shaping the face of retail in polandfile,150_epp-2020-agm-notice.pdf · immediately after the...

SHAPING THE FACE OF RETAIL IN POLAND

EPP N.V. (Incorporated in The Netherlands) (Company number 64965945)JSE share code: EPP ISIN: NL0011983374 LEI code: 7245003P7O9N5BN8C098 (“EPP” or “the company” or “the group”)

AND INCORPORATING THE SUMMARISED

CONSOLIDATED FINANCIAL RESULTS

FOR THE 12 MONTHS ENDED 31 DECEMBER 2019

NOTICE CONVENING THE 2020 ANNUAL GENERAL MEETING

EPP Notice convening 2020 annual general meeting1

PART I: CONVENING NOTICE FOR THE 2020 ANNUAL GENERAL MEETING OF EPP

The EPP integrated report 2019 (IAR 19) was published on 12 March 2020. We are committed to providing stakeholders with an integrated report outlining a holistic overview of the company’s performance including risks and governance as well as the economic, social and environmental aspects of the business.

The notice of the annual general meeting and proxy form as well as the summarised consolidated financial results for the 12 months ended 31 December 2019 included in this booklet should be read in conjunction with the IAR 19. Your attention is drawn to accessing the integrated annual report and audited consolidated annual financial statements on the EPP website: https://www.epp-poland.com/s,128,annual-reports.html

DEAR EPP SHAREHOLDER

The shareholders and other persons entitled to attend general meetings of EPP are invited by the board of directors (“Board”) of the Company to attend the 2020 annual general meeting of the Company on Thursday, 25 June 2020 at 12:00 CET (“AGM”), to be held at Tribes at Gustav Mahlerplein 28, 1082 MA Amsterdam, The Netherlands. Registration will take place between 11:30 CET and the commencement of the AGM at 12:00 CET. Once the AGM has started registration will no longer be possible. The AGM shall be conducted in English.

This invitation must be read in conjunction with: PART II: Agenda PART III: Explanatory notes to agenda PART IV: General information PART V: Instructions and documents for participation and voting at the AGM Other: Abridged CV of each of the proposed members of the Board

EPP N.V.

The Management Board

2EPP Notice convening 2020 annual general meeting

PART II: AGENDA

1. Opening

2. Discussion of report of the Board for the financial year 2019, including corporate governance (no vote)

3. Adoption of annual accounts for the financial year 2019 (resolution)

4. Explanation of dividend policy (no vote)

5. Determination of the appropriation of profit and dividend for the financial year 2019 (no vote)

6. Discharge of the current members of the Board (resolution)

7. (a) Appointment of Mr T Trzósło as executive director of the Board (resolution)

(b) Reappointment of Mr M Dyjas as non-executive director of the Board (resolution)

(c) Reappointment of Mr MM Belka as non-executive director of the Board (resolution)

(d) Appointment of Mr A König as non-executive director of the Board (resolution)

(e) Determine number of directors of the Board (resolution)

8. Amendment of remuneration policy for the Board (resolution)

9. Approval of the amended EPP Long-Term Incentive Plan (resolution)

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

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

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

12. Authorisation of Board to acquire shares (resolution)

13. Implementation of remuneration policy for the Board in the financial year 2019 (no vote)

14. Non-binding advisory vote on the remuneration policy for the Board (resolution)

15. Non-binding advisory vote on the remuneration implementation report for the financial year 2019 (resolution)

16. Appointment of external auditor for the financial year 2020 (resolution)

17. Any other business

18. Closing


PART III: EXPLANATORY NOTES TO THE AGENDA

1. OPENING

2. DISCUSSION OF REPORT OF THE BOARD FOR THE FINANCIAL YEAR 2019, INCLUDING CORPORATE GOVERNANCE (NO VOTE)

This agenda item comprises an account of the financial year 2019 (ended on 31 December 2019), including the report of the Board. The Board will give a presentation on the performance of EPP in the financial year 2019 as described in the report of the Board. The shareholders will then be invited to discuss the report of the Board, including corporate governance.

3. ADOPTION OF ANNUAL ACCOUNTS FOR THE FINANCIAL YEAR 2019 (RESOLUTION) The Board members have signed the annual accounts for 2019 drawn up by the Board. The annual

accounts for 2019 are available on the Company’s website and are submitted for adoption by the AGM in this meeting. It is proposed to the AGM to adopt the annual accounts for 2019.

4. EXPLANATION OF DIVIDEND POLICY (NO VOTE) Under this agenda item the Board will give an explanation of the dividend policy of the Company.

5. DETERMINATION OF THE APPROPRIATION OF PROFIT AND DIVIDEND FOR THE FINANCIAL YEAR 2019 (NO VOTE)

Each financial year, the Board determines which part of the profits shall be reserved. Taking into account the dividend policy of the Company, the interim dividend of 5.8 euro cents per ordinary share in the capital of the Company as declared by the Board on 6 September 2019 (“Interim Distribution”) and the announcement by the Company regarding the revocation in full of the interim dividend for the six months ended on 31 December 2019, the Board determined that the Company’s profits exceeding the aggregate amount of the Interim Distribution realised in the financial year 2019 (ended on 31 December 2019), will be reserved.

6. DISCHARGE OF THE MEMBERS OF THE BOARD (RESOLUTION) It is proposed to the AGM to discharge the members of the Board from liability for the performance of

their duties in the financial year 2019 (ended on 31 December 2019) insofar as the performance of such duties is disclosed in the annual accounts for 2019 or has otherwise been communicated to the general meeting of the Company.

7. APPOINTMENT AND/OR REAPPOINTMENT OF ONE EXECUTIVE DIRECTOR AND THREE NON-EXECUTIVE DIRECTORS OF THE BOARD (RESOLUTION)

In line with the Company’s rotation schedule, Mr HJT Dean and Mr M Dyjas shall retire per the end of the AGM from their positions on the Board. Mr HJT Dean will not be up for reappointment after his retirement as executive director of the Company as per the end of the AGM.

In addition, Mr MM Belka and Ms AP Steer have resigned from their positions as a non-executive director of the Board with effect as per the end of the AGM, in light of the requirement of having (the number nearest to, but not less than) one-third of the directors retiring per the end of the AGM from their positions on the Board. Ms AP Steer will not be up for reappointment.

Under the Company’s articles of association, the Board has the right to make binding nominations for open positions on the Board. The binding nature of the nominations may be overridden by a vote of two-thirds of the votes cast at the AGM if such two-thirds vote constitutes more than half of the issued share capital of the Company.


The following appointments and reappointments are proposed: (a) Appointment of Mr T Trzósło as executive director of the Board (resolution) It is proposed to the AGM to appoint Mr T Trzósło as executive director of the Board, with the title

of Chief Executive Officer, in accordance with the nomination by the Board, for a term until immediately after the annual general meeting to be held in 2023.

The details of Mr T Trzósło (including his shareholding in the capital of the Company, if any) are included in his CV which shall be available on the Company’s website as from the convocation date, as well as in this notice convening the AGM. Tomasz Trzósło joins EPP from JLL where he served as the Managing Director for Poland and Central Europe. He held various senior leadership positions in the company and participated in numerous capital markets transactions including real estate sales, acquisitions and equity raising projects.

Tomasz Trzósło is an experienced property sector leader with a proven track record, which spans over two decades in Central European real estate markets. For the last seven years he managed JLL’s operations in Poland and wider Central Europe, with responsibility for all JLL activities including capital markets, leasing, valuations, property management and project management. Tomasz Trzósło has impressive career credentials having held senior leadership positions in the region managing diverse businesses. He has been involved with all sectors of real estate, including retail, office, industrial, hotel and residential. He holds a Master in Financial Accountancy degree and qualifications in valuation, investment appraisal, property finance and portfolio management. Based upon his experience, the Board believes that Mr T Trzósło is the appropriate candidate for this position.

(b) Reappointment of Mr M Dyjas as non-executive director of the Board (resolution) It is proposed to the AGM to reappoint Mr M Dyjas as non-executive director of the Board, in

accordance with the nomination by the Board, for a term until immediately after the annual general meeting to be held in 2023.

The details of Mr M Dyjas (including his shareholding in the capital of the Company, if any) are included in his CV which shall be available on the Company’s website as from the convocation date, as well as in this notice convening the AGM. Mr M Dyjas has performed his tasks satisfactorily and based upon this performance of tasks since his prior appointment, the Board believes that Mr M Dyjas is the appropriate candidate for this position.

(c) Reappointment of Mr MM Belka as non-executive director of the Board (resolution) It is proposed to the AGM to reappoint Mr MM Belka as non-executive director of the Board, in

accordance with the nomination by the Board, for a term until immediately after the annual general meeting held in 2022.

The details of Mr MM Belka (including his shareholding in the capital of the Company, if any) are included in his CV which shall be available on the Company’s website as from the convocation date, as well as in this notice convening the AGM. Mr MM Belka has performed his tasks satisfactorily and based upon this performance of tasks since his prior appointment, the Board believes that Mr MM Belka is the appropriate candidate for this position.

