NOTICE CONVENING 2019 ANNUAL GENERAL MEETINGfile,134_epp... · notice convening the 2019 AGM. Mr R Weisz has performed his tasks satisfactorily and based upon this performance of

EPP N.V. (Incorporated in The Netherlands) (Company number 64965945) JSE share code: EPP

ISIN: NL0011983374 LEI code: 7245003P7O9N5BN8C098 Website: www.epp-poland.com (“EPP” or “company”)

NOTICE CONVENING 2019 ANNUAL GENERAL MEETING

AND INCORPORATING THE SUMMARISED CONSOLIDATED FINANCIAL RESULTS FOR THE 12 MONTHS ENDED 31 DECEMBER 2018

PART I: CONVENING NOTICE FOR THE 2019 ANNUAL GENERAL MEETING OF EPP

The shareholders and other persons entitled to attend general meetings of EPP are invited by the board of

directors (“board”) of the company to attend the 2019 annual general meeting of the company on Tuesday,

11 June 2019 at 15:00 CET (“AGM”), to be held at Tribes at Gustav Mahlerplein 28, 1082 MA Amsterdam, The

Netherlands. Registration will take place between 14:30 CET and the commencement of the AGM at 15:00 CET.

Once the AGM has started registration will no longer be possible. The AGM shall be conducted in English.

This invitation must be read in conjunction with:

PART II: Agenda

PART III: Explanatory notes to agenda

PART IV: General information

PART V: Instructions and documents for participation and voting at the AGM

Other: Abridged CV of each of the proposed members of the board

EPP N.V.

The Management Board

EPP Notice convening 2019 annual general meeting1

PART II: AGENDA

1. Opening.

2. Discussion of report of the board for the financial year 2018, including corporate governance (no vote).

3. Implementation of remuneration policy for the board in the financial year 2018 (no vote).

4. Adoption of annual accounts for the financial year 2018 (resolution).

5. Explanation of dividend policy (no vote).

6. Determination of the appropriation of profit and dividend for the financial year 2018 (no vote).

7. Discharge of the current members of the board (resolution).

8. (a) Reappointment of Mr J Bagiński as executive director of the board (resolution).

(b) Reappointment of Mr R Weisz as non-executive director of the board and approval of role

(resolution).

(c) Appointment of Mr P Prinsloo as non-executive director of the board (resolution).

(d) Appointment of Mr T de Groot as non-executive director of the board (resolution).

(e) Appointment of Mr J Templeton as non-executive director of the Board (resolution).

(f) Determine number of directors of the board (resolution).

9. Establish the remuneration of the non-executive directors (resolution).

10. (a) Authorisation of board to issue ordinary shares and/or grant rights to subscribe for ordinary shares

(resolution).

(b) Authorisation of board to issue ordinary shares and/or grant rights to subscribe for ordinary shares

for cash (resolution).

11. Authorisation of board to limit or exclude pre-emption rights (resolution).

12. Authorisation of board to acquire shares (resolution).

13. Non-binding advisory vote on the remuneration policy for the board (resolution).

14. Non-binding advisory vote on the remuneration implementation report for the financial year 2018

(resolution).

15. Appointment of external auditor for the financial year 2019 (resolution).

16. Any other business.

17. Closing.

2EPP Notice convening 2019 annual general meeting

PART III: EXPLANATORY NOTES TO THE AGENDA

1. OPENING

2. DISCUSSION OF REPORT OF THE BOARD FOR THE FINANCIAL YEAR 2018, INCLUDING

CORPORATE GOVERNANCE (NO VOTE)

This agenda item comprises an account of the financial year 2018 (ended on 31 December 2018), including

the report by the board. The board will give a presentation on the performance of EPP in the financial year

2018 as described in the report of the board. The shareholders will then be invited to discuss the report by

the board, including corporate governance.

3. IMPLEMENTATION OF REMUNERATION POLICY FOR THE BOARD IN THE FINANCIAL

YEAR 2018 (NO VOTE)

This agenda item provides for a discussion on the implementation of the remuneration policy for the board

in the financial year 2018 (ended on 31 December 2018).

In light of article 2:135 sub-paragraph 5a of the Dutch Civil Code, reference is made to pages 72 through

77 of the annual accounts regarding the implementation of the company’s remuneration policy.

In the context of this agenda item, the board wishes to announce that the current remuneration policy for

the board will undergo a review during 2019. Following such review, if the board would be of the opinion

that an amendment of the remuneration policy is desired, the board shall propose an amended

remuneration policy to the general meeting.

4. ADOPTION OF ANNUAL ACCOUNTS FOR THE FINANCIAL YEAR 2018 (RESOLUTION)

On 6 March 2019, the board members signed the annual accounts for 2018 drawn up by the board. The

annual accounts for 2018 are available on the company’s website and are submitted for adoption by the

AGM in this meeting. It is proposed to the AGM to adopt the annual accounts for 2018.

5. EXPLANATION OF DIVIDEND POLICY (NO VOTE)

Under this agenda item the board will give an explanation of the dividend policy of the company.

6. DETERMINATION OF THE APPROPRIATION OF PROFIT AND DIVIDEND FOR THE

FINANCIAL YEAR 2018 (NO VOTE)

Each financial year, the board determines which part of the profits shall be reserved. Taking into account

the dividend policy of the company, the interim dividend of 5.82 euro cents per ordinary share in the capital

of the company as declared by the board on 7 September 2018 and the interim dividend of 5.78 euro cents

per ordinary share in the capital of the company as declared by the board on 7 March 2019 (collectively

the “Interim Distributions”), the board determined that the company’s profits exceeding the aggregate

amount of the Interim Distributions realised in the financial year 2018 (ended on 31 December 2018), will

be reserved.


7. DISCHARGE OF THE MEMBERS OF THE BOARD (RESOLUTION)

It is proposed to the AGM to discharge the members of the board from liability for the performance of their

duties in the financial year 2018 (ended on 31 December 2018) insofar as the performance of such duties

is disclosed in the annual accounts for 2018 or has otherwise been communicated to the AGM of the

company.

8. APPOINTMENT AND/OR REAPPOINTMENT OF ONE EXECUTIVE DIRECTOR AND FOUR

NON-EXECUTIVE DIRECTORS OF THE BOARD (RESOLUTION)

In line with the company’s rotation schedule, Mr J Bagiński, Mr R Weisz, Mr AJ König and Mr N Senman

shall retire per the end of the AGM. Mr AJ König and Mr N Senman will not be up for reappointment after

their retirement as director of the company as per the end of the AGM. In addition, Mr PJR Driessen has

voluntarily resigned from his position as a non-executive director of the board with effect as per the close

of the 2019 AGM.

Under the company’s articles of association, the board has the right to make binding nominations for open

positions on the board. The binding nature of the nominations may be overridden by a vote of two-thirds

of the votes cast at the AGM if such two-thirds vote constitutes more than half of the issued share capital

of the company.

The following appointments and reappointments are proposed:

(a) Reappointment of Mr J Bagiński as executive director of the board (resolution)

It is proposed to the AGM to reappoint Mr J Bagiński as executive director of the board, with the title

of chief financial officer, in accordance with the nomination by the board, for a term until

immediately after the annual general meeting held in 2022.

The details of Mr J Bagiński (including his shareholding in the capital of the company, if any) are

included in his CV which shall be available on the company’s website as from 30 April 2019, as well as

in this notice convening the 2019 AGM. Mr J Bagiński has performed his tasks satisfactorily and based

upon this performance of tasks since his prior appointment, the board believes that Mr J Bagiński is the

appropriate candidate for this position.

(b) Reappointment of Mr R Weisz as non-executive director of the board and approval of role (resolution)

It is proposed to the AGM to reappoint Mr R Weisz as non-executive director of the board, with the

title of chairman of the board, in accordance with the nomination by the board, for a term until

immediately after the annual general meeting held in 2021. It is furthermore proposed that his dual

role as Chairman of the board and member of the audit committee is approved by the AGM.

The details of Mr R Weisz (including his shareholding in the capital of the company, if any) are included

in his CV which shall be available on the company’s website as from 30 April 2019, as well as in this

notice convening the 2019 AGM. Mr R Weisz has performed his tasks satisfactorily and based upon

this performance of tasks since his prior appointment, the board believes that Mr R Weisz is the

appropriate candidate for this position.


PART III: EXPLANATORY NOTES TO THE AGENDA (continued)

(c) Appointment of Mr P Prinsloo as non-executive director of the board (resolution)

It is proposed to the AGM to appoint Mr P Prinsloo as a non-executive director of the board, in

accordance with the nomination by the board, for a term until immediately after the annual general

meeting held in 2022.

