Plaza Regulatory News (PLAZ)

13 March 2014

PLAZA CENTERS N.V.

Full Year results for the year ended 31 December 2013

Continued improvement of operations, disposal of non core assets AND GOOD PROGRESS WITH THE RESTRUCTURING PROCESS

Plaza Centers N.V. ("Plaza" / "Company" / "Group"), a leading property developer and investor with operations in Central and Eastern Europe ("CEE") and India, today announces its full year results for the year ended 31 December 2013.

Financial highlights:

· Reduction in total assets to €586 million (31 December 2012: €886 million restated - as a result of changes in the accounting presentation of joint venture Special Purpose Vehicles ('SPVs') (due to changes in IFRS)), and primarily due to impairment of trading properties and equity accounted investees as well as debt repayments.

o Book value of the Company's trading properties reduced by 19% over the year, or by €117 million, primarily due to impairments recorded.

· Rental income slightly increased to €23.7 million (31 December 2012: €23.1 million), due to the improvement in the performance of the CEE shopping centres. The rental income performance would have been even stronger, had there not been a loss of income caused by a fire incident in India.

· Net Asset Value decreased by 40% to €274 million (31 December 2012: €459 million) primarily as a result of impairment of assets, mainly in Serbia, Romania and India.

o Net Asset Value per share of £0.79 (31 December 2012: £1.26), a decline of 37%, attributable mainly to the abovementioned impairments.

· Loss for the year of €218 million (31 December 2012: Loss of €86 million), stemming from a non-cash €186 million impairment of trading properties, equity accounted investees, investment property and pre-payments (31 December 2012: €83.7 million of impairments), and an overall net finance cost of €39 million compared to a net finance cost of €17 million in 2012. Impairment of real estate assets in the fourth quarter of 2013 totalled circa €43 million.

o Basic and diluted loss per share of €0.73 (31 December 2012: loss per share of €0.29).

· Consolidated cash position at year end (including restricted bank deposits, short term deposits and held for trading financial assets) of €33.7 million (31 December 2012: €65.8 million) and current cash position of circa €35.2 million (€7 million restricted).

· Gearing increased to 64% (31 December 2012: 50%) as a result of impairment losses and finance costs incurred during the year.

Asset and operational highlights:

· On 31 October 2013, a consortium of shareholders of Dream Island, in which Plaza holds a 43.5% stake, completed the sale of its Dream Island project land holding to the Hungarian State for circa €16.5 million (HUF 5 billion). The proceeds of the transaction were used by the Consortium to repay a proportion of the securitised related bank debt held against the asset. As a result of a previous non-cash, market driven write-down, no accounting loss was incurred.

· On 8 November 2013, the Company's Latvian 50% subsidiary signed a new €59.3 million investment loan with a consortium comprising two banks for its shopping and entertainment centre in Riga, Latvia. The new facility has duration of four years and therefore substantially lengthens the duration of the debt compared to the previous loan facility, which was due for repayment on 30 June 2014.

· On 14 November 2013, Plaza announced that it had reached an agreement to sell Koregaon Park Plaza, a retail, entertainment and office scheme located in Pune, India, subject to the satisfaction of certain closing conditions. The transaction valued the asset at circa €40 million, the asset's current book value. Following the repayment of the outstanding related bank loan, Plaza expects to generate aggregate cash proceeds from the purchaser totalling circa €18 million, before taxes and transaction costs, which should be paid in instalments over the coming two years.

· Plaza's 70% subsidiary reached an agreement in December 2013 to sell its 50% equity stake (together with the other 50% Joint Venture partner) in the Uj Udvar shopping mall in Budapest, Hungary. As a result of the transaction, proceeds of €2.35 million in cash were received by Plaza for its share in the asset.

· Improved occupancy levels achieved across the Company's existing shopping and entertainment centres in the CEE, with the overall portfolio occupancy rate increasing from 89% in 2012 to 93% as at the reporting date, with the following notable successes:

o At Torun Plaza, Poland, occupancy increased to 89% (2012: 84%). A contract with TK Maxx, the multinational fashion retailer, was signed at Torun Plaza (Poland) for 2,700 sqm, creating a new two level store which was opened on 5 March 2014. The letting represents circa 7% of the total lettable area of the mall

o At Riga Plaza, Latvia, occupancy increased to 97% (2012: 94%). H&M, a multinational fashion retailer, signed a contract for 2,700 sqm in Riga Plaza (Latvia). The store is scheduled to open in April 2014 and it is expected that the mall will be nearly fully let by mid-2014

o At Suwalki Plaza, Poland, occupancy increased to 91% (2012: 90%)

o At Zgorzelec Plaza, Poland, occupancy increased to 91% (2012: 89%), and the centre achieved a 58% growth in turnover on year to year basis

o At Liberec Plaza, Czech Republic, occupancy increased to 86% (2012: 80%).

Key highlights since the period end:

Following the announcement of the Company's restructuring programme made on 18 November 2013, Plaza has made good progress towards resolving its liquidity situation. The market prices of the Company's traded debt have reacted positively to the restructuring plan and negotiations with the Company's creditors are moving forward.

The original date of the creditors' voting, scheduled for 17 April 2014, has been postponed to 26 June 2014 due to technicalities involved in formally completing the arrangement. For more details on the court decision, please refer to the Company's website under Investor relations/ Debt restructuring. Despite this, Plaza remains confident that it should be able to conclude its restructuring process successfully in Q3.

Commenting on the results, Ran Shtarkman, the President and CEO of Plaza Centers, said:

"Whilst we have witnessed some confidence returning for prospects in Europe's central and eastern regions, conditions in many of our markets remained challenging in 2013 as the persistent uncertainty created by the crisis continued to be felt. As such, and as announced, despite our efforts to progress asset disposals and complete some alternative financing transactions, we took the decision in November to withhold payment on the upcoming short term maturities of our corporate bonds and approach creditors with a restructuring plan. This was undertaken in order to resolve our liquidity situation, safeguard the continuity of the business and thereby protect the long term interest of our investors, creditors and shareholders.

"Against this backdrop, we are particularly pleased to report that, throughout 2013, we made considerable operational improvements across our portfolio. These are clearly reflected in the increase in occupancy levels from 89% at the end of 2012 to 93% as at the reporting date. At the same time, we continued to make good progress in the ongoing process of re-positioning our business model, ensuring its continued focus on deleveraging the balance sheet and reallocating capital, primarily through the disposal of completed or non-core assets and reinvestment into our core yielding assets. This is best illustrated by the €61 million raised during the year through the sale of five assets, the remaining proceeds from the dissolution of the US holding entity and successful asset management initiatives at Torun Plaza, Suwalki Plaza, Kragujevac Plaza and Riga Plaza.

