At the date of acquisition for the New Plot, the Company recorded a liability to
the sellers of the New Plot according to the fair value of the land, based on an
independent appraisal. After initial recognition, the liability is subsequently
measured at fair value (based on projected discounted cash flows). Gains or
losses arising from changes in the fair value of the liability are recognized in
the statement of income.
In respect of the Third Plot, the sellers are entitled to receive 49% of the net
profit from the entire project less an amount of EUR 450. The agreement provides
for joint control with the sellers of the Third Plot. Accordingly, the
investment in the subsidiary is accounted for by the proportionate consolidation
method.
NOTE 19:- FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group's principal financial instruments comprise bank loans and overdrafts,
and debentures. The main purpose of these financial instruments is to raise
finance for the Group's operations. The Group has various financial assets such
as trade receivables, cash and cash equivalents and short-term deposits, which
arise directly from its operations, and also has granted loans for affiliated
companies.
The main risks arising from the Group's financial instruments are cash flow
interest rate risk, foreign currency risk and credit risk. The Board of
Directors reviews and agrees on policies for managing each of these risks which
are recognized below.
a. Foreign exchange risk:
1. The Group operates in Hungary, Poland, Romania and Croatia and therefore
is exposed to foreign exchange risk arising from various currency exposures.
However, most of the receivables and the payables of each entity in the Group
are denominated in the entity's functional currency, and therefore, the Group is
mainly exposed in respect of loans received and granted that are denominated in
currency other than each entity's functional currency.
2. In order to reduce exposure to currency risk of the debentures (series C)
, as described in Note 12d.3, the Company entered into a cross currency swap,
according to which the Company receives interest in NIS, linked to the CPI,
bearing annual interest of 8% (identical to the terms of the debentures), and
pays an amount in Euro linked to the six-month Euribor plus a margin of 6.6%.
In addition, the Company fixed the exchange rate of the Euro/NIS at the rate of
5.48. This derivative does not qualify as a hedge under IFRS and, consequently,
all changes in the fair value are recorded directly in the income statement.
The following table demonstrates the pre-tax impact of a 10% change in the
currency rates with the most significant exposure, with all other variables held
constant:
+--------------------+-+------------+-+------------+-+------------+-+----------+
| | | December 31, |
+--------------------+-+-------------------------------------------------------+
| | | 2008 | | 2007 |
+--------------------+-+---------------------------+-+-------------------------+
| | | Increase | | Decrease | | Increase | |Decrease |
+--------------------+-+------------+-+------------+-+------------+-+----------+
| | | | | | | | | |
+--------------------+-+------------+-+------------+-+------------+-+----------+
| U.S. dollar | | 569 | | (569) | | (4,797) | | 4,797 |
+--------------------+-+------------+-+------------+-+------------+-+----------+
| Euro | | 2,464 | | (2,464) | | 842 | | (842) |
+--------------------+-+------------+-+------------+-+------------+-+----------+
| Polish Zloty | | 4,097 | | (4,097) | | 1,458 | | (1,458) |
+--------------------+-+------------+-+------------+-+------------+-+----------+
| Hungarian | | 3,504 | | (3,504) | | 111 | | (111) |
| Forint | | | | | | | | |
+--------------------+-+------------+-+------------+-+------------+-+----------+
| New Israeli | | (4,158) | | 4,158 | | (3,268) | | 3,268 |
| Shekel | | | | | | | | |
+--------------------+-+------------+-+------------+-+------------+-+----------+
| Croatian Kuna | | 10 | | (10) | | 19 | | (19) |
+--------------------+-+------------+-+------------+-+------------+-+----------+
| Ron | | 497 | | (497) | | - | | - |
+--------------------+-+------------+-+------------+-+------------+-+----------+
b. Interest rate risk:
The Group's exposure to the risk of changes in market interest rates relates
primarily to the Groups long-term debt obligations and other financial assets
with floating interest rates. Loans obtained and granted at variable rates
expose the Group to cash flow interest risk, which could have adverse effects on
the Group's net income or financial position. Changes in interest rates cause
variations in interest income and expenses on interest-bearing assets and
liabilities.
Financial instruments with fixed interest rates expose the Group to fair value
interest risk.
The following table demonstrates the sensitivity to a reasonably possible change
in interest rates, with all other variables held constant, of the Group's profit
before tax. There is no impact on the Group's equity.
+------------------------------------------+-+-------------+--+-------------+
| | | Increase | | Decrease |
| | | in 100 | | in 100 |
| | | basis | | basis |
| | | points | | points |
+------------------------------------------+-+-------------+--+-------------+
| | | | | |
+------------------------------------------+-+-------------+--+-------------+
| 2008: | | | | |
+------------------------------------------+-+-------------+--+-------------+
| U.S. dollar | | 56 | | (56) |
+------------------------------------------+-+-------------+--+-------------+
| Euro | | (50) | | 50 |
+------------------------------------------+-+-------------+--+-------------+
| Polish Zloty | | 311 | | (311) |
+------------------------------------------+-+-------------+--+-------------+
| Hungarian Forint | | (241) | | 241 |
+------------------------------------------+-+-------------+--+-------------+
| Ron | | - | | - |
+------------------------------------------+-+-------------+--+-------------+
| New Israeli Shekel | | (15) | | 15 |
+------------------------------------------+-+-------------+--+-------------+
| | | | | |
+------------------------------------------+-+-------------+--+-------------+
| 2007: | | | | |
+------------------------------------------+-+-------------+--+-------------+
| U.S. dollar | | 101 | | (101) |
+------------------------------------------+-+-------------+--+-------------+
| Euro | | 101 | | (101) |
+------------------------------------------+-+-------------+--+-------------+
| Polish Zloty | | (83) | | 83 |
+------------------------------------------+-+-------------+--+-------------+
| Hungarian Forint | | (77) | | 77 |
+------------------------------------------+-+-------------+--+-------------+
| Ron | | - | | - |
+------------------------------------------+-+-------------+--+-------------+
| New Israeli Shekel | | 194 | | (194) |
+------------------------------------------+-+-------------+--+-------------+
c. Credit risk:
Receivables are monitored on an ongoing basis, resulting in the Group's exposure
to bad debts being immaterial.
With respect to credit risk arising from the other financial assets of the
Group, which comprise cash and cash equivalents and deposits, the Group's
exposure to credit risk arises from default of the counterparty, with a maximum
exposure equal to the carrying amount of these instruments.
d. Liquidity risk:
The Group's objective is to maintain a balance between continuity of funding and
flexibility through the use of bank overdrafts, bank loans and debentures.
The table below summarizes the maturity profile of the Group's financial
liabilities at December 31, 2008 based on contractual undiscounted payments.