The details of Mr P Prinsloo (including his shareholding in the capital of the company, if any) are

included in his CV which shall be available on the company’s website as from 30 April 2019, as well

as in this notice convening the 2019 AGM. Based upon his long-time experience in all aspects of

international property development, management and finance, the board believes that Mr P Prinsloo

is the appropriate candidate for this position.

(d) Appointment of Mr T de Groot as non-executive director of the board (resolution)

It is proposed to the AGM to appoint Mr T de Groot as a non-executive director of the board, in



The details of Mr T de Groot (including his shareholding in the capital of the company, if any) are


as in this notice convening the 2019 AGM. Based upon his industry experience in retail and a proven

track record in fund raising, portfolio management and optimisation processes, the board believes

that Mr T de Groot is the appropriate candidate for this position.

(e) Appointment of Mr J Templeton as non-executive director of the board (resolution)

It is proposed to the AGM to appoint Mr J Templeton as a non-executive director of the board, in



The details of Mr J Templeton (including his shareholding in the capital of the company, if any) are


as in this notice convening the 2019 AGM. Based upon his experience in retail and industrial

property sectors and extensive real estate experience in a JSE listed REIT for 11 years, the board

believes that Mr J Templeton is the appropriate candidate for this position.

(f) Determine number of directors of the board (resolution)

With due observance of and pursuant to the company’s articles of association, the general meeting

of the company shall determine the number of executive directors and non-executive directors of the

board. It is proposed to the AGM to determine that the number of executive directors and non-

executive directors of the board shall be equal to the number of executive directors and non-

executive directors of the board in function directly after the close of the 2019 AGM.


9. ESTABLISH THE REMUNERATION OF THE NON-EXECUTIVE DIRECTORS (RESOLUTION)

The remuneration of the non-executive directors of the board was established by the general meeting of

the company for the financial year up to and including 2018, with due observance of the remuneration

policy for the board, and should therefore be an agenda item for this year’s AGM.

It is proposed to the AGM to, with due observance of the remuneration policy for the board, establish the

remuneration of the non-executive directors of the board as follows (which proposal is equal to the

remuneration of the non-executive directors of the board for the financial year up to and including 2018):

(i) Chairmanship of the board: €70 000;

(ii) Non-executive board membership (excluding the chairman of the board as mentioned under

(i) above): €50 000;

(iii) Chairmanship of the audit and risk committee: €24 000;

(iv) Membership of the audit and risk committee: €20 000;

(v) Chairmanship of the nomination and remuneration committee: €20 000;

(vi) Membership of the nomination and remuneration committee: €10 000;

(vii) Chairmanship of the investment committee: €20 000;

(viii) Membership of the investment committee: €10 000;

(ix) Chairmanship of the social and ethics committee: €20 000;

(x) Membership of the social and ethics committee: €10 000.

10. AUTHORISATION OF BOARD TO ISSUE ORDINARY SHARES AND/OR GRANT RIGHTS TO

SUBSCRIBE FOR ORDINARY SHARES (RESOLUTION)

The following proposals are made in accordance with article 96, paragraphs 1 and 5, of Book 2 of the

Dutch Civil Code. The authorities are intended to give the board flexibility in financing the company in

the most efficient manner and flexibility in the context of mergers, acquisitions or strategic alliances.

The proposed authorisations, following adoption, replace the current authorisations of the board which

expire at the end of this AGM.

(a) Authorisation of board to issue ordinary shares and/or grant rights to subscribe for ordinary shares

(resolution)

Proposal to authorise the board for a period until the next annual general meeting of the company or

15 months calculated as of the date of the AGM, whichever period is shorter, to issue ordinary shares or

grant rights to acquire ordinary shares in addition to the authority proposed in agenda item 10(b) below:

(i) up to a maximum of 90 794 680 ordinary shares (being 10.94% of the total number of shares issued

as at the date of the notice of AGM and 10% of the total number of EPP shares in issue as at

3 May 2019, following the equity raise undertaken on 24 April 2019) in connection with or on the

occasion of mergers, acquisitions or strategic alliances, (ii) up to a maximum of 18 500 000 ordinary

shares under the EPP Long-Term Incentive Plan, and (iii) as a separate, additional authority, for the

purposes of affording shareholders an election to receive distributions from the company either in the

form of a cash dividend, or in the form of new EPP ordinary shares, credited as fully paid up, all within

the limits laid down in the company’s articles of association and subject at all times to the Rules and


Regulations of the Luxembourg Stock Exchange (“LuxSE”) and the Johannesburg Stock Exchange

(“JSE”) Listings Requirements.

(b) Authorisation of board to issue ordinary shares and/or grant rights to subscribe for ordinary shares

for cash (resolution)

Proposal to authorise the board for a period until the next annual general meeting of the company

or 15 months calculated as of the date of the AGM, whichever period is shorter, to issue ordinary

shares or grant rights to acquire ordinary shares up to a maximum of 45 397 340 ordinary shares for

a capital raise (cash) in connection with or on the occasion of a transaction other than mergers,

acquisitions or strategic alliances, all within the limits laid down in the company’s articles of

association and subject at all times to the Rules and Regulations of the LuxSE and the JSE Listings

Requirements, and on the following terms:

(i) the allotment and issue of shares must be made to persons qualifying as public shareholders

and not to related parties as defined in the JSE Listings Requirements;

(ii) the shares which are the subject of the issue of shares for cash must be of a class already in issue;

(iii) the total aggregate number of shares which may be issued for cash in terms of this authority

may not exceed 45 397 340 shares, (being 5.47% of the total number of shares issued as

at the date of the notice of the AGM and 5% of the total number of EPP shares in issue as

at 3 May 2019, following the equity raise undertaken on 24 April 2019). Accordingly, any

shares issued under this authority prior to this authority lapsing shall be deducted from the

45 397 340 shares the company is authorised to issue in terms of this authority for the

purpose of determining the remaining number of shares that may be issued in terms of this

authority;

(iv) in the event of a sub-division or consolidation prior to this authority lapsing, the existing

authority shall be adjusted accordingly to represent the same allocation ratio;

(v) the maximum discount at which shares may be issued is 10% of the weighted average

traded price on the JSE of those shares over the 30 business days prior to the date that the

price of the issue, while taking into account Dutch law, is agreed between the company and

the party/ies subscribing for the shares; and

(vi) after the company has issued shares for cash which represent, on a cumulative basis within

a financial year, 5% or more of the number of shares in issue prior to that issue, the

company shall publish an announcement containing full details of the issue (including

the number of shares issued, the average discount to the weighted average traded price of

the shares over the 30 days prior to the date that the price of the issue is agreed in writing

between the company and the party/ies subscribing for the shares and an explanation,

including supporting documentation (if any), of the intended use of the funds).

In order to comply with the JSE Listings Requirements, the board shall not make use of this

authorisation if the resolution set out in this agenda item 10(b) will not be adopted with a majority

of at least 75% of the total number of votes cast.



The proposed authorisations, following adoption, replaces the current authorisations of the board which

expire at the end of this AGM.

11. AUTHORISATION OF BOARD TO LIMIT OR EXCLUDE PRE-EMPTION RIGHTS (RESOLUTION)


15 months calculated as of the date of the AGM, whichever period is shorter, to restrict or exclude pre-

emptive rights in relation to the issue of ordinary shares or the granting of rights to acquire ordinary shares.

This proposal is made in accordance with article 96a, paragraph 6, of Book 2 of the Dutch Civil Code. This

authorisation is limited to the number of shares that the board is authorised to issue on the basis of the

authorisations referred to under agenda item 10(a) and 10(b).

If less than 50% of the issued and outstanding capital is represented, this proposal can only be adopted by

a majority of at least two-thirds of the votes cast. If 50% or more of the issued and outstanding capital is

represented, a simple majority is sufficient to adopt this proposal.

The proposed authorisation, following adoption, replaces the current authorisation of the board which

expires at the end of this AGM.

12. AUTHORISATION OF BOARD TO ACQUIRE SHARES (RESOLUTION)


15 months calculated as of the date of the AGM, whichever period is shorter, to acquire shares in the company

(including shares issued as stock dividend), for the maximum number of shares as is permissible under section

2:98 of the Dutch Civil Code, either through purchase on a stock exchange or otherwise provided that:

(a) repurchases of shares may not in the aggregate in any financial year exceed 20% of the company’s

issued ordinary share capital as per the date of the AGM;

(b) the repurchase may not be made at a price greater than 10% above the weighted average of the

market value of the company’s shares for the five business days on the JSE and/or the LuxSE

immediately preceding the date on which the purchase is effected;

(c) any repurchase of the shares in terms of this resolution shall be subject to the LuxSE Rules and

Regulations and the JSE Listings Requirements.