"Our clear priority is to conclude our restructuring process successfully whilst continuing to leverage the ability and expertise of our management team and the quality of our income generating assets to achieve success in our day-to-day operations. It is this combination of factors that underpins the Board's continued confidence that the Company retains significant value for its stakeholders and will be able to repay its creditors."

For further details please contact:

Notes to Editors

Plaza Centers N.V.(www.plazacenters.com) is a leading emerging markets developer of shopping and entertainment centres with operations in Central and Eastern Europe and India. It focuses on constructing new centres and, where there is significant redevelopment potential, redeveloping existing centres in both capital cities and important regional centres. The Company is dual listed on the Main Board of the London Stock Exchange and, as of 19 October 2007, the Warsaw Stock Exchange (LSE:"PLAZ", WSE: "PLZ/PLAZACNTR"). Plaza Centers N.V. is an indirect subsidiary of Elbit Imaging Ltd. ("EI"), an Israeli public company whose shares are traded on both the Tel Aviv Stock Exchange in Israel and the NASDAQ Global Market in the United States. It has been active in real estate development in emerging markets for over 18 years.

Forward-looking statements

This press release may contain forward-looking statements with respect to Plaza Centers N.V. future (financial) performance and position. Such statements are based on current expectations, estimates and projections of Plaza Centers N.V. and information currently available to the company. Plaza Centers N.V. cautions readers that such statements involve certain risks and uncertainties that are difficult to predict and therefore it should be understood that many factors can cause actual performance and position to differ materially from these statements. Plaza Centers N.V. has no obligation to update the statements contained in this press release, unless required by law.

PRESIDENT AND CHIEF EXECUTIVE OFFICER'S STATEMENT

I am pleased to report that we are making good progress with the restructuring process whilst continuing to leverage the ability and expertise of our management team to enhance the quality of our income generating assets across all key parameters such as occupancy levels, footfall and turnover.

Central and Eastern Europe economies are experiencing signs of a change in sentiment, with Poland and the Czech Republic both reporting increased investment activity in 2013. However, we have seen marked differences between the countries north of the region, which have proved more resilient, and the struggling southern economies, including Romania and Bulgaria. It was as a result of the sustained challenging market conditions, combined with the lack of transactional liquidity in a number of the countries in which we operate, that we took the decision in November to withhold payments on the upcoming maturities of our outstanding corporate bonds and suggest a restructuring plan to creditors.

Against these specific and very real challenges, I am pleased to report that Plaza has, once again, been successful in delivering considerable progress at the operational level of the business through intensive asset management initiatives such as attracting significant anchor tenants to our assets. We have also continued to reallocate capital to pay our debts following the sale of a number of our completed and non-core assets.

Key Events

In line with its stated strategy, Plaza made a number of significant disposals of its non-core assets during the year, including:

· In May, Plaza sold its 50% stake in a vehicle which primarily holds interest in an office complex located in Pune, Maharashtra. The successful transaction valued assets owned by the vehicle collectively at €33.4 million and, as a result, Plaza received gross proceeds of circa €16.7 million.

· In July, Plaza successfully completed the sale of 100% of its stake in a vehicle which owns the interest in the Prague 3 project ("Prague 3"), a logistics and commercial centre in the third district of Prague. The transaction valued the asset at circa €11.1 million and, as a result, further to related bank financing and other balance sheet adjustments, Plaza received net proceeds of circa €7.6 million in cash.

· In October, a consortium of shareholders of Dream Island, in which Plaza holds a 43.5% stake, completed the sale of its Dream Island project land holding to the Hungarian State for circa €16.5 million (HUF 5 billion). The proceeds of the transaction were used by the Consortium to repay a proportion of the securitised related bank debt held against the asset. As a result of a previous non-cash, market driven writedown, the asset was held on Plaza's balance sheet at the value of the loan, which was non-recourse so no accounting loss was incurred in the 2013 financial statements.

· On 14 November 2013, Plaza announced that it had reached an agreement to sell Koregaon Park Plaza, a retail, entertainment and office scheme located in Pune, India, subject to the satisfaction of certain closing conditions. The transaction valued the asset at circa €40 million, the asset's current book value. Following the repayment of the outstanding related bank loan, Plaza expects to generate aggregate cash proceeds from the purchaser totalling circa €18 million, before taxes and transaction costs, which should be paid in instalments over the coming two years. The transaction is subject to fulfilment of certain conditions, including consent from the financing banks.

· As announced in January 2014, in December, Plaza's 70% subsidiary reached an agreement to sell its 50% equity stake (together with the other 50% Joint Venture partner) in the Uj Udvar shopping mall in Budapest,

Hungary. As a result of the transaction, proceeds of €2.35 million in cash were received by Plaza for its share in the asset.

· Finally, Plaza has also sold its interest in a SPV which owns a site in Roztoky, Czech Republic which was being held for a potential residential development. The site was sold for circa €2 million, resulting in net cash proceeds of €1.3 million after debt-related deductions.

These transactions are demonstrative of the Company's ability to continue to deliver on its strategy to reduce debt levels and reassign capital realised from the sale of completed and non-core assets to pay down debt and invest in the core yielding assets in its portfolio, thereby creating capital value and driving income growth.

In addition, the Company continues to make strong progress with its asset management initiatives. Occupancy levels across the Company's existing shopping and entertainment centres continued to increase, reaching an overall occupancy of 93%, footfall increased by 4% and the average monthly turnover increased by 24.5%. In addition an important refinancing agreement was signed during the year, with the Company's Latvian 50% subsidiary signing a new €59.3 million investment loan with a consortium comprising two banks for its shopping and entertainment centre in Riga, Latvia. The new facility has duration of four years and therefore substantially lengthens the duration of the debt compared to the previous loan facility, which was due for repayment on 30 June 2014.

Results

Due to a circa €186 million non-cash impairment charged against the Company's trading properties, equity accounted investees, investment property and prepayments, Plaza ended the year with a loss attributable to the owners of the Company of €218 million. A €186 million impairment charge related to the reduction in the value of our assets across the portfolio with the following geographic breakdown: Serbia (€37 million), Romania (€27 million), India (€76 million), Czech Republic (€20 million), Greece (€12 million), Poland (€11 million), Bulgaria and Hungary (€4.5 million) and Latvia (€1.5 million uplift). The writedowns are a reflection of the ongoing economic uncertainty in many of the countries in which we operate.

As part of the Company's commitment to repositioning the business, Plaza raised €61 million through the successful disposal of five assets, which included receiving the remaining funds from the €1.428 billon US transaction the Company completed in 2012. The 2013 NOI including equity accounted from Riga Plaza totalled €17 million (31 December 2012:€16.2 million).

