit and loss, interim condensed consolidated comprehensive income, interim condensed consolidated statement of cash flow, interim condensed consolidated statement of changes in equity for the six months then ended, and selected explanatory notes. Management is responsible for the preparation and presentation of this interim condensed consolidated financial information in accordance with International Accounting Standard IAS 34 "Interim Financial Reporting" and article 17 of the Directive on Financial Reporting (DFR) of the SIX Swiss Exchange. Our responsibility is to express a conclusion on this interim condensed consolidated financial information based on our review.

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim condensed consolidated financial information is not prepared, in all material aspects, in accordance with International Accounting Standard IAS 34 "Interim Financial Reporting" and article 17 of the Directive on Financial Reporting (DFR) of the SIX Swiss Exchange.

Deloitte AG

Marcel Meyer

Avazkhodja Usmanov

Licensed audit expert

Auditor in charge

Zurich, September 25, 2020

20 REPORTS EXTERNAL VALUERS

EXTERNAL REPORTS

bld. 1, 2 Letnikovskaya str., Moscow 115 114 tel +7 495 737 8000 fax +7 495 737 8011 www.jll.com

Jones Lang LaSalle LLC has been instructed to prepare valuation reports regarding the following properties:

Magistral'naya office building (Moscow)
Arbat 24 mixed-use complex (Moscow)
Arbat 39 mixed-use complex (Moscow)
Geneva House office building (Moscow)
Berlin House office building (Moscow)
Polar Lights office building (Moscow)
Hermitage Plaza office building (Moscow)
Scandinavia land plot (Leningrad Oblast)

We understand that the reports are required for accounting purposes. The date of valuation: 30 June 2020.

Our valuation has been carried out in compliance with the RICS Valuation - Global Standards, issued November 2019, effective from 31 January 2020, published by the Royal Institution of Chartered Surveyors.

Market Value is defined by the RICS Valuation - Global Standards (issued November 2019, effective from 31 January 2020) as 'The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm's length transaction, after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion.'

In addition, our calculations have been carried out and are presented exclusive of VAT. Our reports summarise our key assumptions, estimations and conclusions used in arriving at our opinion of Market Value. The purpose of the reports is to present the basic facts and conclusions adopted in relation to the properties in arriving at our opinions.

Finally, and in accordance with our normal practice, we confirm that the reports are confidential to the party to whom they are addressed for the specific purpose to which they refer. No responsibility whatsoever is accepted to any third party and neither the whole of the reports, nor any parts, nor references thereto, may be published in any document, statement or circular, nor in any communication with third parties without our prior written approval of the form and context in which it will appear.

Yours faithfully,

Tim Millard MRICS

Reginal Director

Head of the Advisory Group

JLL Russia&CIS

REPORTS EXTERNAL VALUERS	21
EXTERNAL REPORTS

	PricewaterhouseCoopersGmbH
	Wirtschaftsprüfungsgesellschaft
	Kapelle-Ufer 4
	10117 Berlin
	Postfach 04 05 68
	10063 Berlin
PricewaterhouseCoopers GmbHWirtschaftsprüfungsgesellschaft	www.pwc.de
Kapelle-Ufer 4, 10117 Berlin	Tel.: +49 30 2636-1359
City Gate Stuttgart GmbH
Fax: +49 30 9585 946 120
Mr. Marcus Friedrichs	julia.sacchi@de.pwc.com
Westendstr. 28
60325 Frankfurt	7 September 2020

	DHe/JSa

Assessment of Fair Value of the property City Gate Stuttgart

Dear Mr. Friedrichs,

You have first mandated PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft, Berlin to ascertain the Fair Value of the Property "City Gate Stuttgart" at Friedrichstraße/Kriegsberg- straße/Arnulf-Klett-Platz crossing as at 31 December 2016.

After the initial valuation, we provided regular bi-annual updates as of 30 June and 31 December of each year, and recently, you engaged us to update the Fair Value assessment of the subject property as of 30 June 2020.

The valuation at hand is to serve IFRS accounting purposes in compliance with the International Financial Reporting Standard IFRS 13 issued by International Accounting Standards Board (IASB).

IFRS 13.9 defines Fair Value as "the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date".

We have summarized the assumptions, estimations and conclusions made in our valuation, and our opinion of Fair Value of the Property in our Report dated 17 July 2020.

According to the engagement letter signed by you, the Report is confidential and shall therefore not be passed in whole or in part to any third party and shall not in whole or in part be published or referred to in a public document, the Internet or any other public media.

Yours faithfully

PricewaterhouseCoopersGmbH

Wirtschaftsprüfungsgesellschaft

Dirk Hennig

Julia Sacchi

Vorsitzender des Aufsichtsrats: WP StB Dr. Norbert Vogelpoth

Geschäftsführer: WP StB Dr. Ulrich Störk, WP StB Dr. Peter Bartels, Dr. Joachim Englert, WP StB Petra Justenhoven, WP Clemens Koch, StB Marius Möller, WP StB Uwe Rittmann, StB RA Klaus Schmidt, StB CPA Mark Smith

Sitz der Gesellschaft: Frankfurt am Main, Amtsgericht Frankfurt am Main HRB 107858

PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft ist Mitglied von PricewaterhouseCoopers International, einer Company limited by guarantee registriert in England und Wales

22 REPORTS EXTERNAL VALUERS

EXTERNAL REPORTS

	PricewaterhouseCoopers GmbH
	Wirtschaftsprüfungsgesellschaft
	Kapelle-Ufer 4
	10117 Berlin
	Postfach 04 05 68
PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft	10063 Berlin
www.pwc.de
Kapelle-Ufer 4, 10117 Berlin

Fünfunddreißigste Verwaltungsgesellschaft	Tel.: +49 30 2636-1359
Fax: +49 30 9585 946 120
DWI Grundbesitz mbH
julia.sacchi@de.pwc.com
Mr. Marcus Friedrichs
Westendstraße 28
60325 Frankfurt	7 September 2020

	DHe/JSa

Assessment of Fair Value of the property Work Life Center in Hamburg

Dear Mr. Friedrichs,

You have first mandated PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft, Berlin to ascertain the Fair Value of the Property "Work Life Center" at Gorch-Fock-Wall 1a in 20354 Hamburg as at 31 December 2017.

The valuation at hand is to serve IFRS accounting purposes in compliance with the International Financial Reporting Standard IFRS 13 issued by International Accounting Standards Board (IASB).

IFRS 13 defines Fair Value as "the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date".

We have summarized the assumptions, estimations and conclusions made in our valuation, and our opinion of Fair Value of the Property in our Report dated 17 July 2020.

Yours faithfully

PricewaterhouseCoopersGmbH

Wirtschaftsprüfungsgesellschaft

Dirk Hennig

Julia Sacchi

Vorsitzender des Aufsichtsrats: WP StB Dr. Norbert Vogelpoth

Sitz der Gesellschaft: Frankfurt am Main, Amtsgericht Frankfurt am Main HRB 107858

PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft ist Mitglied von PricewaterhouseCoopers International, einer Company limited by guarantee registriert in England und Wales

REPORTS EXTERNAL VALUERS 23

EXTERNAL REPORTS

	PwC Advisory Services GmbH
	Donau-City-Straße 7
	1220 Vienna
	Austria
QBC Immobilien GmbH & Co Delta KG	Tel.: +43 1 501 88 - 0
Fax: +43 1 501 88 - 601
Ms Anna Bernhart	E-mail: office.wien@at.pwc.com
Am Belvedere 4	www.pwc.at

1100 Vienna	September 15, 2020
Austria
	EMA/HAAR
Assessment of Fair Value of the property QBC 4 in Vienna
Dear Ms. Bernhart,

based on our agreement (hereinafter "agreement" or "engagement letter") as of July 13, 2020, QBC Immobilien GmbH & Co Delta KG ("QBC" or "you") has mandated PwC Advisory Services GmbH, Vienna to ascertain the Fair Value of the Property "QBC4", Karl-Popper-Straße 4, 1100 Vienna, KG 01101 EZ 3667 as of June 30, 2020.

The PwC Advisory Terms of Business (as amended 6 April 2011; see Attachment) were the basis for providing our services and for our responsibility, also in relation to third parties. We particularly draw your attention to our limitations of liability.

The valuation was to serve IFRS accounting purposes in compliance with the International Financial Reporting Standard IFRS 13 issued by International Accounting Standards Board (IASB).

IFRS 13 defines Fair Value as "the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date".

We have summarized the assumptions, estimations and conclusions made in our valuation, and our opinion of Fair Value of the Property in our Report dated September 15, 2020.

According to the engagement letter signed by you, the Report was exclusively prepared for you in accordance with the engagement letter and the therein determined purposes for re- porting. The Report is confidential and shall therefore not be passed in whole or in part to any third party and shall not in whole or in part be published or referred to in a public docu- ment, the Internet or any other public media. Duties of care and liabilities on the part of PwC towards third parties are excluded.

Yours faithfully

PwC Advisory Services GmbH

ppa. Olena ChekmezovaMatthias Eicher

Managing Directors: Georg Beham, MSc, WP/StB Mag. Horst Bernegger, StB Mag. Andrea Cerne-Stark, WP/StB Mag. (FH) Gerald Eibisberger, Dr. Matthias Eicher,

Mag. Dieter Harreither, WP (D) Dipl.Kfm.(Univ.) Hans Hartmann, Andreas Hladky, Mag. MBA Agatha Kalandra, MMag. Manfred Kvasnicka, MBA, Mag. Michael Georg Lackner, Mag. Christoph Obermair, Mag. Georg Ogrinz, StB Mag. Hannes Orthofer, StB Mag. Peter Perktold, Nicole Prieller, WP/StB Dipl.Kfm.Univ. Dorotea-E. Rebmann,

Mag. Dr. Barbara Redlein, Mag. Miklós Révay, WP/StB Mag. Jürgen Schauer, Roland Schöbel, StB Mag. Thomas Strobach, WP/StB MMag. Frédéric Vilain, Mag. Kristof Wabl, WP/StB Mag. Günter Wiltschek, Mag. Thomas Windhager, WP/StB Mag. Felix Wirth

Domicile: Vienna; Company Register: FN 88905 v, Commercial Court of Vienna; DVR: 0582484 VAT number: ATU16070203

PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.

24 REPORTS EXTERNAL VALUERS

EXTERNAL REPORTS

PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft Kapelle-Ufer 4, 10117 Berlin

SA3 Media S.à r.l.

Ms. Carole Sassel and Mr. Fernand Sassel 7, route d´Esch

1470 Luxemburg Luxemburg

PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft

Kapelle-Ufer 4 10117 Berlin Postfach 04 05 68 10063 Berlin www.pwc.de

Tel.: +49 30 2636-1359

Fax: +49 30 9585 946 120 julia.sacchi@de.pwc.com

7 September 2020 DHe/JSa

Assessment of Fair Value of the property nhow in Berlin, Stralauer Allee 3

Dear Ms. Sassel, Dear Mr. Sassel,

You have mandated PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft, Berlin to ascertain the Fair Value of the hotel property nhow Berlin at Stralauer Allee 3 in 10245 Berlin as at 30 June 2020.

The valuation was to serve IFRS accounting purposes in compliance with the International Financial Reporting Standard IFRS 13 issued by International Accounting Standards Board (IASB).

IFRS 13 defines Fair Value as "the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date".

We have summarized the assumptions, estimations and conclusions made in our valuation, and our opinion of Fair Value of the Property in our Report dated 21 July 2020.