+--------------------------------+-+-----------+-+-----------+-+-----------+-+-----------+-+------------+
| | | Year ended December 31, 2008 |
+--------------------------------+-+--------------------------------------------------------------------+
| | | On | | Less | | 1-5 | | More | | Total |
| | | demand | | than | | years | | than | | |
| | | | | 12 | | | | 5 | | |
| | | | | months | | | | years | | |
+--------------------------------+-+-----------+-+-----------+-+-----------+-+-----------+-+------------+
| | | | | | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+-----------+-+-----------+-+------------+
| Interest-bearing | | - | | 39,976 | | 64,738 | | 23,825 | | 128,539 |
| loans and | | | | | | | | | | |
| borrowings | | | | | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+-----------+-+-----------+-+------------+
| Trade and | | - | | 4,700 | | - | | - | | 4,700 |
| other payables | | | | | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+-----------+-+-----------+-+------------+
| Other | | - | | - | | 2,971 | | 1,393 | | 4,364 |
| financial | | | | | | | | | | |
| liabilities | | | | | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+-----------+-+-----------+-+------------+
| | | | | | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+-----------+-+-----------+-+------------+
+--------------------------------+-+-----------+-+-----------+-+-----------+-+-----------+-+------------+
| | | Year ended December 31, 2007 |
+--------------------------------+-+--------------------------------------------------------------------+
| | | On | | Less | | 1-5 | | More | | Total |
| | | demand | | than | | years | | than | | |
| | | | | 12 | | | | 5 | | |
| | | | | months | | | | years | | |
+--------------------------------+-+-----------+-+-----------+-+-----------+-+-----------+-+------------+
| | | | | | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+-----------+-+-----------+-+------------+
| Interest-bearing | | - | | 33,499 | | 76,071 | | 30,647 | | 140,217 |
| loans and | | | | | | | | | | |
| borrowings | | | | | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+-----------+-+-----------+-+------------+
| Trade and | | - | | 16,021 | | - | | - | | 16,021 |
| other payables | | | | | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+-----------+-+-----------+-+------------+
| Other | | - | | 781 | | - | | - | | 781 |
| financial | | | | | | | | | | |
| liabilities | | | | | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+-----------+-+-----------+-+------------+
e.Political risk:
The Group has significant business in Central and Eastern Europe. Certain CEE
countries are considered as emerging markets. Political and economic changes in
these regions can have consequences for the Group's activities there, as well as
an impact on the results and financial positions of the Group. By close
monitoring of these businesses the board of management intends to limit the
risks of those changes.
f. Capital management:
The primary objective of the Group's capital management is to ensure that it
maintains a strong credit rating and healthy capital ratios in order to support
its business and maximise shareholder value.
The Group manages its capital structure and makes adjustments to it, in light of
changes in economic conditions. To maintain or adjust the capital structure, the
Group may adjust the dividend payment to shareholders, return capital to
shareholders or issue new shares. No changes were made in the objectives,
policies or processes during the years ended December 31, 2008 and 2007.
The Group monitors capital using a gearing ratio, which is net financial debt
divided by total equity plus net debt. The Group's policy is to keep the gearing
lower than 55%. The Group includes within net financial debt, interest-bearing
loans and borrowings, less cash and cash equivalents, and short-term deposits.
+------------------------------------------------+-+-------------+--+-------------+
| | | 2008 | | 2007 |
+------------------------------------------------+-+-------------+--+-------------+
| | | | | |
+------------------------------------------------+-+-------------+--+-------------+
| Interest-bearing loans and | | 108,135 | | 121,390 |
| borrowings | | | | |
+------------------------------------------------+-+-------------+--+-------------+
| Less - cash and short-term deposits | | (44,713) | | (85,956) |
+------------------------------------------------+-+-------------+--+-------------+
| | | | | |
+------------------------------------------------+-+-------------+--+-------------+
| Net financial debt | | 63,422 | | 35,434 |
+------------------------------------------------+-+-------------+--+-------------+
| | | | | |
+------------------------------------------------+-+-------------+--+-------------+
| Total equity | | 79,903 | | 88,895 |
+------------------------------------------------+-+-------------+--+-------------+
| | | | | |
+------------------------------------------------+-+-------------+--+-------------+
| Capital and net debt | | 143,325 | | 124,329 |
+------------------------------------------------+-+-------------+--+-------------+
| | | | | |
+------------------------------------------------+-+-------------+--+-------------+
| Gearing ratio | | 44% | | 29% |
+------------------------------------------------+-+-------------+--+-------------+
g. Fair value of financial instruments:
Set out below is a comparison by category of carrying amounts and fair values of
all of the Group's financial instruments:
+-----------------------------------+-+---------+-+---------+-+---------+-+---------+
| | | Carrying amount | | Fair value |
+-----------------------------------+-+---------------------+-+---------------------+
| | | 2008 | | 2007 | | 2008 | | 2007 |
+-----------------------------------+-+---------+-+---------+-+---------+-+---------+
| Financial assets | | | | | | | | |
+-----------------------------------+-+---------+-+---------+-+---------+-+---------+
| Cash | | 22,056 | | 70,905 | | 22,056 | | 70,905 |
+-----------------------------------+-+---------+-+---------+-+---------+-+---------+
| Deposits | | 22,657 | | 15,051 | | 22,657 | | 15,051 |
+-----------------------------------+-+---------+-+---------+-+---------+-+---------+
| Loan | | 16,746 | | 35,298 | | 16,641 | | 35,028 |
| notes | | | | | | | | |
+-----------------------------------+-+---------+-+---------+-+---------+-+---------+
| Loans to | | 41,012 | | - | | 40,557 | | - |
| associates | | | | | | | | |
+-----------------------------------+-+---------+-+---------+-+---------+-+---------+
| | | | | | | | | |
+-----------------------------------+-+---------+-+---------+-+---------+-+---------+
| Financial liabilities | | | | | | | | |
+-----------------------------------+-+---------+-+---------+-+---------+-+---------+
| Interest-bearing loans and | | | | | | | | |
| borrowings: | | | | | | | | |
+-----------------------------------+-+---------+-+---------+-+---------+-+---------+
| Floating | | 50,230 | | 56,303 | | 50,050 | | 56,303 |
| rate | | | | | | | | |
| borrowings | | | | | | | | |
+-----------------------------------+-+---------+-+---------+-+---------+-+---------+
| Fixed rate | | 57,905 | | 65,087 | | 21,258 | | 62,813 |
| borrowings | | | | | | | | |
+-----------------------------------+-+---------+-+---------+-+---------+-+---------+
| Other liabilities | | 2,482 | | 715 | | 2,482 | | 715 |
+-----------------------------------+-+---------+-+---------+-+---------+-+---------+
Interest on financial instruments classified as floating rate is repriced at
intervals of less than six months. Interest on financial instruments classified
as fixed rate is fixed until the maturity of the instrument. The other financial
instruments of the Group that are not included in the above tables are
non-interest bearing and are therefore not subject to interest rate risk.