(d) Appointment of Mr A König as non-executive director of the Board (resolution) It is proposed to the AGM to appoint Mr A König as non-executive director of the Board, in

accordance with the nomination by the Board, for a term until immediately after the annual general meeting held in 2023.


PART III: EXPLANATORY NOTES TO THE AGENDA (CONTINUED)

Mr A König has served as a non-executive director of the Board in prior years and had voluntarily stepped down at the end of the annual general meeting in 2019. Upon the untimely passing of the non-executive director Mr M Wainer, it follows that Mr A König, with a view to his long-lasting experience and his support of the Company, would (again) be up for appointment. The details of Mr A König (including his shareholding in the capital of the Company, if any) are included in his CV which shall be available on the Company’s website as from the convocation date, as well as in this notice convening the AGM. Based upon his experience, the Board believes that Mr A König is the appropriate candidate for this position.

(e) Determine number of directors of the Board (resolution) With due observance of and pursuant to the Company’s articles of association, the general meeting

of the Company shall determine the number of executive directors and non-executive directors of the Board. It is proposed to the AGM to determine that the number of executive directors of the Board shall be two and the number of non-executive directors of the Board shall be nine.

Since Ms AP Steer has elected not to stand for reappointment, the Board will commence a search to fill this vacancy – with a view to selecting a fully independent Dutch resident with a legal background and an interest in corporate governance, preferably female, who is sufficiently equipped to chair the Nomination and Remuneration Committee.

8. AMENDMENT OF REMUNERATION POLICY FOR THE BOARD (RESOLUTION) During the annual general meeting of the Company held in 2019, the Board announced that the current

remuneration policy for the Board would undergo a review during 2019. The Board has conducted such review and it is now proposed to the AGM to amend the remuneration policy for the Board. A copy of the proposed remuneration policy shall be available on the Company’s website as from the convocation date at https://www.epp-poland.com/s,129,shareholder-circulars.html.

The proposed amendments to the remuneration policy follow the review and analysis of the existing remuneration policy and are made in light of recent market developments, legal and regulatory requirements and to ensure that the policy is sufficiently connected with external market developments. As part of this review, the Board analysed the current pay levels and compared and considered these levels to market practices, market levels within the remuneration reference group and appropriate pay mix levels. Furthermore, in order to increase transparency on the STI and LTI performance targets, a performance incentive zone and associated payout levels are provided for the relevant financial and non-financial performance targets, including their weighting. These elements have been included in the proposed remuneration policy. Once adopted, the proposed remuneration policy will replace the current remuneration policy with retrospective effect as from 1 January 2020.

9. APPROVAL OF THE AMENDED EPP LONG-TERM INCENTIVE PLAN (RESOLUTION) Unless the context indicates a contrary intention, the words in the first column shall have the meanings

assigned to them in the second column; the singular includes the plural and vice versa; an expression which denotes one gender includes the other gender; a natural person includes a juristic person and vice versa and cognate expressions shall bear corresponding meanings.


“Depositary” as defined in clause 3.7 of the LTI Plan; “Lock-up Period” as defined in clause 6.1 of the LTI Plan; the link between respective

tranches, reference periods, vesting dates and Lock-up Periods is illustrated in Schedule 4 of the LTI Plan;

“LTI Plan” means the EPP Long-Term Incentive Plan as approved at the Company’s extraordinary general meeting held on 8 December 2017;

“Members of the Key Personnel” means the natural persons specified in Schedule 1 of the LTI Plan, as well as any entity Affiliated (as defined in the LTI Plan) with a Member of Key Personnel designated by such Member of the Key Personnel, pursuant to clause 3.5 of the LTI Plan. For the sake of clarity, a Member of the Key Personnel may also participate in the LTI Plan within the individual business activity;

“Restricted Shares” means the shares in the capital of the Company that were transferred to a Member of the Key Personnel with regards to which the Lock-up Period has not yet passed, i.e. upon the lapse of the Lock-up Period the Restricted Shares cease to be Restricted Shares.

The following proposal is made in accordance with article 135 of Book 2 of the Dutch Civil Code and clause 2.10 of the LTI Plan.

It is proposed to the AGM to (i) approve the amendments to the LTI Plan, including Schedules 1, 3 and 4 of the LTI Plan; a copy of the proposed amendments to the LTI Plan (including such Schedules) shall be available on the Company’s website as from the convocation date at https://www.epp-poland.com/s,129,shareholder-circulars.html, (ii) approve that the aggregate maximum number of shares in the capital of the Company that is granted to all Members of the Key Personnel for 2020 is increased by 533 333 shares (being the maximum number of shares in the capital of the Company that may be granted to Mr T. Trzósło for 2020) and constitutes 2 383 333 shares in the capital of the Company, and respectively the aggregate maximum number of shares in the capital of the Company that may be utilised for the purpose of the LTI Plan (for the entire period of its duration, being 10 years) is increased by 533 333 shares and constitutes 19 033 333 (nineteen million thirty-three thousand three hundred thirty-three) shares in the capital of the Company, and (iii) approve the full accelerated release of all Restricted Shares (granted to Mr HJT Dean but entrusted with the Depositary) that the Depositary will be holding on 1 July from the Lock-up as well as approve that the Depositary may dispose of shares in the capital of the Company kept by the Depositary (including Restricted Shares, following the lapse or, respectively, release of the respective Lock-up Period) as per any further instructions of Mr HJT Dean.

The above amendments to the LTI Plan are proposed in order to facilitate (i) the retirement of Mr HJT Dean as Chief Executive Officer of the Company, who is currently included as a Member of the Key Personnel in the LTI Plan and is entitled to receive shares in the capital of the Company as a form of remuneration, and (ii) the nomination for appointment of Mr T Trzósło as new Chief Executive Officer of the Company and recognising him as a Member of the Key Personnel who is eligible to participate in the LTI Plan.

In accordance with clause 2.10 of the LTI Plan, this proposal requires the majority of at least 75% of the votes cast, with votes attaching to shares in the capital of the Company owned or controlled by Members of the Key Personnel who are existing participants of the LTI Plan excluded from voting.


10. AUTHORISATION OF BOARD TO ISSUE ORDINARY SHARES AND/OR GRANT RIGHTS TO SUBSCRIBE FOR ORDINARY SHARES (RESOLUTION)

The following proposals are made in accordance with article 96, paragraphs 1 and 5, of Book 2 of the Dutch Civil Code. The authorities are intended to give the Board flexibility in financing the Company in the most efficient manner and flexibility in the context of mergers, acquisitions or strategic alliances. The proposed authorisations, following adoption, replace the current authorisations of the Board which expire at the end of this AGM.

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

Proposal to authorise the Board for a period until the next annual general meeting of the Company or 15 months calculated as of the date of the AGM, whichever period is shorter, to, save for any pro rata issue of shares, issue ordinary shares or grant rights to acquire ordinary shares in addition to the authority proposed in agenda item 10(b) below (i) up to a maximum of 90 794 680 ordinary shares (being 10%) of the total number of shares issued and outstanding as at the date of the notice of AGM) in connection with or on the occasion of mergers, acquisitions or strategic alliances, (ii) up to a maximum of 19 033 333 ordinary shares to facilitate the EPP Long-Term Incentive Plan as approved at the Company’s extraordinary general meeting held on 8 December 2017, and (iii) as a separate, additional authority, for the purposes of affording shareholders an election to receive distributions from the Company either in the form of a cash dividend, or in the form of new EPP ordinary shares, credited as fully paid up, all within the limits laid down in the Company’s articles of association and subject at all times to the Rules and Regulations of the Luxembourg Stock Exchange (“LuxSE”) and the Johannesburg Stock Exchange (“JSE”) Listings Requirements.

The general meeting of the Company shall remain authorised to resolve upon an issuance of shares and/or grant of rights to subscribe for shares.

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

Proposal to authorise the Board for a period until the next annual general meeting of the Company or 15 months calculated as of the date of the AGM, whichever period is shorter, to issue ordinary shares or grant rights to acquire ordinary shares up to a maximum of 45 397 340 ordinary shares for a capital raise (cash) in connection with or on the occasion of a transaction other than mergers, acquisitions or strategic alliances, all within the limits laid down in the Company’s articles of association and subject at all times to the Rules and Regulations of the LuxSE and the JSE Listings Requirements, and on the following terms:

(i) the allotment and issue of shares must be made to persons qualifying as public shareholders and not to related parties as defined in the JSE Listings Requirements;

(ii) the shares which are the subject of the issue of shares for cash must be of a class already in issue or, where this is not the case, must be limited to such rights that are convertible into a class already in issue;

(iii) the total aggregate number of shares which may be issued for cash in terms of this authority may not exceed 45 397 340 shares (being 5% of the total number of shares issued and outstanding as at the date of the notice of the AGM). Accordingly, any shares issued under this authority prior to this authority lapsing shall be deducted from the 45 397 340 shares the Company is authorised to issue in terms of this authority for the purpose of determining the remaining number of shares that may be issued in terms of this authority;

(iv) in the event of a sub-division or consolidation prior to this authority lapsing, the existing authority shall be adjusted accordingly to represent the same allocation ratio;



(v) the maximum discount at which shares may be issued is 5% of the weighted average traded price on the JSE of those shares over the 30 business days prior to the date that the price of the issue (the “reference period”), while taking into account Dutch law, is agreed between the Company and the party/ies subscribing for the shares (the “reference price”) provided that the reference price shall be reduced by the amount of any dividend if (i) the “ex” date for shareholders to be recorded on the relevant register in order to receive the relevant dividend occurs during the reference period and/or (ii) the shares to be issued shall only be issued after the “ex” date; and

(vi) after the Company has issued shares for cash which represent, on a cumulative basis within a financial year, 5% or more of the number of shares in issue prior to that issue, the Company shall publish an announcement containing full details of the issue (including the number of shares issued, the average discount to the weighted average traded price of the shares over the 30 days prior to the date that the price of the issue is agreed in writing between the Company and the party/ies subscribing for the shares and an explanation, including supporting information (if any), of the intended use of the funds).