Yours faithfully

PricewaterhouseCoopersGmbH

Wirtschaftsprüfungsgesellschaft

Dirk Hennig

Julia Sacchi

Vorsitzender des Aufsichtsrats: WP StB Dr. Norbert Vogelpoth

Sitz der Gesellschaft: Frankfurt am Main, Amtsgericht Frankfurt am Main HRB 107858

PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft ist Mitglied von PricewaterhouseCoopers International, einer Company limited by guarantee registriert in England und Wales

FINANCIAL

REPORT

24 INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (UNAUDITED) FINANCIAL REPORT

in US$	Note *	30.06.2020	31.12.2019
Assets
Non-current assets
Investment properties	7,8	1,138,277,378	1,007,516,128
Prepayments for future acquisitions		23,068,555	22,962,341
Goodwill	11	72,498,020	76,620,949
Deferred tax assets		559,926	650,824
Furniture and equipment		67,924	82,635
Total non-current assets		1,234,471,803	1,107,832,877
Current assets
Inventory	10	102,662,027	124,420,990
Accounts receivable	12	27,138,830	882,976
Prepayments		2,756,306	2,362,158
Prepaid taxes		4,642,906	3,683,928
Cash&cash equivalents	13	104,937,099	29,372,858
Total current assets		242,137,168	160,722,910
Total assets		1,476,608,971	1,268,555,787
Liabilities
Non-current liabilities
Borrowings	14	913,308,530	655,449,347
Deferred tax liabilities		137,668,920	158,371,253
Other non-current liabilities		9,540,733	8,085,129
Total non-current liabilities		1,060,518,183	821,905,729
Current liabilities
Accounts payable and accrued expenses		8,006,648	6,895,412
Advances received		12,238,660	16,215,826
Taxes payable		12,009,417	12,296,695
Borrowings	14	9,916,097	3,909,669
Total current liabilities		42,170,822	39,317,602

Equity
Share capital	18	590,539,374	590,539,374
Share premium	18	19,176,805	19,176,805
Treasury shares	18	- 2,242,034	- 1,975,238
Accumulated deficit		- 60,553,467	- 70,893,189
Cumulative translation adjustment		- 182,554,861	- 133,371,463
Shareholders' equity attributable to the holders of the Company		364,365,817	403,476,289
Non-controlling interest		9,554,149	3,856,167
Total equity		373,919,966	407,332,456

Total equity and liabilities		1,476,608,971	1,268,555,787
Number of shares outstanding		9,895,549	9,904,959
Net asset value per share		36.82	40.73

* The Notes are an integral part of these Interim Condensed Consolidated Financial Statements.

INTERIM CONDENSED CONSOLIDATED STATEMENT OF PROFIT AND LOSS (UNAUDITED)	25
FINANCIAL REPORT

for six months ended

in US$	Note *	30.06.2020	30.06.2019
Rental income
Gross rental income	15	31,066,966	38,879,098
Service charge income	15	5,619,489	6,225,013
Utilities	15	- 1,740,650	- 2,104,357
Property operating expenses	15	- 2,755,659	- 2,034,910
Repair and maintenance costs	15	- 361,697	- 292,332
Ground rents paid	15	- 201,523	- 267,227
Non-income taxes	15	- 2,581,289	- 2,640,046
Net rental income	15	29,045,637	37,765,239
Gains and losses arising from the sales of properties
Sales of properties	16	27,913,900	7,444,796
Cost of sales	16	- 15,459,063	- 4,362,059
Net gain arising from the sales of properties	16	12,454,837	3,082,737
Administrative and selling expenses
Management fees	20	- 1,580,828	- 1,249,838
Professional and administration fees		- 1,701,549	- 2,850,368
Selling expenses		- 384,632	-
Salaries and social charges		- 235,585	- 234,921
Total administrative and selling expenses		- 3,902,594	- 4,335,127
Other income/(expenses)
Interest income		194,295	232,486
Other income		371,423	564,922
Other expenses		- 1,616,016	- 1,396,792
Depreciation		- 7,636	- 11,852
Net foreign exchange (loss)/gain		- 28,134,006	38,219,125
Net other (expenses)/income		- 29,191,940	37,607,889
Valuation movements
Net (loss)/gain from fair value adjustment on investment properties	7	- 57,345,482	36,238,072
Net gain/(loss) due to effect of currency fluctuation on
valuation of investment property		78,496,680	- 60,616,739
Net valuation movements		21,151,198	- 24,378,667
Net operating gain before finance cost		29,557,138	49,742,071
Finance costs	17	- 18,257,788	- 16,255,147
Gain before taxes		11,299,350	33,486,924
Income taxes		- 1,447,831	- 6,079,251
Net profit for the period		9,851,519	27,407,673
Attributable to:
Equity holders of the Company		10,339,722	27,291,003
Non-controlling interest		- 488,203	116,670
Earnings per share for profit attributable to equity holders
of the Company during the period
Weighted average number of outstanding shares		9,900,051	9,915,385
Basic and diluted		1.04	2.75

* The Notes are an integral part of these Interim Condensed Consolidated Financial Statements.

26 INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED) FINANCIAL REPORT

for six months ended

in US$			30.06.2020	30.06.2019
Net profit for the period			9,851,519	27,407,673
Other comprehensive gain/(loss)
Other comprehensive (loss)/gain to be reclassified to profit or loss	in	subsequent periods:
(Loss)/gain on currency translation differences			- 42,808,575	21,234,606
Net other comprehensive (loss)/gain to be reclassified to profit or	loss	in subsequent periods	- 42,808,575	21,234,606


Total comprehensive (loss)/gain for the period			- 32,957,056	48,642,279
Attributable to:
Equity holders of the Company			- 33,138,612	49,133,662
Non-controlling interest			181,556	- 491,383

* The Notes are an integral part of these Interim Condensed Consolidated Financial Statements.

INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW (UNAUDITED) 27

FINANCIAL REPORT

for six months ended

in US$	Note *	30.06.2020	30.06.2019
Cash flows from operating activities
Net profit for the period		9,851,519	27,407,673
Net foreign exchange loss/(gain)		28,134,006	- 38,219,125
Net loss/(gain) from fair value adjustment on investment properties	7	57,345,482	- 36,238,072
Net (gain)/loss due to effect of currency fluctuation on
valuation of investment property		- 78,496,680	60,616,739
Other non-cash expenses		979,004	21,995
Gain arising from sale of investment property		- 11,603,782	-
Depreciation		7,636	11,852
Interest income		- 194,295	- 232,486
Finance costs	17	18,257,788	16,255,147
Income tax expense		1,447,831	6,079,251
Cash generated from operations before movements in working capital		25,728,509	35,702,974
Movements in working capital
Increase/ (decrease) in accounts payable and other liabilities		2,000,263	- 10,642,055
(Increase)/Decrease in accounts receivable		- 7,265,356	2,556,685
Decrease in inventory	10	6,630,063	4,362,059
Cash generated from operations		27,093,479	31,979,663
Interest income received		194,295	232,486
Income tax paid		- 3,675,403	- 5,436,464
Net cash generated from operating activities		23,612,371	26,775,685
Cash flows from investing activities
Acquisitions of business, net of cash acquired	6	-	- 54,689,100
Purchases of investment properties	7,8	- 180,771,628	- 1,325,391
Net cash used in investing activities		- 180,771,628	- 56,014,491
Cash flows from financing activities
Finance costs paid		- 14,821,148	- 14,635,679
Proceeds from notes payable	14	247,039,409	49,396,207
Repayment of borrowings		-	-
Proceeds from sale of treasury shares		-	-
Acquisition of treasury shares		- 266,796	- 252,414
Unicredit loan refinance fees	14	-	- 4,430,072
Net cash generated from financing activities		231,951,465	30,078,042
Net change in cash&cash equivalents		74,792,208	839,236
Cash&cash equivalents at the beginning of the period		29,372,573	41,688,479
Net gain from foreign currency translation		749,008	1,860,477
Cash&cash equivalents at the end of the period	13	104,913,789	44,388,192

* The Notes are an integral part of these Interim Condensed Consolidated Financial Statements.

28 INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FINANCIAL REPORT

in US$	Share capital	Share premium	Treasury shares	Accumulated deficit
Balance as at 01.01.2019	590,539,374	19,176,805	- 1,540,593	- 111,571,870
Net profit for the period	-	-	-	27,291,003
Other comprehensive gain	-	-	-	-
Total comprehensive gain/(loss) for the period	-	-	-	27,291,003
Acquisition of treasury shares	-	-	- 252,414	-
Balance as at 30.06.2019	590,539,374	19,176,805	- 1,793,007	- 84,280,867
Net profit for the period	-	-	-	13,387,678
Other comprehensive gain	-	-	-	-
Total comprehensive gain for the period	-	-	-	13,387,678
Acquisition of treasury shares, net
(acquisitions US$182.291, sales US$ 60)	-	-	- 182,231	-
Balance as at 31.12.2019	590,539,374	19,176,805	- 1,975,238	- 70,893,189
Net profit/(loss) for the period	-	-	-	10,339,722
Other comprehensive (loss)/gain	-	-	-	-
Total comprehensive gain/(loss) for the period	-	-	-	10,339,722
Acquisition of treasury shares	-	-	- 266,796	-
Acquisition of a subsidiary during the period	-	-	-	-
Balance as at 30.06.2020	590,539,374	19,176,805	- 2,242,034	- 60,553,467

* The Notes are an integral part of these Interim Condensed Consolidated Financial Statements.

INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 29

FINANCIAL REPORT

	Shareholders' equity attributable
Currency translation adjustment	to the holders of the Company	Non-controlling interest	Total equity
- 161,101,897	335,501,819	3,667,529	339,169,348
-	27,291,003	116,670	27,407,673
21,842,659	21,842,659	- 608,053	21,234,606
21,842,659	49,133,662	- 491,383	48,642,279
-	- 252,414	-	- 252,414
- 139,259,238	384,383,067	3,176,146	387,559,213
-	13,387,678	206,804	13,594,482
5,887,775	5,887,775	473,217	6,360,992
5,887,775	19,275,453	680,021	19,955,474
-	- 182,231	-	- 182,231
- 133,371,463	403,476,289	3,856,167	407,332,456
-	10,339,722	- 488,203	9,851,519
- 49,183,398	- 49,183,398	669,759	- 48,513,639
- 49,183,398	- 38,843,676	181,556	- 38,662,120
-	- 266,796	-	- 266,796
-	-	5,516,426	5,516,426
- 182,554,861	364,365,817	9,554,149	373,919,966

30	NOTES TO THE INTERIM CONDENSED CONSOLIDATED ACCOUNTS
	FINANCIAL REPORT

1. CORPORATE INFORMATION

EPH European Property Holdings Limited (fromer "Eastern Property Holdings Ltd") is a limited liability company incorporated and domiciled in British Virgin Islands whose shares are publicly traded on the SIX Swiss Exchange. The registered office is located at Hauteville Trust (BVI) Limited, P.O. Box 3483, Road Town, Tortola, British Virgin Islands.

The Interim Condensed Consolidated Financial Statements of EPH Euro- pean Property Holdings Limited (the "Company" or "EPH") and its subsidiaries (together the "Group") for the half year ended 30 June 2020 were authorised for issue in accordance with a resolution of the directors on 25 September 2020. The principal activities of the Group are given in Note 5.