As at 31 December 2013, Plaza had a consolidated cash position (including restricted bank deposits, short term deposits and available for sale financial assets) of approximately €33.7 million, of which circa €7 million of cash was held as restricted cash on a consolidated basis. Working capital stood at negative €291 million as all the liabilities are shown as current due to the implementation of the restructuring programme, the subsequent suspension of payments and the classification of trading properties as non-current due to the uncertainties surrounding the timing of the restructuring's completion and the future disposal of a number of assets. As at the date of this report, the Company has a current cash position of circa €35.2 million (inclusive of the €7 million of restricted cash).

NAV

The Company's property portfolio (CEE and India) was valued by Cushman and Wakefield as at 31 December 2013 and their summary valuation is shown below.

Net Asset Value per share decreased by 40%, attributable primarily to non-cash impairments amounting to €186 million. The writedown in value reflects uncertainties in respect of the development of projects, depressed rental levels in the above mentioned countries and low transaction volumes resulting from a constrained supply of debt. The majority of written down assets comprise land with associated planning consent, which management continues to value at the lower of cost or net realisable value. Management will continue to evaluate the local economic context before any development programme is commenced as well as looking at other alternatives to monetise the land bank if development is not economically viable.

The Company's NAV was calculated as follows:

(1) Except for Targu Mures (Romania) project, where the company has applied a more conservative value

(2) Excluding book value of assets which were valued by Cushman and Wakefield

Portfolio progress

Currently the Company is engaged in 20 development projects and owns seven operational shopping and entertainment centre assets and two office schemes, located across the Central and Eastern European region and in India. The location of the projects, as at 13 March 2014, is summarised as follows:

Liquidity & Financing

Plaza ended the year with a consolidated cash position (including restricted bank deposits, short term deposits and available for sale financial assets) of approximately €33.7 million, of which circa €7 million of cash is held as restricted cash on a consolidated basis. Working capital as at 31 December 2013 totalled negative €291 million, and, as mentioned above, the Company's current cash position is circa €35.2 million (out of which €7 million is restricted).

Plaza continued to focus on deleveraging its balance sheet during the period but, as a result of impairment losses recorded in the period and finance costs incurred, the gearing level increased to 64% in 2013.

On 14 November 2013, Plaza announced that it had made the decision to withhold material payments to bondholders, specifically a circa €15 million payment due to Polish bondholders on 18 November 2013 and a circa €17 million payment due to Israeli bondholders on 31 December 2013. Despite ongoing efforts to complete a number of asset sales and secure some alternative financing transactions, Plaza had been unable to conclude these deals within a timeframe that would have enabled it to meet those payment obligations.

Therefore, to ensure the long-term viability of the business, the Board agreed to approach the creditors of the Company with a restructuring plan so that a formalized restructuring process could be implemented. Subsequently, on 18 November, Plaza filed for reorganization proceedings (surseance van betaling) with the District Court of Amsterdam in the Netherlands and submitted a restructuring plan to enable it to restructure its debt and resolve its immediate liquidity situation. This will be achieved primarily through:

- a deferral of principal payment obligations to creditors of the Company for a period of three to four years, or shorter if cash flow permits

- interest payments made as due, with an additional 1.5% interest to be paid in addition to regular interest

- early repayment of the Company's debt balance upon the realization or refinancing of assets with 75% of the net cash flows

- allocation to the representatives of the non-collateral backed debt options of 9.99% of the Company's shares

- as long as the deferred debt balance is not paid in full, no dividend will be distributed without the majority bondholders' consent

- a potential rights issue of €20 million to shareholders

- a negative pledge on Company's assets

- a deferral of banks' recourse rights to the Company for a further four years.

Aside from the proposed payment deferral, the terms of the proposed restructuring plan do not require bondholders to take a loss on the value of their outstanding exposures. The original date of the creditors voting, scheduled for 17 April 2014, was postponed to 26 June 2014 due to the technicalities involved in formally completing the arrangement. Please refer to the debt restructuring page under investor relations section on the Company's website for further details.

Strategy and Outlook

During the year, Plaza continued to be impacted by the lasting economic uncertainty across CEE. Whilst financial institutions in the region remain well financed, they continue to take a cautious approach to lending and investors continue to be wary of moving up the risk curve, both factors which are illustrated by the lack of transactional activity in 2013.

In the shopping mall space, the core economies are well serviced with retail and entertainment centres, so we continue to see value in the region's secondary cities. For this reason, as signs of an improvement in business and investor sentiment across CEE become even more apparent, our portfolio should be particularly well positioned to benefit from wider recovery in Eurozone growth.

Notwithstanding the challenges that remain and the Company's current liquidity position, Plaza's efforts to reposition the business resulted in five significant sales of non-core assets and securing increased occupancy levels, footfall and turnover across its portfolio of operating assets. The success of the Company's intensive asset management initiatives, which have driven these operational achievements, are extremely important in maximising the income and value of our shopping centres, particularly in the context of the future implementation of the restructuring plan.

Alongside the management of the restructuring process, which continues to make good progress, it is vital that Plaza continues to look to the long term objectives of the business. The deferral of the repayment of our debt maturities enables us to progress with the initiation of projects and investment as appropriate, including actively managing our income generating assets to prepare for their ultimate sale, whilst continuing to identify exit opportunities from our remaining non-core assets.

Despite our challenged liquidity position and restructuring process, our belief in the strength of the underlying fundamentals of our assets and land reserves remains intact. By utilising the extensive skills of our experienced management team, the deep relationships we have with our tenants and finance providers and maintaining our cautious but opportunistic approach, the Company is positioning itself, on completion of the restructuring, to be able to return the rewards of capital appreciation and income growth to its shareholders.

Ran Shtarkman

President and Chief Executive Officer

13 March 2014

OPERATIONAL REVIEW

During the reporting period, Plaza made significant progress against its operational and strategic objectives, by delivering improved fundamentals at the portfolio level and realising value through the sale of a number of its non-core assets.

Highlights for the financial year included:

§ Operations:Improving performance of its operating shopping and entertainment centres located in four countries in the CEE.

§ Disposals: In 2013, the Company received net cash of circa €61 million through the disposal of five assets (€29 million) and the collection of the remaining proceeds from the transaction in the US (€32 million).

§ Financial position: Plaza's current consolidated cash position stands at circa €35.2 million (out of which €7 million is restricted).