In order to comply with the JSE Listings Requirements, the Board shall not make use of this authorisation if the resolution set out in this agenda item 10(b) will not be adopted with a majority of at least 75% of the total number of votes cast.

The proposed authorisations, following adoption, replace the current authorisations of the Board which expire at the end of this AGM.

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

Proposal to authorise the Board for a period until the next annual general meeting of the Company or 15 months calculated as of the date of the AGM, whichever period is shorter, to restrict or exclude pre-emptive rights in relation to the issue of ordinary shares or the granting of rights to acquire ordinary shares, save for any pro rata issue of shares. This proposal is made in accordance with article 96a, paragraph 6, of Book 2 of the Dutch Civil Code. This authorisation is limited to the number of shares that the Board is authorised to issue on the basis of the authorisations referred to under agenda item 10(a) and 10(b).

If less than 50% of the issued and outstanding capital is represented, this proposal can only be adopted by a majority of at least two-thirds of the votes cast. If 50% or more of the issued and outstanding capital is represented, a simple majority is sufficient to adopt this proposal.

The general meeting of the Company shall remain authorised to resolve to restrict or exclude pre-emption rights.

The proposed authorisation, following adoption, replaces the current authorisation of the Board which expires at the end of this AGM.


12. AUTHORISATION OF BOARD TO ACQUIRE SHARES (RESOLUTION) Proposal to authorise the Board for a period until the next annual general meeting of the Company or

15 months calculated as of the date of the AGM, whichever period is shorter, to acquire shares in the Company (including shares issued as stock dividend), for the maximum number of shares as is permissible under article 2:98 of the Dutch Civil Code, either through purchase on a stock exchange or otherwise provided that:

(a) repurchases of shares may not in the aggregate in any financial year exceed 20% of the Company’s issued ordinary share capital as per the date of the AGM;

(b) the repurchase may not be made at a price greater than 10% above the weighted average of the market value of the Company’s shares for the five business days on the JSE and/or the LuxSE immediately preceding the date on which the purchase is effected;

(c) any repurchase of shares shall be implemented through the order book of the JSE or the LuxSE and without prior arrangement or understanding between the Company and the counterparty;

(d) at any point in time the Company may appoint only one agent to effect repurchases on its behalf which have been authorised by the Board;

(e) the Company or (where the repurchase is effected by any subsidiary of the Company), the subsidiary is duly authorised to repurchase shares in accordance with applicable law and, where relevant, its articles of association;

(f) repurchases may not take place during a prohibited period (as defined in terms of the JSE Listings Requirements) unless a repurchase programme is in place (where the dates and quantities of shares to be repurchased during the prohibited period are fixed) and has been submitted to the JSE in writing prior to commencement of the prohibited period;

(g) an announcement will be published as soon as the Company has acquired shares constituting, on a cumulative basis, 3% of the number of shares in issue as of the date of the AGM, and for each 3% in aggregate acquired thereafter, containing full details of such repurchases; and

(h) the Board must resolve that the repurchase is authorised, the Company has passed the solvency and liquidity test and since that test was performed, there have been no material changes to the financial position of the group.

The directors undertake that, having considered the effects of a repurchase of the maximum number of shares allowed for under this general authority and the price at which the repurchases may take place pursuant to the repurchase general authority, for a period of 12 (twelve) months after the date of the notice of AGM, the Company and the EPP group will be able, in the ordinary course of business, to pay its debts; the consolidated assets of the Company and the group, fairly valued in accordance with International Financial Reporting Standards, will exceed the consolidated liabilities of the Company and the group; and the Company and the group’s ordinary share capital, reserves and working capital will be adequate for ordinary business purposes.

The following additional information, some of which may appear elsewhere in the Company’s annual report, is provided in terms of the JSE Listings Requirements for purposes of the resolution:

major beneficial shareholders – page 179 share capital of the Company – page 114

Directors’ responsibility statement The directors, whose names appear on pages 16 and 17 of the Company’s annual report, collectively and

individually accept full responsibility for the accuracy of the information pertaining to this resolution and certify that, to the best of their knowledge and belief, there are no facts that have been omitted which would make any statement false or misleading, and that all reasonable enquiries to ascertain such facts have been made and that the resolution contains all information required by legislation and the JSE Listings Requirements.



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

material changes in the affairs or financial position of the Company and its subsidiaries since the date of signature of the annual accounts for 2019 and up to the date of this notice of AGM.

The purpose of this proposal is to give the Board the authorisation to reduce the Company’s outstanding share capital in order to return capital to the Company’s shareholders, and/or to cover obligations under share-based compensation plans or for other purposes. The proposal is made in accordance with article 98, paragraph 4 of Book 2 of the Dutch Civil Code.

The proposed authorisation, following adoption, replaces the current authorisation of the Board which expires at the end of this AGM.

13. IMPLEMENTATION OF REMUNERATION POLICY FOR THE BOARD IN THE FINANCIAL YEAR 2019 (NO VOTE)

This agenda item provides for a discussion on the implementation of the remuneration policy for the Board in the financial year 2019 (ended on 31 December 2019). Reference is made to pages 70 through 73 of the annual accounts regarding the implementation of the Company’s remuneration policy.

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

Proposal to vote on the remuneration policy for the Board in accordance with the JSE Listings Requirements in order to allow shareholders to endorse, through a non-binding advisory vote, the Company’s remuneration policy as set out in the Company’s annual report.

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

Proposal to vote on the remuneration implementation report in accordance with the JSE Listings Requirements in order to allow shareholders to endorse, through a non-binding advisory vote, the Company’s remuneration implementation report as set out in the Company’s annual report.

In terms of the JSE Listings Requirements the remuneration policy and the remuneration implementation report must be tabled every year for separate non-binding advisory votes by shareholders of the Company at the AGM. The vote allows shareholders to express their view on the Company’s remuneration policy and the remuneration implementation report. In the event of 25% or more of shareholders voting against non-binding resolutions referred to under agenda items 14 and 15, the Board is committed to engaging actively with dissenting shareholders in this regard, in order to address all legitimate and reasonable objections and concerns.

16. APPOINTMENT OF EXTERNAL AUDITOR FOR THE FINANCIAL YEAR 2020 (RESOLUTION)

It is proposed to the AGM to reappoint Ernst & Young Accountants LLP as external auditor for the audit of the annual accounts of the Company for the financial year 2020 (ending on 31 December 2020), as nominated by the non-executive directors of the Board and upon the recommendation of the Audit and Risk Committee of the Company, and, among other things, due consideration has been given to the observations of the executive directors of the work of the external auditor.

17. ANY OTHER BUSINESS18. CLOSING


PART IV: GENERAL INFORMATION

MEETING DOCUMENTSThe agenda and explanatory notes thereto (as well as the other meeting materials mentioned in the notice) are available on the Company’s website (www.epp-poland.com) from the convocation date (being 27 May 2020). These documents are also available for inspection at the registered office of the Company in The Netherlands (Gustav Mahlerplein 28, 1082 MA Amsterdam, The Netherlands), where copies may be obtained free of charge. If you wish to receive copies of the documents, please contact the Company secretary, Rafał Kwiatkowski, tel: +48 22 43 00 300/email: [email protected], or the Company’s JSE sponsor, Java Capital Trustees and Sponsors Proprietary Limited, email: [email protected].

ATTENDANCE INSTRUCTIONSGeneralIn light of the evolving outbreak of Covid-19 (Coronavirus), the Company encourages its shareholders to exercise their voting rights via proxy. To mitigate potential health risks, the Company will limit social gatherings at the AGM and will adhere to instructions made by the Dutch government, for example on the maximum number of people attending and social distancing. The Company may take, or be required to take additional precautionary measures to protect the health and safety of all participants to the meeting. The Company will continue to closely monitor developments and will share further updates when available.