NOTE 20:- MARKETING, GENERAL AND ADMINISTRATIVE EXPENSES
+-----------------------------------------+-+-----------+-+-----------+-+-----------+
| | | Year ended December 31, |
+-----------------------------------------+-+---------------------------------------+
| | | 2008 | | 2007 | | 2006 |
+-----------------------------------------+-+-----------+-+-----------+-+-----------+
| | | | | | | |
+-----------------------------------------+-+-----------+-+-----------+-+-----------+
| Professional fees | | 1,462 | | 1,122 | | 605 |
+-----------------------------------------+-+-----------+-+-----------+-+-----------+
| Management fees | | 396 | | 71 | | 295 |
+-----------------------------------------+-+-----------+-+-----------+-+-----------+
| Rent and office maintenance | | 620 | | 320 | | 200 |
+-----------------------------------------+-+-----------+-+-----------+-+-----------+
| Marketing | | 514 | | 814 | | 490 |
+-----------------------------------------+-+-----------+-+-----------+-+-----------+
| Salaries (including director's | | 2,260 | | 2,643 | | 907 |
| fees (1)) | | | | | | |
+-----------------------------------------+-+-----------+-+-----------+-+-----------+
| Share-based compensation | | - | | 47 | | 275 |
+-----------------------------------------+-+-----------+-+-----------+-+-----------+
| Travel expenses | | 284 | | 356 | | 113 |
+-----------------------------------------+-+-----------+-+-----------+-+-----------+
| Other | | 815 | | 593 | | 473 |
+-----------------------------------------+-+-----------+-+-----------+-+-----------+
| | | | | | | |
+-----------------------------------------+-+-----------+-+-----------+-+-----------+
| | | 6,351 | | 5,966 | | 3,358 |
+-----------------------------------------+-+-----------+-+-----------+-+-----------+
(1) Director's fees:
+------------------------------------+-+----------+-+----------+--+----------+
| | | 2008 | | 2007 | | 2006 |
+------------------------------------+-+----------+-+----------+--+----------+
| | | | | | | |
+------------------------------------+-+----------+-+----------+--+----------+
| Director's fees *) | | 1,113 | | 989 | | 545 |
+------------------------------------+-+----------+-+----------+--+----------+
| Directors insurance | | 45 | | 45 | | 22 |
+------------------------------------+-+----------+-+----------+--+----------+
| Bonuses | | 26 | | 646 | | 54 |
+------------------------------------+-+----------+-+----------+--+----------+
| | | | | | | |
+------------------------------------+-+----------+-+----------+--+----------+
| | | 1,184 | | 1,680 | | 621 |
+------------------------------------+-+----------+-+----------+--+----------+
*) The executive director's and non executive fees (including bonuses) for
the year 2008 are as follows:
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| | | | 2008 |
+-----+-----------------+-+-----------------------------------------------------------------------+
| | | |Outstanding | | Fees in | | Bonus in | | Share | | Total |
| | | | amount of | |thousands | |thousands | | based | | for |
| | | | options | | | | | |compensation | |the year |
| | | | | | | | | |in thousands | | |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| | | | | | | | | | | | |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| | Executive | | | | | | | | | | |
| | directors | | | | | | | | | | |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| 1. | O.Katzenelson, | | - | | 485 | | - | | - | | 485 |
| | CEO | | | | | | | | | | |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| 2. | Shaul Lotan, | | - | | 181 | | - | | - | | 181 |
| | Chairman | | | | | | | | | | |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| 3. | Ran Yaakobs, | | 500,000 | | 190 | | 16 | | - | | 206 |
| | CFO *) | | | | | | | | | | |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| | | | | | | | | | | | |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| | Total | | 500,000 | | 856 | | 16 | | - | | 872 |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| | | | | | | | | | | | |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| | Non-executive | | | | | | | | | | |
| | directors | | | | | | | | | | |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| 1. | Yosef Zimer *) | | 500,000 | | 55 | | 10 | | - | | 65 |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| 2. | Ron Hadasi | | - | | 24 | | - | | - | | 24 |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| 3. | Gilly Jacoby | | - | | 29 | | - | | - | | 29 |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| 4. | Karl Ferenc | | - | | 30 | | - | | - | | 30 |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| 5. | Eyal Keltsh | | - | | 77 | | - | | - | | 77 |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| 6. | Gerald Parkes | | - | | 24 | | - | | - | | 24 |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| 7. | David Dekel | | - | | 18 | | - | | - | | 18 |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| | | | | | | | | | | | |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| | Total | | 500,000 | | 257 | | 10 | | - | | 267 |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| | | | | | | | | | | | |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| | Total | | 1,000,000 | | 1,113 | | 26 | | - | | 1,139 |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
*) All the options were granted in 2006; in 2008 no new options were granted
or exercised.
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| | | | 2007 |
+-----+-----------------+-+-----------------------------------------------------------------------+
| | | |Outstanding | | Fees in | | Bonus in | | Share | | Total |
| | | | amount of | |thousands | |thousands | | based | | for |
| | | | options | | | | | |compensation | |the year |
| | | | | | | | | |in thousands | | |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| | Executive | | | | | | | | | | |
| | members | | | | | | | | | | |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| 1. | O.Katzenelson, | | - | | 447 | | 420 | | - | | 867 |
| | CEO | | | | | | | | | | |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| 2. | Shaul Lotan, | | - | | 179 | | 103 | | - | | 282 |
| | Chairman | | | | | | | | | | |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| 3. | Ran Yaakobs, | | 500,000 | | 144 | | 88 | | 10 | | 242 |
| | CFO *) | | | | | | | | | | |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| | | | | | | | | | | | |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| | Total | | 500,000 | | 770 | | 611 | | 10 | | 1,391 |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| | | | | | | | | | | | |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| | Non-executive | | | | | | | | | | |
| | members | | | | | | | | | | |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| 1. | Yosef Zimer *) | | 500,000 | | 51 | | 35 | | 9 | | 95 |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| 2. | Shimon | | - | | 21 | | - | | - | | 21 |
| | Katzenelson | | | | | | | | | | |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| 3. | Ron Hadasi | | - | | 9 | | - | | - | | 9 |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| 4. | Gilly Jacoby | | - | | 23 | | - | | - | | 23 |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| 5. | Karl Ferenc | | - | | 25 | | - | | - | | 25 |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| 6. | Eyal Keltsh | | - | | 72 | | - | | - | | 72 |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| 7. | Gerald Parkes | | - | | 18 | | - | | - | | 18 |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| | | | | | | | | | | | |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| | Total | | - | | 219 | | 35 | | 9 | | 263 |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| | | | | | | | | | | | |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| | Total | | 1,000,000 | | 989 | | 646 | | 19 | | 1,654 |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
*) All the options were granted in 2006; in 2007, no new options were granted
or exercised.