The directors undertake that, having considered the effects of a repurchase of the maximum number of

shares allowed for under this general authority and the price at which the repurchases may take place

pursuant to the repurchase general authority, for a period of 12 (twelve) months after the date of the notice

of AGM, the company and the EPP Group will be able, in the ordinary course of business, to pay its debts;

the consolidated assets of the company and the group, fairly valued in accordance with International

Financial Reporting standards, will exceed the consolidated liabilities of the company and the group; and

the company and the group’s ordinary share capital, reserves and working capital will be adequate for

ordinary business purposes.


The following additional information, some of which may appear elsewhere in the company’s annual

report, is provided in terms of the JSE Listings Requirements for purposes of the resolution:

major beneficial shareholders – page 189

share capital of the company – page 123

Directors’ responsibility statement

The directors, whose names appear on pages 18 and 19 of the company’s annual report, collectively and

individually accept full responsibility for the accuracy of the information pertaining to this resolution and

certify that, to the best of their knowledge and belief, there are no facts that have been omitted which would

make any statement false or misleading, and that all reasonable enquiries to ascertain such facts have been

made and that the resolution contains all information required by legislation and the JSE Listings Requirements.

Material changes

Other than the facts and developments reported on in the company’s annual report there have been no

material changes in the affairs or financial position of the company and its subsidiaries since the date of

signature of the annual accounts for 2018 and up to the date of this notice of AGM.

The purpose of this proposal is to give the board the authorisation to reduce the company’s outstanding

share capital in order to return capital to the company’s shareholders, and/or to cover obligations under

share-based compensation plans or for other purposes. The proposal is made in accordance with article 98,

paragraph 4 of Book 2 of the Dutch Civil Code.

The proposed authorisation, following adoption, replaces the current authorisation of the board which

expires at the end of this AGM.

13. NON-BINDING ADVISORY VOTE ON THE REMUNERATION POLICY FOR THE BOARD (RESOLUTION)

Proposal to vote on the remuneration policy for the board in accordance with the JSE Listings Requirements

in order to allow shareholders to endorse, through a non-binding advisory vote, the company’s

remuneration policy as set out in the company’s annual report.

14. NON-BINDING ADVISORY VOTE ON THE REMUNERATION IMPLEMENTATION REPORT FOR THE BOARD (RESOLUTION)

Proposal to vote on the remuneration implementation report in accordance with the JSE Listings

Requirements in order to allow shareholders to endorse, through a non-binding advisory vote, the

company’s remuneration implementation report as set out in the company’s annual report.

In terms of the JSE Listings Requirements the remuneration policy and the remuneration implementation

report must be tabled every year for separate non-binding advisory votes by shareholders of the company

at the AGM. The vote allows shareholders to express their view on the company’s remuneration policy and

the remuneration implementation report. In the event of 25% or more of shareholders voting against non-

binding resolutions referred to under agenda items 13 and 14, the board is committed to engaging actively

with dissenting shareholders in this regard, in order to address all legitimate and reasonable objections and

concerns.



15. APPOINTMENT OF EXTERNAL AUDITOR FOR THE FINANCIAL YEAR 2019 (RESOLUTION)

It is proposed to the AGM to reappoint Ernst & Young Accountants LLP as external auditor for the audit of

the annual accounts of the company for the financial year 2019 (ending on 31 December 2019), as

nominated by the non-executive directors of the board and upon the recommendation of the audit and

risk committee of the company, and, among other things, due consideration has been given to the

observations of the executive directors of the work of the external auditor.

16. ANY OTHER BUSINESS

17. CLOSING


MEETING DOCUMENTS

The agenda and explanatory notes thereto (as well as the other meeting materials mentioned in the notice) are

available on the company’s website (www.epp-poland.com) from 30 April 2019. These documents are also

available for inspection at the registered office of the company in the Netherlands (Gustav Mahlerplein 28, 1082

MA Amsterdam, the Netherlands) as well as at the offices of the company’s JSE sponsor, Java Capital Trustees

and Sponsors Proprietary Limited (6A Sandown Valley Crescent, Sandton, 2196, Johannesburg, South Africa),

where copies may be obtained free of charge. If you wish to receive copies of the documents, please contact

the company secretary, Rafał Kwiatkowski, tel: +48 22 43 00 300/e-mail: [email protected].

ATTENDANCE INSTRUCTIONSRecord date and relevant register

Under Dutch law and the company’s articles of association, persons entitled to attend and, if applicable, to vote

at the AGM are persons registered as such on Tuesday, 14 May 2019 (“record date”) in one of the sub-registers

designated for that purpose by the board of directors of EPP after all debit and credit entries have been made

on the record date, regardless of whether the shares in the capital of the company (“shares”) are still held by

them at the date of the AGM and in addition have registered themselves in the manner mentioned below. The

sub-registers designated for holders of book-entry shares are the registers administered by Computershare

Investor Services Proprietary Limited in respect of securities traded on the JSE and Clearstream Banking

Luxembourg in respect of shares securities traded on the LuxSE, indicating who is entitled to such shares on the

record date. The register designated for holders of registered shares is the company’s register of shareholders

(as referred to in article 5 of the articles of association) on the record date.

Quorum requirements

In accordance with the articles of association of EPP, the quorum required for the AGM to begin or for any

matter to be considered is as follows:

at least three (3) shareholders entitled to attend and vote and who are present in person or able to participate

in the AGM by electronic communication, or represented by a proxy who is present in person or able to

participate in the meeting by electronic communication, must be present;

the AGM may not begin until sufficient persons are present at the AGM to exercise, in aggregate, at least

twenty-five percent (25%) of the voting rights that are entitled to be exercised in respect of at least one

matter to be decided at the AGM; and

a matter to be decided at the AGM may not begin to be considered unless sufficient persons are present at

the AGM to exercise, in aggregate, at least twenty-five percent (25%) of all of the voting rights that are

entitled to be exercised in respect of that matter at the time the matter is called on the agenda.

Attendance and voting rights in respect of securities traded on the LuxSE

Persons holding securities reflecting the beneficial entitlement to shares that are held in their name by PLC

Nominees (Pty) Ltd (“nominee”) in book-entry form (“securities”), who wish to attend and vote at the AGM,

either in person or by proxy, should instruct his/her relevant bank, brokerage or other intermediary

(“intermediary”) to issue a statement confirming his/her holding of securities (including name, address and the

PART IV: GENERAL INFORMATION


number of securities held by the relevant holder on the record date). Such statements should be submitted

ultimately on Monday, 10 June 2019 by SWIFT message to Clearstream Banking S.A. in Luxembourg or the

company secretary by email at [email protected].

A holder of securities who has submitted a statement to Clearstream Banking Luxembourg in accordance with

the aforementioned will receive an attendance card issued in his/her name (“attendance card”). Such holder

of the securities (or his/her proxy) must hand over the attendance card (together with any relevant letter of

representation or power of attorney) at the registration desk upon arrival at the AGM in order to gain access.

Clearstream Banking Luxembourg shall collect all authority to attend the AGM, registration, proxy and voting

instruction forms, together with any relevant letter of representation or power of attorney, on behalf of the

company, and Clearstream Banking Luxembourg shall submit all such information to the company secretary by

email at [email protected] ultimately on Monday, 10 June 2019.

Attendance and voting rights in respect of securities traded on the JSE

A holder of securities in “own name” may attend the AGM and vote thereat in person by providing a

registration form to his/her Central Securities Depository Participant (“CSDP”), broker or nominee with a copy

to the company’s transfer secretaries or the company secretary, in accordance with the instructions below. Such

holder of securities (or his/her proxy) will receive an attendance card that must be handed over at the registration

desk upon arrival at the AGM in order to gain access.

If a holder of securities in “own name” does not wish to or is unable to attend the AGM, but wishes to be

represented thereat, such holder must complete a proxy form and submit the same in accordance with the

instructions below.

Holders of securities, other than in “own name”, who wish to attend and vote at the AGM (either in person or by

proxy), should instruct his/her CSDP, broker or nominee to provide him/her with the necessary authority (letter of

representation or power of attorney and a statement confirming his/her holding of securities (including name,

address and the number of securities held by the relevant holder on the record date)), to attend the AGM in person,

in the manner stipulated in terms of the agreement governing his/her relationship with the CSDP, broker or

nominee. The relevant authority to attend the AGM should be registered in the manner mentioned below and is to

be used to qualify for attendance to the AGM and must be produced, with identification, at the registration desk

upon arrival at the AGM. Forms of identification include valid identity documents, driver’s licences and passports.

Holders of securities, other than in “own name”, who do not wish to or are unable to attend the AGM, but

wish to vote thereat, should provide his/her CSDP, broker or nominee with his/her voting instructions in the

manner stipulated in the agreement governing his/her relationship with the CSDP, broker or nominee. These

instructions must be provided to the CSDP, broker or nominee by the cut-off time and date advised by the CSDP,

broker or nominee for instructions of this nature.