Record date and relevant registerUnder Dutch law and the Company’s articles of association, persons entitled to attend and, if applicable, to vote at the AGM are persons registered as such on Thursday, 28 May 2020 (“record date”) in one of the sub-registers designated for that purpose by the board of directors of EPP after all debit and credit entries have been made on the record date, regardless of whether the shares in the capital of the Company (“shares”) are still held by them at the date of the AGM and in addition have registered themselves in the manner mentioned below. The sub-registers designated for holders of book-entry shares are the registers administered by Computershare Investor Services Proprietary Limited in respect of securities traded on the JSE and Clearstream Banking Luxembourg in respect of shares securities traded on the LuxSE, indicating who is entitled to such shares on the record date. The register designated for holders of registered shares is the Company’s register of shareholders (as referred to in Article 5 of the articles of association) on the record date.

Quorum requirementsIn accordance with the articles of association of EPP, the quorum required for the AGM to begin or for any matter to be considered is as follows: at least three (3) shareholders entitled to attend and vote and who are present in person or able to

participate in the AGM by electronic communication, or represented by a proxy who is present in person or able to participate in the meeting by electronic communication, must be present;

the AGM may not begin until sufficient persons are present at the AGM to exercise, in aggregate, at least twenty-five percent (25%) of the voting rights that are entitled to be exercised in respect of at least one matter to be decided at the AGM; and

a matter to be decided at the AGM may not begin to be considered unless sufficient persons are present at the AGM to exercise, in aggregate, at least twenty-five percent (25%) of all of the voting rights that are entitled to be exercised in respect of that matter at the time the matter is called on the agenda.

Attendance and voting rights in respect of securities traded on the LuxSEPersons holding securities reflecting the beneficial entitlement to shares that are held in their name by PLC Nominees (Pty) Ltd (“nominee”) in book-entry form (“securities”), who wish to attend and vote at the AGM, either in person or by proxy, should instruct his/her relevant bank, brokerage or other intermediary (“intermediary”) to issue a statement confirming his/her holding of securities (including name, address and the number of securities held by the relevant holder on the record date). Such statements should be submitted ultimately on Tuesday, 23 June 2020 by SWIFT message to Clearstream Banking S.A. in Luxembourg or the Company secretary by email at [email protected].


A holder of securities who has submitted a statement to Clearstream Banking Luxembourg in accordance with the aforementioned will receive an attendance card issued in his/her name (“attendance card”). Such holder of the securities (or his/her proxy) must hand over the attendance card (together with any relevant letter of representation or power of attorney) at the registration desk upon arrival at the AGM in order to gain access.

Clearstream Banking Luxembourg shall collect all authority to attend the AGM, registration, proxy and voting instruction forms, together with any relevant letter of representation or power of attorney, on behalf of the Company, and Clearstream Banking Luxembourg shall submit all such information to the Company secretary by email at [email protected] ultimately on Tuesday, 23 June 2020.

Attendance and voting rights in respect of securities traded on the JSEA holder of securities in “own name” may attend the AGM and vote thereat in person by providing a registration form to his/her Central Securities Depository Participant (“CSDP”), broker or nominee with a copy to the Company’s transfer secretaries or the Company secretary, in accordance with the instructions below. Such holder of securities (or his/her proxy) will receive an attendance card that must be handed over at the registration desk upon arrival at the AGM in order to gain access.

If a holder of securities in “own name” does not wish to or is unable to attend the AGM, but wishes to be represented thereat, such holder must complete a proxy form and submit the same in accordance with the instructions below.

Holders of securities, other than in “own name”, who wish to attend and vote at the AGM (either in person or by proxy) should instruct his/her CSDP, broker or nominee to provide him/her with the necessary authority (letter of representation or power of attorney and a statement confirming his/her holding of securities (including name, address and the number of securities held by the relevant holder on the record date)), to attend the AGM in person, in the manner stipulated in terms of the agreement governing his/her relationship with the CSDP, broker or nominee. The relevant authority to attend the AGM should be registered in the manner mentioned below and is to be used to qualify for attendance to the AGM and must be produced, with identification, at the registration desk upon arrival at the AGM. Forms of identification include valid identity documents, driver’s licences and passports.

Holders of securities, other than in “own name”, who do not wish to or are unable to attend the AGM, but wish to vote thereat, should provide his/her CSDP, broker or nominee with his/her voting instructions in the manner stipulated in the agreement governing his/her relationship with the CSDP, broker or nominee. These instructions must be provided to the CSDP, broker or nominee by the cut-off time and date advised by the CSDP, broker or nominee for instructions of this nature.

All authority to attend the AGM, registration, proxy and voting instruction forms, together with any relevant letter of representation or power of attorney, should be lodged at or posted to the Company’s transfer secretaries, ultimately on Tuesday, 23 June 2020. The address details for the transfer secretaries are as set out below:

Computershare Investor Services Proprietary Limited 15 Biermann AvenueRosebank TowersRosebank, 2196Johannesburg South Africa(PO Box 61051, Marshalltown, 2107)[email protected]


PART IV: GENERAL INFORMATION (CONTINUED)

The Company’s transfer secretaries shall collect all authority to attend the AGM, registration, proxy and voting instruction forms, together with any relevant letter of representation or power of attorney, on behalf of the Company, and the Company’s transfer secretaries shall submit all such information to the Company secretary by email at [email protected] ultimately on Tuesday, 23 June 2020.

In the case of any doubt relating to the authorization of a holder of securities to participate in the AGM and admission thereto, the decision of the chairman of the AGM will be decisive.

RegistrationRegistration will take place at the registration desk at the venue between 11:30 CET and the commencement of the AGM at 12:00 CET. It is not possible to register after this time. Attendees may be asked to produce proof of identity (together with any relevant letter of representation or power of attorney) and may be declined access in case such proof of identity (together with any relevant letter of representation or power of attorney) is not produced. Forms of identification include valid identity documents, driver’s licences and passports. Each person entitled to vote or his proxy shall sign the attendance list.

Video conferencingThe Company has made provision for EPP shareholders or their proxies to follow the AGM by way of video conferencing. EPP shareholders or their proxies who wish to follow the AGM by way of video conferencing will be required to advise the Company thereof ultimately on Friday, 19 June 2020, by submitting to the Company secretary by email at [email protected] and [email protected], relevant contact details, including an email address, cellular number and landline as well as full details of the EPP shareholder’s title to securities issued by the Company and proof of identity and written confirmation of the EPP shareholder’s title to dematerialised shares. Upon receipt of the required information, the EPP shareholder concerned will be provided with a secure code and instructions to access the video conferencing for the AGM. EPP shareholders must note that access to the video conferencing for the AGM will be at the expense of the EPP shareholders who wish to utilise the facility.

EPP shareholders and their proxies following the AGM by way of video conferencing will not be able to cast their votes at the AGM through this medium. EPP shareholders who wish to vote at the AGM should submit a proxy in the manner set out above.


PART V: INSTRUCTIONS AND DOCUMENTS FOR PARTICIPATION AND VOTING AT THE 2020 ANNUAL GENERAL MEETING

EPP N.V.(Incorporated in The Netherlands)(Company number 64965945)JSE share code: EPPISIN: NL0011983374LEI Code: 7245003P7O9N5BN8C098(“EPP” or “Company”)

VOTING INSTRUCTION FORMProxy and voting instruction form for the 2020 annual general meeting of shareholders of EPP N.V. on Thursday, 25 June 2020 at 12:00 CET at Tribes at Gustav Mahlerplein 28, 1082 MA Amsterdam, The Netherlands.

The undersigned:

Hereby grants a proxy to:

each of the Chairman (R Weisz), A Steer and T de Groot, each acting independently, and in their absence at the meeting, any other director of EPP

(please indicate your choice)

in respect of EPP shares

To be present at the abovementioned annual general meeting of shareholders on behalf of the undersigned, to sign the attendance registration forms, participate in deliberations, speak, exercise voting rights in respect of the shares in EPP to which the undersigned’s securities relate in accordance with the instructions below, and do whatever the proxy holder may deem necessary, all with the authority of substitution. This proxy is governed by the laws of The Netherlands.

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


PART V: INSTRUCTIONS AND DOCUMENTS FOR PARTICIPATION AND VOTING AT THE 2020 ANNUAL GENERAL MEETING (CONTINUED)

Voting instruction (per agenda item) Number of shares

In favour Against Abstain

Agenda item3. Adoption of annual accounts for the financial year 2019

6. Discharge of the current members of the Board

7. (a) Appointment of Mr T Trzósło as executive director of the Board

(b) Reappointment of Mr M Dyjas as non-executive director of the Board

(c) Reappointment of Mr MM Belka as non-executive director of the Board

(d) Appointment of Mr A König as non-executive director of the Board

(e) Determine number of directors of the Board

8. Amendment of remuneration policy for the Board

9. Approval of the amended EPP Long-Term Incentive Plan

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

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

11. Authorisation of Board to limit or exclude pre-emption rights

12. Authorisation of Board to acquire shares

14. Non-binding advisory vote on the remuneration policy for the Board

15. Non-binding advisory vote on the remuneration implementation report for the financial year 2019

16. Appointment of external auditor for the financial year 2020

Signed at on 2020

Signature(s)

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


NOTESGeneralIn light of the evolving outbreak of Covid-19 (“Coronavirus”), the Company encourages its shareholders to exercise their voting rights via proxy. To mitigate potential health risks, the Company will limit social gatherings at the AGM and will adhere to instructions made by the Dutch government, for example on the maximum number of people attending and social distancing. The Company may take, or be required to take additional precautionary measures to protect the health and safety of all participants to the meeting. The Company will continue to closely monitor developments and will share further updates when available.