The Company was founded in 2003 with the intention to invest European money in the promising Russian real estate market. In 2016, EPH acquired its first property outside Russia. In the following years, the company continued its westward expansion and strengthened its real estate portfolio through further acquisitions in Germany and Austria. In June 2020, the Company changed its name to EPH European Property Holdings to underline its geographic shift and its intensive expansion phase across European real estate markets.

2. BASIS OF PREPARATION

The Interim Condensed Consolidated Financial Statements for the six months ended 30 June 2020 have been prepared in accordance with IAS 34, 'Interim financial reporting'. The Interim Condensed Consolidated Financial Statements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Group's annual financial statements for the year ended 31 December 2019.

Management prepared these Interim Condensed Consolidated Financial Statements on a going concern basis.

Functional and presentation currency

The functional currency of the Company is the US dollar ("US$"). The functional currency of the Group's major subsidiaries is the Russian ruble (for Russian subsidiaries) and Euro ("EUR") (for German and Austrian subsidiar- ies). Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates. The Interim Condensed Consolidated Financial Statements are presented in US dollars ("US$").

Foreign currency exchange rates

The Group uses official rates of exchange, as determined by the Swiss National Bank (for 1 US$). The rates are given at the bottom of the page.

	30.06.2020	31.12.2019	30.06.2019
in US$	RUB	EUR	RUB	EUR	RUB	EUR
closing rate	70.6570	0.8912	62.1071	0.8917	63.0829	0.8780
average rate	70.2545	0.9054	64.4692	0.8933	64.8153	0.8846

Income tax

Income tax in the interim periods is accrued using the effective tax rate that would be applicable to the expected total annual earnings.

Seasonality of interim operations

The Group's operating income includes rent and sales income from real estate assets. While operations are subject to long-term cyclical patterns in rental and sales prices, Management of the Group does not believe interim operations are subject to seasonality.

The same accounting policies and methods of computation are followed in the Interim Condensed Consolidated Financial Statements as compared with the most recent annual Consolidated Financial Statements except for those described in Note 3.

3. CHANGES IN ACCOUNTING POLICIES

New amendments and improvements to standards set out below became effective 1 January 2020 and did not have any impact or did not have a material impact on the Group's Interim Condensed Consolidated Financial Statements:

Amendments to Conceptual Framework: fair value, improved definitions and recommendations (subject of changes);
Amendments to IFRS 9, IAS 39 and IFRS 7: interest benchmark reform
Amendments to IAS 1 and IAS 8: definition of a materiality;
IFRS 17: insurance contracts.

The following amendments have significant impact on the Group's Interim Condensed Consolidated Financial Statements:

Amendments to IFRS 3 Business Combinations

In October 2018, the IASB issued amendments to the definition of a business in IFRS 3 Business Combinations to help entities determine whether an acquired set of activities and assets is a business or not.

The amendments mainly include:

Clarification that, to be considered a business, an acquired set of activities and assets must include, at a minimum, an input and a substantive pro- cess that together significantly contribute to the ability to create outputs.
Removal of the assessment of whether market participants are capable of replacing any missing outputs or processes and continuing to pro- duce outputs
Adding guidance and illustrative examples to help entities assess whether a substantive process has been acquired
Narrowing the definitions of business and outputs by focusing on goods or services provided to customers and by removing the reference to an ability to reduce costs
Adding an optional concentration test that permits a simplified assess- ment of whether an acquired set of activities and assets is not a business.
The amendments must be applied to transactions that are either busi- ness combinations or asset acquisitions for which the acquisition date is on or after the first annual reporting period beginning on or after 1 January 2020. The amendments will have an effect on how manage- ment classifies acquisition of properties and the Group expects that the amendments will reduce the number of transactions that are accounted for as a business combination.

Early adoption of standards

In the first half of 2020, the Group did not early adopt any new or amended standards and does not plan to early adopt any of the issued, but not yet effective standards.

4. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS

The preparation of financial statements requires Management to make judge- ments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and ex- penses. Actual results may differ from these estimates.

Although management believes that the assumption and estimates used in these interim condensed consolidated financial statements are appropriate, any unforeseeable changes in these assumptions could impact the net assets, financial position and results of operations. The Covid-19 situation has been considered by judgements. In view of the global effects of the coronavirus pandemic on the economy and society, all current forecasts can be made only with a considerably higher degree of uncertainty. This applies particularly in the context of international links and interrelations between the financial mar- kets, the real economy and political decisions, which each individually have an influence on the economic effects of the pandemic already, but when combined are impossible to assess with any certainty ex ante. The management judgements and estimates are therefore based on the fundamental premise that the coronavirus pandemic represents a temporary phenomenon, affecting the Group's profits in the short run.

Judgements and estimates critical for these interim consolidated financial statements are given below.

JUDGEMENTS

Acquisition of investment properties

The Group acquires subsidiaries that own real estates. At the time of acqui- sition, the Group considers whether the acquisition represents the acquisition of a business or acquisition of an asset. The Group accounts for an acquisition as a business combination where an integrated set of activities is acquired in addition to the property. More specifically, consideration is made of the extent to which substantive processes are acquired. If acquired set of activities does not have an output (i.e. revenue), the process (or group of processes) is substantive only if:

it is critical to the ability to develop or convert an acquired input or inputs into outputs; and
the inputs acquired include both an organised workforce that has the necessary skills, knowledge, or experience to perform that process (or group of processes) and other inputs that the organised workforce could develop or convert into outputs.

If acquired set of activities has an output, the process (or group of process- es) shall be considered substantive if, when applied to an acquired input or inputs, it:

is critical to the ability to continue producing outputs, and the inputs acquired include an organised workforce with the necessary skills, knowledge, or experience to perform that process; or
significantly contributes to the ability to continue producing outputs and:
- is considered unique or scarce; or
- cannot be replaced without significant cost, effort, or delay in the ability to continue producing outputs.

NOTES TO THE CONSOLIDATED ACCOUNTS 31

FINANCIAL REPORT

When the acquisition of subsidiaries does not represent a business, it is accounted for as an acquisition of a group of assets and liabilities. The cost of the acquisition is allocated to the assets and liabilities acquired based upon their relative fair values, and no goodwill or deferred tax is recognised.

Recognition of revenue on sale of investment and inventory property Revenue on sale of investment and inventory property is recognised when a performance obligation is satisfied, which occurs when control of the property transfers to the buyer. In each case, management considers indicators to determine the point in time at which control passes to the customer, including but not limited to whether:

the Group has a right to payment;
the customer has obtained legal title to the asset;
the entity has transferred possession of the asset to the customer;
the customer has significant risks and rewards of ownership of the asset;
the customer has accepted the asset.

If the customer has not physically accepted the asset but obtained significant risk and rewards of the ownership of the asset (which usually coincides in time with the transfer of legal title to the asset in Russia), the latter prevails in determining the moment of the control transfer.

ESTIMATES

Valuation of Investment property

Refer to Note 9.

Corporate profit tax rate for German properties

In 2016 and 2017, as of the acquisition date a deferred tax liability was recognised in City Gate and WLC due to the excess of the fair value of these businesses over their tax value. Goodwill arose on acquiring an asset via a share deal, where the Group inherited the fiscal basis of the assets. As IFRS require recognition of deferred taxes on a nominal basis, while share transactions are based on market value of these taxes, a difference appeared was reflected in the goodwill. Therefore, in this case the impairment test consists in a comparison between the accounting value of the Goodwill and the potential tax optimization existing at the date of reporting.

At the date of acquisition and in subsequent reporting periods, management applied corporate profit tax rate of 30.50% for City Gate and 32.275% for WLC for the measurement of the entities' deferred tax liabilities. On 1 Janu- ary 2020, Management re-estimated tax rates that the entities are eligible to apply in the future if the investment properties will be realized, being now 15.825% for both entities. Management made sure and resumed that both entities will meet the conditions to apply for extended trade tax deduction. Remeasurement resulted in goodwill's excess over deferred tax liabilities, which was written off and recognized in profit and loss as decrease to the deferred tax benefit resulting from rate change.

32 NOTES TO THE CONSOLIDATED ACCOUNTS FINANCIAL REPORT

5. SEGMENT INFORMATION

Information on the major customers and gross and net rental income of the Rental properties segment on asset by asset basis is given in Note 15.

Asset STRAL 3 (Berlin, Germany), acquired on 2 April 2020 (Note 8), refers to the Rental Properties Segment based on its business nature, production processes, type of customer, distribution methods and other characteristics. Asset LASS 1 (Vienna, Austria), acquired on 29 June 2020 (Note 8), refers to the newly introduced segment Rental Property Under Construction. Upon completion of construction and start of leases, expected in June 2022, the asset will be reclassified to Rental Properties Segment. For the period of one day after acquisition up to 30 June 2020, there were no operations at the segment.

In 2020, the Company issued interest bearing subordinated registered notes. Proceeds are mainly used to finance acquisition of rental properties and rental properties under construction. Therefore, the notes as well as interest expensed or capitalised for them are also presented in Rental Properties and Rental Property Under Construction segments in proportion to the value of the properties.

Revenue of the Group by operating activities for the periods is as follows:

			for six months ended 30.06.2020
in US$		Rental properties	Residential properties for sale	Other segments	Total
Gross rental income		31,066,966	-	-	31,066,966
Other rental expenses		- 2,021,329	-	-	- 2,021,329
Net rental income		29,045,637	-	-	29,045,637
Sales of properties		20,432,782	7,481,118	-	27,913,900
Net gain arising from the sales of properties	11,603,782	851,055	-	12,454,837
Interest income		150,285	44,010	-	194,295
Net foreign exchange gain/(loss)	- 2,705,821	58,536	- 25,486,721	- 28,134,006
Valuation movements		21,099,244	-	51,954	21,151,198
Finance costs		- 17,019,108	- 849,730	- 388,950	- 18,257,788
Income tax expense		810,487	- 2,207,798	- 50,520	- 1,447,831
Other expenses		- 1,355,630	- 1,672,352	- 2,126,841	- 5,154,823
Net profit/(loss) for the	period	41,628,876	- 3,776,279	- 28,001,078	9,851,519
			for six months ended 30.06.2019
in US$		Rental properties	Residential properties for sale	Other segments	Total
Gross rental income		38,879,098	-	-	38,879,098
Other rental expenses		- 1,113,859	-	-	- 1,113,859
Net rental income		37,765,239	-	-	37,765,239
Gain on disposal of inventory	-	3,082,737	-	3,082,737
Interest income		218,328	14,158	-	232,486
Net foreign exchange gain/(loss)	5,505,245	- 107,440	32,821,320	38,219,125
Valuation movements		- 24,467,803	-	89,136	- 24,378,667
Finance costs		- 15,358,447	- 849,688	- 47,012	- 16,255,147
Income tax expense		- 3,391,370	- 2,687,881	-	- 6,079,251
Other expenses		- 2,868,244	- 1,140,839	- 1,169,766	- 5,178,849
Net profit/(loss) for the	period	- 2,597,052	- 1,688,953	31,693,678	27,407,673

NOTES TO THE CONSOLIDATED ACCOUNTS 33

FINANCIAL REPORT

The Management Committee also assesses the performance of operating segments based on the results of valuation of the respective assets.