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| | | | 2006 |
+-----+-----------------+-+-----------------------------------------------------------------------+
| | | |Outstanding | | Fees in | | Bonus in | | Share | | Total |
| | | | amount of | |thousands | |thousands | | based | | for |
| | | | options | | | | | |compensation | |the year |
| | | | | | | | | |in thousands | | |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| | Executive | | | | | | | | | | |
| | members | | | | | | | | | | |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| 1. | O.Katzenelson, | | - | | 241 | | - | | - | | 241 |
| | CEO | | | | | | | | | | |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| 2. | Shaul Lotan, | | - | | 135 | | - | | - | | 135 |
| | Chairman | | | | | | | | | | |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| 3. | Ran Yaakobs, | | 500,000 | | 75 | | 32 | | 55 | | 162 |
| | CFO | | | | | | | | | | |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| | | | | | | | | | | | |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| | Total | | 500,000 | | 451 | | 32 | | 55 | | 538 |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| | | | | | | | | | | | |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| | Non-executive | | | | | | | | | | |
| | members | | | | | | | | | | |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| 1. | Yosef Zimer | | 500,000 | | 26 | | 22 | | 55 | | 103 |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| 2. | Shimon | | - | | 9 | | - | | - | | 9 |
| | Katzenelson | | | | | | | | | | |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| 3. | Jon Kempster | | - | | 18 | | - | | - | | 18 |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| 4. | Gilly Jacoby | | - | | 13 | | - | | - | | 13 |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| 5. | Karl Ferenc | | - | | 13 | | - | | - | | 13 |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| 6. | Eyal Keltsh | | - | | 15 | | - | | - | | 15 |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| | | | | | | | | | | | |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| | Total | | 500,000 | | 94 | | 22 | | 55 | | 171 |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| | | | | | | | | | | | |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
| | Total | | 1,00,000 | | 545 | | 54 | | 110 | | 709 |
+-----+-----------------+-+-------------+-+-----------+-+-----------+-+--------------+-+----------+
NOTE 21:- FINANCE INCOME (COSTS)
+-----------------------------------+-+----------+-+----------+--+----------+
| | | Year ended December 31, |
+-----------------------------------+-+-------------------------------------+
| | | 2008 | | 2007 | | 2006 |
+-----------------------------------+-+----------+-+----------+--+----------+
a. Finance costs:
+----------------------------------+-+-------------+-+-------------+--+----------+
| | | | | | | |
+----------------------------------+-+-------------+-+-------------+--+----------+
| Interest expense | | (10,476) | | (4,983) | | (3,217) |
+----------------------------------+-+-------------+-+-------------+--+----------+
| Exchange differences | | (19,109) | | (11,564) | | (1,940) |
+----------------------------------+-+-------------+-+-------------+--+----------+
| Bank charges and other, | | (1,163) | | (1,015) | | (498) |
| net | | | | | | |
+----------------------------------+-+-------------+-+-------------+--+----------+
| | | | | | | |
+----------------------------------+-+-------------+-+-------------+--+----------+
| | | (30,748) | | (17,562) | | (5,655) |
+----------------------------------+-+-------------+-+-------------+--+----------+
| Capitalized borrowing | | 3,063 | | 1,528 | | 2,053 |
| costs | | | | | | |
+----------------------------------+-+-------------+-+-------------+--+----------+
| | | | | | | |
+----------------------------------+-+-------------+-+-------------+--+----------+
| | | (27,685) | | (16,034) | | (3,602) |
+----------------------------------+-+-------------+-+-------------+--+----------+
b. Finance income:
+-----------------------------------+-+-----------+-+-----------+--+-----------+
| | | | | | | |
+-----------------------------------+-+-----------+-+-----------+--+-----------+
| Financial assets at fair | | 131 | | - | | - |
| value through profit and | | | | | | |
| loss | | | | | | |
+-----------------------------------+-+-----------+-+-----------+--+-----------+
| Gain on early repayment | | 7,937 | | - | | - |
| of debentures | | | | | | |
+-----------------------------------+-+-----------+-+-----------+--+-----------+
| Interest income | | 10,505 | | 7,259 | | 915 |
+-----------------------------------+-+-----------+-+-----------+--+-----------+
| Exchange differences | | 6,699 | | 16,395 | | 4,920 |
+-----------------------------------+-+-----------+-+-----------+--+-----------+
| | | | | | | |
+-----------------------------------+-+-----------+-+-----------+--+-----------+
| | | 25,272 | | 23,654 | | 5,835 |
+-----------------------------------+-+-----------+-+-----------+--+-----------+
NOTE 22:- OTHER INCOME AND OTHER EXPENSES
a. Other income:
+------------------------------------+-+-----------+-+-----------+-+-----------+
| | | Year ended December 31, |
+------------------------------------+-+---------------------------------------+
| | | 2008 | | 2007 | | 2006 |
+------------------------------------+-+-----------+-+-----------+-+-----------+
| | | | | | | |
+------------------------------------+-+-----------+-+-----------+-+-----------+
| Gain on sale of interests in | | 6,527 | | 8,314 | | 4,183 |
| subsidiaries and joint ventures | | | | | | |
+------------------------------------+-+-----------+-+-----------+-+-----------+
| Other | | (197) | | 307 | | 33 |
+------------------------------------+-+-----------+-+-----------+-+-----------+
| | | | | | | |
+------------------------------------+-+-----------+-+-----------+-+-----------+
| | | 6,330 | | 8,621 | | 4,216 |
+------------------------------------+-+-----------+-+-----------+-+-----------+
b. Year ended December 31, 2008:
As described in Note 14, the Company sold its wholly-owned subsidiary to a
jointly controlled company and deferred the recognition of the gain on the sale
until the loan, which was recorded in respect of this sale, was collected.
During the third quarter, the Company collected the loan and recognized the gain
in the amount of approximately EUR 5,300.
NOTE 23:- EARNINGS PER SHARE
Earnings per share are calculated by dividing the profit attributable to equity
holders of the Company by the weighted average number of Ordinary shares in
issue after giving effect to the split:
+-----------------------------------------+-+------------+-+------------+--+------------+
| | | Year ended December 31, |
+-----------------------------------------+-+-------------------------------------------+
| | | 2008 | | 2007 | | 2006 |
+-----------------------------------------+-+------------+-+------------+--+------------+
| | | | | | | |
+-----------------------------------------+-+------------+-+------------+--+------------+
| Profit attributable to | | 5,529 | | 19,270 | | 7,031 |
| equity holders of the | | | | | | |
| parent | | | | | | |
+-----------------------------------------+-+------------+-+------------+--+------------+
| | | | | | | |
+-----------------------------------------+-+------------+-+------------+--+------------+
| Weighted average number of | | 171,693 | | 166,342 | | 126,495 |
| Ordinary shares outstanding | | | | | | |
| (thousands) | | | | | | |
+-----------------------------------------+-+------------+-+------------+--+------------+
| Effect of dilution: | | | | | | |
+-----------------------------------------+-+------------+-+------------+--+------------+
| Share options | | 910 | | 1,811 | | 1,621 |
+-----------------------------------------+-+------------+-+------------+--+------------+
| | | | | | | |
+-----------------------------------------+-+------------+-+------------+--+------------+
| Adjusted weighted average | | 172,603 | | 168,153 | | 128,116 |
| number of Ordinary shares | | | | | | |
| for diluted earnings per | | | | | | |
| share | | | | | | |
+-----------------------------------------+-+------------+-+------------+--+------------+
| | | | | | | |
+-----------------------------------------+-+------------+-+------------+--+------------+
| Profit per share (basic and | | 0.03 | | 0.12 | | 0.06 |
| diluted) (EUR per share) | | | | | | |
+-----------------------------------------+-+------------+-+------------+--+------------+
NOTE 24:- RELATED PARTY DISCLOSURES
The financial statements include the financial statements of Nanette Real Estate
Group N.V. and the subsidiaries listed in the Appendix to the consolidated
financial statements.
a. Transactions with related parties:
1. Composition:
+---------------------------------+-+----------+--+----------+--+----------+
| | | Year ended December 31, |
+---------------------------------+-+--------------------------------------+
| | | 2008 | | 2007 | | 2006 |
+---------------------------------+-+----------+--+----------+--+----------+
| General and | | | | | | |
| administrative | | | | | | |
| expenses: | | | | | | |
+---------------------------------+-+----------+--+----------+--+----------+
| Key | | 1,139 | | 1,654 | | 709 |
| management | | | | | | |
| personnel | | | | | | |
| of the | | | | | | |
| Group | | | | | | |
| (including | | | | | | |
| directors' | | | | | | |
| fees *) | | | | | | |
+---------------------------------+-+----------+--+----------+--+----------+
| Shareholders | | 288 | | 244 | | 377 |
+---------------------------------+-+----------+--+----------+--+----------+
| | | | | | | |
+---------------------------------+-+----------+--+----------+--+----------+
| | | 1,427 | | 1,898 | | 1,086 |
+---------------------------------+-+----------+--+----------+--+----------+
| Finance income: | | | | | | |
+---------------------------------+-+----------+--+----------+--+----------+
| Proportionately | | 1,606 | | 1,510 | | 405 |
| consolidated | | | | | | |
| entities | | | | | | |
+---------------------------------+-+----------+--+----------+--+----------+
| | | | | | | |
+---------------------------------+-+----------+--+----------+--+----------+
| Finance costs: | | | | | | |
+---------------------------------+-+----------+--+----------+--+----------+
| Shareholders | | 914 | | 705 | | 2 |
+---------------------------------+-+----------+--+----------+--+----------+
*) Compensation of key management personnel composed as follows:
+----------------------------+-+----------+--+----------+--+----------+
| | | 2008 | | 2007 | | 2006 |
+----------------------------+-+----------+--+----------+--+----------+
| | | | | | | |
+----------------------------+-+----------+--+----------+--+----------+
| Short-term | | 1,139 | | 1,635 | | 599 |
| benefits | | | | | | |
+----------------------------+-+----------+--+----------+--+----------+
| Share-based | | - | | 19 | | 110 |
| compensation | | | | | | |
+----------------------------+-+----------+--+----------+--+----------+
| | | | | | | |
+----------------------------+-+----------+--+----------+--+----------+
| | | 1,139 | | 1,654 | | 709 |
+----------------------------+-+----------+--+----------+--+----------+
2. Management fees in the amount of EUR 272 to a company controlled by key
management personnel were capitalized to inventory cost in 2008 (2007 - EUR 379).