All authority to attend the AGM, registration, proxy and voting instruction forms, together with any relevant

letter of representation or power of attorney, should be lodged at or posted to the company’s transfer


PART IV: GENERAL INFORMATION (continued)

secretaries, ultimately on Monday, 10 June 2019. The address details for the transfer secretaries are as set

out below:

Computershare Investor Services Proprietary Limited

15 Biermann Avenue

Rosebank Towers

Rosebank, 2196

Johannesburg

South Africa

(PO Box 61051, Marshalltown 2107)

[email protected]

The company’s transfer secretaries shall collect all authority to attend the AGM, registration, proxy and voting


company, and the company’s transfer secretaries shall submit all such information to the company secretary by


In the case of any doubt relating to the authorisation of a holder of securities to participate in the AGM and

admission thereto, the decision of the chairman of the AGM will be decisive.

Registration

Registration will take place at the registration desk at the venue between 14:30 CET and the commencement

of the AGM at 15:00 CET. It is not possible to register after this time. Attendees may be asked to produce proof

of identity (together with any relevant letter of representation or power of attorney) and may be declined access

in case such proof of identity (together with any relevant letter of representation or power of attorney) is not

produced. Forms of identification include valid identity documents, driver’s licences and passports. Each person

entitled to vote or his proxy shall sign the attendance list.

Electronic participation

The company has made provision for EPP shareholders or their proxies to participate electronically in the AGM by

way of video conferencing. EPP shareholders or their proxies who wish to participate electronically in the AGM will

be required to advise the company thereof ultimately on Friday, 7 June 2019, by submitting to the company

secretary by email at [email protected], relevant contact details, including an email address,

cellular number and landline as well as full details of the EPP shareholder’s title to securities issued by the company

and proof of identity and written confirmation of the EPP shareholder’s title to dematerialised shares. Upon receipt

of the required information, the EPP shareholder concerned will be provided with a secure code and instructions

to access the electronic communication during the AGM. EPP shareholders must note that access to the electronic

communication will be at the expense of the EPP shareholders who wish to utilise the facility.

EPP shareholders and their proxies participating in the video conference call will not be able to cast their votes

at the AGM through this medium. EPP shareholders who wish to vote at the AGM should submit a proxy in the

manner set out above.


PART V: INSTRUCTIONS AND DOCUMENTS FOR PARTICIPATION AND VOTING AT THE 2019 ANNUAL GENERAL MEETING

EPP N.V.

(Incorporated in The Netherlands)

(Company number 64965945)

JSE share code: EPP

ISIN: NL0011983374

LEI code: 7245003P7O9N5BN8C098

(“EPP” or “company”)

VOTING INSTRUCTION FORM

Proxy and voting instruction form for the 2019 annual general meeting of shareholders of EPP N.V. on Tuesday,

11 June 2019 at 15:00 CET at Tribes at Gustav Mahlerplein 28, 1082 MA Amsterdam, the Netherlands.

The undersigned:

hereby grants a proxy to:

the chairman, and failing him, any other director of EPP

(please indicate your choice)

in respect of EPP shares

To be present at the abovementioned annual general meeting of shareholders on behalf of the undersigned, to

sign the attendance registration forms, participate in deliberations, speak, exercise voting rights in respect of the

shares in EPP to which the undersigned’s securities relate in accordance with the instructions below, and do

whatever the proxy holder may deem necessary, all with the authority of substitution. This proxy is governed by

the laws of the Netherlands.

Voting instruction and signature page to be completed and signed on next page.


PART V: INSTRUCTIONS AND DOCUMENTS FOR PARTICIPATION AND VOTING AT THE 2019 ANNUAL GENERAL MEETING (continued)

Voting instruction (per agenda item) Number of shares

In favour Against Abstain

Agenda item

4. Adoption of annual accounts for the financial year 2018

7. Discharge of the current members of the board

8. (a) Reappointment of Mr J Bagiński as executive director

of the board

(b) Reappointment of Mr R Weisz as non-executive

director of the board and approval of role

(c) Appointment of Mr P Prinsloo as non-executive

director of the board

(d) Appointment of Mr T de Groot as non-executive


(e) Appointment of Mr J Templeton as non-executive


(f) Determine number of directors of the board

9. Establish the remuneration of the non-executive directors

10. (a) Authorisation of board to issue ordinary shares and/or

grant rights to subscribe for ordinary shares

(b) Authorisation of board to issue ordinary shares and/or

grant rights to subscribe for ordinary shares for cash

11. Authorisation of board to limit or exclude pre-emption

rights

12. Authorisation of board to acquire shares

13. Non-binding advisory vote on the remuneration policy for

the board

14. Non-binding advisory vote on the remuneration

implementation report for the financial year 2018

15. Appointment of external auditor for the financial year 2019

Signed at on 2019

Signature(s)

Assisted by (where applicable) (state capacity and full name)


NOTES

Record date and relevant register

Under Dutch law and the company’s articles of association, persons entitled to attend and, if applicable, to vote

at the AGM are persons registered as such on Tuesday, 14 May 2019 (“record date”) in one of the sub-registers

designated for that purpose by the board of directors of EPP after all debit and credit entries have been made

on the record date, regardless of whether the shares in the capital of the company (“shares”) are still held by

them at the date of the AGM and in addition have registered themselves in the manner mentioned below.

The sub-registers designated for holders of book-entry shares are the registers administered by Computershare

Investor Services Proprietary Limited in respect of securities traded on the JSE and Clearstream Banking

Luxembourg in respect of shares securities traded on the LuxSE, indicating who is entitled to such shares on the

record date. The register designated for holders of registered shares is the company’s register of shareholders

(as referred to in article 5 of the articles of association) on the record date.

Quorum requirements

In accordance with the articles of association of EPP, the quorum required for the AGM to begin or for any

matter to be considered is as follows:

at least three (3) shareholders entitled to attend and vote and who are present in person or able to participate

in the AGM by electronic communication, or represented by a proxy who is present in person or able to

participate in the meeting by electronic communication, must be present;

the AGM may not begin until sufficient persons are present at the AGM to exercise, in aggregate, at least

twenty-five percent (25%) of the voting rights that are entitled to be exercised in respect of at least one

matter to be decided at the AGM; and

a matter to be decided at the AGM may not begin to be considered unless sufficient persons are present at

the AGM to exercise, in aggregate, at least twenty-five percent (25%) of all of the voting rights that are

entitled to be exercised in respect of that matter at the time the matter is called on the agenda.

Attendance and voting rights in respect of securities traded on the LuxSE

Persons holding securities reflecting the beneficial entitlement to shares that are held in their name by PLC

Nominees (Pty) Ltd (“nominee”) in book-entry form (“securities”), who wish to attend and vote at the AGM,

either in person or by proxy, should instruct his/her relevant bank, brokerage or other intermediary

(“intermediary”) to issue a statement confirming his/her holding of securities (including name, address and the

number of securities held by the relevant holder on the record date). Such statements should be submitted

ultimately on Monday, 10 June 2019 by SWIFT message to Clearstream Banking S.A. in Luxembourg or the

company secretary by email at [email protected].

A holder of securities who has submitted a statement to Clearstream Banking Luxembourg in accordance with

the aforementioned will receive an attendance card issued in his/her name (“attendance card”). Such holder

of the securities (or his/her proxy) must hand over the attendance card (together with any relevant letter of

representation or power of attorney) at the registration desk upon arrival at the AGM in order to gain access.


PART V: INSTRUCTIONS AND DOCUMENTS FOR PARTICIPATION AND VOTING AT THE 2019 ANNUAL GENERAL MEETING (continued)

Clearstream Banking Luxembourg shall collect all authority to attend the AGM, registration, proxy and voting


company, and Clearstream Banking Luxembourg shall submit all such information to the company secretary by


Attendance and voting rights in respect of securities traded on the JSE

A holder of securities in “own name” may attend the AGM and vote thereat in person by providing a

registration form to his/her Central Securities Depository Participant (“CSDP”), broker or nominee with a copy

to the company’s transfer secretaries or the company secretary, in accordance with the instructions below. Such

holder of securities (or his/her proxy) will receive an attendance card that must be handed over at the registration

desk upon arrival at the AGM in order to gain access.

If a holder of securities in “own name” does not wish to or is unable to attend the AGM, but wishes to be

represented thereat, such holder must complete a proxy form and submit the same in accordance with the

instructions below.

Holders of securities, other than in “own name”, who wish to attend and vote at the AGM (either in person or

by proxy), should instruct his/her CSDP, broker or nominee to provide him/her with the necessary authority (letter

of representation or power of attorney and a statement confirming his/her holding of securities (including name,

address and the number of securities held by the relevant holder on the record date)), to attend the AGM in

person, in the manner stipulated in terms of the agreement governing his/her relationship with the CSDP, broker

or nominee. The relevant authority to attend the AGM should be registered in the manner mentioned below

and is to be used to qualify for attendance to the AGM and must be produced, with identification, at the

registration desk upon arrival at the AGM. Forms of identification include valid identity documents, driver’s

licences and passports.