Record date and relevant registerUnder Dutch law and the Company’s articles of association, persons entitled to attend and, if applicable, to vote at the AGM are persons registered as such on Thursday, 28 May 2020 (“record date”) in one of the sub-registers designated for that purpose by the board of directors of EPP after all debit and credit entries have been made on the record date, regardless of whether the shares in the capital of the Company (“shares”) are still held by them at the date of the AGM and in addition have registered themselves in the manner mentioned below. The sub-registers designated for holders of book-entry shares are the registers administered by Computershare Investor Services Proprietary Limited in respect of securities traded on the JSE and Clearstream Banking Luxembourg in respect of shares securities traded on the LuxSE, indicating who is entitled to such shares on the record date. The register designated for holders of registered shares is the Company’s register of shareholders (as referred to in Article 5 of the articles of association) on the record date.

Quorum requirementsIn accordance with the articles of association of EPP, the quorum required for the AGM to begin or for any matter to be considered is as follows: at least three (3) shareholders entitled to attend and vote and who are present in person or able to

participate in the AGM by electronic communication, or represented by a proxy who is present in person or able to participate in the meeting by electronic communication, must be present;

the AGM may not begin until sufficient persons are present at the AGM to exercise, in aggregate, at least twenty-five percent (25%) of the voting rights that are entitled to be exercised in respect of at least one matter to be decided at the AGM; and

a matter to be decided at the AGM may not begin to be considered unless sufficient persons are present at the AGM to exercise, in aggregate, at least twenty-five percent (25%) of all of the voting rights that are entitled to be exercised in respect of that matter at the time the matter is called on the agenda.

Attendance and voting rights in respect of securities traded on the LuxSEPersons holding securities reflecting the beneficial entitlement to shares that are held in their name by PLC Nominees (Pty) Ltd (“nominee”) in book-entry form (“securities”), who wish to attend and vote at the AGM, either in person or by proxy, should instruct his/her relevant bank, brokerage or other intermediary (“intermediary”) to issue a statement confirming his/her holding of securities (including name, address and the number of securities held by the relevant holder on the record date). Such statements should be submitted ultimately on Tuesday, 23 June 2020 by SWIFT message to Clearstream Banking S.A. in Luxembourg or the Company secretary by email at [email protected].

A holder of securities who has submitted a statement to Clearstream Banking Luxembourg in accordance with the aforementioned will receive an attendance card issued in his/her name (“attendance card”). Such holder of the securities (or his/her proxy) must hand over the attendance card (together with any relevant letter of representation or power of attorney) at the registration desk upon arrival at the AGM in order to gain access.


PART V: INSTRUCTIONS AND DOCUMENTS FOR PARTICIPATION AND VOTING AT THE 2020 ANNUAL GENERAL MEETING (CONTINUED)

Clearstream Banking Luxembourg shall collect all authority to attend the AGM, registration, proxy and voting instruction forms, together with any relevant letter of representation or power of attorney, on behalf of the Company, and Clearstream Banking Luxembourg shall submit all such information to the Company secretary by email at [email protected] ultimately on Tuesday, 23 June 2020.

Attendance and voting rights in respect of Securities traded on the JSEA holder of securities in “own name” may attend the AGM and vote thereat in person by providing a registration form to his/her Central Securities Depository Participant (“CSDP”), broker or nominee with a copy to the Company’s transfer secretaries or the Company secretary, in accordance with the instructions below. Such holder of securities (or his/her proxy) will receive an attendance card that must be handed over at the registration desk upon arrival at the AGM in order to gain access.

If a holder of securities in “own name” does not wish to or is unable to attend the AGM, but wishes to be represented thereat, such holder must complete a proxy form and submit the same in accordance with the instructions below.

Holders of securities, other than in “own name”, who wish to attend and vote at the AGM (either in person or by proxy) should instruct his/her CSDP, broker or nominee to provide him/her with the necessary authority (letter of representation or power of attorney and a statement confirming his/her holding of securities (including name, address and the number of securities held by the relevant holder on the record date)), to attend the AGM in person, in the manner stipulated in terms of the agreement governing his/her relationship with the CSDP, broker or nominee. The relevant authority to attend the AGM should be registered in the manner mentioned below and is to be used to qualify for attendance to the AGM and must be produced, with identification, at the registration desk upon arrival at the AGM. Forms of identification include valid identity documents, driver’s licences and passports.

Holders of securities, other than in “own name”, who do not wish to or are unable to attend the AGM, but wish to vote thereat, should provide his/her CSDP, broker or nominee with his/her voting instructions in the manner stipulated in the agreement governing his/her relationship with the CSDP, broker or nominee. These instructions must be provided to the CSDP, broker or nominee by the cut-off time and date advised by the CSDP, broker or nominee for instructions of this nature.

All authority to attend the AGM, registration, proxy and voting instruction forms, together with any relevant letter of representation or power of attorney, should be lodged at or posted to the Company’s transfer secretaries, ultimately on Tuesday, 23 June 2020. The address details for the transfer secretaries are as set out below:

Computershare Investor Services Proprietary Limited 15 Biermann AvenueRosebank TowersRosebank, 2196 JohannesburgSouth Africa(PO Box 61051, Marshalltown, 2107)[email protected]

The Company’s transfer secretaries shall collect all authority to attend the AGM, registration, proxy and voting instruction forms, together with any relevant letter of representation or power of attorney, on behalf of the Company, and the Company’s transfer secretaries shall submit all such information to the Company secretary by email at [email protected] ultimately on Tuesday, 23 June 2020.


In the case of any doubt relating to the authorisation of a holder of securities to participate in the AGM and admission thereto, the decision of the chairman of the AGM will be decisive.

RegistrationRegistration will take place at the registration desk at the venue between 11:30 CET and the commencement of the AGM at 12:00 CET. It is not possible to register after this time. Attendees may be asked to produce proof of identity (together with any relevant letter of representation or power of attorney) and may be declined access in case such proof of identity (together with any relevant letter of representation or power of attorney) is not produced. Forms of identification include valid identity documents, driver’s licences and passports. Each person entitled to vote or his proxy shall sign the attendance list.

Video conferencingThe Company has made provision for EPP shareholders or their proxies to follow the AGM by way of video conferencing. EPP shareholders or their proxies who wish to follow the AGM by way of video conferencing will be required to advise the Company thereof ultimately on Friday, 19 June 2020, by submitting to the Company secretary by email at [email protected] and [email protected], relevant contact details, including an email address, cellular number and landline as well as full details of the EPP shareholder’s title to securities issued by the Company and proof of identity and written confirmation of the EPP shareholder’s title to dematerialised shares. Upon receipt of the required information, the EPP shareholder concerned will be provided with a secure code and instructions to access the video conferencing for the AGM. EPP shareholders must note that access to the video conferencing for the AGM will be at the expense of the EPP shareholders who wish to utilise the facility.

EPP shareholders and their proxies following the AGM by way of video conferencing will not be able to cast their votes at the AGM through this medium. EPP shareholders who wish to vote at the AGM should submit a proxy in the manner set out above.


OTHER: ABRIDGED CV OF THE PROPOSED MEMBERS OF THE BOARD

TOMASZ TRZÓSŁO (TO BE APPOINTED EXECUTIVE DIRECTOR) (Male, 45, Polish)Tomasz has over 20 years of experience in the Central and Eastern European (CEE) real estate markets where he has held various senior positions, including the most recent role of Managing Director of the CEE markets of JLL where he was responsible for overseeing the company’s operations across the Czech Republic, Hungary, Romania and Slovakia, alongside his responsibilities as country manager for JLL’s business in Poland. Tomasz also headed up the Polish capital markets team for JLL from 2005, and the wider CEE capital markets team from 2008 to 2013. He has been involved in numerous transactions across the CEE, including investment, structured equity, fund raising and debt deals. He has a strong track record and true understanding of the market in both Poland and the CEE region and across all real estate sectors including retail, office, industrial, hotel and residential. He holds a master’s degree in Financial Accountancy and Economics from the Cracow University of Economics and has qualifications in valuation, investment appraisal, property finance and portfolio management. He holds no shares in the capital of the Company.

MAREK BELKA (TO BE REAPPOINTED AS AN INDEPENDENT NON-EXECUTIVE DIRECTOR) (Male, 68, Polish)Marek is a former Prime Minister of Poland (2004 to 2005) and President of Narodowy Bank Polski Polish Central Bank) (2010 to 2016). He has held various political positions since 1996, including Advisor to the President of Poland, Minister of Finance and Deputy Prime Minister. He has also held positions in international organisations, serving as executive secretary of the Economic Commission for Europe (in the rank of Undersecretary General of the UN) and Director of the European Department in the International Monetary Fund (2008 to 2010). Marek worked in Albania as advisor to three consecutive prime ministers of the country and in the Coalition Provisional Authority in Iraq (2003 to 2004). He was a member of the board of directors of two commercial banks in Poland (at different times) and served as chairman of LOT Polish Airlines from 2002 to 2003. Since July 2019 he has served as member of the European Parliament. He has a degree Economics MA, PhD and Habilitacja (higher degree common in continental Europe). He holds no shares in the capital of the Company.