As of the reporting date, Plaza has 29 assets in nine countries, of which 20 are under various stages of development across the CEE region and India. Of these, nine are located in Romania, two in India, four in Poland, two in Serbia, and single assets in Bulgaria, Greece and Hungary. In addition to these developments, Plaza retains the ownership of and operates seven shopping and entertainment centres in Poland, Czech Republic, Serbia, India and Latvia and two office buildings in Budapest and Bucharest.

The development projects are at various stages of the development cycle, from the landholdings through to the planning and permits.

The Company's current assets and pipeline projects are summarised in the table below:

(*) all completion dates of the projects are subject to securing external financing and securing sufficient tenant's demand.

Details of these activities by country are as follows:

Poland

Plaza owns and operates three completed shopping and entertainment centres across Poland. During the year, each of the centres have delivered notable asset management successes, including new signed leases totalling over 6,800 sqm, improving the overall occupancy of the Polish portfolio to 90%.

Torun Plaza, which was completed and opened in late 2011, comprises approximately 40,000 sqm of GLA and represents Plaza's tenth completed centre in Poland. Occupancy has risen to approximately 89% (including signed lease agreements) compared to 84% in 2012. Following the year end, TK Maxx opened as an anchor retailer on 5 March 2014 occupying 2,700 sqm. The centre is currently let to premium international and local brands such as Cinema City, H&M, C&A, KappAhl, Zara, Bershka, Stradivarius, Pull & Bear and Massimo Dutti.

The mall demonstrated a strong operational performance over 2013, and Plaza's focus on asset management and marketing activities since the mall opened led to a footfall improvement of 5% in 2013. As a result, average monthly turnover at the mall over the 2013 Christmas period improved by 24% compared to the same period last year.

Suwalki Plaza, comprising approximately 20,000 sqm of GLA and including tenants such as H&M, Rossmann, New Yorker, KappAhl and Cinema Lumiere, continues to perform well. Plaza has been successful at driving the turnover at the centre, with an average increase of 10% compared to 2012. Successful asset management initiatives undertaken by Plaza saw occupancy improve from 90% to 91% during the year.

Significant operational improvement was also achieved at Zgorzelec Plaza. The 13,000 sqm shopping and entertainment centre saw occupancy levels rise from 89% in 2012 to 91% as at the reporting date. In addition, footfall in the centre increased by 29% compared to 2012 and the centre achieved a 58% growth in turnover on year to year basis.

Plaza also continued the feasibility and planning studies at Lodz Plaza (comprising approximately 35,000 sqm of GLA). As a result, construction is scheduled to begin in late 2015 with completion expected in 2017.

Hungary

Plaza has a transferable land use right to plot of land on which it plans to develop an office extension onto the Arena Plaza shopping centre built by the Company. The extension will comprise an office complex with approximately 40,000 sqm of GLA. In line with Plaza's cautious approach to development, it is waiting for the recovery of the Budapest office market and a general rise in both occupancy rates and rental fee levels before beginning construction of the project.

The Group continues to own its office building, David House on Andrassy Boulevard, in Budapest.

Czech Republic

Plaza continues to own and manage Liberec Plaza shopping and entertainment centre (approximately 17,000 sqm GLA), which opened in March 2009. During the period, the turnover of the mall improved by 10%, whilst occupancy increased from 80% to 86%.

Romania

Plaza holds a 75% interest in a company in partnership with the Government of Romania to develop Casa Radio project (Dambovita), the largest development plot in central Bucharest. It will comprise approximately 555,000 sqm of GBA, including a 76,000 sqm GLA shopping mall and leisure centre (one of the largest in CEE), offices, hotel, an apartment hotel and a convention and conference hall. The Company has obtained the PUD (Detailed Urban Permit) and the Zonal Urban Plan ("PUZ") to the Dambovita Center Multifunctional Complex and completion of the first phase is scheduled for 2016/2017.

In light of the financial crisis, and in order to insure a construction process that is aligned to current market conditions, the Company started preliminary discussions with the Authorities (which are both shareholders of the SPV and a party to the Public Private Partnership ('PPP') regarding the future development of the project. The Company has also officially notified the Authorities that it will be seeking to redefine some of the terms of the existing PPP contract, such as timetable, structure and project milestones.

In addition, Plaza continued the feasibility and planning studies and permitting of Timisoara Plaza (comprising approximately 38,000 sqm of GLA) and Cina in Bucharest Romania. At Timisoara Plaza, construction is scheduled to begin in late 2014 with completion expected in 2016. The Cina retail and office scheme will comprise app. 4,800 sqm GLA with an expected completion date in 2015/2016.

Latvia

In March 2009, Plaza completed and opened Riga Plaza, the 49,000 sqm shopping and entertainment centre in which Plaza owns a 50% stake.

Riga Plaza is located on the western bank of the River Daugava by the Sala Bridge. The centre continues to deliver significant operational improvements, seeing occupancy levels increase to 97% following the lease agreement signed with H&M which is due to open in April 2014. There are ongoing discussions with a number of potential occupiers for the remaining space from which Plaza hopes to conclude further lettings shortly. Also footfall and turnover improved throughout the year by 7% and 14% respectively.

Latvia was the fastest growing economy in the EU in 2012. Following the successful introduction of the Euro in 2013 and strengthening household consumption, the country is well positioned for further growth, which we expect to underpin the further improvements in the performance of Riga Plaza going forward.

Serbia

On 20 March 2012, Plaza opened its first Serbian shopping and entertainment centre in Kragujevac, a city of 180,000 inhabitants.Kragujevac Plaza comprises 22,000 sqm of GLA and was over 90% let on opening to tenants including Nike, Adidas, Aldo, New Yorker, Deichmann, TerraNova, Fashion and Friends, H&O, Oviesse, Fox, Chicco and Home Center. As at the reporting date, the centre is fully let with significant improvements both in terms of footfall (+15%) and turnover (+17%), demonstrating Plaza's ability to capitalise on opportunities in new markets.

Kragujevac Plaza is the first western style shopping centre to be completed outside of Belgrade, and enjoys a catchment area of approximately 590,000 inhabitants within a 30 minute car journey of the centre. The centre has a six screen Cineplex cinema facility which is the only cinema and bowling facility in the region.

Plaza's other investment in Serbia is a state-owned plot and building in Belgrade, which Plaza secured in a competitive tender. The building was formerly occupied by the federal ministry of internal affairs of the former Yugoslavia and is located in the centre of Belgrade in a neighbourhood of government offices and foreign embassies. On completion, the scheme, Belgrade (MUP) Plaza, will comprise a shopping gallery, an apartment-hotel and business centre totalling circa 63,000 sqm of GBA. Construction is planned to commence in 2015/2016 and scheduled for completion in 2017. The project is currently in the process of securing the relevant local planning and permitting approvals.