Holders of securities, other than in “own name”, who do not wish to or are unable to attend the AGM, but

wish to vote thereat, should provide his/her CSDP, broker or nominee with his/her voting instructions in the

manner stipulated in the agreement governing his/her relationship with the CSDP, broker or nominee. These

instructions must be provided to the CSDP, broker or nominee by the cut-off time and date advised by the CSDP,

broker or nominee for instructions of this nature.

All authority to attend the AGM, registration, proxy and voting instruction forms, together with any relevant

letter of representation or power of attorney, should be lodged at or posted to the company’s transfer

secretaries, ultimately on Monday, 10 June 2019. The address details for the transfer secretaries are as set out

below:


Computershare Investor Services Proprietary Limited

15 Biermann Avenue

Rosebank Towers

Rosebank, 2196

Johannesburg

South Africa

(PO Box 61051, Marshalltown 2107)

[email protected]

The company’s transfer secretaries shall collect all authority to attend the AGM, registration, proxy and voting


company, and the company’s transfer secretaries shall submit all such information to the company secretary by


In the case of any doubt relating to the authorisation of a holder of securities to participate in the AGM and

admission thereto, the decision of the chairman of the AGM will be decisive.

Registration

Registration will take place at the registration desk at the venue between 14:30 CET and the commencement

of the AGM at 15:00 CET. It is not possible to register after this time. Attendees may be asked to produce proof

of identity (together with any relevant letter of representation or power of attorney) and may be declined access

in case such proof of identity (together with any relevant letter of representation or power of attorney) is not

produced. Forms of identification include valid identity documents, driver’s licences and passports. Each person

entitled to vote or his proxy shall sign the attendance list.

Electronic participation

The company has made provision for EPP shareholders or their proxies to participate electronically in the AGM by

way of video conferencing. EPP shareholders or their proxies who wish to participate electronically in the AGM will

be required to advise the company ultimately on Friday, 7 June 2019, by submitting to the company secretary by

email at [email protected], relevant contact details, including an email address, cellular number

and landline as well as full details of the EPP shareholder’s title to securities issued by the company and proof of

identity and written confirmation of the EPP shareholder’s title to dematerialised shares. Upon receipt of the

required information, the EPP shareholder concerned will be provided with a secure code and instructions to access

the electronic communication during the AGM. EPP shareholders must note that access to the electronic

communication will be at the expense of the EPP shareholders who wish to utilise the facility.

EPP shareholders and their proxies participating in the video conference call will not be able to cast their votes

at the AGM through this medium. EPP shareholders who wish to vote at the AGM should submit a proxy in the

manner set out above.


OTHER: ABRIDGED CV OF EACH OF THE PROPOSED MEMBERS OF THE BOARD

Jacek Bagiński (to be appointed executive director) (male, 49, Polish)Jacek has over 22 years’ senior financial executive experience in diverse businesses operating across Poland and CEE countries. He was a member of the management board and CFO of Empik Media & Fashion S.A., one of the largest holding companies controlling a group of retail, e-commerce and service operations. Prior to this he has been a member of a number of management boards and CFO of companies listed on the Warsaw Stock Exchange, and also served in senior executive positions in multinational corporations including PepsiCo and BP/Amoco. Jacek was responsible for business development including M&As, financing and taxation as well as financial planning and controlling. Jacek obtained a degree in Corporate Financial Management from Warsaw School of Economics, and from the University of North Texas, International Oil and Gas Accounting and Financial Management School. Since 2017 he has been the chief financial officer of EPP N.V. Jacek holds 900 000 shares in the company.

Robert Weisz (independent non-executive director) (male, 69, Dutch)Robert serves as Partner and Managing Director of Timevest, a European commercial property investment company. Its portfolio includes commercial retail locations and residential properties in Germany and the Netherlands. Previously, Robert was Partner and Managing Director of DBN Group, a commercial property company operating in the Netherlands and the US. He has been visiting professor at the Technical University of Eindhoven’s Urban Planning Design group and was formerly a guest lecturer in property finance and valuation at the Amsterdam School of Real Estate and University of Groningen. Robert is a co-author of three textbooks on property investment. He holds an MBA, and is a CA, fellow of the Royal Institute of Chartered Surveyors RICS. Robert was appointed to the board of directors of the company effective 12 August 2016. His current term expires in 2019. Robert holds 34 000 shares in the capital of the company.

Pieter Prinsloo (to be appointed non-executive director) (male, 53, South African)Pieter serves as CEO of Redefine Europe B.V., a subsidiary of Redefine Properties Ltd. Previously Pieter held the position of CEO of Hyprop Investments Ltd in South Africa, which brought him extensive real estate experience in a JSE listed REIT for more than 14 years. Earlier, Pieter was involved in private property development and management for New Africa Developments, and gained

extensive know-how in commercial and structured property finance with ABSA Bank and Standard Bank in South Africa. Pieter holds a Bachelor of Science (Quantity Surveyor) cum laude degree of the University of Pretoria and has received awards from the Association of South African Quantity Surveyors. Pieter does not hold shares in the capital of the company.

Taco Tammo Johannes de Groot (to be appointed independent non-executive director) (male, 56, Dutch)Taco holds the position of CEO/Chairman of the board of Vastned Retail N.V., a listed investment fund (NYSE Euronext Amsterdam AMX) with assets in the Netherlands, Belgium, France and Spain. Here he introduced and implemented to the company a new strategy attracting large institutional investors. Earlier, Taco was a founding partner/non-executive member of the board of MSeven Real Estate in London, a specialised fund and asset management organisation focusing on the UK. Prior to that, Taco was a founding partner of GPT/Halverton LLP in London, a fund and asset management company active in Europe, and founded Rubens Capital Partners with a portfolio of residential and retail assets for family offices and wealthy private investors. Taco obtained a master degree in Dutch Law at Utrecht University and a master degree in Real Estate (MRE) at Amsterdam University, together with various INSEAD and Rotterdam University programs. Taco holds the position of non-executive director at Tritax EuroBox Plc, listed on the London Stock Exchange, and is a visiting lecturer at ASRE/University Amsterdam and Hogeschool Rotterdam. Taco is a member (chartered surveyor) and assessor of RICS Netherlands. Taco does not hold shares in the capital of the company.

James William Andrew Templeton (to be appointed non-executive director) (male, 46, South African) James serves as the CEO of Castleview Property Fund Limited, a fund focussing on retail property investments in South Africa and is listed on the JSE. Previously James was the chief executive officer of Emira Property Fund Limited which brought him extensive real estate experience in a JSE listed REIT for 11 years across retail, offices and industrial property sectors. James was also employed as an equities analyst at Barnard Jacobs Mellet, a prominent South African stockbroker from 1996 to 2003 where he covered various sectors including real estate. James holds a Bachelor of Commerce (Honours) from the University of KwaZulu-Natal and is a CFA charterholder. James holds no shares in the capital of the company.


EPP N.V. (Incorporated in The Netherlands) (Company number 64965945) JSE share code: EPP

ISIN: NL0011983374 LEI code: 7245003P7O9N5BN8C098 Website: www.epp-poland.com (“EPP” or “company”)

SUMMARISED CONSOLIDATED FINANCIAL RESULTS FOR THE 12 MONTHS ENDED 31 DECEMBER 2018

FINANCIAL HIGHLIGHTS

Net operating income up 38% to

€143 million (2017: €103.3 million)

Distributable earnings up 26% to

€96 million (2017: €76.6 million)

Distributable income per share

up 6.7% to €11.60 cents

(2017: €10.87 cents)

Investment properties up 33% to

€2.2 billion (2017: €1.65 billion)

Successfully executed acquisitions

of over €400 million

Total asset value up 27% to

€2.5 billion (2017: €1.95 billion)

Net asset value excluding

deferred tax (“NAV”) up 20% to

€1.18 billion (2017: €928 million)

NAV per share up 2.4% to €1.35

(2017: €1.32)

Loan-to-value (“LTV”) of 51.9%

(2017: 47.4%)

Cost of debt was 2.33% (2017:

2.14%) with a weighted maturity

of 3.9 years

OPERATIONAL HIGHLIGHTS

Total retail gross lettable area

(“GLA”) increased by 54%

to 684 000 m2

(2017: 444 350 m2)

Vacancies improved to 0.4%

(2017: 1.4%)

Footfall increased to over

100 million

Footfall and sales up +1%

Like-for-like NRI

growth 4.2%

Successfully acquired five

quality retail assets totalling

240 000 m2 GLA

RETAIL

21 EPP Summarised consolidated financial results for the 12 months ended 31 December 2018

CONSOLIDATED STATEMENT OF PROFIT OR LOSS

Audited2018€’000

Audited

2017

€’000

Rental income and recoveries* 157 506 151 706 Straight-line rental income – 504 Service charge income 39 610 –Property operating expenses (54 442) (48 955)

Net property income 142 674 103 255 Other income 378 713 Other expenses (1 414) (1 348)Administrative expenses (15 821) (15 586)

Net operating profit 125 817 87 034 Net gain from fair value adjustment on investment properties 17 473 75 305

Profit from operations 143 290 162 339 Finance income 4 865 7 419 Finance costs (39 758) (23 085)Foreign exchange gains/(losses) 5 814 (1 827)Participation in profits of joint ventures 23 381 16 059

Profit before taxation 137 592 160 905 Current income tax (8 914) (4 873)Deferred tax (4 513) (27 684)

Profit for the period 124 165 128 348 Attributable to EPP shareholders 124 165 128 348 Earnings per share:Basic and diluted earnings, on profit for the period (€ cents) 15.4 19.1

* Rental income includes €1 950 000 of straight-line rental income accrual in 2018.