MACIEJ DYJAS (TO BE REAPPOINTED AS NON-EXECUTIVE DIRECTOR) (Male, 57, German)Maciej is a Managing Partner of Griffin Real Estate, a leading investment manager in private equity real estate in Central and Eastern Europe’s commercial real estate market. He is also a Managing Partner at Cornerstone Partners – a private equity investment firm, active in the CEE region – with an impressive track record of transactions. Before joining Griffin Real Estate and Cornerstone, he was a Managing Partner and Chief Executive Officer of Eastbridge group, a Luxembourg-based private investment fund which in 2014 held over USD 3 billion in assets related to retail, consumer goods and real estate. He has degrees from the University of Warsaw and the University of Stuttgart in Mathematics, IT and Management. He holds no shares in the capital of the Company.

ANDREW KÖNIG (TO BE APPOINTED NON-EXECUTIVE DIRECTOR) (Male, 52, South African)A qualified Chartered Accountant with more than 25 years of commercial and financial experience, Andrew was previously the group Financial Director of Independent News and Media. He is the chief executive officer of Redefine Properties Limited responsible for all aspects of regulatory compliance, corporate activity and communications, and for ensuring the board’s strategy is implemented. Andrew holds a Bachelor’s degree in Commerce and a Bachelor’s degree in Accounting and is a CA(SA). He indirectly holds 3 913 027 shares in the capital of the Company.

SHAPING THE FACE OF RETAIL IN POLAND

SUMMARISED CONSOLIDATED FINANCIAL RESULTS FOR THE 12 MONTHS ENDED 31 DECEMBER 2019

EPP N.V. (Incorporated in The Netherlands) (Company number 64965945)JSE share code: EPP ISIN: NL0011983374 LEI code: 7245003P7O9N5BN8C098 (“EPP” or “the company” or “the group”)

Net property income up 3.8% to €148.1 million (2018: €142.6 million)

Distributable earnings up 9.6% to €105.5 million (2017: €96.3 million)

Distributable income per share up 0.2% to €11.62 cents (2017: €11.60 cents) in line with guidance

Oversubscribed equity raise of €90 million

LTV declined to 50% in line with deleveraging strategy (2018: 51.9%)

Cost of debt 2.5% (2018: 2.3%)

Successfully executed acquisitions of over €200 million

NAV per share €1.32 (2018: €1.35)

FINANCIAL HIGHLIGHTS

RETAIL

Successful opening of Galeria Młociny – first flagship asset located in Warsaw with over 75 000 m² of retail space

Successful addition of over 200 000 m² GLA of quality retail space, total portfolio over 900 000 m²

Occupancy 99.5% (2018: 99.6%)

Footfall up +0.7% (2018: +1%)

Footfall increased to over 110 million

Tenant sales up +4.8% (2018: +1%)

Occupancy cost ratio 13.4% (2018: 13.6%)

Like-for-like NRI growth was +3.3%

WALT by GLA of 4.65 years (2018: 4.81 years)

OPERATIONAL HIGHLIGHTS

22EPP Summarised consolidated financial results for the 12 months ended 31 December 2019

CONSOLIDATED STATEMENT OF PROFIT OR LOSS

2019€’000

2018€’000

Rental income and recoveries* 163 633 157 506 Service charge income 37 676 39 610 Property operating expenses (53 209) (54 442)

Net property income 148 100 142 674 Other income 984 378 Other expenses (769) (1 414)Administrative expenses (15 739) (15 821)

Net operating profit 132 576 125 817 Net result from fair value adjustment on investment properties (740) 17 473

Profit from operations 131 836 143 290 Finance income 6 229 4 865 Finance costs (43 645) (39 758)Foreign exchange (losses)/gains (10 042) 5 814 Participation in profits of joint ventures 3 402 23 381

Profit before taxation 87 780 137 592 Current income tax (9 807) (8 914)Deferred tax (11 808) (4 513)

Profit for the period 66 165 124 165 Attributable to EPP shareholders 66 165 124 165 Earnings per share:Basic and diluted earnings on profit for the period (€ cents) 7.49 15.36

* Rental income includes €729 000 of straight-line rental income accrual in 2019.

EPP Summarised consolidated financial results for the 12 months ended 31 December 201923

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

2019€’000

2018€’000

Profit for the period 66 165 124 165 Other comprehensive income to be reclassified to profit or loss in subsequent periodsForeign currency translation reserve joint ventures 984 (2 128)Foreign currency translation reserve subsidiaries 8 898 (3 681)

Other comprehensive income, net of tax, to be reclassified to profit or loss in subsequent periods 9 882 (5 809)

Total comprehensive income for the period, net of tax 76 047 118 356

Total comprehensive income attributable to the owners of EPP for the period, net of tax 76 047 118 356


CONSOLIDATED STATEMENT OF FINANCIAL POSITION

2019€’000

2018€’000

ASSETSNon-current assets 2 501 054 2 360 360 Investment property 2 321 384 2 201 737 Investment in joint ventures 171 117 138 698 Loans receivable – 16 202 Other non-current assets 845 1 815 Tenants’ deposits and other monetary assets 7 021 –Deferred tax asset 687 1 908

Current assets 105 661 111 355 Inventory 110 250 Tax receivable 1 193 589 Trade and other receivables 17 129 16 970 Loans receivable 6 723 5 635 Tenants’ deposits and other monetary assets 13 187 27 571 Cash and cash equivalents 67 319 60 340

Total assets 2 606 715 2 471 715

EQUITY AND LIABILITIESEquity 1 087 372 1 022 688 Share capital 735 437 672 292 Share premium 228 227 203 318 Accumulated profit 113 339 147 250 Share-based payment reserve 6 580 5 921 Foreign currency translation reserve 3 789 (6 093)

Non-current liabilities 1 443 837 1 387 212 Bank borrowings 1 291 838 1 273 767 Trade payables and other liabilities 13 234 16 335 Deferred tax liability 109 443 97 110 Lease liabilities 29 322 –

Current liabilities 75 506 61 815 Bank borrowings 34 127 30 575 Loans payable – 92 Tax payables 359 1 960 Trade payables and other liabilities 38 181 29 188 Lease liabilities 2 839 –

Total liabilities 1 519 343 1 449 027

Total equity and liabilities 2 606 715 2 471 715


CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Share capital€’000

Share premium

€’000

Treasury shares€’000

Accumu-lated

profit/(loss)

€’000

Foreigncurrency

trans-lation

reserve€’000

Share-based

payment reserve

€’000

Total equity

attribu-table

to the owners of EPP€’000

Balance as at 31 December 2017 571 026 147 534 (783) 111 419 (284) 4 909 833 821 Profit for the year – – – 124 165 – – 124 165 Other comprehensive income – – – – (3 681) – (3 681)Other comprehensive income from joint ventures – – – – (2 128) – (2 128)

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

Issue of ordinary shares 101 266 56 234 – – – – 157 500 Transaction cost related to issuance of shares – (450) – – – – (450)Acquisition of own shares – – (2 312) – – – (2 312)Transfer of own shares – – 3 095 – – (3 095) – Share-based payments expenses – – – – – 4 107 4 107 Dividend provided for or paid – – – (88 334) – – (88 334)

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

Profit for the year – – – 66 165 – 66 165 Other comprehensive income – – – 8 898 – 8 898 Other comprehensive income from joint ventures – – – 984 – 984

Total comprehensive income – – – 66 165 9 882 – 76 047

Issue of ordinary shares 63 145 26 343 – – – – 89 488 Transaction cost related to issuance of shares – (1 434) – – – – (1 434)Acquisition of own shares – – (2 142) – – – (2 142)Transfer of own shares – – 2 142 – – (2 142) – Share-based payment expenses – – – – – 2 801 2 801 Dividend provided for or paid – – – (100 076) – – (100 076)

Balance as at 31 December 2019 735 437 228 227 – 113 339 3 789 6 580 1 087 372


CONSOLIDATED STATEMENT OF CASH FLOW

2019€’000

2018€’000

Profit before tax 87 780 137 592 Adjustments: Amortisation/depreciation of fixed assets 629 –Straight-line adjustment (729) (1 950)Share-based payment reserve 2 802 1 012 Valuation gain on investment property 740 (17 473)Share of profit in joint ventures (3 402) (23 381)Finance income (6 229) (4 865)Finance expense 43 645 39 802

Working capital adjustments:Increase in rent and other receivables 705 8 166 Increase in prepayments and accrued income 1 234 (1 587)Increase in inventory and other assets 141 275 Change in tenants’ deposits and other monetary assets – (3 958)Increase in trade, other payables and accruals 8 357 (12 803)Movements in tenants’ deposits liabilities 289 916

Cash generated from operations 135 962 121 746 Tax paid (12 680) (8 212)