Assets and liabilities valuation as of 30.06.2020

	Rental	Rental Property	Residential	Other
	Properties	Under Construction	Properties for sale	Segments	Total
Investment properties	1,052,457,393	82,452,166	-	3,367,819	1,138,277,378
Prepayments for future acquisitions	23,068,555	-	-	-	23,068,555
Goodwill	72,498,020	-	-	-	72,498,020
Inventory	-	-	102,662,027	-	102,662,027
Cash&cash equivalents	28,612,851	200,379	1,181,485	74,942,384	104,937,099
Other Assets	33,506,086	1,308,599	338,484	12,723	35,165,892
Total Assets	1,210,142,905	83,961,144	104,181,996	78,322,926	1,476,608,971
Total Liabilities	987,095,479	86,155,548	29,224,419	213,559	1,102,689,005
		Assets and liabilities valuation as of 31.12.2019
		Rental Property	Residential	Other
	Rental Properties	Under Construction	Properties for sale	segments	Total
Investment properties	1,003,743,451	-	-	3,772,677	1,007,516,128
Goodwill	22,962,341	-	-	-	22,962,341
Inventory	76,620,949	-	-	-	76,620,949
Loans	-	-	124,420,990	-	124,420,990
Cash&cash equivalents	23,457,710	-	3,998,331	1,916,817	29,372,858
Other Assets	6,702,821	-	874,729	84,971	7,662,521
Total Assets	1,133,487,272	-	129,294,050	5,774,465	1,268,555,787
Total Liabilities	830,638,707	-	30,506,992	77,632	861,223,331

Geographical information on Group's revenues and significant non-financial assets is given below:

		for six months ended 30.06.2020
in US$	Russia	Germany	Austria	Total
Gross rental income	23,735,135	5,378,476	1,953,355	31,066,966
Net rental income	22,743,246	4,349,036	1,953,355	29,045,637
Sales of residential and investment properties	27,913,900	-	-	27,913,900
Carrying amount of:
Investment property	599,047,834	341,225,314	198,004,230	1,138,277,378
Prepayments for future acquisitions	-	-	23,068,555	23,068,555
Goodwill	45,621,368	15,175,987	11,700,665	72,498,020
Inventory	102,662,027	-	-	102,662,027
Total	747,331,229	356,401,301	232,773,450	1,336,505,980
		for six months ended 30.06.2019
in US$	Russia	Germany	Austria	Total
Gross rental income	33,641,915	3,928,329	1,308,854	38,879,098
Net rental income	33,252,134	3,204,250	1,308,855	37,765,239
Carrying amount of:
Investment property	634,748,670	237,705,148	119,362,187	991,816,005
Goodwill	45,621,368	19,606,676	11,876,581	77,104,625
Inventory	124,077,680	-	-	124,077,680
Total	804,447,718	257,311,824	131,238,768	1,192,998,310

34	NOTES TO THE INTERIM CONDENSED CONSOLIDATED ACCOUNTS
	FINANCIAL REPORT

		6. BUSINESS COMBINATION
		On 28 February 2019, the Company acquired 100% of the group of entities: holding companies QBC BT IV Alpha
		GmbH, QBC BT IV Beta GmbH, QBC BT IV Epsilon GmbH and property company QBC Immobilien GmbH&Co Delta
		KG owning the office property in Am Belvedere 4, 1100 Vienna, Austria. The property is a newly constructed Class
		A office property in the attractive and sought-after Quartier Belvedere in Vienna and in close proximity to the newly
		constructed main station of Vienna. The property comprises an approx. gross floor area of 20,000 sqm with 71
		parking spaces and is fully let, primarily to the headquarters of the accounting firm BDO.
		The property has been acquired on market terms. The acquired assets and liabilities constitute a business and are
		accounted for in accordance with IFRS 3.
		The fair values of the identifiable assets and liabilities of the acquired business as of the date of acquisition is given
		below (translated at rate 1.1391 US$/EUR):
in US$		28 February 2019
Assets
Investment property		117,358,448
Trade receivables		37,520
Other assets		81,230
Cash and cash equivalents	716,299
Total assets		118,193,497
Liabilities
Deferred tax liabilities		11,877,628
Borrowings		62,487,315
Accounts payable and accrued expenses	300,783
Total liabilities		74,665,726
Total identifiable net	assets at fair value	43,527,771

Goodwill arising on acquisition	11,877,628
Purchase consideration	55,405,399
thereof paid in cash		55,405,399

Analysis of cash flows	on acquisition
Net cash acquired with the subsidiaries	716,299
Cash payment		- 55,405,399
Net cash outflow		- 54,689,100

At the date of the acquisition, the fair value of the trade receivables did not differ from their gross contractual amount. As of the acquisition date, a deferred tax liability is recognised due to the excess of the fair value of the investment property over its tax value. Goodwill arises on acquiring an asset via a share deal, where the Group inherits the fiscal basis of the assets. As IFRS require recognition of deferred taxes on a nominal basis, while share transactions are based on market value of these taxes, a difference appeared is reflected in the goodwill. None of the goodwill is expected to be deductible for income tax purposes.

Transaction costs incurred in the amount of US$ 1.5 million are recognised in profit or loss in line Professional and administration fees.

36	NOTES TO THE INTERIM CONDENSED CONSOLIDATED ACCOUNTS
	FINANCIAL REPORT

7. INVESTMENT PROPERTIES

The balances and movements of investments properties on a project basis, reconciliation of their carrying amounts to the fair values determined by the independent appraisal and descriptions of the properties are given in the tables below.

for the half year ended 30.06.2020

							Scandinavia
in US$	Berlin House	Geneva House	Polar Lights	Hermitage Plaza	Magistral'naya	Arbat	land plots
Beginning of the period	152,229,774	147,198,000	111,737,000	209,869,000	4,824,000	21,499,000	3,772,677
Acquisitions	-	-	-	-	-	-	-
Additions from
subsequent expenditure	11,597	-	319,372	486,307	-	6,930	-
Borrowing costs (2)	-	-	-	-	-	-	-
Disposals (1)	-	-	-	-	-	- 8,829,000	-
Other	- 10,362	-	- 890,413	- 41,925	-	-	-
Revaluations	- 759,507	- 1,996,000	- 11,445,959	- 25,311,382	- 639,000	- 2,536,930	51,954
Land lease obligations	- 40,488	-	-	-	-	-	-
Effect of translation to presentation currency	-	-	-	-	-	-	- 456,812
End of period	151,431,014	145,202,000	99,720,000	185,002,000	4,185,000	10,140,000	3,367,819
			as of 30.06.2020
Market value as estimated
by the external valuer	151,100,000	145,202,000	99,720,000	185,002,000	4,185,000	10,140,000	3,367,819
Construction in progress
carried at cost	-	-	-	-	-	-	-
Add: land lease obligation
recognised separately	331,014	-	-	-	-	-	-
Carrying amount for
financial reporting purposes	151,431,014	145,202,000	99,720,000	185,002,000	4,185,000	10,140,000	3,367,819
			for the year ended 31.12.2019
							Scandinavia
in US$	Berlin House	Geneva House	Polar Lights	Hermitage Plaza	Magistral'naya	Arbat (1)	land plots
Beginning of the period	141,292,855	140,730,907	96,432,222	201,096,102	4,488,262	18,956,000	3,320,000
Acquisitions arising from
business combinations	-	-	-	-	-	-	-
Additions from
subsequent expenditure	33,721	42,585	1,816,408	2,548,280	-	-	-
Disposals	-	-	-	-	-	-	-
Other	- 22,824	-	-	- 35,761	-	-	-
Revaluations	10,890,916	7,155,416	14,220,592	8,356,482	424,000	2,543,000	54,701
Land lease obligations	35,106	- 730,908	- 732,222	- 2,096,103	- 88,262	-	-
Effect of translation to presentation currency	-	-	-	-	-	-	397,976
End of period	152,229,774	147,198,000	111,737,000	209,869,000	4,824,000	21,499,000	3,772,677
			as of 31.12.2019
Market value as estimated
by the external valuer	151,897,000	147,198,000	111,737,000	209,869,000	4,824,000	21,499,000	3,772,677
Add: land lease obligation
recognised separately	332,774	-	-	-	-	-	-
Carrying amount for
financial reporting purposes	152,229,774	147,198,000	111,737,000	209,869,000	4,824,000	21,499,000	3,772,677

NOTES TO THE INTERIM CONDENSED CONSOLIDATED ACCOUNT	37
FINANCIAL REPORT

for the half year ended 30.06.2020

					LASS1
in US$	City Gate	WLC	QBC 4	STRAL 3 (under construction)	Total
Beginning of the period	139,284,513	100,033,644	117,068,520	-	-	1,007,516,128
Acquisitions	-	-	-	111,665,075	81,736,967	193,402,042
Additions from
subsequent expenditure	-	-	-	-	-	824,206
Borrowing costs (2)	-	-	-	-	705,696	705,696
Disposals (1)	-	-	-	-	-	- 8,829,000
Other	- 20,357	- 15,947	-	-	-	- 979,004
Revaluations	- 421,437	- 1,088,537	- 1,557,323	- 11,641,361	-	- 57,345,482
Land lease obligations	-	-	-	-	-	- 40,488
Effect of translation
to presentation currency	71,105	38,524	40,869	3,320,092	9,502	3,023,280
End of period	138,913,824	98,967,684	115,552,066	103,343,806	82,452,165	1,138,277,378
			as of 30.06.2020
Market value as estimated
by the external valuer	138,913,824	98,967,684	115,552,066	103,343,806	-	1,055,494,199
Construction in progress
carried at cost	-	-	-	-	82,452,165	82,452,165
Add: land lease obligation
recognised separately	-	-	-	-	-	331,014
Carrying amount for
financial reporting purposes	138,913,824	98,967,684	115,552,066	103,343,806	82,452,165	1,138,277,378
			for the year ended 31.12.2019
in US$	City Gate	WLC	QBC 4			Total
Beginning of the period	136,209,289	98,926,142	-			841,451,779
Acquisitions arising from business
combinations	-	-	117,358,448			117,358,448
Additions from
subsequent expenditure	215,712	189,415	29,436			4,875,557
Other	- 41,267	- 31,623	-			- 131,476
Revaluations	5,534,754	2,864,710	1,467,280			53,511,851
Land lease obligations	-	-	-			- 3,612,389
Effect of translation
to presentation currency	- 2,633,975	- 1,915,000	- 1,786,644			- 5,937,643
End of period	139,284,513	100,033,644	117,068,520			1,007,516,128
			as of 31.12.2019
Market value as estimated
by the external valuer	139,284,513	100,033,644	117,068,520			1,007,183,354
Add: land lease obligation
recognised separately	-	-	-			332,774
Carrying amount for
financial reporting purposes	139,284,513	100,033,644	117,068,520			1,007,516,128

(1) Disposal of investment property at Arbat 24

In June 2020, the Group sold to a third party the office area of 2 600 sqm in Arbat 24 with the carrying amount of

US$ 8.83 million. Refer to Note 16.

The Group capitalizes in the cost of rental property under construction interest incurred in connection to the borrowing of funds directly attributable to its acquisition and construction.