22EPP Summarised consolidated financial results for the 12 months ended 31 December 2018

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME


Audited

2017

€’000

Profit for the period 124 165 128 348 Foreign currency translation reserve joint ventures (2 128) 3 553 Foreign currency translation reserve subsidiaries (3 681) (3 403)

Other comprehensive income, net of tax, to be reclassified to profit or loss in subsequent periods (5 809) 150

Total comprehensive income for the period, net of tax 118 356 128 498

Total comprehensive income attributable to the owners of EPP for the period, net of tax 118 356 128 498


CONSOLIDATED STATEMENT OF FINANCIAL POSITION


Audited

2017

€’000

ASSETSNon-current assets 2 360 360 1 797 545Investment property 2 201 737 1 655 572 Investment in joint ventures 138 698 116 009 Tangible assets – 47 Loans receivable 16 202 25 917 Other non-current assets 1 815 – Deferred tax asset 1 908 –

Current assets 111 355 154 569 Inventory 250 525 Tax receivable 589 209 Trade and other receivables 16 970 26 723 Loans receivable 5 635 3 955 Restricted cash 27 571 23 613 Cash and cash equivalents 60 340 99 544

Total assets 2 471 715 1 952 114

EQUITY AND LIABILITIES Equity 1 022 688 833 821 Share capital 672 292 571 026 Share premium 203 318 147 534 Treasury shares – (783)Accumulated profit 147 250 111 419 Share-based payment reserve 5 921 4 909 Foreign currency translation reserve (6 093) (284)

Non-current liabilities 1 387 212 941 710 Bank borrowings 1 273 767 831 183 Loans payable – 1 741 Other liabilities 16 335 15 033 Deferred tax liability 97 110 93 753

Current liabilities 61 815 176 583 Bank borrowings 30 575 117 155 Loans payable 92 18 019 Tax payables 1 960 879 Trade and other payables 29 188 40 353 Provisions – 177

Total liabilities 1 449 027 1 118 293

Total equity and liabilities 2 471 715 1 952 114


CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Share

capital

€’000

Share

premium/

capital

reserves

€’000

Treasury

shares

€’000

Accumu-

lated

profit/

(loss)

€’000

Foreign

currency

translation

reserve

€’000

Share-

based

payment

reserve

€’000

Total

equity

attribu-

table

to the

owners

of EPP

€’000

Balance as at 31 December 2016 (audited) 474 702 95 095 – 38 075 (434) – 607 438 Profit for the year – – – 128 348 – – 128 348 Other comprehensive income – – – – (3 403) – (3 403)Other comprehensive income

from joint ventures – – – – 3 553 – 3 553

Total comprehensive income – – – 128 348 150 – 128 498

Issue of ordinary shares 96 324 56 650 – – – – 152 974 Transaction cost related to

issuance of shares – (4 211) – – – – (4 211)Acquisition of own shares – – (1 810) – – – (1 810)Recognition of share-based

payments – – – – – 5 936 5 936 Transfer of shares – – 1 027 – – (1 027) –Dividend paid – – – (55 004) – – (55 004)

Balance as at 31 December 2017 (audited) 571 026 147 534 (783) 111 419 (284) 4 909 833 821

Profit for the year – – – 124 165 – – 124 165 Other comprehensive income – – – – (3 681) – (3 681)Other comprehensive income

from joint ventures – – – – (2 128) – (2 128)

Total comprehensive income – – – 124 165 (5 809) – 118 356

Issue of ordinary shares

(note 11) 101 266 56 234 – – – – 157 500 Transaction cost related to

issuance of shares (note 11) – (450) – – – – (450)Acquisition of own shares – – (2 312) – – – (2 312)Transfer of own shares (note 13) – – 3 095 – – (3 095) – Share-based payments

expenses (note 13) – – – – – 4 107 4 107 Dividend provided for or paid

(note 12) – – – (88 334) – – (88 334)

Balance as at 31 December 2018 (audited) 672 292 203 318 – 147 250 (6 093) 5 921 1 022 688


CONSOLIDATED STATEMENT OF CASH FLOW



Profit before tax 137 592 160 905 Adjustments:Amortisation/depreciation of fixed assets – 39 Straight line adjustment (1 950) (504)Share-based payment reserve 1 012 4 909 Valuation gain on investment property (17 473) (71 721)Share of profit in joint ventures (23 381) (16 059)Finance income (4 865) (7 419)Finance expense 39 802 23 085

Working capital adjustments:Increase in rent and other receivables 8 166 10 043 Increase in prepayments and accrued income (1 587) (3 634)Increase in inventory and other assets 275 (451)Increase of restricted cash (3 958) (1 768)Increase in trade, other payables and accruals (12 803) 18 677Movements in tenants’ deposits 916 2 547

Cash generated from operations 121 746 118 649 Tax paid (8 212) (4 167)

Net cash generated from operating activities 113 534 114 482

Investing activitiesPurchase of investment property (498 643) (321 849)Investments in joint ventures – (19 317)Capital expenditure on completed investment property (24 745) (44 724)Disposal of investment property – 155 551 Loans granted (1 273) (46 174)Loans repaid 11 396 7 596Interest received 1 361 188 Profit share – 5 795

Net cash utilised in investing activities (511 904) (262 934)

Financing activitiesProceeds from borrowings 731 952 311 562 Repayment of borrowings (379 013) (144 778)Borrowing arrangement fees (2 598) –Proceeds from issue of share capital 157 500 152 975 Transaction costs on issue of shares (450) (4 211)Acquisition of own shares (2 312) (783)Transfer of own shares 3 095 –Dividends paid (88 334) (66 923)Loans repaid (19 633) –Interest paid (34 295) (18 571)Interest received – 198

Net cash generated from financing activities 365 912 229 469

Net increase in cash and cash equivalents (32 458) 81 017

Cash and cash equivalents at the beginning of the period 99 544 21 921 Effect of foreign exchange fluctuations (6 746) (3 394)

Cash and cash equivalents at the end of the period 60 340 99 544


NAV PER SHARE


Audited

2017

€’000

NAV attributable to ordinary equity holders of the parent

(excluding deferred tax) 1 117 891 927 574 Net tangible asset value (excluding deferred tax) 1 117 891 927 574 Number of ordinary shares at the reporting date (thousands) 829 990 704 970 NAV per share (excluding deferred tax) (€) 1.35 1.32 Net tangible asset value per share (€) 1.35 1.32


COMMENTARY

1. REPORTING ENTITY

EPP is a Dutch-based real estate company that follows the REIT formula and is one of the leading owners

of retail space in Poland. The company’s portfolio is complemented by high quality offices located in

regional cities across Poland. As of 31 December 2018 the company manages a portfolio of 19 retail centres

and six offices located in the majority of regional cities in Poland. In addition to these income generating

properties, EPP also has two developments in the capital – Warsaw, namely Towarowa 22 and Młociny

(expected to open in Q2 2019). By the end of 2020 EPP expects to own 28 shopping centres post the

conclusion of the M1 transaction.

As of 31 December 2018, EPP owned and operated 684 000 m² of retail GLA and 147 000 m² of office

GLA, excluding joint ventures. The investment portfolio has a diversified tenant base of leading retailers

with international brands in the retail properties, and primarily blue-chip companies in the office properties.

The company‘s operations are fully internalised and all asset management and property management is

done in-house.

EPP’s shares are listed on the official list and admitted to trading on the Euro MTF market of the

Luxembourg Stock Exchange (“LuxSE”) and on the Main board of the JSE Limited (“JSE”) in the Real Estate

Holdings and Development Sector. The company has primary listings on both the LuxSE and the JSE.

The company’s strategy is to own large dominant shopping centres, located in strong catchment areas and

which have asset management opportunities in terms of extensions across Poland. EPP intends continuing

to divest from offices and recycle the proceeds to fund purchases of retail assets.