Net cash generated from operating activities 123 282 113 534

Investing activitiesPurchase of investment property (242 619) (498 643)Capital expenditure on completed investment property (23 280) (24 745)Disposal of investment property 60 000 –Loans granted (7 399) (1 273)Loans repaid 5 333 11 396 Change in other monetary assets related to investment activity 2 143 –Interest received 509 1 361 Profit share 3 487 –

Net cash utilised in investing activities (201 826) (511 904)

Financing activitiesProceeds from borrowings 187 645 731 952 Repayment of borrowings (58 822) (379 013)Borrowing arrangement fees (1 153) (2 598)Proceeds from issue of share capital 89 488 157 500 Transaction costs on issue of shares (1 435) (450)Acquisition of own shares (2 142) (2 312)Transfer of own shares – 3 095 Dividends paid (100 076) (88 334)Loans repaid – (19 633)Interest paid (32 654) (34 295)Change in other monetary assets related to financing activity (2 158) –Lease payments (3 052) –

Net cash generated from financing activities 75 641 365 912

Net increase in cash and cash equivalents (2 903) (32 458)

Cash and cash equivalents at the beginning of the period 60 340 99 544 Effect of foreign exchange fluctuations 9 882 (6 746)

Cash and cash equivalents at the end of the period 67 319 60 340


NET ASSET VALUE (“NAV”) PER SHARE

2019€’000

2018€’000

NAV attributable to ordinary equity holders of the parent (excluding deferred tax) 1 196 129 1 117 891 Net tangible asset value (excluding deferred tax) 1 196 129 1 117 891 Number of ordinary shares at the reporting date (thousands) 907 947 829 990 NAV per share (excluding deferred tax) (€) 1.317 1.347 Net tangible asset value per share (€) 1.317 1.347


COMMENTARY

1. REPORTING ENTITY EPP is the largest owner of retail real estate in Poland in terms of GLA. The company’s portfolio consists

of 32 projects (25 retail properties, six office locations and one planned mixed-use development) with a total leasable area of over 1 000 000 m². EPP’s projects are located in the most attractive Polish cities with the strongest consumer demand and growth potential.

EPP is committed to delivering the best possible rates of return to its shareholders by providing consumers with a unique shopping experience and tenants with attractive space and innovative solutions to help them develop their businesses. The company, which operates like a REIT, is listed on the JSE Limited in Johannesburg in the Republic of South Africa and Euro MTF market of the Luxembourg Stock Exchange (the “LuxSE”) in Luxembourg.

2. BASIS OF PREPARATION The consolidated financial statements were prepared by the management of the company on 10 March

2020 in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”), the JSE Listings Requirements, IAS 34 and IFRS as adopted by the European Union.

The stand-alone financial statements of EPP N.V. to be included in the integrated report were prepared in accordance with Part 9 of Book 2 of the Dutch Civil Code (“Dutch-GAAP”).

The group’s financial statements were prepared on a historical cost basis, except for investment properties and loans receivable measured at fair value. The consolidated financial statements are presented in euro (€) and all values are rounded to the nearest thousand (€’000), except where otherwise indicated. Notes are an integral part of the financial statements.

This summarised report is extracted from audited information, but is not itself audited. The directors take full responsibility for the preparation of this summarised report and for ensuring that the financial information has been correctly extracted from the underlying audited annual financial statements for the year ended 31 December 2019.

EPP’s integrated report containing the audited annual financial statements for the year ended 31 December 2019 has been published and is available on the company’s website at https://www.epp-poland.com/s,128,annual-reports.html. EPP’s notice of annual general meeting will be published in due course and an announcement will be released once published.

3. SIGNIFICANT ACCOUNTING POLICIES – IMPACT OF NEW STANDARDS New and amended standards and interpretations The accounting policies adopted are consistent with those of the previous financial year. For the first

time the group applied certain standards and amendments which are effective for annual periods beginning on or after 1 January 2019. Amongst them, IFRS 16 had the most material impact.

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

impact on recognition of leases in situations where EPP is the lessor, but it had an effect on the accounting policies applied in situations where the group is the lessee. Under IFRS 16, all lease contracts, including those previously classified as operating leases, were recognised as a right-of-use asset and as a lease liability in the statement of financial position.


COMMENTARY (CONTINUED)

The group implemented the standard using the modified retrospective method, with the cumulative effect of the first application of IFRS 16 recognised as at 1 January 2019, without restating the comparative data.

On transition to IFRS 16, the group elected to apply the practical expedient to grandfather the assessment of which transactions are leases. It applied IFRS 16 only to those contracts which were previously classified as leases under IAS 17.

For leases previously classified as operating leases, the group recognised a lease liability, measured at the present value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate at the date of initial application. The group recognised the respective right-of-use asset at an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments recognised immediately before the date of initial application.

For leases previously classified as finance leases, the carrying amount of the right-of-use asset and the lease liability at the date of initial application was the carrying amount of the lease asset and lease liability immediately before that date measured applying IAS 17.

Right of perpetual

usufructLand lease agreement Other Total

Operating lease commitments as at 31 December 2018 157 906 2 489 325 160 720 Weighted average incremental borrowing rate as at 1 January 2019 6.95% 4.18% 3.54% –

Discounted operating lease commitments as at 1 January 2019 30 426 2 119 283 32 828

Add:Lease payments relating to renewal periods not included in operating lease commitments as at 31 December 2018 – – – –Previously recognised finance lease liabilities – – 541 541

Lease liabilities as at 1 January 2019 30 426 2 119 824 33 369

The group has analysed all concluded agreements to identify those to which the new recognition method applies following the implementation of IFRS 16. The group identified the following types of agreements which were recognised as operating leases under IAS 17, mostly:

perpetual usufruct rights to land; and land lease agreements.

The group did not apply any exemptions for lease contracts that, at the commencement date, have a lease term of 12 months or less and do not contain a purchase option (short-term leases), and lease contracts for which the underlying asset is of low value (low-value assets).

Management’s key estimation relates to the discounting rates (incremental borrowing rates) used in measuring the lease liabilities.


On transition to IFRS 16, the company recognised an additional €33.4 million of right-of-use assets (mostly related to perpetual usufruct of land, presented together with the investment property) and €33.4 million of lease liabilities. The details of leases accounting for the year 2019 are included in note 6 Leases.

Value of right-of-use asset as at

1 January2019

€’000

Value of financial

liability as at 1 January

2019€’000

Perpetual usufruct rights to land 30 426 30 426Land lease agreement 2 119 2 119Other 824 824

Total 33 369 33 369

IFRIC Interpretation 23: Uncertainty over Income Tax Treatments IAS 12 specifies how to account for current and deferred tax, but not how to reflect the effects of

uncertainty. The interpretation clarifies how to apply the recognition and measurement requirements in IAS 12 when there is uncertainty over income tax treatments.

The group assessed whether it has any uncertain tax positions. The group determined that it is probable that its tax treatments (including those for the subsidiaries) will be accepted by the taxation authorities. This interpretation did not have an impact on the consolidated financial statements of the group.

Other new standards and interpretations Amendments to IFRS 9: Prepayment Features with Negative Compensation. Amendments to IAS 28: Long-term Interests in Associates and Joint Ventures. Amendments to IAS 19: Plan Amendment, Curtailment or Settlement. Amendments to IFRS 3: Business Combinations – Previously held Interests in a joint operation. Amendments to IFRS 11: Joint Arrangements – Previously held Interests in a joint operation. Amendments to IAS 12: Income Taxes – Income tax consequences of payments on financial instruments

classified as equity. Amendments to IAS 23: Borrowing Costs – Borrowing costs eligible for capitalisation.

Although these amendments applied for the first time in 2019, they did not have a material impact on the annual consolidated financial statements of the group.

The group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective.

4. AUDIT OPINION The auditors, EY, have issued their unmodified opinion, which includes disclosures on key audit matters,

on the annual financial statements for the year ended 31 December 2019 and a copy of the audit opinion together with their underlying audited annual financial statements are available for inspection at the company’s registered office, and on https://www.epp-poland.com/s,128,annual-reports.html.


5. FINANCIAL RESULTS The net profit for the 12 months ended 31 December 2019 amounted to €66.2 million and distributable

income totalled €105 million. The equity (excluding deferred tax) as at 31 December 2019 amounted to €1.196 million (2018: €1.118 million) with equity per share of €1.32 cents (2018: €1.35 cents per share). The net LTV ratio as of 31 December 2018 was 50.00% with an average cost of debt of 2.50%.

M1 tranche 2 portfolio On 27 June 2019, the group announced the acquisition of the second tranche of the M1 portfolio.

The M1 portfolio consists of shopping centres and retail parks owned by Chariot Top Group B.V., a consortium in which Redefine Properties Limited owns 25%. The asset’s aggregated value is €692.1 million. The acquisition was announced on 4 January 2018 and has been divided into three tranches.

Tranche 1 had a gross asset value (“GAV”) of €358.7 million and comprises M1 Czeladź, M1 Kraków, M1 Łódź and M1 Zabrze totalling collectively 194 400 m² GLA and NOI of €25.1 million and was successfully concluded in January 2018.