38	NOTES TO THE INTERIM CONSOLIDATED ACCOUNTS
	FINANCIAL REPORT

	Berlin House	Geneva House	Polar Lights	Hermitage Plaza	Magistral'naya
Country	Russia		Russia	Russia	Russia
City	Moscow	Moscow	Moscow	Moscow	Moscow
				4&13,2/4,	11/2 1st
Address	5, Petrovka Street	7, Petrovka Street	26, Pravdy Street	Krasnoproletarskaya St.	Magistralnaya St
Property description	Office&retail centre	Office&retail centre	Office&retail centre	Office centre	Office centre
Class	A	A	B+	A	B
Building area, sqm	13,381	16,455	37,815	40,216	3,552
Land	leasehold	leasehold	leasehold	leasehold	leasehold
Net rentable area in sqm (BOMA)	10,100	11,970	30,750	32,900	3,177
office	6,620	10,340	29,270	32,260	3,177
retail	3,480	1,630	1,480	640	-
other	-	-	-	-	-
Parking lots
underground	62	132	159	281	-
surface	-	-	52	-	39
Vacancy rate as a % of net rentable area	13.5%	8.9%	2.9%	3.5%	0.0%
Lease terms	2020 - 2030	2020 - 2035	2020 - 2027	2020 - 2026	2022
Weighted average lease term, years	4.3	4.9	3.1	4.7	2.0
Carrying amount, US$	151,431,014	145,202,000	99,720,000	185,002,000	4,185,000

NOTES TO THE INTERIM CONSOLIDATED ACCOUNTS	39
FINANCIAL REPORT

							as of 30.06.2020
Arbat 39 (1)		Scandinavia land	City Gate	WLC (2)	QBC 4	STRAL 3	LASS 1
Russia		Russia	Germany	Germany	Austria	Germany	Austria
Moscow	Leningrad Region	Stuttgart	Hamburg	Vienna	Berlin	Vienna
		near Leninskoye
		Settlement,
39, Arbat Street		Vyborgskiy District	11, Kriegsbergstrasse	1a, Gorch-Fock-Wall	4, Am Belvedere	3, Stralauer Allee	1, Lassallestrasse
Mixed-use:		Office&retail	Office and retail		Design hotel	Office building
apartments&retail		4 land plots of 55 ha	with restaurant	with fitness	Office centre	(ref. to music theme)	under construction
Elite	n/a	A	A	A	n/a	n/a
10,520		n/a	26,445	12,068	20,000	20,160	29 000*
leasehold	freehold	freehold	freehold	freehold	freehold	freehold
1,200		n/a	17,260	12,068	17,425	20,160	29 000*
-	n/a	15,407	6,171	17,425	n/a	n/a
1,200		n/a	1,330	2,519	-	n/a	n/a
				2 416 (fitness),
-	n/a	523 (restaurant)	962 (other)	-	n/a	n/a

65		n/a	145	89	71	86	n/a
-	n/a	-	-	-	39	n/a
85%		n/a	0.0%	1.2%	0.0%	-	n/a
2023		n/a	2021 - 2030	2023 - 2032	unlimited	n/a	n/a
3.0		n/a	6.3	7.8	unlimited	15.4	n/a
10,140,000		3,367,819	138,913,824	98,967,684	115,552,066	103,343,806	82,452,165

Arbat project represents a multi-use building of 10,520 sqm at Abat Street 39 in Moscow. The building includes elite segment apartments and retail/office area. Retail/ office premises have been recognised as investment property and carried at fair value. Main characteristics on retail/ office premises is presented in the table below. Apartments, which are intended for sale, have been recognised as Inventory and carried at cost but tested against an appraisal for impairment at each balance sheet date (Note 10).
The carrying value of Work Life Center represents its fair value adjusted for outstanding capital expenditure in the amount of EUR 0.30 million (US$ 0.34 million) (31 December 2019: EUR 0.30 million (US$ 0.34 million)).

40	NOTES TO THE INTERIM CONSOLIDATED ACCOUNTS
	FINANCIAL REPORT

8. ACQUISITIONS OF INVESTMENT PROPERTY STRAL3

On 2 April 2020, the Company's subsidiary Lexworth Finance Ltd acquired from third parties 89.9% of shares in SA3 Media S.A.R.L. (original name Arion Investment S.A.R.L.), domiciled in Luxemburg. SA3 Media owns freehold land plot and the building in Stralauer Allee 3,4,5,6,10245 Berlin (Friedrichshain area). The property had been completed in 2010 and comprises approximately 20,160 sqm, including 304 rooms, 86 underground&39 surface parking spaces, a spa, restaurant and two music studios. The property is leased in its entirety to the hotel operator Nhow Hotel, part of the NH Hotel Group. The lease has over 15 years left with the option to extend by a further 10 years. The SA3 Media S.A.R.L. does not manage the hotel and does not provide any services to its guests. The lessee bears all direct expenses related to the operating of the hotel, with the exception of exterior design and maintenance of the building.

The consideration for the Group's share in the property amounted to EUR 90.9 million (US$ 98.9 million), of which EUR 0.47 million (0,52 million) is outstanding as of 30 June 2020. The total value of the investment property amounted to EUR 102.9 million (US$ 111.7 million at acquisition date), including transaction related costs in the amount of EUR 1.3 million (US$ 1.4 million) incurred by the Group.

LASS1

On 29 June 2020, the Company's subsidiary Lexworth Finance Ltd acquired from third parties 100% of shares in Ramses Immobilien Gesellschaft mbH&Co OG ("Ramses" hereinafter) (refer to Note 20 for all the intermediary companies participating), a company domiciled in Austria.

Ramses owns freehold land plot and building in Lassallestrasse 1 in Vienna. The mixed-use building was originally built in 1993 and is currently undergoing a refurbishment that is expected to be completed in June 2022. The property will be spread across nine floors and after refurbishment and construction of the top floor will comprise a total of approx. 29,000 sqm with 150 underground and 70 outdoor parking spaces. Tenants of the building will include City of Vienna, the State Police and the supermarket Merkur, with an average lease of more than 10 years. Ramses and all other acquired entities do not employ any staff. During construction phase, only tenant State Police will sit in the building under lease. Other tenants will move in after completion of construction and refurbishment expected in June 2022. At the date of acquisition, 28% of the area are contracted for lease. It is expected that the lease will increase to 85% of the area by the end of the construction.

The price of the property is agreed as initial payment plus contingent consideration when the Group is obligated to make additional payments if the future event or condition occurs. Initial payment amounted to EUR 72.3 million (US$

81.1 million), of which EUR 2.5 million (US$ 2.9 million) is outstanding as of 30 June 2020 and presented in current liabilities, line Borrowings of the statement of financial position. Additional payments are contingent on future events, primarily conclusion of the new leases and construction progress. There were no additional payments due in the reporting period. In addition to the share purchase agreement, the Group also concluded general construction agree- ment with the seller for EUR 50 million (US$ 56.1 million) for construction work at the building. Final purchase price for the property will be determined at construction completion date, planned for June 2022, and should not be higher than EUR 145 million (US$ 162.7 million), including EUR 50 million (US$ 56.1 million) to be paid under the general construction agreement.

Transaction related costs of EUR 0.54 million (US$ 0.61 million) are capitalized in the cost of the investment property. The Group measures LASS 1 property at cost, since its fair value is not reliably measurable in the refurbishment stage, until its fair value becomes reliably measureable or construction is completed (whichever is earlier). Contingent payments will be recognized in the cost of the property, when incurred.

The acquisition is fully financed by the funds from subordinated notes issued in the reporting period. Until completion of the construction, interest incurred will be capitalized in the cost of investment property.

NOTES TO THE INTERIM CONSOLIDATED ACCOUNTS	41
FINANCIAL REPORT

9. FAIR VALUE MEASUREMENT - INVESTMENT PROPERTY

Valuation of real estate assets involves a significant number of assumptions and judgement calls by the valuers. These variables include, but are not limited to: future rent and sale price levels, amount of time needed to rent or sell space, time needed to deliver new construction, best and highest use of an asset or space in an asset, and exchange rates. Varying any of these factors can have a material impact on valuations, and variations in a number of these factors at once can have a significant effect.

When possible, valuers make their assumptions based on available evidence. When such evidence is lacking, which is often the case in the Russian market, assumptions are based on the experience and judgement of the valuer.

The fair value of each Investment Property is determined by independent real estate valuation experts using recognised valuation techniques where, except for Scandinavia land plots, the Discounted Cash Flow Method (DCF) within the income approach is used. Scandinavia land plots are valued by using sales comparable method.

The determination of the fair value of Investment Property requires the use of estimates such as future cash flows from assets (including lettings, tenants' profiles, future revenue streams, capital values of fixtures and fittings, plant and machinery, any environmental matters and the overall repair and condition of the property) and discount rates applicable to those assets. Future revenue streams, inter alia, comprises contracted rent (passing rent) and estimated rental income (ERV) after the contract period. In estimating ERV, the potential impact of future lease incentives to be granted to secure new contracts is taken into consideration. All these estimates are based on local market conditions existing at the reporting date.

For all investment properties that are measured at fair value, the current use of the property is considered the highest and best use.

Techniques used for valuing investment property

The Discounted Cash Flow Method involves the projection of a series of periodic cash flows either to an operating property or a development property. To these projected cash flow series, an appropriate, market-derived discount rate is applied to achieve an indication of the present value of the income stream associated with the property. The calculated periodic cash flow is typically estimated as gross rental income less vacancy and collection losses and less operating expenses/outgoings and investment costs. A series of periodic net operating incomes, along with an estimate of the reversion/terminal/exit value (which uses the traditional valuation approach) anticipated at the end of the projection pe- riod, are discounted to present value. The aggregate of the net present values equals the market value of the property.

Under Sales Comparable Method, estimations of the property's market value are based on analysis of recent sales/ offers of comparable real estate assets, provided that key parameters of the comparable assets are similar to the ones of the valued property. The method assumes that the market will estimate the value of the valued property the same way as it was done for comparable properties.

Investment properties fair value hierarchy

The Group uses the following hierarchy for determining and disclosing the fair value of investment properties by valuation technique:

Level 1: quoted (unadjusted) prices in active markets for identical assets;
Level 2: other techniques for which all inputs that have a significant effect on the recorded fair value are observ- able, either directly or indirectly;
Level 3: techniques that use inputs that have a significant effect on the recorded fair value that are not based on observable market data.

As of 30 June 2020 and 31 December 2019, the Group held the investment properties carried at fair value determined by the Level 3 technique.

During six months ending 30 June 2020 and the year ending 31 December 2019, there were no transfers between

Level 1&2 fair value measurements.

42	NOTES TO THE INTERIM CONSOLIDATED ACCOUNTS
	FINANCIAL REPORT

Valuation techniques used to derive Level 3 fair values

The table below presents the following for each investment property:

The fair value measurement at the end of the reporting period;
A description of the valuation techniques applied;
Quantitative information about significant unobservable inputs used in the fair value measurement.