3. Agreements with Lehman (a shareholder), see Note 15b(5).
b. Balances with related parties:
+--------------------------------------------+---------+--+------------+-+------------+
| | | December 31, |
+--------------------------------------------+------------+---------------------------+
| | | 2008 | | 2007 |
+------------------------------------------------------+--+------------+-+------------+
| | | | | |
+------------------------------------------------------+--+------------+-+------------+
| Accounts receivable - other | | 898 | | - |
+------------------------------------------------------+--+------------+-+------------+
| | | | | |
+------------------------------------------------------+--+------------+-+------------+
| Highest balance during the year | | 898 | | - |
+------------------------------------------------------+--+------------+-+------------+
| | | | | |
+------------------------------------------------------+--+------------+-+------------+
| Other financial assets: | | | | |
+------------------------------------------------------+--+------------+-+------------+
| Proportionately consolidated | | 16,615 | | 28,093 |
| entity (1) | | | | |
+------------------------------------------------------+--+------------+-+------------+
| Shareholder | | - | | 835 |
+------------------------------------------------------+--+------------+-+------------+
| Other | | - | | 6,370 |
+------------------------------------------------------+--+------------+-+------------+
| | | | | |
+------------------------------------------------------+--+------------+-+------------+
| | | 16,615 | | 35,298 |
+------------------------------------------------------+--+------------+-+------------+
| | | | | |
+------------------------------------------------------+--+------------+-+------------+
| Loans to associates (2) | | 41,012 | | - |
+------------------------------------------------------+--+------------+-+------------+
| | | | | |
+------------------------------------------------------+--+------------+-+------------+
| Short-term loans from shareholder (3) | | 5,517 | | 3,849 |
+------------------------------------------------------+--+------------+-+------------+
| | | | | |
+------------------------------------------------------+--+------------+-+------------+
| Long-term loans before deducting current | | - | | 10,603 |
| maturities from shareholder | | | | |
+------------------------------------------------------+--+------------+-+------------+
| | | | | |
+------------------------------------------------------+--+------------+-+------------+
| Liabilities - other: | | | | |
+------------------------------------------------------+--+------------+-+------------+
| Shareholder | | 345 | | 96 |
+--------------------------------------------+---------+--+------------+-+------------+
(1) Terms and conditions of loans to proportionately consolidated entity:
+------------------------------------+-+-------------+--+-------------+
| | | Weighted | | December |
| | | average | | 31, |
| | | interest | | 2008 |
| | | rate (*) | | |
+------------------------------------+-+-------------+--+-------------+
| | | % | | |
+------------------------------------+-+-------------+--+-------------+
| | | | | |
+------------------------------------+-+-------------+--+-------------+
| In Euros | | 5.12 | | 6,990 |
+------------------------------------+-+-------------+--+-------------+
| In U.S. dollars | | - | | 1,142 |
+------------------------------------+-+-------------+--+-------------+
| In Hungarian Forint | | 13 | | 8,483 |
+------------------------------------+-+-------------+--+-------------+
| | | | | |
+------------------------------------+-+-------------+--+-------------+
| | | | | 16,615 |
+------------------------------------+-+-------------+--+-------------+
(*) Fixed interest rate as of December 31, 2008.
The replacement dates of these loans have not yet been determined.
(2) For terms and conditions (see Note 8f).
(3) Terms and conditions of loans from shareholders:
+------------------------------------+-+-------------+--+-------------+
| | | Weighted | | December |
| | | average | | 31, |
| | | interest | | 2008 |
| | | rate | | |
+------------------------------------+-+-------------+--+-------------+
| | | % | | |
+------------------------------------+-+-------------+--+-------------+
| | | | | |
+------------------------------------+-+-------------+--+-------------+
| In Euros (1) | | 5.89% | | 3,850 |
+------------------------------------+-+-------------+--+-------------+
| In Hungarian Forint (2) | | 10.50% | | 1,667 |
+------------------------------------+-+-------------+--+-------------+
| | | | | |
+------------------------------------+-+-------------+--+-------------+
| | | | | 5,517 |
+------------------------------------+-+-------------+--+-------------+
(1) Interest in respect of these loans is based on EURIBOR, with a margin of
3% and capped at 7%.
(2) Interest in respect of these loans is based on BUBOR, with a margin of
0.50%.
The replacement dates of these loans have not yet been determined.
NOTE 25:- SEGMENT INFORMATION
a. General:
The Group operates internationally and its organizational structure is based on
geographical areas. Accordingly, the division of operations in this manner
represents the basis according to which the Group reports data for management
purposes. The segments are determined according to the countries from which the
Group's revenues are generated. The Company has two reportable segments: Hungary
and Poland.