2. BASIS OF PREPARATION

The summarised consolidated financial statements for the year ended 31 December 2018 have been

prepared by the management of the company in accordance with the measurement and recognition

requirements of International Financial Reporting Standards (“IFRS”) as issued by the International

Accounting Standards board (“IASB”), the requirements of IAS 34: Interim Financial Reporting, the JSE

Listings Requirements and in accordance with Dutch law and the LuxSE rules and regulations.

The group’s financial statements were prepared on a historical cost basis, except for investment properties

measured at fair value and bank loans measured at amortised cost. The consolidated financial statements

are presented in Euro (€) and all values are rounded to the nearest thousand (€’000), except where

otherwise indicated.


COMMENTARY (continued)

These summarised consolidated financial statements are extracted from the audited consolidated financial

statements, but are not themselves audited. The directors take full responsibility for the preparation of the

summarised consolidated financial statements and for ensuring that the financial information has been

correctly extracted from the underlying audited consolidated financial statements. The auditors, Ernst &

Young, have issued their unmodified opinion on the audited consolidated financial statements for the year

ended 31 December 2018 and a copy of the audit opinion, together with the underlying audited

consolidated financial statements are available for inspection at the company’s registered office.

The company’s integrated report containing the audited consolidated financial statements for the

year ended 31 December 2018 has been published and is available on the company’s website at

https://www.epp-poland.com/s,155, investor-relations.html. EPP’s notice of annual general meeting will

be published in due course and an announcement will be released once published.

3. SIGNIFICANT ACCOUNTING POLICIES – IMPACT OF NEW STANDARDS

IFRS 9: Financial Instruments

The group has adopted IFRS 9: Financial Instruments issued in July 2014 with a date of initial application

of 1 January 2018. The requirements of IFRS 9 represent a significant change from IAS 39: Financial

Instruments: Recognition and Measurement; however, the impact on the group results is not material. In

accordance with the transitional provisions in IFRS 9, comparative figures have not been restated.

The nature and effects of the key changes to the group’s accounting policies resulting from its adoption of

IFRS 9 are summarised below.

Classification of financial assets and financial liabilities

IFRS 9 contains three principal classification categories for financial assets: measured at amortised cost, fair

value through other comprehensive income (“FVOCI”) and fair value through profit and loss (“FVTPL”).

The classification of financial assets under IFRS 9 is generally based on the business model in which a

financial asset is managed and its contractual cash flow characteristics. IFRS 9 eliminates the previous IAS

39 categories of held to maturity, loans and receivables and available for sale. Under IFRS 9, derivatives

embedded in contracts where the host is a financial asset in the scope of the standard are never separated.

Instead, the hybrid financial instrument as a whole is assessed for classification.

Impairment of financial assets

IFRS 9 replaces the “incurred loss” model in IAS 39 with an expected credit loss (“ECL”) model. The new

impairment model applies to financial assets measured at amortised cost, contract assets and debt

investments at FVOCI. Under IFRS 9, credit losses are recognised earlier than under IAS 39.

Classification of financial assets and financial liabilities on the date of initial application of IFRS 9

The following table shows the original measurement categories under IAS 39 and the new measurement

categories under IFRS 9 for each class of the group’s financial assets as at 1 January 2018.


Original classification

under IAS 39

New classification

under IFRS 9

Original carrying amount

under IAS 39

€’000

New carrying amount

under IFRS 9€’000

Financial assetsLoans receivable Loans and receivables Financial assets at

FVTPL 29 872 29 872Long-term loans granted to

JV (presented under

Investments in joint ventures)

Loans and receivables

(presented under

Investment in joint

ventures)

Financial assets at

amortised cost

21 780 21 780Restricted cash Loans and receivables Financial assets at

amortised cost 23 613 23 613Cash and cash equivalents Loans and receivables Financial assets at

amortised cost 99 544 99 544Trade and other receivables Loans and receivables Financial assets at

amortised cost 11 692 11 692

Total financial assets 186 504 186 504

Trade and other receivables that were classified as loans and receivables under IAS 39 are now classified as

financial assets at amortised cost. The impact of IFRS 9 expected credit loss allowance compared to the loss

allowance recognised based on IAS 39 was not material.

The loans receivable were classified as financial assets at FVTPL as a result of the business model assessment

and the fact that the SPPI test is not met. Description of loans receivable is presented in note 8 of the

audited financial statements.

The long-term loans granted to JVs (presented under Investments in joint ventures) were classified as

financial assets at amortised cost as a result of business model assessment and the fact that the SPPI test

is met. We assessed the credit risk of JVs, taking into consideration the net assets and liquidity situation

and assessed the carrying amount approximates the fair value.

There was no material impact on classification of financial liabilities.

IFRS 15: Revenue from Contracts with Customers

The group performed an assessment of IFRS 15 and concluded that IFRS 15 will be implemented using the

modified retrospective approach. The group concluded that IFRS 15 does not have a significant impact on

the group’s consolidated financial statements and accounting policies at the implementation date. The only

impact would be that service charged income is separately presented on the consolidated statement of

profit or loss; in the prior period this was included in rental income. Note that IFRS 15 did not affect the

recognition of lease income as this is still dealt with under IAS 17: Leases.


IFRS 16: Leases

IFRS 16: Leases is effective for annual periods beginning on or after 1 January 2019. There is no impact on

the recognition of leases in situations where EPP is the lessor.

In the management board’s opinion, the new standard will have an effect on the accounting policies

applied in situations where the group is the lessee. Under IFRS 16, all lease contracts, including those

currently classified as operating leases, will be recognised as a right-of-use asset and as a lease liability in

the statement of financial position.

The group will implement the standard using the modified retrospective method, with the cumulative effect

of the first application of IFRS 16 recognised as at 1 January 2019, without restating the comparative data.

On transition to IFRS 16 the group elected to apply the practical expedient to grandfather the assessment

of which transaction was originally classified as a lease. It applied IFRS 16 only to those contracts which

were previously classified as leases under IAS 17.

For leases previously classified as operating leases the group will recognise a lease liability, measured at the

present value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate

at the date of initial application. The group will recognise the respective right-of-use asset at an amount

equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments recognised

immediately before the date of initial application.

For leases previously classified as finance leases the carrying amount of the right-of-use asset and the lease

liability at the date of initial application shall be the carrying amount of the lease asset and lease liability

immediately before that date measured applying IAS 17.

The group has analysed all concluded agreements to identify those to which the new recognition method

applies following the implementation of IFRS 16. The group identified the following types of agreements

which were recognised as operating leases under IAS 17:

Office rental agreement.

Cars and IT equipment lease agreements.

Perpetual usufruct rights to land.

Land lease agreement.

The key management’s estimation relates to the discounting rates (incremental borrowing rate) used in

measuring the lease liabilities.



On a transition to IFRS 16 the company will recognise an additional €33.4 million of right-of-use assets

(added to the value of investment property) and €33.4 million of lease liabilities, recognising the difference

in retained earnings for each group of the lease contracts:

Value of right-to-use

asset 1 January

2019€’000

Value of financial liability

1 January 2019€’000

Office rental agreement 78 78Cars and IT equipment lease agreements 746 746Perpetual usufruct rights to land 30 426 30 426Land lease agreement 2 119 2 119

Total 33 369 33 369

4. FINANCIAL RESULTS

The net profit for the 12 months ended 31 December 2018 amounted to €124.2 million and distributable

income totalled €96.3 million. Total NAV excluding deferred tax amounted to €1 118 million equating to

a NAV per share of €1.35. The net LTV ratio as of 31 December 2018 was 51.9% with an average cost

of debt of 2.33%.

Acquisition of M1 portfolio

In October 2017, EPP reached an agreement to acquire a portfolio of retail properties for a combined

consideration that values the portfolio at €692.1 million. During the first half of 2018, the group

successfully purchased the first tranche of the M1 portfolio consisting of four properties for a consideration

of €359 million.

Acquisition of the remaining properties is conditional upon fulfilment of outstanding conditions precedent

and is scheduled as follows:

the second tranche portfolio comprising a further six properties with an aggregate GLA of 184 000 m2,

an aggregate value of €222.5 million and an aggregate purchase consideration of €75.2 million with the

expected completion date by June 2019; and

the third tranche portfolio comprising a further two properties with an aggregate GLA of 68 100 m2,

an aggregate value of €110.9 million and an aggregate purchase consideration of €44.1 million with the

expected completion date by June 2020.

The delay in completing the second and third tranche acquisitions is to enable the seller to implement

various contracted asset management initiatives (including certain lease renewals or renegotiations) to align

those acquisitions with EPP’s investment requirements and strategy.