Property	Fair value as of 30.06.2020	Valuation technique	Key unobservable inputs	Range (Weighted average), per sq.m p.a.
			ERV	US$ 750 - US$ 2,700 (US$ 1,270)
			Discount rate	10.50%
Berlin House	$151,100,000	DCF	Capitalisation rate	8.50%
			ERV	US$ 750 - US$ 3,100 (US$ 935)
			Discount rate	10.50%
Geneva House	$145,202,000	DCF	Capitalisation rate	8.50%
			ERV	US$ 21 - US$ 1,389 (US$ 335)
			Discount rate	13.25%
Polar Lights	$99,720,000	DCF	Capitalisation rate	9.75%
			ERV	US$ 189 - US$ 1,712 (US$ 487)
			Discount rate	12.25%
Hermitage Plaza	$185,002,000	DCF	Capitalisation rate	9.00%
			ERV	US$ 179 (US$ 179)
			Discount rate	15.75%
Magistral'naya	$4,185,000	DCF	Capitalisation rate	10.75%
			ERV	€ 276 - € 300 (€ 291)
		DCF	Discount rate	4.35%
City Gate	€ 123,800,000		Capitalisation rate	3.85%
			ERV	€ 228 - € 276 (€ 270)
		DCF	Discount rate	4.30%
Work Life Center	€ 88,200,000		Capitalisation rate	3.70%
			ERV	€ 188 - € 226 (€ 197)
		DCF	Discount rate	3.74%
QBC 4	€ 102,980,000		Capitalisation rate	3.20%
			ERV	US$ 208 (US$ 208)
		DCF	Discount rate	5.90%
STRAL 3	€ 92,100,000		Capitalisation rate	4.45%
			ERV	US$ 572 - US$ 1,144 (US$ 804)
		DCF	Discount rate	11.75%
Arbats 39	$10,140,000		Capitalisation rate	8.75%
Scandinavia	$3,367,819	Comparable approach	n.a	n.a

NOTES TO THE INTERIM CONSOLIDATED ACCOUNTS	43
FINANCIAL REPORT

Property	Fair value as of 31.12.2019	Valuation technique	Key unobservable inputs	Range (Weighted average), per sq.m p.a.
			ERV	US$ 750 - US$ 2,621 (US$ 1,251)
			Discount rate	10.50%
Berlin House	$151,897,000	DCF	Capitalisation rate	8.50%
			ERV	US$ 750 - US$ 3,100 (US$ 935)
			Discount rate	10.50%
Geneva House	$147,198,000	DCF	Capitalisation rate	8.75%
			ERV	US$ 172 - US$ 1,580 (US$ 380)
			Discount rate	13.25%
Polar Lights	$111,737,000	DCF	Capitalisation rate	9.75%
			ERV	US$ 244 - US$ 768 (US$ 552)
			Discount rate	12.25%
Hermitage Plaza	$209,869,000	DCF	Capitalisation rate	9.00%
			ERV	US$ 202 (US$ 202)
			Discount rate	15.75%
Magistral'naya	$4,824,000	DCF	Capitalisation rate	10.75%
			ERV	€ 276 - € 300 (€ 291)
		DCF	Discount rate	4.55%
City Gate	€ 124,200,000		Capitalisation rate	3.85%
			ERV	€ 228 - € 276 (€ 270)
		DCF	Discount rate	4.50%
Work Life Center	€ 89,500,000		Capitalisation rate	3.65%
			ERV	€ 184 - € 222 (€ 195)
		DCF	Discount rate	3.74%
QBC 4	€ 104,390,000		Capitalisation rate	3.20%
			ERV	US$ 430 - US$ 1,659 (US$ 591)
		DCF	Discount rate	11.75%
Arbats IP	$21,499,000		Capitalisation rate	10.25%; 8.75%
Scandinavia	$3,772,677	Comparable approach	n.a	n.a

44	NOTES TO THE INTERIM CONSOLIDATED ACCOUNTS
	FINANCIAL REPORT

Sensitivity analysis to significant changes in unobservable inputs within Level 3 of the hierarchy

The significant unobservable inputs used in the fair value measurement categorized within Level 3 of the fair value hierarchy of the entity's portfolios of investment property are:

ERV
Discount rate
Capitalisation rate

Significant increases (decreases) in the ERV in isolation would result in a significantly higher (lower) fair value measure- ment. Significant increases (decreases) in the discount rate/capitalisation rate in isolation would result in a significantly lower (higher) fair value measurement.

The table below presents the sensitivity of the valuation to changes in the most significant unobservable inputs used in the fair value measurement categorized within Level 3.

30.06.2020	Effect on fair value
in US$	Sensitivity used	Rental properties
Decrease in ERV	5%	- 30,703,312
Increase in discount rate	25 bps	- 15,563,502
Increase in capitalisation rate	25 bps	- 30,504,712
31.12.2019	Effect on fair value
in US$	Sensitivity used	Rental properties
Decrease in ERV	5%	- 31,279,332
Increase in discount rate	25 bps	- 14,107,496
Increase in capitalisation rate	25 bps	- 28,113,870
10. INVENTORY
	for six months ended	for the year ended
in US$	30.06.2020	31.12.2019
Inventory
Beginning of the period	124,420,990	116,649,298
Disposal	- 6,630,063	- 5,309,113
Disposal by joint operator	-	- 605,959
Effect of translation to presentation currency	- 15,128,900	13,686,764
End of period	102,662,027	124,420,990

ARBAT MULTI-USE COMPLEXES (APARTMENT PREMISES)

Inventory consists of residential properties at Arbat Multi-use complexes. Arbat projects represent two multi-use buildings of 24,630 and 10,520 sqm at Arbat Street 24 and Arbat Street 39 in Moscow. The part of the project representing residential properties expected for sale is recognized as inventory. As of 30 June 2020, the Group owns the apartments with total area of approx. 9,200 sqm.

In the reporting period, the Group sold five apartments at Arbat Street 39, one apartment at Arbat Street 24 with several parking lots to third parties and recognised gain on sale in the amount of US$ 0.85 million (Note 16). This includes parking lots sold to the buyer of the office area at Arbat 24 (refer to Note 16).

Inventory is kept at cost and tested against appraised values for impairment at each balance sheet date. The carrying value is thus the lower of cost and net realizable value. The cost of the space allocated for apartments in the Arbat Multi-use Complexes was determined to be US$ 102.66 million as of 30 June 2020 (31 December 2019: US$ 124.42 million).

NOTES TO THE INTERIM CONSOLIDATED ACCOUNTS	45
FINANCIAL REPORT

11. GOODWILL

for six months ended 30.06.2020

in US$	Berlin House	Geneva House	Polar Lights	Hermitage Plaza	City Gate	WLC	QBC 4	Total
Goodwill
Beginning of the period	8,837,903	3,655,945	12,372,982	20,754,539	13,564,628	5,740,848	11,694,104	76,620,949
Impairment	-	-	-	-	- 2,920,838	- 1,217,162	-	- 4,138,000
Forex effect	-	-	-	-	5,972	2,538	6,561	15,071
End of period	8,837,903	3,655,945	12,372,982	20,754,539	10,649,762	4,526,224	11,700,665	72,498,020
				for the year ended 31.12.2019
in US$	Berlin House	Geneva House	Polar Lights	Hermitage Plaza	City Gate	WLC	QBC 4	Total
Goodwill
Beginning of the period	8,837,903	3,655,945	12,372,982	20,754,539	13,833,167	5,854,500	-	65,309,036
Arising on business
combinations (Note 6)	-	-	-	-	-	-	11,877,628	11,877,628
Forex effect	-	-	-	-	- 268,539	- 113,652	- 183,524	- 565,715
End of period	8,837,903	3,655,945	12,372,982	20,754,539	13,564,628	5,740,848	11,694,104	76,620,949
Impairment of goodwill arisen on acquisition of City Gate and WLC results from the change in estimate of future income
tax benefits for these businesses in comparison to those at the date of acquisition. Refer to Note 4 for detail.
12. ACCOUNTS RECEIVABLE
in US$							30.06.2020	31.12.2019
Rental receivable							5,072,290	882,976
Receivable on sale of investment property (1)						20,432,782	-
Receivable on sale of residential property (2)						1,633,758	-
Total							27,138,830	882,976
Receivable on sale of investment property refers to the sale of office area at Arbat 24 (Note 16). The amount is excl.
VAT.
Receivable on sale of Inventory property refers to the sale of apartments and parking lots, including those sold to the
buyer of office area at Arbat 24 mentioned above (Note 16).
13. CASH AND CASH EQUIVALENTS
in US$							30.06.2020	31.12.2019
Cash at bank							52,327,891	20,311,397
Fiduciary deposits (1)							15,361,599	8,090,564
Cash in transit							-	504,654
Escrow account (2)							36,837,784	-
Cash equivalents (3)							409,825	466,243
Cash and cash equivalents						104,937,099	29,372,858
Bank overdrafts (Note 14)							- 23,310	- 285
Cash and cash equivalents with bank overdrafts					104,913,789	29,372,573

Fiduciary deposits are denominated in Rouble and have different terms up to 7 days and interest rates of 3,0% - 4,2% p.a.
Cash on escrow account at notary is kept for settlements on acquisition of SALZ 4 (Hotel Innside) project (refer to Note 21).
Cash equivalent represent interest-free Sberbank promissory note payable on demand.

46	NOTES TO THE INTERIM CONSOLIDATED ACCOUNTS
	FINANCIAL REPORT

14. BORROWINGS
in US$				30.06.2020	31.12.2019
Borrowings (long term)	currency of issue	nominal interest	repayment date
			Sept. 2023;
Bonds issued	US$	5,5% - 7,25%	May and Dec. 2024	454,183,086	454,069,321
Notes payable due to			Dec. 2022;
Aurora Value Fund	EUR	1,5%; 1,7%	Feb. 2024	327,301,693	100,032,983
Notes payable due to			Dec. 2022;
Lionshare Opportunities Fund	EUR	1,5%; 1,7%	Feb. 2024	35,232,339	10,990,171
Jilford Investments Limited	US$	7%	Dec. 2022	28,725,878	27,886,804
		3M EURIBOR
UniCredit	EUR	+1,125%	April 2024	56,871,856	56,840,137
AVM Invest	EUR	4.5%	Dec. 2031	5,274,230	-
Jelfor Limited	EUR	4,5%	Dec. 2022	4,259,851	4,171,152
Meglior Holdings Limited	EUR	4,26%	Oct. 2026	1,459,597	1,458,779
Total				913,308,530	655,449,347
Borrowings (short term)
Bonds interest accrued	US$	5,5% - 7,25%		3,712,500	3,712,500
Notes payable due to
Aurora Value Fund	EUR	1,5%; 1,7%		2,776,545	-
Notes payable due to
Lionshare Opportunities Fund	EUR	1,5%; 1,7%		318,951	-
Meglior Holdings Limited	EUR	4,26%		227,999	196,884
Bank overdrafts	US$			23,310	285
Loans to seller of LASS 1				2,856,792	-
Total				9,916,097	3,909,669
	BONDS
	Bonds are measured at amortised cost using the effective interest rate (EIR). Amortised cost is calculated by taking
	into account transaction costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in
	the statement of profit or loss.
	The information on all four bond placements performed by the Company is presented in the table:
	Nominal vlaue, US$	Amortised cost, US$	Nominal interest rate	Interest payment date	Maturity date
Bonds issued in Aug 2014	140,000,000	141,692,080	5.5%	March and September	Sep 2023
Bonds issued in Sep 2014	130,000,000	131,590,793	5.5%	March and September	Sep 2023
Bonds issued in Jun 2015	135,000,000	134,739,460	7.25%	June and December	May 2024
Bonds issued in Dec 2015	50,000,000	49,873,253	6.75%	June and December	Dec 2024
Total	455,000,000	457,895,586

NOTES TO THE INTERIM CONSOLIDATED ACCOUNTS	47
FINANCIAL REPORT

NOTES PAYABLE

In December 2017, to finance the acquisition of Work Life Center the Company issued subordinated registered notes nominated in EUR for the total amount of EUR 56.0 million with 1.7% annual interest maturing in December 2022. Notes with the total amount of EUR 50.5 million were issued to Company's majority shareholder, Aurora Value Fund and notes with the total amount of EUR 5.5 million were issued to Lionshare Opportunities Fund ("Lionshare").

In February 2019, the Company has received EUR 43 million by issuance of subordinated and secured notes to the same largest shareholders (EUR 38.7 million to Aurora Value Fund and EUR 4.3 million to Lionshare Opportunities Fund) at an interest rate of 1.5% p.a. and secured by pledge of 100% of the shares of the Cyprus holding company of City Gate Stuttgart GmbH, Ferran Limited. Unless previously redeemed, the Company undertakes to repay all outstanding notes at par of their aggregate principal amount, without further notice on 21 February 2024. At any time after 1 March 2019, the Company may redeem all but not only some of the notes for the time being outstanding at par with interest accrued to the day of redemption.