b. Operating segment data:
As of December 31, 2008 and for the year then ended:
+-------------------------+-+------------+-+-----------+-+----------+-+-----------------+
| | | Hungary | | Poland | | Other | | Consolidated |
| | | | | *) | | | | |
+-------------------------+-+------------+-+-----------+-+----------+-+-----------------+
| Income | | | | | | | | |
| statement | | | | | | | | |
| data: | | | | | | | | |
+-------------------------+-+------------+-+-----------+-+----------+-+-----------------+
| | | | | | | | | |
+-------------------------+-+------------+-+-----------+-+----------+-+-----------------+
| Revenues | | 18,322 | | 8,047 | | 160 | | 26,529 |
+-------------------------+-+------------+-+-----------+-+----------+-+-----------------+
| | | | | | | | | |
+-------------------------+-+------------+-+-----------+-+----------+-+-----------------+
| Segment | | 3,806 | | 2,811 | | (355) | | 6,262 |
| results - | | | | | | | | |
| operating | | | | | | | | |
| profit | | | | | | | | |
+-------------------------+-+------------+-+-----------+-+----------+-+-----------------+
| | | | | | | | | |
+-------------------------+-+------------+-+-----------+-+----------+-+-----------------+
| Unallocated | | | | | | | | 3,856 |
| general | | | | | | | | |
| corporate | | | | | | | | |
| expenses | | | | | | | | |
+-------------------------+-+------------+-+-----------+-+----------+-+-----------------+
| | | | | | | | | |
+-------------------------+-+------------+-+-----------+-+----------+-+-----------------+
| Operating | | | | | | | | 2,406 |
| profit | | | | | | | | |
+-------------------------+-+------------+-+-----------+-+----------+-+-----------------+
| | | | | | | | | |
+-------------------------+-+------------+-+-----------+-+----------+-+-----------------+
| Finance | | | | | | | | (27,685) |
| costs | | | | | | | | |
+-------------------------+-+------------+-+-----------+-+----------+-+-----------------+
| Finance | | | | | | | | 25,272 |
| income | | | | | | | | |
+-------------------------+-+------------+-+-----------+-+----------+-+-----------------+
| Other income | | | | | | | | 6,330 |
| | | | | | | | | |
+-------------------------+-+------------+-+-----------+-+----------+-+-----------------+
| | | | | | | | | |
+-------------------------+-+------------+-+-----------+-+----------+-+-----------------+
| Profit | | | | | | | | 6,323 |
| before taxes | | | | | | | | |
| on income | | | | | | | | |
+-------------------------+-+------------+-+-----------+-+----------+-+-----------------+
As of December 31, 2007 and for the year then ended:
+----------------------------+-+------------+--+-----------+--+----------+--+-----------------+
| | | Hungary | | Poland | | Other | | Consolidated |
+----------------------------+-+------------+--+-----------+--+----------+--+-----------------+
| Income | | | | | | | | |
| statement data: | | | | | | | | |
+----------------------------+-+------------+--+-----------+--+----------+--+-----------------+
| | | | | | | | | |
+----------------------------+-+------------+--+-----------+--+----------+--+-----------------+
| Revenues | | 18,101 | | 15,007 | | 66 | | 33,174 |
+----------------------------+-+------------+--+-----------+--+----------+--+-----------------+
| | | | | | | | | |
+----------------------------+-+------------+--+-----------+--+----------+--+-----------------+
| Segment results | | 3,602 | | 6,974 | | (288) | | 10,288 |
| - operating | | | | | | | | |
| profit | | | | | | | | |
+----------------------------+-+------------+--+-----------+--+----------+--+-----------------+
| | | | | | | | | |
+----------------------------+-+------------+--+-----------+--+----------+--+-----------------+
| Unallocated | | | | | | | | 3,894 |
| general | | | | | | | | |
| corporate | | | | | | | | |
| expenses | | | | | | | | |
+----------------------------+-+------------+--+-----------+--+----------+--+-----------------+
| | | | | | | | | |
+----------------------------+-+------------+--+-----------+--+----------+--+-----------------+
| Operating | | | | | | | | 6,394 |
| profit | | | | | | | | |
+----------------------------+-+------------+--+-----------+--+----------+--+-----------------+
| Finance costs | | | | | | | | (16,034) |
+----------------------------+-+------------+--+-----------+--+----------+--+-----------------+
| Finance income | | | | | | | | 23,654 |
+----------------------------+-+------------+--+-----------+--+----------+--+-----------------+
| Other income | | | | | | | | 8,621 |
+----------------------------+-+------------+--+-----------+--+----------+--+-----------------+
| | | | | | | | | |
+----------------------------+-+------------+--+-----------+--+----------+--+-----------------+
| Profit before | | | | | | | | 22,635 |
| taxes on income | | | | | | | | |
+----------------------------+-+------------+--+-----------+--+----------+--+-----------------+
*) In the second quarter of 2008, jointly controlled Polish companies that
were proportionately consolidated in previous periods were transferred to a
holding company in which the Company accounts for its interest using the equity
method (see Note 8e). Accordingly, commencing from the second quarter of 2008,
segment revenues for Poland no longer include the revenues and results of these
Polish companies. Segment results include the share in profit of the holding
company (associate).
As of December 31, 2006 and for the year then ended:
+----------------------------------+-+------------+--+-----------+--+-----------------+
| | | Hungary | | Poland | | Consolidated |
+----------------------------------+-+------------+--+-----------+--+-----------------+
| Income statement | | | | | | |
| data: | | | | | | |
+----------------------------------+-+------------+--+-----------+--+-----------------+
| | | | | | | |
+----------------------------------+-+------------+--+-----------+--+-----------------+
| Revenues | | 21,203 | | 10,666 | | 31,869 |
+----------------------------------+-+------------+--+-----------+--+-----------------+
| | | | | | | |
+----------------------------------+-+------------+--+-----------+--+-----------------+
| Segment results - | | 2,500 | | 2,448 | | 4,948 |
| operating profit | | | | | | |
+----------------------------------+-+------------+--+-----------+--+-----------------+
| | | | | | | |
+----------------------------------+-+------------+--+-----------+--+-----------------+
| Unallocated general | | | | | | 1,957 |
| corporate expenses | | | | | | |
+----------------------------------+-+------------+--+-----------+--+-----------------+
| | | | | | | |
+----------------------------------+-+------------+--+-----------+--+-----------------+
| Operating profit | | | | | | 2,991 |
+----------------------------------+-+------------+--+-----------+--+-----------------+
| | | | | | | |
+----------------------------------+-+------------+--+-----------+--+-----------------+
| Finance costs | | | | | | (3,602) |
+----------------------------------+-+------------+--+-----------+--+-----------------+
| Finance income | | | | | | 5,835 |
+----------------------------------+-+------------+--+-----------+--+-----------------+
| Other income | | | | | | 4,216 |
+----------------------------------+-+------------+--+-----------+--+-----------------+
| | | | | | | |
+----------------------------------+-+------------+--+-----------+--+-----------------+
| Profit before taxes | | | | | | 9,440 |
| on income | | | | | | |
+----------------------------------+-+------------+--+-----------+--+-----------------+
NOTE 26:-EVENTS SUBSEQUENT TO BALANCE SHEET DATE
a. Subsequent to the balance sheet date, the Company purchased its own
debentures (series B and series C) on the Tel-Aviv Stock Exchange, at par value
of NIS 2,416,577 and NIS 10.1 million, respectively (approximately EUR 2.4
million), for a total consideration of NIS 0.8 million and NIS 5.2 million
(approximately EUR 1.1 million), respectively. The profit from these purchases was
recognized in the income statement in the first quarter of 2009.
b. During February 2009, the Company (through a wholly-owned subsidiary)
completed the purchase of an additional 15% of the issued and outstanding share
capital of Osnova-C (see Note 8d), for a nominal consideration of approximately
$ 1 (EUR 1). The Company also granted loans to Osnova-C, in the total amount of $
6,350 thousand (EUR 4,536) includes $ 350 which were required by the Osnova-C as
an additional Investment from the Shareholders, at an annual interest rate of
LIBOR, with a margin of 5%. Subsequent to this purchase, the Company holds 30%
of the share capital of Osnova-C.
c. On March 25, 2009, Midrug Ltd. downgraded credit rating of the debentures
(series B and C) to local rating of Baa1.