Tranche 2 originally comprised M1 Bytom, M1 Częstochowa, M1 Radom and Power Park Olsztyn, Power Park Opole and Power Park Kielce. Upon completion of the second tranche the composition of the properties has been consensually amended from six properties to four properties with a GLA of 141 000 m² for an aggregate value of €224 million. The Second Tranche Acquisition comprised the properties known as M1 Radom, M1 Bytom, M1 Częstochowa and M1 Poznań.

Tranche 3 comprising the remaining Power Parks: Olsztyn, Opole, Kielce and Tychy with GAV of €111.5 million and 111 100 m² GLA is to be completed in 2020.

Malta Office Park, Symetris Business Park and O3 Business Campus On 24 June 2019, EPP concluded a sale agreement to dispose of a 70% share in three of its office

assets (Malta Office Park, Symetris Business Park and O3 Business Campus) with GAV of €188.3 million and GLA totalling 86 000 m² to JV partner Henderson Park Private Equity Fund.

New equity raise In April 2019, EPP successfully placed 77 956 989 new shares with various new and existing

shareholders at a price of €1.15 per share (R18.60 per share). The proceeds were used to partially fund the acquisition of tranche 2 of the M1 portfolio.

The issued ordinary share capital of the company as at 31 December 2019 comprises 907 946 792 ordinary shares of €0.81 each (all of which are listed on the LuxSE and the JSE) and one preference share of €0.81 (not listed on any stock exchange).

There are no special dividend distribution rights attributed to the preference share anymore, after distribution of the special dividend in 2017.

6. SEGMENT INFORMATION For investment property, discrete financial information is provided on a property-by-property basis to

members of executive management. The information provided is net of rentals (including gross rent and property expenses), valuation gains/losses, profit/loss on disposal of investment property and share of profit or loss from the joint ventures. The individual properties are aggregated into segments with similar economic characteristics such as the nature of the property and the occupier market it serves. This information is provided to the chief operating decision makers, namely the executive directors. Management considers that this is best achieved by aggregating into retail and office segments.



Consequently, the group is considered to have two reportable segments, as follows: Retail — acquires, develops and leases shopping malls; and Office — acquires, develops and leases offices.

The group’s administrative costs, finance revenue, finance costs and income taxes are not reported to the members of the executive management team on a segmental basis. The operations between segments are eliminated for consolidation purposes. Segment assets represent investment property and the investment in the joint ventures. Segment liabilities represent loans and borrowings, as these are the only liabilities reported to the board on a segmental basis.

Cumulative top 10 retail and office tenants represent 32% of rental income.

Retail€’000

Office€’000

Unallocated€’000

Total€’000

2019Segment profit Rent and recoveries income 177 268 22 432 1 609 201 309 Property operating expenses (45 876) (7 068) (265) (53 209)

Net property income 131 392 15 364 1 344 148 100

Investment in joint ventures 144 840 26 277 – 171 117 Investment property 2 182 488 138 896 – 2 321 384

Total segment assets 2 327 328 165 173 – 2 492 501

Bank borrowings 1 114 764 61 464 149 737 1 325 965

Total segment liabilities 1 114 764 61 464 149 737 1 325 965

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

Net property income 118 378 23 268 1 028 142 674

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

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

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

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

All revenues were generated from external customers based in Poland.

All investment properties are located in Poland.


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

shareholders. The company intends declaring half-yearly dividends, which are expected to be declared for the periods ended 30 June and 31 December of the relevant year. No assurance can be made that dividends will be proposed or declared in any given year.

The EPP board of directors (“the board”) has declared an interim dividend of €5.82000 cents per ordinary share for the six months ended 31 December 2019.

A further announcement informing shareholders of the salient dates and tax treatment of the dividend will be released in due course.



GROUP MANAGEMENT REPORT

HEADLINE EARNINGS AND DISTRIBUTABLE INCOME RECONCILIATION

2019€’000

2018€’000

Profit for the period attributable to EPP shareholders 66 165 124 165 Change in fair value of investment properties including joint ventures (net of tax) (5 045) (36 711)

Headline and diluted earnings attributable to EPP shareholders 61 120 87 454

Change in deferred tax (other than the deferred tax change related to fair value of investment properties) 11 949 1 194 Fair value losses/(gains) in joint ventures (other than the change in fair value of investment properties in JV) 6 631 (92)Cost of refinancing – 2 598 Amortised cost valuation of long-term financial liabilities and other 4 977 3 405 Provision for LTI 2 802 4 106 Distribution of shares to the board (2 142) (2 349)Unrealised foreign exchange losses/(gains) 10 042 (5 814)Amortisation of selling fees 1 600 1 294 Rental lease straight-lining, IFRS 9 remeasurements, other items 5 698 2 362 Antecedent dividend 2 848 2 121

Distributable income 105 525 96 278

Actual number of shares in issue 907 946 793 829 989 804Shares in issue for distributable earnings 907 946 792 829 989 803 Weighted number of shares in issue 883 598 583 808 554 466

Basic and diluted earnings per share (€ cents)* 7.5 15.4 Headline earnings and diluted headline earnings per share (€ cents)** 6.92 10.82 Distributable income per share (€ cents)** 11.62 11.60

* There are no dilutionary instruments in issue and therefore headline earnings and diluted headline earnings are the same.

** Calculated based on actual number of shares in issue as at 31 December 2019 and 31 December 2018, respectively.

SUCCESSFUL ACQUISITIONS AND TRANSACTIONSOn 24 June 2019, EPP acquired four shopping centres (M1 Poznań, M1 Radom, M1 Częstochowa and M1 Bytom) from tranche 2 of the M1 portfolio with a gross asset value of €224 million, GLA of 141 000 m² and NOI of €16 million. Tranche 3 of the M1 portfolio, comprising a further four properties, is due to complete in 2020.

On 27 June 2019, EPP disposed of 70% of EPP’s share in three office properties (Malta Office Park, Symetris Business Park and O3 Business Campus) through a joint venture agreement with Henderson Park.

The company successfully raised new equity of €90 million from an oversubscribed equity raise. The equity was used for the funding of acquisitions for the year.

Footfall was up 0.7%; however, more impressively, tenant sales increased 4.8% for the year despite the Sunday trading ban.


GROUP MANAGEMENT REPORT (CONTINUED)

More than 110 million customers visited our shopping centres during 2019. Our asset and property managers have worked extremely hard during the year as demonstrated in the like-for-like net rental income (“NRI”) growth up 3.3% for the full year 2019. The team also executed on our food and beverage strategy with the opening of “Food Station”, the new food hall concept introduced in 2019 at our shopping centre in Wrocław, Pasaż Grunwaldzki.

EPP’s flagship Warsaw-based shopping centre, Galeria Młociny, successfully opened on 23 May 2019. Galeria Młociny is one of the most modern shopping centres in Poland and has over 75 000 m² of retail space with 220 shops and over 40 restaurants and cafés. The shopping centre will also be the home of the first Primark in Poland.

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

31 December 2019

31 December 2018

Vacancy based on total GLA (%)Office 3.9 4.6Retail 0.5 0.4

Sectoral profile

By GLA%

By revenue%

Retail 84 87Office 16 13

Total 100 100

CHANGES TO THE BOARDThe board nominated Tomasz Trzósło for appointment to succeed Hadley Dean as chief executive officer, subject to approval by EPP shareholders at the upcoming annual general meeting.

PROSPECTSEPP holds a dominant portfolio of quality assets which is expected to perform better than the market in general, and net operating income to grow on a like for like basis. However, management is cognisant that the recent emergence of the COVID-19 virus globally, and especially in Poland and Central Europe over the last couple of days, may temporarily impact the properties, and therefore no guidance can be provided until the situation stabilises and can be properly assessed. Once the company is confident that the risk is adequately assessed it will provide an update to the market.

By order of the board

EPP N.V.

12 March 2020


NOTES

COMPANY INFORMATION

DirectorsHadley Dean (chief executive officer)Jacek Bagiński (chief financial officer)Robert Weisz* (Chairman)Marek Belka*Maciej Dyjas**Dionne Ellerine*Andrea Steer*Marc Wainer**James Templeton*Pieter Prinsloo**Taco de Groot* * Independent non-executive** Non-executive

Registered officeGustav Mahlerplein28, 1082 AmsterdamThe Netherlands

Company secretaryRafał Kwiatkowski (Master of Laws)al. Solidarnosci 3625-323 KielcePoland

Transfer secretariesComputershare Investor Services (Pty) LtdRosebank Towers15 Biermann AvenueRosebank2195 (PO Box 61051, Marshalltown, 2107)

LuxSE listing agentHarney Westwood & Riegels SARL56, rue Charles Martel L-2134Luxembourg

JSE sponsorJava Capital6A Sandown Valley CrescentSandton2196

EPP Investor RelationsCurwin RittlesMobile: +48 885 982 310 [email protected]

Singular Systems IRMichèle Mackey: +27 (0)10 003 0700 [email protected]

EPP Summarised consolidated financial results for the 12 months ended 31 December 2019a

www.epp-poland.com

shaping the face of retail in polandfile,150_epp-2020-agm-notice.pdf · immediately after the...

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