The Company also owns a plot of land in Belgrade which will be developed into a shopping and entertainment centre. Concept designs have been submitted and approved (location permit granted) for Belgrade Plaza (Visnjicka) (previously known under the project name Sport Star Plaza), Plaza's proposed scheme comprising a total GLA of approximately 32,000 sqm. Construction is planned to commence during 2014/2015 with anticipated completion scheduled for 2015/2016.

On 1 March 2013, Serbia was granted candidate status to the European Union. Plaza believes this will significantly increase the flow of international capital into the country, enabling its carefully selected Serbian development pipeline, and completed and operational asset to benefit from an anticipated growth in investor interest.

Greece

Plaza owns a land plot which received the relevant planning permission for a 26,000 sqm GLA shopping and entertainment centre. Although the land plot is in an excellent location, in line with the Company's prudent approach to development, Plaza will continue to monitor the macroeconomic situation in Greece before committing additional capital to the project. 

India

On 14 November 2013, Plaza announced that it had reached an agreement to sell Koregaon Park Plaza, a retail, entertainment and office scheme located in Pune, India, subject to the satisfaction of certain closing conditions. The transaction valued the asset at €40 million, the asset's current book value. Following the repayment of the outstanding related bank loan, Plaza will receive aggregate net cash proceeds from the purchaser totalling circa €16 million (after tax and transaction costs). Subject to fulfilment of certain conditions, including a consent from the financing bank, the Company expects to collect the first part of this, totalling circa €10m, in the coming six months and the remaining consideration will then follow in several instalments until 2016.

In 2008, Plaza formed a joint venture with Elbit Imaging ("JV") to develop three mega mixed-use projects in Bangalore, Chennai and Kochi in India. Under the terms of the agreement Plaza acquired a 47.5% stake in Elbit India Real Estate Holding Limited, which already owned stakes of between 50% and 80% in three mixed-use projects in India, in conjunction with local Indian partners. This joint venture's voting rights are split 50:50 between Elbit and Plaza.

These three projects are as follows:

Bangalore - This residential project, owned in an equal share between the JV and a prominent local developer, is located on the eastern side of Bangalore, India's fifth largest city with a population of more than eight million inhabitants. With a total built area of over 310,000 sqm, it will comprise over 1,100 luxury residential units when completed. In 2010, the JV signed a new framework agreement which, inter alia, entitles the JV to receive 70% of the net proceeds from the project until a target 20% IRR is received. Once the JV has received the 20% IRR on its investment, the JV will exit the project. Currently the project is in planning phase. As at 31 December 2013, due to uncertainty about the Group's ability to develop the project in the foreseeable future, the Group recorded €31 million of writedown expenses in the Company's profit or loss for the year.

Chennai - A residential development, which is 80% owned by the JV and 20% by a prominent local developer. The scheme will be developed into a residential project consisting of approximately 160,000 sqm of plotted area for development and approximately 70,000 sqm for high quality villas. Chennai is India's fourth largest city with a population of more than eight million inhabitants. The JV is currently in advanced negotiations to sign a joint development agreement with a reputable local developer to complete the project.

As at 31 December, due to uncertainty about the Group's ability to develop the project in the foreseeable future, the Group estimated the net realizable value of the project according to a comparable model. This resulted in the Group recording €20.7 million of writedown expenses in the Company's profit or loss.

Kochi Island - A 50:50 partnership with a local developer, this mixed-use project will comprise more than 575,000 sqm of high-end residential apartment buildings, office complexes, a hotel and serviced apartments complex, retail area and a marina. It is located on a backwater island adjacent to the administrative, commercial and retail hub of the city of Kochi, in the state of Kerala. Kochi has a local population of more than two million inhabitants.

Plaza's investment in Kochi project (€4.3 million) was done through a pre-payment advance guaranteed by Elbit, its parent company.

On 11 November 2013, the Company demanded and exercised a corporate guarantee in the amount of €4.3 million including the interest thereon up until such date (the "Reimbursement Payment") which has been provided by Elbit within the terms of the original Indian JV Agreement, on the grounds of Elbit defaulting on the finalisation and conclusion of the transfer of the Kochi Project Rights to the Indian JV Vehicle.

In its reply letter, Elbit has refused to repay the Reimbursement Payment. The Company is of the view that based on the abovementioned JV Agreement and its ancillary documents (including the corporate guarantee issued by EIbit in the Company's favour as mentioned above), it has a valid claim to recover the €4.3 million.

Despite the above view, and in view of uncertainties, the Company has made the decision to impair the pre-payment in its financials.

FINANCIAL REVIEW

Results

During 2013, Plaza remained focused on the execution of its strategy to dispose of non-core assets in its portfolio, to enable it to reallocate capital to its core yielding assets and to reduce debt levels.

The Company has designated its properties into three types:

· Completed trading properties projects

· Projects scheduled for construction

· Plots in the planning phase.

In respect of its completed trading properties projects, the Company still faces material uncertainties in respect of the time needed to sell the properties. However the Company has not changed its business model and is actively seeking buyers. Therefore it is clear from the Company's perspective that these completed properties are trading properties, rather than investment properties.

In respect of plots held, which are not intended to be constructed in the near future, the Company is actively looking for buyers and does not hold the plots passively with the intention to gain from a potential value increase. Plots scheduled for construction are intended to be developed and sold in the normal course of business once circumstances allow. For this reason we also believe that these are appropriately classified as trading properties. As at 31 December 2013, the trading properties were classified as non-current assets in the Statement of Financial Position, except for Koregaon Park, India, for which a sale purchase agreement was signed during the reporting period.

As a result of IFRS 11, the Group has changed its accounting policy for its interests in joint arrangements. Under IFRS 11, the Group has classified its interests in joint arrangements as Equity accounted investees. The balances of 2012 have been restated in the financial statements. The main change was the reclassification of the Indian residential JV projects and Riga Plaza (Latvia) to equity accounted investees.

Income comprised rental income from operating shopping centres: In 2013, Plaza generated €23.7 million of income compared to €23.1 million in 2012. The rental income performance would have been even stronger, had there not been a loss of income caused by a fire incident in India. However, income from the Group's Fantasy Park operation which provides gaming and entertainment services in Plaza's active shopping centres decreased to €3.3 million from €6.9 million in 2012 following the closure of a number of underperforming units.

The cost of operation of active malls remained at the same level despite increasing rental income (€9.4 million in both 2012 and 2013). The cost of marketing expenses were classified as part of operating cost rather than administrative expenses, and comparative figures for 2012 were also restated. The cost of the Fantasy Park operations (operation of entertainment centres) also decreased from €8.3 million in 2012 to €4 million in 2013 after the closures mentioned above.