LIST OF SUBSIDIARIES, PROPORTIONATELY CONSOLIDATED COMPANIES
AND ASSOCIATES
+--------------------------------------+-+------------------------+--+-----------+--+-----------+--+--------+
| | | | | Shareholding and control |
+--------------------------------------+-+------------------------+--+--------------------------------------+
| | | | | December 31, |
+--------------------------------------+-+------------------------+--+--------------------------------------+
| Name of company | | Country | | 2008 | | 2007 | | 2006 |
+--------------------------------------+-+------------------------+--+-----------+--+-----------+--+--------+
| | | | | % |
+--------------------------------------+-+------------------------+--+--------------------------------------+
| Subsidiaries: | | | | | | | | |
+--------------------------------------+-+------------------------+--+-----------+--+-----------+--+--------+
| Robyg Investment | | Poland | | 70.10 | | 70.10 | | 70.10 |
| Sp.z.o.o. | | | | | | | | |
+--------------------------------------+-+------------------------+--+-----------+--+-----------+--+--------+
| Thokoly Udvar Kft. | | Hungary | | 100.00 | | 100.00 | | 89.33 |
+--------------------------------------+-+------------------------+--+-----------+--+-----------+--+--------+
| Zold Park Haz Kft. | | Hungary | | 77.50 | | 77.50 | | 77.50 |
+--------------------------------------+-+------------------------+--+-----------+--+-----------+--+--------+
| Foodex 2003 Kft. | | Hungary | | 100.00 | | 100.00 | | 57.50 |
+--------------------------------------+-+------------------------+--+-----------+--+-----------+--+--------+
| Karolina Udvar Kft. | | Hungary | | 100.00 | | 100.00 | | 57.50 |
+--------------------------------------+-+------------------------+--+-----------+--+-----------+--+--------+
| MZM Properties Sp.z.o.o. | | Poland | | - | | - | | 90.00 |
+--------------------------------------+-+------------------------+--+-----------+--+-----------+--+--------+
| Robyg B.V. | | Netherlands | | 100.00 | | 100.00 | | 89.33 |
+--------------------------------------+-+------------------------+--+-----------+--+-----------+--+--------+
| Robyg Orgod Sp.z.o.o. | | Poland | | 100.00 | | 100.00 | | 46.00 |
+--------------------------------------+-+------------------------+--+-----------+--+-----------+--+--------+
| Robyg Galicia Sp.z.o.o. | | Poland | | 100.00 | | 80.00 | | 80.00 |
+--------------------------------------+-+------------------------+--+-----------+--+-----------+--+--------+
| Robyg Morena Sp.z.o.o. | | Poland | | - | | - | | 80.00 |
+--------------------------------------+-+------------------------+--+-----------+--+-----------+--+--------+
| IMMO Prop. Kft. | | Hungary | | 100.00 | | 100.00 | | 57.00 |
+--------------------------------------+-+------------------------+--+-----------+--+-----------+--+--------+
| Kamaraerdo Kft. | | Hungary | | 100.00 | | 100.00 | | 100.00 |
+--------------------------------------+-+------------------------+--+-----------+--+-----------+--+--------+
| Nanette Construction | | Hungary | | 100.00 | | 100.00 | | 100.00 |
| Kft. | | | | | | | | |
+--------------------------------------+-+------------------------+--+-----------+--+-----------+--+--------+
| Star Development | | Poland | | 100.00 | | 100.00 | | - |
| Sp.z.o.o. | | | | | | | | |
+--------------------------------------+-+------------------------+--+-----------+--+-----------+--+--------+
| Nanette Real Estate | | Romania | | 100.00 | | 100.00 | | - |
| Development Srl. | | | | | | | | |
+--------------------------------------+-+------------------------+--+-----------+--+-----------+--+--------+
| Nanette North Star | | Romania | | 100.00 | | 100.00 | | - |
| Properties Srl. | | | | | | | | |
+--------------------------------------+-+------------------------+--+-----------+--+-----------+--+--------+
| California Group Srl. | | Romania | | 100.00 | | 100.00 | | - |
+--------------------------------------+-+------------------------+--+-----------+--+-----------+--+--------+
| Nanette Borovje D.O.O. | | Croatia | | 100.00 | | 100.00 | | - |
+--------------------------------------+-+------------------------+--+-----------+--+-----------+--+--------+
| Etgar Financial Services | | Israel | | 100.00 | | - | | - |
| Ltd. | | | | | | | | |
+--------------------------------------+-+------------------------+--+-----------+--+-----------+--+--------+
| Albert Ingatian | | Hungary | | 100.00 | | - | | - |
+--------------------------------------+-+------------------------+--+-----------+--+-----------+--+--------+
| Paty Plots | | Hungary | | 100.00 | | - | | - |
+--------------------------------------+-+------------------------+--+-----------+--+-----------+--+--------+
| Nanette Holdings | | Cyprus | | 100.00 | | - | | - |
| (Ukraine) Ltd. | | | | | | | | |
+--------------------------------------+-+------------------------+--+-----------+--+-----------+--+--------+
| Laniste D.O.O. | | Croatia | | 100.00 | | - | | - |
+--------------------------------------+-+------------------------+--+-----------+--+-----------+--+--------+
| Nanette Nekretnine | | Croatia | | 100.00 | | - | | - |
| D.O.O. | | | | | | | | |
+--------------------------------------+-+------------------------+--+-----------+--+-----------+--+--------+
| Nanette Construction rom | | Romania | | 100.00 | | - | | - |
+--------------------------------------+-+------------------------+--+-----------+--+-----------+--+--------+
| | | | | | | | | |
+--------------------------------------+-+------------------------+--+-----------+--+-----------+--+--------+
| Proportionately | | | | | | | | |
| consolidated companies: | | | | | | | | |
+--------------------------------------+-+------------------------+--+-----------+--+-----------+--+--------+
| Robyg Palacowa Sp.z.o.o. | | Poland | | - | | 50.00 | | 50.00 |
+--------------------------------------+-+------------------------+--+-----------+--+-----------+--+--------+
| OK Investment Sp.z.o.o. | | Poland | | 50.00 | | 50.00 | | 50.00 |
+--------------------------------------+-+------------------------+--+-----------+--+-----------+--+--------+
| Robyg Wilanow II | | Poland | | - | | 42.50 | | 32.50 |
| Sp.z.o.o. | | | | | | | | |
+--------------------------------------+-+------------------------+--+-----------+--+-----------+--+--------+
| Gondola HAZ K.f.t. | | Hungary | | 50.00 | | 50.00 | | 50.00 |
+--------------------------------------+-+------------------------+--+-----------+--+-----------+--+--------+
| Real Prop House K.f.t. | | Hungary | | 50.01 | | 50.01 | | 50.01 |
+--------------------------------------+-+------------------------+--+-----------+--+-----------+--+--------+
| MZM Properties Sp.z.o.o. | | Poland | | - | | 45.00 | | - |
+--------------------------------------+-+------------------------+--+-----------+--+-----------+--+--------+
| Robyg Morena Sp.z.o.o. | | Poland | | - | | 40.00 | | - |
+--------------------------------------+-+------------------------+--+-----------+--+-----------+--+--------+
| Robyg City Apartments | | Poland | | - | | 37.50 | | - |
| Sp.z.o.o. | | | | | | | | |
+--------------------------------------+-+------------------------+--+-----------+--+-----------+--+--------+
| Nanette Pipera | | Romania | | 50.00 | | 50.00 | | - |
| Properties Srl. | | | | | | | | |
+--------------------------------------+-+------------------------+--+-----------+--+-----------+--+--------+
| Nanette City Gate | | Romania | | 50.00 | | 50.00 | | - |
| Timisoara Srl. | | | | | | | | |
+--------------------------------------+-+------------------------+--+-----------+--+-----------+--+--------+
| Nanette Heights Timisoara | | Romania | | 50.00 | | 50.00 | | - |
| Srl. | | | | | | | | |