Acquisition of Symetris Business Park phase II

On 27 July 2018 EPP, concluded the acquisition of the second phase of Symetris Business Park as part of

the ROFO agreement.

Acquisition of King Cross Marcelin Shopping Centre in Poznań King Cross Marcelin is the major shopping destination in western Poznań with an immediate catchment of

over 202 000 people living within a 15 minute drive of the centre. The local average per capita purchasing

power is close to €9 000 (37% above the national average). An additional 459 000 people live within a

16 to 30 minute drive.

King Cross Marcelin opened in March 2005 and occupies a prominent and highly visible location on

Bukowska Street, one of the important roads leading west towards Poznań – Ławica Airport. King Cross

Marcelin is situated at the fringe of the Poznań Grunwald and Ławica districts. Approximately 95% of King

Cross Marcelin is let to popular international and national retailers including Auchan, Media Markt, H&M,

Intersport, Jysk, Reserved, New Yorker, CCC, Smyk, Empik Pepco, Rossmann, Super-Pharm and McDonalds.

New equity raise

In July 2018, EPP successfully placed 36 436 916 new shares with Redefine Properties Limited at a price of

€1.24 (R19.26) per share to partially fund the acquisition of the King Cross Marcelin Shopping Centre.

5. SEGMENT INFORMATION

The group is considered to have two reportable segments, as follows:

Retail: acquires, develops and leases shopping malls; and

Office: acquires, develops and leases offices.

The group’s administrative costs, finance revenue, finance costs and income taxes are not reported to the

members of the executive management team on a segment basis. The operations between segments are

eliminated for consolidation purposes.

Segment assets represent investment property and the investment in the joint ventures.

Segment liabilities represent loans and borrowing, as these are the only liabilities reported to the board on

a segmental basis.



Retail€’000

Office€’000

Unallocated€’000

Total€’000

31 December 2018Segment profitRent and recoveries income 162 256 33 402 1 458 197 116 Property operating expenses (43 878) (10 134) (430) (54 442)

Net property income 118 378 23 268 1 028 142 674

Investment in joint ventures 138 698 – – 138 698 Investment property 1 885 337 316 400 – 2 201 737

Total segment assets 2 024 035 316 400 – 2 340 435

Bank borrowings 1 009 100 171 412 123 830 1 304 342

Total segment liabilities 1 009 100 171 412 123 830 1 304 342

2017Segment profitRent and recoveries income 105 913 44 602 1 695 152 210Property operating expenses (34 116) (14 287) (552) (48 955)

Net property income 71 797 30 315 1 143 103 255

Investment in joint ventures 116 009 – – 116 009Investment property 1 347 072 308 500 – 1 655 572

Total segment assets 1 463 081 308 500 – 1 771 581

Bank borrowings 686 982 161 699 99 657 948 338

Total segment liabilities 686 982 161 699 99 657 948 338

All revenues were generated from external customers based in Poland.

All investment properties are located in Poland.

6. DIVIDEND DECLARATION

EPP’s dividend policy states that the company intends to declare 100% of its distributable income to

shareholders. The company intends declaring half-yearly dividends, which are expected to be declared for

the periods ended 30 June and 31 December of the relevant year. No assurance can be made that dividends

will be proposed or declared in any given year.

The EPP board of directors (“board”) has declared an interim dividend of 5.78000 euro cents per ordinary

share for the six months ended 31 December 2018.

A further announcement informing shareholders of the salient dates and tax treatment of the dividend will

be released in due course.


7. FUTURE REPORTING

Due to the LuxSE requirement for companies with less than three years trading to report quarterly, EPP has

reported quarterly since listing. However, as three years have elapsed since listing this requirement falls

away following the last reported quarterly results for Q3 2018 released in December. Going forward EPP

will be reporting on a six monthly basis to align to the company’s JSE listed property peers.



GROUP MANAGEMENT REPORT

HEADLINE EARNINGS AND DISTRIBUTABLE INCOME RECONCILIATION


Audited

2017

€’000

Profit for the period attributable to EPP shareholders 124 165 128 348 Change in fair value of investment properties including joint ventures

(net of tax) (36 711) (82 295)

Headline and diluted earnings attributable to EPP shareholders 87 454 46 053

Change in deferred tax (other than the deferred tax change related to

fair value of investment properties) 1 194 14 057 Fair value losses/(gains) in joint ventures (other than the change in

fair value of investment properties in JV) (92) 5 380 Cost of refinancing 2 598 –Amortised cost valuation of long-term financial liabilities and other 3 405 2 621 Provision for long-term incentive plan 4 106 4 909 Distribution of shares to the board (2 349) (782)Other items (2 159) 680 Antecedent dividend 2 121 3 678

Distributable income 96 278 76 596

Actual number of shares in issue 829 989 804 704 970 210Shares in issue for distributable earnings 829 989 804 704 970 210Weighted number of shares in issue 808 554 466 671 412 270

Basic and diluted earnings per share (€ cents) 15.4 19.1 Headline earnings and diluted headline earnings per share (€ cents)* 10.82 6.90 Distributable income per share (€ cents)** 11.60 10.87

* There are no dilutionary instruments in issue and therefore headline earnings and diluted headline earnings are the same.** Calculated based on actual number of shares in issue as at 31 December 2018 and 31 December 2017, respectively.

PORTFOLIO PERFORMANCE

EPP significantly increased the scale of the business during 2018 by adding 240 000 m² GLA of quality retail

space.

These acquisitions include the first tranche of the M1 portfolio consisting of four properties for a consideration

of €359 million. The total GLA added was over 194 000 m² with an average property size of over 48 000 m².

The majority of these assets are located in the desirable Silesia region in Poland. In addition, EPP purchased Kings

Cross Marcelin, a 45 393 m² shopping centre located in the affluent western part of Poznań. EPP now holds

approximately 684 000 m² of quality retail space.


GROUP MANAGEMENT REPORT (continued)

Footfall and tenant sales were up for the year despite the introduction of the Sunday trading ban in March 2018.

The ban had no significant impact on operations and more than a 100 million customers visited our shopping

centres during 2018. Our asset and property managers have worked extremely hard during the year and this

was seen with like-for-like net rental income (“NRI”) growth up 4.2% for the full year 2018.

Our flagship Warsaw-based shopping centre Młociny (84 400 m²) is on schedule to open in Q2 2019. Młociny

is more than 90% pre-leased, with several retailers who will be opening in Poland for the first time expected to

debut in the shopping centre.

Vacancy profile

The vacancy profile indicated below reflects the vacancy percentage in terms of current GLA by sector.

31 December

2017

31 December 2018

Vacancy based on total GLA (%)Office 4.0 4.6Retail 1.4 0.4

Sectoral profile 31 December 2018

By GLA%

By revenue%

Retail 82 83Office 18 17

Total 100 100

PROSPECTS

EPP’s core portfolio is expected to perform well, and net operating income is expected to grow at 2% to 3%

for the year ending 31 December 2019 on a like for like basis. This forecast is based on the following

assumptions: that a stable global and Polish macro-economic environment will prevail and no major tenant

failures will occur. This forecast has not been reviewed or reported on by the company’s auditors. A dividend

per share forecast has not been provided as this is dependent on the outcome and timing of a number of

initiatives to reduce the company’s LTV. However, with the expected growth in net operating income, even after

the impact of the initiatives currently underway to reduce the company’s LTV, growth in distributions per share

is expected to be flat or better.

There have been no changes to the board during the period under review.

By order of the board

EPP N.V.

7 March 2019


Directors

Hadley Dean (chief executive officer)

Jacek Bagiński (chief financial officer)

Robert Weisz* (chairman)

Marek Belka*

Peter Driessen*

Maciej Dyjas**

Dionne Ellerine*

Andrew König**

Nebil Senman**

Andrea Steer*

Marc Wainer*** Independent non-executive** Non-executive

Registered office

Gustav Mahlerplei

28, 1082 Amsterdam

The Netherlands

Company secretary

Rafał Kwiatkowski (Master of Laws)

al. Solidarnosci 36

25-323 Kielce

Poland

Transfer secretaries

Computershare Investor Services (Pty) Ltd

Rosebank Towers

15 Biermann Avenue

Rosebank, 2195

(PO Box 61051, Marshalltown, 2107)

LuxSE listing agent

M Partners

56, rue Charles Martel L-2134

Luxembourg

JSE sponsor

Java Capital

6A Sandown Valley Crescent

Sandton

2196

EPP Investor Relations

Curwin Rittles

+48 885 982 310

[email protected]

Singular Systems IR

Michèle Mackey

+27 (0)10 003 0700

[email protected]

COMPANY INFORMATION

www.epp-poland.com

Documents

NOTICE CONVENING 2019 ANNUAL GENERAL MEETINGfile,134_epp... · notice convening the 2019 AGM. Mr R Weisz has performed his tasks satisfactorily and based upon this performance of