Writedown of trading properties amounted to €118 million in 2013 (€60 million in 2012). This amount is attributable mainly to projects in Serbia (€37 million), Romania (€24.6 million), India (€15.6 million), Czech Republic (€15 million), Greece (€12 million), Poland (€11 million) and Bulgaria (€2.4 million).

As mentioned above, in accordance with IFRS 11, the Group has changed its accounting policy regarding joint arrangement. Joint ventures are classified as equity accounted investments. The writedown in connection to those assets amounted to €56 million in 2013 and €23 million in 2012. More than 90% of the writedown relates to Plaza's Indian projects (Bangalore, Chennai and Kharadi). This was slightly offset by the €1.5 million increase in the value of Riga Plaza (Latvia).

Administrative expenses amounted to €9.4 million (2012: €11.4 million after restatement) an 18% decrease as a result of a decrease in payroll and employee related expenses as part of the Company's efforts to reduce costs during the year.

Other expense increased from €1 million in 2012 to €11.5 million in 2013, due to the impairment of certain prepayments and fair value adjustment of investment property.

Restructuring costs were incurred in connection with the Company's debt restructuring process.

A net finance loss of €39.3 million was recorded in 2013 compared to a net finance cost of €17.2 million in 2012.

Finance income decreased to €1.3 million from €20.4 million in 2012 mainly due to no income being recorded in connection to its buyback programme (2012: €4.3 million income) as the Company ceased this activity in order to preserve short term liquidity. In addition, no income resulted from hedging activity through selling currency options (2012: €11.7 million) as hedging activity was reduced also in order to preserve short term liquidity.

Finance expenses increased from €37.5 million to €40.6 million (after capitalization of borrowing costs of €6.5 million in 2013 and €19.1 million in 2012). The main reasons for this increase were:

· discontinuing of capitalization of interest on debentures in H2 2013, resulting in an additional €3 million of expenses being reflected in the profit or loss

· loss on the reissuance of bonds previously bought back (2013 - €5.7 million, 2012 - nil)

· increase in foreign exchange loss on bonds (2013 - €5.4 million, 2012 - €2.0 million).

This was partly offset by the decrease in the expense recorded due to the increase in the fair value of bonds (2013 - €13.2 million, 2012 - €19.0 million).

A tax benefit of €6.3 million recorded in the consolidated income statement mainly represents the decrease in the deferred tax liability, primarily in connection with the fair value changes of the debentures measured through the profit or loss.

As a result of the above, the loss for the year amounted to circa €218 million in 2013, compared to €86.1 million in 2012. Basic and diluted loss per share for 2013 was €0.73 (2012: €0.29).

Balance sheet and cash flow

The balance sheet as at 31 December 2013 showed total assets of €586 million compared to total assets of €886 million at the end of 2012. The decrease was mainly driven by the writedown of trading properties and equity accounted investees, as well as the disposal of assets and cash used for repayment of debt.

The Company's consolidated cash position (including restricted bank deposits, short term deposits and held for trading financial assets) decreased to €33.7 million (31 December 2012: €65.8 million). Gearing increased to 64% (31 December 2012: 50%) as a result of impairment losses and finance costs incurred during the year.

The value of investment property decreased from €14.5 million in 2012 to nil in 2013, due to the sale of the Prague 3 project in the Czech Republic, the sole investment property at the end of the 2012.

Trading properties decreased from €612 million in 2012 to €495 million in 2013 mainly as result of writedowns booked in the period. At the end of the year, excluding Koregaon Park for which a sale and purchase agreement was signed before year end, trading properties were classified as non-current assets due to uncertainties about the development and realization dates.

Plaza has on its balance sheet a €40 million investment in equity accounted investees which includes a joint venture project reclassified in accordance with IFRS 11. The only operating asset currently classified under this heading is Riga Plaza. The value has decreased from the 2012 figure of €161.7 mainly as result of the dissolution of the US holding entity (totalling €32 million), disposals (totalling €21 million), writedowns (totalling €56 million) and the effect of the changes in exchange rates (totalling €15 million).

Total bank borrowings (long and short term) amounted to €175.5 million (31 December 2012: €206 million). This decrease is primarily the result of loans disposed of and repaid during the year. All loans were accounted for as current liabilities following the suspension of payments by Plaza and the uncertainty surrounding the restructuring plan.

Apart from bank financing, Plaza has a balance sheet liability of €168.6 million (with an adjusted par value of circa €201.5 million, including unpaid interest) from issuing debentures on the Tel Aviv Stock Exchange and to Polish institutional investors. These debentures are presented at their fair value with the exception of the debentures issued from August 2009 onward, which are presented at amortised cost.

Provisions are booked in connection with the Company's Casa Radio project in Bucharest Romania.

As at 31 December 2013, the net balance of the Company, with its controlling shareholders, is a liability of approximately €0.9 million.

Other current liabilities have increased in 2013 from €7.6 million to €11.2 million. The increase is attributable to unpaid debenture and bank loan interest and the advance payment received in respect of the sale of Koregaon Park.

The total equity decreased from the figure of €443 million in 2012 to €210 million in 2013 as a result of a €14 million increase in the translation reserve connected to the Indian operations of the Company stemming from the weakening of the Indian Rupee against the EUR during the year (app 17% devaluation), and the €218 million loss suffered mainly due to the writedowns, turning the retained earnings of €189 million into retained losses of €29 million.

Roy Linden

Chief Financial Officer

13 March 2014

Valuation Summary by Cushman and Wakefield as at 31 December 2013 (in EUR) - 2012 comparatives are based on a Jones Lang LaSalle report

 (1) In 2013 the Company applied a more conservative approach, and lower value was used in the financial statements than in the valuation report

(*) Assets were valued with the comparative sales price method; no value at completion was estimated

(**) Rounded to nearest thousand

Notes

· All values of land and project assume full planning consent for the proposed use.

· Plaza Centers had a 50% interest in the Riga Plaza shopping centre development.

· Plaza Centers had a 35% interest in the Uj Udvar Shopping Centre development.

· Plaza Centers had a 50% interest in Kharadi Plaza and Trivandrum Plaza.

· Plaza Centers had a 43.5% interest in Dream Island.

· Plaza Centers has a 75% share of Casa Radio Plaza.

· Plaza Centers has a 25% share of Bangalore.

· Plaza Centers has a 40% share of Chennai.

· All the figures reflect Plaza's share.

(*) Restated due to Retrospective application.