+--------------------------------------+-+------------------------+--+-----------+--+-----------+--+--------+
| Nanette Bucharest | | Romania | | 50.00 | | 50.00 | | - |
| Properties | | | | | | | | |
+--------------------------------------+-+------------------------+--+-----------+--+-----------+--+--------+
| EDR Construction Brasov | | Holland | | 55.00 | | - | | - |
| B.V. | | | | | | | | |
+--------------------------------------+-+------------------------+--+-----------+--+-----------+--+--------+
| UKRA Real Estate B.V. | | Holland | | 50.00 | | - | | - |
+--------------------------------------+-+------------------------+--+-----------+--+-----------+--+--------+
| | | | | | | | | |
+--------------------------------------+-+------------------------+--+-----------+--+-----------+--+--------+
| Subsidiary of UKRA Real | | | | | | | | |
| Estate B.V.: | | | | | | | | |
+--------------------------------------+-+------------------------+--+-----------+--+-----------+--+--------+
| PP Plots | | Hungary | | 100.00 | | - | | - |
+--------------------------------------+-+------------------------+--+-----------+--+-----------+--+--------+
| | | | | | | | | |
+--------------------------------------+-+------------------------+--+-----------+--+-----------+--+--------+
| Proportionately | | | | | | | | |
| consolidated company of | | | | | | | | |
| EDR Construction Brasov | | | | | | | | |
| B.V.: | | | | | | | | |
+--------------------------------------+-+------------------------+--+-----------+--+-----------+--+--------+
| Taltoring | | Hungary | | 50.00 | | - | | - |
+--------------------------------------+-+------------------------+--+-----------+--+-----------+--+--------+
| | | | | | | | | |
+--------------------------------------+-+------------------------+--+-----------+--+-----------+--+--------+
| Proportionately | | | | | | | | |
| consolidated companies | | | | | | | | |
| of Robyg B.V.: | | | | | | | | |
+--------------------------------------+-+------------------------+--+-----------+--+-----------+--+--------+
| Robyg Development | | Poland | | - | | 50.00 | | 50.00 |
| Sp.z.o.o. | | | | | | | | |
+--------------------------------------+-+------------------------+--+-----------+--+-----------+--+--------+
+-------------------------------------+-+--------------------+--+-----------+--+-----------+--+--------+
| | | | | Shareholding and control |
+-------------------------------------+-+--------------------+--+--------------------------------------+
| | | | | December 31, |
+-------------------------------------+-+--------------------+--+--------------------------------------+
| Name of company | | Country | | 2008 | | 2007 | | 2006 |
+-------------------------------------+-+--------------------+--+-----------+--+-----------+--+--------+
| | | | | % |
+-------------------------------------+-+--------------------+--+--------------------------------------+
| | | | | | | | | |
+-------------------------------------+-+--------------------+--+-----------+--+-----------+--+--------+
| Subsidiary of MZM | | | | | | | | |
| Properties Sp.z.o.o. - | | | | | | | | |
+-------------------------------------+-+--------------------+--+-----------+--+-----------+--+--------+
| Robyg Park Sp.z.o.o. | | Poland | | 99.00 | | 70.00 | | 70.00 |
+-------------------------------------+-+--------------------+--+-----------+--+-----------+--+--------+
| | | | | | | | | |
+-------------------------------------+-+--------------------+--+-----------+--+-----------+--+--------+
| Subsidiary of Robyg | | | | | | | | |
| Morena Sp.z.o.o.: | | | | | | | | |
+-------------------------------------+-+--------------------+--+-----------+--+-----------+--+--------+
| Piekarnicza Sp.z.o.o. | | Poland | | 100.00 | | 100.00 | | - |
+-------------------------------------+-+--------------------+--+-----------+--+-----------+--+--------+
| | | | | | | | | |
+-------------------------------------+-+--------------------+--+-----------+--+-----------+--+--------+
| Proportionately | | | | | | | | |
| consolidated company of | | | | | | | | |
| Kamaraerdo K.f.t.: | | | | | | | | |
+-------------------------------------+-+--------------------+--+-----------+--+-----------+--+--------+
| Kamara-Projekt K.f.t. | | Hungary | | 50.00 | | 50.00 | | 50.00 |
+-------------------------------------+-+--------------------+--+-----------+--+-----------+--+--------+
| | | | | | | | | |
+-------------------------------------+-+--------------------+--+-----------+--+-----------+--+--------+
| Associated companies of | | | | | | | | |
| Nanette Holdings | | | | | | | | |
| (Ukraine) Ltd.: | | | | | | | | |
+-------------------------------------+-+--------------------+--+-----------+--+-----------+--+--------+
| Olimpia Real Estate LLC | | Ukraine | | 15.00 | | - | | - |
+-------------------------------------+-+--------------------+--+-----------+--+-----------+--+--------+
| Osanova C. | | Ukraine | | 15.00 | | - | | - |
+-------------------------------------+-+--------------------+--+-----------+--+-----------+--+--------+
| | | | | | | | | |
+-------------------------------------+-+--------------------+--+-----------+--+-----------+--+--------+
| Associated company: | | | | | | | | |
+-------------------------------------+-+--------------------+--+-----------+--+-----------+--+--------+
| Robyg S.A. | | Poland | | 48.18 | | - | | - |
+-------------------------------------+-+--------------------+--+-----------+--+-----------+--+--------+
| | | | | | | | | |
+-------------------------------------+-+--------------------+--+-----------+--+-----------+--+--------+
| Subsidiaries of Robyg | | | | | | | | |
| S.A. | | | | | | | | |
+-------------------------------------+-+--------------------+--+-----------+--+-----------+--+--------+
| MZM Properties | | Poland | | 100.00 | | - | | - |
+-------------------------------------+-+--------------------+--+-----------+--+-----------+--+--------+
| Robyg Morena Sp.z.o.o. | | Poland | | 100.00 | | - | | - |
+-------------------------------------+-+--------------------+--+-----------+--+-----------+--+--------+
| Robyg Palacowa Sp.z.o.o. | | Poland | | 100.00 | | - | | - |
+-------------------------------------+-+--------------------+--+-----------+--+-----------+--+--------+
| Robyg Wilanow II | | Poland | | 85.00 | | - | | - |
| Sp.z.o.o. | | | | | | | | |
+-------------------------------------+-+--------------------+--+-----------+--+-----------+--+--------+
| Robyg city Apartments | | Poland | | 75 | | - | | - |
| Sp.z.o.o. | | | | | | | | |
+-------------------------------------+-+--------------------+--+-----------+--+-----------+--+--------+
| Robyg Development | | Poland | | 100.00 | | - | | - |
| SP.z.o.o. | | | | | | | | |
+-------------------------------------+-+--------------------+--+-----------+--+-----------+--+--------+
| Jagondo Estates | | Poland | | 100.00 | | - | | - |
+-------------------------------------+-+--------------------+--+-----------+--+-----------+--+--------+
| Robyg Marina Tower | | Poland | | 100.00 | | - | | - |
+-------------------------------------+-+--------------------+--+-----------+--+-----------+--+--------+
| Robyg Wroclaw I | | Poland | | 100.00 | | - | | - |
+-------------------------------------+-+--------------------+--+-----------+--+-----------+--+--------+
| Robyg Wroclaw II | | Poland | | 100.00 | | - | | - |
+-------------------------------------+-+--------------------+--+-----------+--+-----------+--+--------+
| Robyg Zarzadzanie | | Poland | | 100.00 | | - | | - |
| Zp.z.o.o. | | | | | | | | |
+-------------------------------------+-+--------------------+--+-----------+--+-----------+--+--------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR CKKKDNBKBNNN
Nanette Real Estate N.V (LSE:NAT)
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