In March 2020, the Company issued additionally subordinated unsecured notes to Aurora (EUR 183 million) and Lion- share (EUR 21.6 million) at interest rate of 3.5% p.a. Unless previously redeemed, the Company undertakes to repay all outstanding notes at par of their aggregate principal amount, without further notice on 23 March 2023. At any time after 15 March 2020, the Company may redeem all but not only some of the notes for the time being outstanding at par with interest accrued to the day of redemption. In June 2020, additional issue of the subordinated notes to Aurora amounted to EUR 19.4 million, 3.5% p.a. repayable on 22 June 2023 unless previously redeemed in full.

JILFORD LOAN

Loan was obtained in prior periods to finance Arbat Project. It has fixed 7% annual interest rate. Maturity term is 31 December 2022.

UNICREDIT LOAN

The loan represents refinanced credit facility of the Austrian subsidiary QBC Immobilien GmbH&Co Delta KG that was acquired in February 2019 (refer to Note 6). After acquisition of the subsidiary, the loan was refinanced. Respective refinancing charges of US$ 4.4 million were recognised as liability at acquisition date and paid in March 2019. The loan is repayable in April 2024, with quarterly payments of interest 3M EURIBOR+1.125% p.a. The loan agreement provides for embedded interest cap, closely related to the host contract and accounted for as part of the liability on the loan.

The loan is secured by 100% shares in subsidiary QBC Immobilien GmbH&Co Delta KG that holds investment property.

JELFOR LOAN

The EUR-denominated loan was issued to the German subsidiary WLC by its non-controlling shareholder in 2016, at 4.5% p.a. and repayable in December 2022.

MEGLIOR LOAN

The EUR-denominated subordinated loan was issued to the German subsidiary City Gate by its non-controlling shareholder in 2016, at 4.26 % p.a. and repayable in October 2026.

AVM INVEST LOAN

The loan was provided by the non-controlling shareholder of newly acquired entity SA3 Media (hotel property STRAL3) in the amount EUR 4.70 million (US$ 5.27 million), at 4.5% p.a., unsecured. Maturity is December 2031.

LOAN PAYABLE TO THE SELLERS OF LASS 1

The loan is an outstanding liability to the previous shareholder of newly acquired Ramses (LASS 1 property) (Note 8), 0%. It was fully repaid by the Group in August 2020.

As of 30 June 2020, fair values of the borrowings approximate their carrying amounts.

48 NOTES TO THE CONSOLIDATED ACCOUNTS FINANCIAL REPORT

15. GROSS AND NET RENTAL INCOME

The breakdown of Net Rental Income on an asset by asset basis is presented below:

in US$	Berlin House	Geneva House	Polar Lights	Hermitage Plaza	Magistral'naya
Gross rental income	5,775,484	5,544,634	5,201,909	6,822,825	298,438
Service charge income	876,372	1,052,287	719,041	1,463,202	131,992
Utilities	- 192,800	- 192,299	- 363,907	- 235,912	- 29,135
Property operating expenses	- 172,660	- 165,250	- 400,445	- 664,673	- 40,883
Repair and maintenance costs	- 44,090	-	- 20,086	- 44,114	- 211
Ground rents paid	- 15,185	- 37,957	- 37,972	- 103,352	- 7,057
Non-income taxes	- 423,087	- 534,153	- 735,643	- 703,775	- 40,187
Net rental income	5,804,034	5,667,262	4,362,897	6,534,201	312,957

in US$	Berlin House	Geneva House	Polar Lights	Hermitage Plaza	Magistral'naya
Gross rental income	6,687,968	7,191,204	5,221,642	14,107,672	317,139
Service charge income	1,109,428	1,219,865	856,911	1,772,259	142,360
Utilities	- 228,491	- 234,418	- 460,663	- 309,414	- 39,218
Property operating expenses	- 137,244	- 177,835	- 404,352	- 476,055	- 45,567
Repair and maintenance costs	- 62,005	0	- 50,339	- 21,982	- 1,660
Ground rents paid	- 65,251	- 41,142	- 41,159	- 112,025	- 7,650
Non-income taxes	- 431,196	- 545,126	- 774,679	- 718,544	- 41,021
Net rental income	6,873,209	7,412,548	4,347,361	14,241,911	324,383

As of 30 June 2020, the top five tenants in the Group are VimpelCom (12% of the half-year rental income), Richemont

Group (11%), S7 Airlines (7%), Ingrad Nedvizhimost (7%) and BDO Austria (7%).

As of 31 December 2019, the top five tenants in the Group are VimpelCom (27% of the annual rental income), Rich- emont Group (11%), S7 Airlines (6%), Ingrad Nedvizhimost (5%) and BDO Austria (4%).

The following table represents the rental income to be received by the Group in future periods under leases currently in effect:

in US$	30.06.2020	31.12.2019
Less than 1 year	75,204,068	75,924,009
From 1 year to 5 years	218,779,612	231,448,915
More than 5 years*	214,430,965	184,800,631

Total	508,414,645	492,173,555

*The income on leases with BDO at QBC 4, unlimited in term, is included in the table for the period up to 30 June 2030. After this term, payments will amount to EUR 4 mln (USD 5 mln) annually.

NOTES TO THE CONSOLIDATED ACCOUNTS 49

FINANCIAL REPORT

for six months ended 30.06.2020

in US$	Arbat	City Gate	WLC	QBC 4	STRAL 3	Total
Gross rental income	91,845	2,360,890	1,857,432	1,953,355	1,160,154	31,066,966
Service charge income	6,050	460,661	324,281	585,603	-	5,619,489
Utilities	- 2,152	- 353,755	- 154,430	- 216,260	-	- 1,740,650
Property operating expenses	-	- 213,462	- 670,835	- 351,200	- 76,251	- 2,755,659
Repair and maintenance costs	- 4,541	- 66,310	- 175,613	- 16,332	9,600	- 361,697
Ground rents paid	-	-	-	-	-	- 201,523
Non-income taxes	- 29,307	- 72,345	- 19,037	- 1,811	- 21,944	- 2,581,289
Net rental income	61,895	2,115,679	1,161,798	1,953,355	1,071,559	29,045,637
					for six months ended 30.06.2019
in US$	Arbat	City Gate	WLC	QBC 4		Total
Gross rental income	116,290	2,388,086	1,540,243	1,308,854.00		38,879,098
Service charge income	7,286	437,786	346,520	332,598.00		6,225,013
Utilities	- 552	- 489,843	- 166,119	- 175,639.00		- 2,104,357
Property operating expenses	- 54,316	- 180,620	- 405,453	- 153,468.00		- 2,034,910
Repair and maintenance costs	- 1,933	-	- 151,844	- 2,569.00		- 292,332
Ground rents paid	-	-	-	-		- 267,227
Non-income taxes	- 14,053	- 88,393	- 26,113	- 921.00		- 2,640,046
Net rental income	52,722	2,067,016	1,137,234	1,308,855		37,765,239

50	NOTES TO THE INTERIM CONSOLIDATED ACCOUNTS
	FINANCIAL REPORT

16. GAINS AND LOSSES ARISING FROM THE SALES OF PROPERTIES

for six months ended

in US$	30.06.2020	30.06.2019
Sales of investment property	20,432,782	-
Cost of sales	- 8,829,000	-
Gain on sale	11,603,782	-

Sales of residential property	7,481,118	7,444,796
Cost of sales	- 6,630,063	- 4,362,059
Gain on sale	851,055	3,082,737
Total gain on sale of properties	12,454,837	3,082,737

In the reporting period, the Group continued to sell apartments and parking lots in Arbat 24 and Arbat 39 properties.

Gain on sale for the period amounted to US$ 0.85 million (six months ended 30.06.2019: US$ 3.08 million).

In the reporting period, the Group recognized profit on sale of the investment property commercial area at Arbat 24 to a third party cutomer for the amount of US$ 11.60 million.

17. FINANCE COSTS

for six months ended

in US$	30.06.2020	30.06.2019
Interests on bonds issued	14,120,015	14,120,015
Interest on notes payable	2,326,752	796,199
Interest on loans payable	962,285	971,201
Interest on bank loan	368,763	260,937.00
Bank charges	434,725	65,034
Other finance cost	45,248	41,761
Total	18,257,788	16,255,147

NOTES TO THE CONSOLIDATED ACCOUNTS 51

FINANCIAL REPORT

SHAREHOLDERS' EQUITY Authorised capital
Art. 5 of the Company's Memorandum of Association, as amended by the resolutions passed at the Extraordinary Shareholders Meeting of 29 June 2004, 19 November 2004, 7 March 2005, the General Meeting of Members of

May 2006, 3 May 2007, 24 June 2008, the Extraordinary Shareholders Meeting of 15 April 2013, Shareholders Meeting of 17 June 2014 and 11 June 2019 provides for an authorised capital which entitles the Board of Directors to issue a total of 21,000,000 registered ordinary shares without par value and 1,000,000 registered Series A preferred shares without par value.

	Number of ordinary shares	Number of series A preferred shares
	30.06.2020	31.12.2019	30.06.2020	31.12.2019
Authorised capital
Total authorised capital	21,000,000	11,000,000	1,000,000	1,000,000
Opening balance unissued authorised capital	11,025,978	1,025,978	1,000,000	1,000,000
Increase		10,000,000	-	-
Utilisation for capital increase	-	-	-	-
Conversion to ordinary shares	-	-	-	-
Closing balance unissued authorised capital
without par value	11,025,978	11,025,978	1,000,000	1,000,000
	Number of ordinary shares	Number of series A preferred shares
	30.06.2020	31.12.2019	30.06.2020	31.12.2019
Issued share capital without par value
Opening balance	9,974,022	9,974,022	-	-
Capital increase	-	-	-	-
Closing balance	9,974,022	9,974,022	-	-
				Number of shares
			30.06.2020	31.12.2019
Treasury shares
Opening balance			69,063	54,005
Issued to treasury			-	-
Purchase			9,410	15,060
Sales				2
Closing balance			78,473	69,063

No dividend was paid during reporting period.

52 NOTES TO THE CONSOLIDATED ACCOUNTS FINANCIAL REPORT

19. CONTINGENCIES Pledges

Shares in some of the subsidiaries are pledged to secure borrowings of the Group (refer to Note 14).

Capital commitments

On 22 August 2019, the Group signed the share purchase agreement to acquire 100% of ownership interest in the currently under construction office and retail complexes QBC 1&2 as well as the parking garage QBC 7 located at Am Belvedere 10, 1100 Vienna, Austria. The properties are directly adjacent to the QBC 4 property, the BDO Headquar- ters, acquired by the Group in February 2019. The closing of the transaction will occur after finalization of construction and is expected for Q1 2021 also subject to various other customary closing conditions. The preliminary purchase price amounts to EUR 230 million subject to final purchase price calculations. On 19 August 2019, the Company has paid EUR 20.00 million as a down payment.

In June 2020, the Group signed a general construction agreement for the amount of EUR 50 million for construction and refurbishment works at newly acquired property LASS 1 in Vienna (refer to Note 8). The works are to be completed by June 2022.