(*) Restated due to Retrospective application

NOTE 1 PRINCIPAL ACTIVITIES AND OWNERSHIP

Plaza Centers N.V. ("the Group" or "the Company") was incorporated and is registered in the Netherlands. The Company's registered office is at Keizersgracht 241, 1016 EA, Amsterdam, the Netherlands. The Company conducts its activities in the field of establishing, operating and selling of shopping and entertainment centres, as well as other mixed-use projects (retail, office, residential) in Central and Eastern Europe (starting 1996), India (from 2006), and, between 2010 and 2012, also in the USA. The consolidated financial statements for each of the periods presented comprise the Company and its subsidiaries (together referred to as the "Group") and the Group's interest in associates and jointly controlled entities.

The Company is dual listed on the Main Board of the London Stock Exchange ("LSE") and, starting October 2007, on the Warsaw Stock Exchange ("WSE").

The Company's immediate parent company is Elbit Ultrasound (Luxembourg) B.V. / S.à r.l. ("EUL"), which holds 62.5% of the Company's shares, as at the end of the reporting period (December 31, 2012 - 62.5%). The ultimate parent company is Elbit Imaging Limited ("EI").

NOTE 2 BASIS OF PREPARATION

a. Statement of compliance

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS"), as adopted by the European Union ("EU").

These consolidated financial statements are not intended for statutory filing purposes. The Company is required to file consolidated financial statements prepared in accordance with The Netherlands Civil Code. At the date of approving these financial statements the Company had not yet prepared consolidated financial statements for the year ended December 31, 2013 in accordance with the Netherlands Civil Code.

The consolidated financial statements were authorized for issue by the Board of Directors on March 12, 2014.

b. Basis of measurement

The consolidated financial statements have been prepared on the historical cost basis, except for the following material items in the statement of the financial position:

· Investment properties were measured at fair value

· Liabilities for cash-settled share-based payment arrangements are measured at fair value

· Available for sale financial assets are measured at fair value

· Derivative financial instruments are measured at fair value

· Non-Derivative financial instruments at fair value through profit or loss are measured at fair value.

c. Functional and presentation currency

These consolidated financial statements are presented in EURO ("EUR"), which is the Company's functional currency. All financial information presented in EUR has been rounded to the nearest thousand, unless otherwise indicated.

d. Going concern

On November 14, 2013 the Company announced that it would be freezing payments to all its lenders and would be entering into negotiations with these creditors to arrive at an agreed debt arrangement (restructuring plan). The Company's proposed debt arrangement includes a potential equity injection from the owners in the amount of circa 20 million EUR via a right issuance, a delay of all the bond series' principal payment by three years, a realization plan under which 19 of the 29 assets are estimated to be realized by 2018 for circa 490 million EUR (net proceeds), a transfer of 75% of the net proceeds of realizations to the bondholders as early repayment, compensate the bondholders with an additional 1.5% annual interest, and additional compensation to the bondholders with equity instruments (share issuance without additional proceeds), being options to issue up to 9.99% of the Company's outstanding shares.

Management believes that the implementation of the restructuring plan will provide the Company with the ability to resolve its immediate liquidity situation in order to continue operating as going concern and preserve value for its shareholders and creditors.

Management acknowledges that significant uncertainty remains over the Group's ability to meet its funding requirements and to refinance or repay its debts as they fall due. If for any reason the Group is unable to reach an approved restructuring plan, then this would have an impact on the Group's ability to realise assets at their recognised values, and to extinguish liabilities in the normal course of business at the amounts stated in the consolidated financial statements and ultimately result in the Group being unable to continue as a going concern. The consolidated financial statements have been prepared on a going concern basis, which assumes that the Group will be able to successfully complete its proposed debt arrangement.

e. Investment property vs. trading property classification

The Company has designated its properties into three types (Completed trading property projects, plots scheduled for construction and plots under planning stage).

In respect of its completed trading property projects, and as written above, the Company still faces material uncertainties in respect of the time needed to sell the properties. However the Group has not changed its business model and is actively seeking buyers. Therefore it is clear from the Company's perspective that these completed properties are trading properties, rather than investment properties.

In respect of plots held, which are not intended to be constructed in the near future, the Company is actively looking for buyers and does not hold the plots passively with the intention to gain from a potential value increase. Plots scheduled for construction are intended to be developed and sold in the normal course of business once circumstances allow. Therefore we also believe that these are appropriately classified as trading properties.

f. Use of estimates and judgments

The preparation of the consolidated financial statements in conformity with IFRS as adopted by the EU requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

f. Use of estimates and judgments (cont.)

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

Information about other critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the consolidated financial statements is included in the following note:

· Note 8 - Suspension of borrowing costs capitalization

· Note 8 - Classification of trading properties as current vs. non-current

· Note 8 - Trading property vs. Investment property

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next financial year are included in the following notes:

· Note 8 - key assumptions used in determining the net realisable value of trading properties

Functional currency

The EUR is the functional currency for Group companies (with the exception of Indian companies - in which the functional currency is the Indian Rupee - INR, and the investment in the USA held until June 30, 2012 - in which the functional currency was the USD) since it is the currency of the economic environment in which the Group operates. This is because the EUR (and in India and the USA - the INR and USD, respectively) is the main currency in which management, determines its pricing with tenants, potential buyers and suppliers, determine its financing activities and budgets and assesses its currency exposures.

Operating cycle determination

The Normal Operating Cycle ("NOC") of the Group is driven by its business model to buy, develop and sell, primarily shopping centres, and comprises the estimated amount of time required to complete the process from the acquisition of undeveloped land through its development, preparation for sale and ultimate disposal. Based on the Group's experience, mainly from the period from 1996-2008, this period of time was three to five years (and in respect of large scale, multi-phase/mixed-use projects, up to eight years). For example for completed shopping centres these steps include achieving a stabilized tenants list, improving the tenant mix, increasing occupancy rates, completion of certain tenant improvements and finding the qualified buyers. For plots this includes obtaining permits, finance and construction.

The Company maintains its existing business model; however with the financial crisis as background the level of uncertainty of the actual amount of time needed to complete all steps in the process has become much higher than what the Company believes is a normal level.

Over the period 2009 - 2012, the Company has had difficulty selling completed properties at prices reflecting management's view of reasonable estimated values, as well as experienced a lack of available finance for development of plots.

The return to what management considers more normal conditions, primarily in the CEE markets where it has properties, has been longer than expected.

In view of these uncertainties and abnormalities, the Company has taken a position of reclassifying its entire trading properties asset to long term, until the abnormal level of uncertainty is reduced.

NOTE 3 CASH AND CASH EQUIVALENTS

(*) Restated due to Retrospective application

(1) Main EUR and USD deposits as of December 31, 2013 are held on corporate level and bear money market interest rates which are mainly between 0% and 0.5%.