Covid-19

Starting from early 2020 a new coronavirus disease (COVID-19) has begun rapidly spreading all over the world resulting in announcement of the pandemic status by the World Health Organization in March 2020. Responses put in place by many countries to contain the spread of COVID-19 are resulting in significant operational disruption for many companies and have significant impact on global financial markets. As the situation is rapidly evolving it may have a significant effect on business of many companies across a wide range of sectors, including, but not limited to such impacts as disruption of business operations as a result of interruption of production or closure of facilities, supply chain disruptions, quarantines of personnel, reduced demand and difficulties in raising financing. In addition, companies may face the increasingly broad effects of COVID-19 as a result of its negative impact on the global economy and major financial markets.

Management has repeatedly analysed the impact of COVID-19 crisis on the Group's rental income on an asset by asset basis including the most important and for this crisis relevant legal regulations for each of the countries the Group is currently invested in, an overview on requests received from tenants in regards to rent deferrals or reductions and the Group's position to these requests as well as expectations on potential effects on rental income. Management cannot judge on the future potential negative impact of COVID-19 on the global economy and major financial markets as well as on EPH properties but as per the most recent assessment impacts on the Group are only considered short-term with no material impact expected for the long-term.

As assumed, some of the Group's tenants have requested rent reductions or rent deferrals. EPH is responding to requests on the basis of the respective legislations. It must still be expected that some more of the tenants might use their rights given under the current legislations and defer rent payments. Apart from the fact that such deferrals have only been received from a limited number of tenants, the Group does not expect any difficulties in meeting its financial obligations as a result of COVID-19.

NOTES TO THE CONSOLIDATED ACCOUNTS 53

FINANCIAL REPORT

20. RELATED PARTIES

The Interim Condensed Consolidated Financial Statements include the financial statements of the Company and the subsidiaries and joint operations. The Company's intermediary holding companies and joint operations are listed in the following table:

% Holding

Name of subsidiary	Incorporated in	30.06.2020	31.12.2019
Housefar Limited	Limassol, Cyprus	100%	100%
Idelisa Limited	Limassol, Cyprus	100%	100%
Silverlake Limited	Limassol, Cyprus	100%	100%
Whiterock Investments Limited	Limassol, Cyprus	100%	100%
Redhill Investment Limited	Limassol, Cyprus	100%	100%
Connecta GmbH&Co. KG	Frankfurt am Main, Germany	100%	100%
EPH Real Estate Limited	Limassol, Cyprus	100%	100%
PNL Media Limited	Limassol, Cyprus	100%	100%
Capital Estate Group Limited	Limassol, Cyprus	100%	100%
T&A Services Limited	Tortola, BVI	100%	100%
Lexworth Finance Limited	Limassol, Cyprus	100%	100%
Ferran Limited	Limassol, Cyprus	100%	100%
Setford Limited	Limassol, Cyprus	100%	100%
Andorian Beteiligungsverwaltungs GmbH	Vienna, Austria	100%	100%
QBC BT IV Alpha GmbH	Vienna, Austria	100%	100%
QBC BT IV Beta GmbH	Vienna, Austria	100%	100%
Obewan Beteiligungsverwaltungs GmbH	Vienna, Austria	100%	0%
Ophuhus Beteiligungsverwaltungs GmbH	Vienna, Austria	100%	0%
Obewan GmbH&Co	Vienna, Austria	100%	0%
Joint operations
Vakhtangov Place Limited	Limassol, Cyprus	60%	60%
Bluestone Investments Limited	Limassol, Cyprus	60%	60%

Entities Obewan Beteiligungsverwaltungs GmbH, Ophuhus Beteiligungsverwaltungs GmbH and Obewan GmbH&Co KG are intermediaries that hold shares in the entity Ramses, the owner of LASS 1 property, acquired in the reporting period (refer to Note 8).

Related parties include shareholders, associates, entities under joint control, key management personnel and other related parties having significant influence on the Group. The Company and its subsidiaries, in the ordinary course of their business, enter into various sale, purchase and service transactions with related parties.

Transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are not disclosed in this Note. Refer to the Group's latest published annual financial statements for description of the relationships with the related parties, which remained basically the same in the reporting period.

The Group's related party balances as of 30 June 2020 and 31 December 2019 consisted of the following:
in US$	30.06.2020	31.12.2019
Other related parties
Accounts payable and accrued expenses	- 1,216,224	- 328,258
Accounts receivable	186	119
Advances paid	118,958	22,331
Advances received	- 11,030	- 11,029

Shareholders
Borrowings (Note 14)	- 365,629,528	- 111,023,154

The Group's transactions with related parties for the periods ended of 30 June 2020 and 30 June 2019 consisted of the following:

54 NOTES TO THE CONSOLIDATED ACCOUNTS FINANCIAL REPORT

for six months ended

in US$	30.06.2020	30.06.2019
Other related parties
Gross rental income	199,268	198,718
Management fees	- 1,580,828	- 1,249,838
Other expenses	- 5,812	- 6,310
Professional and administration fees	- 51,521	- 361,706

Shareholders
Finance costs	- 2,326,752	- 796,199

OTHER TRANSACTIONS

Valartis Group delivered financial services related to the acquisitions of investment property by the Group in the reporting period in the amount of US$ 577.3 thousand. It was capitalized in the cost of the respective investment properties (refer to Note 8).

Several managers of Valartis Group work as managers at several Russian subsidiaries of the Group. Salary for the reporting period amounted to US$ 105 thousand (half year 2019: US$ 39 thousand).

Transactions and balances with key management personnel

Compensation to the board of directors amounted to US$ 124 thousand in the reporting period (half year 2019: US$ 125 thousand). It is presented in line Professional and administration fees in the Profit and loss statement.

Compensation prepaid as at 30 June 2020 amounts to US$ 198 thousand (31 December 2019: US$ 72 thousand).

It is presented in line Prepayments in the Statement of financial position.

21. SUBSEQUENT EVENTS 

Acquisition of hotel property SALZ 4 (Hotel Innside)

On 2 July 2020, the Company acquired from a third party 100% of interest in the entity holding the hotel property in Salzgasse 4 in Dresden, Germany. The property is occupied by 4-star Hotel Innside Dresden of Melia Hotels&Resorts Group. The property comprises an area of 15,550 sqm. with a total of 180 rooms, 46 underground parking spaces, a spa, restaurant, 261 sqm. of retail space and meeting rooms for up to 230 people. It was developed, planned and built 10 years ago. The current lease agreement with Melia Hotels International runs till December 2029.

Settlement of receivable on sale of properties

In July 2020, the buyer of the investment property and parking lots at Arbat 24 fully repaid receivable arisen on sale in the amount US$ 25.18 million, including VAT 20% (refer to Note 12).

GENERAL INFORMATION

56 CORPORATE DETAILS GENERAL INFORMATION

BOARD OF DIRECTORS

Olga Melnikova

Gustav Stenbolt

Michael Cuthbert

Tomasz Dukala

Hans Messmer

Annamaria Vassiliades

DOMICILE

EPH European Property Holdings Limited c/o Hauteville Trust (BVI) Limited

P.O. Box 3483 Road Town, Tortola British Virgin Islands

AUDITORS	SECURITY NUMBER
Deloitte AG	1673866
General-Guisan-Quai 38
CH-8022 Zürich
Switzerland	ISIN NUMBER
(since June 2018)	VGG290991014
REAL ESTATE MANAGER	TICKER SYMBOL
Valartis International Limited	EPH
Vanterpool Plaza, 2nd Floor
Wickhams Cay 1
Road Town, Tortola	COMPANY WEBSITE
British Virgin Islands (since January 2010)	https://europeanpropertyholdings.com

CORPORATE DETAILS 57

GENERAL INFORMATION

EPH European Property Holdings Limited c/o Hauteville Trust (BVI) Limited

P.O. Box 3483 Road Town, Tortola British Virgin Islands

CONCEPT, DESIGN AND REALISATION

NeidhartSchön AG Zurich, Switzerland

Neidhart + Schön Print AG, Switzerland

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Eastern Property Holdings Ltd. published this content on 28 September 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 September 2020 18:34:05 UTC

End-of-day quote Swiss Exchange Other stock markets 23:00:00 04/02/2024 GMT			5-day change	1st Jan Change
24.2 ^USD	-5.47%		-5.47%	-7.63%

07:21am	EPH European Property Secures Approval for Extension of Bonds	MT
05-07	Transcript : EPH European Property Holdings PLC, Q4 2023 Earnings Call, May 07, 2024

EPH European Property Holdings Limited

Equities

EPH

VGG290991014

Real Estate Development & Operations

Eastern Property : SEMI-ANNUAL REPORT 2020 EPH EUROPEAN PROPERTY HOLDINGS

Latest news about EPH European Property Holdings Limited

Chart EPH European Property Holdings Limited

Company Profile

Income Statement Evolution

Annual profits - Rate of surprise

Sector Other Real Estate Development & Operations

EPH European Property Secures Approval for Extension of Bonds	06:21am	MT
Transcript : EPH European Property Holdings PLC, Q4 2023 Earnings Call, May 07, 2024	05-07
EPH European Property Swings to Loss in FY23, Net Rental Income Rises	04-29	MT
EPH European Property to Acquire Swiss Hotel	12-20	MT
EPH European Property Holdings Expands Its Property Portfolio To Switzerland By Acquiring 5-Star Hotel Trois Couronnes In Vevey	12-19	RE
EPH European Property Holdings PLC signed an agreement to acquire Hotel Des Trois Couronnes.	12-18	CI
Transcript : EPH European Property Holdings PLC, H1 2023 Earnings Call, Oct 03, 2023	03/10/23
EPH European Property Posts Higher H1 Loss; Rental Income Grows	02/10/23	MT
EPH European Property Holdings PLC Reports Earnings Results for the Half Year Ended June 30, 2023	28/09/23	CI
EPH European Property Flags Wider H1 Loss	11/09/23	MT
EPH European Property Holdings PLC Provides Earnings Guidance for the First Half Year 2023	08/09/23	CI
EPH European Property Proposes Amendments for Bonds Totaling EUR244 Million	14/08/23	MT
EPH European Property Holdings PLC Reports Earnings Results for the Full Year Ended December 31, 2022	28/04/23	CI
Real Estate Investor EPH Completes Exit from Russian Portfolio	20/04/23	MT
EPH European Property Holdings PLC Announces the Resignation of Hans Messmer as Board Member	19/04/23	CI
EPH European Property Holdings PLC Announces Board and Executive Changes	13/04/23	CI
EPH European Property Posts Growth In Nine-month Rental Income	01/12/22	MT
EPH European Property Gains Shareholder Approval to Exit Russian Portfolio	02/11/22	MT
Transcript : EPH European Property Holdings Limited, H1 2022 Earnings Call, Oct 05, 2022	05/10/22
EPH European Property Turns To H1 Loss On Russian Portfolio Impairment	03/10/22	MT
EPH European Property Holdings Limited Reports Earnings Results for the Half Year Ended June 30, 2022	01/10/22	CI
EPH European Property Flags H1 Loss On Russian Portfolio Impairment	13/09/22	MT
EPG European Property Holdings Limited Expects Loss for First Half of 2022	12/09/22	CI
EPH European Property's Q1 Rental Income Rises	01/06/22	MT
Transcript : EPH European Property Holdings Limited, 2021 Earnings Call, May 05, 2022	05/05/22

	1st Jan change	Capi.
EPH EUROPEAN PROPERTY HOLDINGS LIMITED	-7.63%	396M
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DLF LIMITED	+15.65%	24.86B
MITSUBISHI ESTATE CO., LTD.	+45.81%	22.8B
CHINA OVERSEAS LAND & INVESTMENT LTD.	+10.76%	21.41B
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