NOTE 4 RESTRICTED BANK DEPOSITS

(*) Restated due to Retrospective application.

(1) As of December 31, 2013, EUR 5.6 million is restricted mainly in respect of bank facilities agreements signed to finance Projects in Poland, Serbia, and the Czech Republic. These amounts carry an annual interest rate of mainly Overnight rates.

(2) Restriction over 2012 USD balance was removed following the insurance refund in June 2013 (refer also to note 28(d)). Restriction over 2012 NIS balance was removed following the repayment of NIS denominated loan

NOTE 5 AVAILABLE FOR SALE FINANCIAL ASSETS

Available-for-sale financial assets ("AFS") portfolio consisted of mainly traded debt securities issued by banks and corporates.

The fair value of available-for-sale financial assets was determined by reference to their quoted closing bid price at the reporting date.

(*) An additional EUR 1.27 million of debt securities bonds were purchased as held for trading financial assets.

NOTE 6 TRADE RECEIVABLES

(*) Restated due to Retrospective application.

NOTE 7 OTHER RECEIVABLES, PREPAYMENTS AND ADVANCES

a. Other receivables

(*) Restated due to Retrospective application

b. Prepayments and advances

(*) Restated due to Retrospective application.

(1) The 2012 amount represents two components, with both amounts impaired in the course of 2013:

A) Prepayment in respect of the Kochi project in India in the amount of EUR 4.3 million.

On 11 November, 2013 the Company has demanded and exercised the corporate guarantee in the amount of EUR 4.3 million including the interest thereon up till such date (the "Reimbursement Payment") provided by EI in the frame of the Indian JV Agreement on the ground of EI's default to finalize and conclude the transfer of the Kochi Project Rights to the Indian JV Vehicle.

EI in its reply letter has refused to repay the Reimbursement Payment. The Company is in the view that, based on the mentioned JV Agreement and its ancillary documents (including the mentioned corporate guarantee issued by EI in favour of the Company), it has valid claim to get back the mentioned amount of EUR 4.3 million.

Despite the above, and in view of uncertainties regarding amounts and/or time, the Company decided to record the prepayment.

B) Prepayment in respect of the Targu Mures project in the amount of circa EUR 1 million. The Company decided to record this prepayment in view of uncertainty associated with the development of the project.

NOTE 8 TRADING PROPERTIES

(*) Restated due to Retrospective application.

(**) As of December 31, 2013, the Koregaon park trading property is the only trading property presented as short term, owing to the existence of a sale and purchase agreement on the trading property. All other trading properties are classified as long term.

(1) The Company temporarily suspended capitalization of borrowing costs starting July 1, 2013, following temporary suspension of active development of the majority of its trading properties due to the Group's liquidity crisis.

(2) Breakdown of write -down of trading properties:

(3) Breakdown of write -down of trading properties (cont.):

The write downs were caused mainly by the following factors:

· There were significant decreases in Net Realizable Values of certain projects below the carrying amount due to worsening market condition in the certain countries in which the Group operates including mainly Romania and Serbia.

· In accordance with the Group's accounting policy plots of lands held for development are not written down below costs if the completed projects are expected to be sold at or above cost.

· Following management reassessment of the business plans of certain undeveloped plots of lands, and the difficulty to assess whether they will be developed or not, and to recover their costs, the carrying amount of the lands were written down to their Net Realizable Values.

· The disposal of certain properties subsequent to the reporting period at a selling price below their carrying amount triggered write down of these properties to their contractual selling price (refer to note 28(B))

(4) Including cost of Casa Radio project in Romania in a total amount of EUR 153 million (2012 - EUR 158 million).

The value of the Casa Radio project in Romania includes two non-operative gas turbines with a total carrying amount of EUR 3 million (following write down). These turbines were purchased in the past with the purpose of supplying energy to the completed project due to lack of sufficient energy infrastructure capabilities in Bucharest at the time. Following an improvement in the energy infrastructure in recent years the turbines became redundant and efforts were made to dispose of them. In the course of 2013 the turbines were written down (EUR 6.3 million) to their Net Realizable Values based on most recent offering prices received from potential buyers. Refer to note 32 (B) for the selling of the turbines.

NOTE 9 PROPERTY AND EQUIPMENT

(*) Restated due to Retrospective application.

Major additions/ disposals/ impairments during the period

(1) The airplane of the Company is pledged as a security for a bank facility utilized for the purchase of the airplane. For the selling of the airplane refer to note 32(A).

(2) In 2012, the Company recorded a loss due to impairment of its airplane of EUR 0.4 million, based on external valuation.

NOTE 10 INVESTMENT PROPERTY

NOTE 11 EQUITY ACCOUNTED INVESTEES

The Group has the following interest (directly and indirectly) in the below joint ventures (the Group has no investment in associates), as at December 31, 2013 and 2012:

(1) Refer also to note 28(E) for the dissolving of investee.

(2) Refer also to note 34(A) for the selling of the investee.

(3) Refer also to note 34(C) for the selling of the investees.

None of the joint ventures are publicly listed.

The movement in equity accounted investees (in aggregation) was as follows:

(1) EPUS was the top holding company of the US operations, holding all the discontinued operations in the US. Upon the disposal of all US assets, EPUS remained with undistributed cash amounts, and had no activity, therefore the EPUS remaining asset was deemed not to be part of the discontinued operations, and therefore reclassified to equity accounted investees. EPUS was dissolved in March 2013, and all of the remaining cash in it was distributed as liquidation dividend to the owners. Refer also to note 28(E).

(2) Breakdown of the Group's share of write downs (reversals of write downs) of trading properties projects held by equity accounted investees is as follows:

(3) Refer also to note 28(A) and 28(C) for the selling of Ercorner, Uj Udvar and P-One.

(4) As of December 31, 2013, the loan to equity accounted investee Diksna totalled EUR 7 million (December 31, 2012 - EUR 6.9 million). Other investment in equity accounted investees is either through various equity instruments, or by loans to cover negative equity position considered part of the Group's net investment in the investee.

Material joint ventures

Within the joint ventures, two joint ventures were deemed as material, and these are EPI (due to holding of major schemes in Bangalore and Chennai) and Diksna (being the only active shopping center held through a joint venture). The summarized financial information of the material joint ventures is as follows:

(*) Including cash and cash equivalents in the amount of EUR 1.1 million (2012 - EUR 1.1 million).

(**) Though EPI is 47.5% held by the Company, the Company is accounted for 50% of the results, as the third party holding 5% in EPI is deemed not to participate in accumulated losses, hence EI and the Company, the holders of the remaining 95%, each account for 50% of the results of EPI each.

Material joint ventures (cont.)