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BDO

spółka

ograniczoną

odpowiedzialnością

spółka komandytowa

ul. Postępu 12

02-676 Warszawa

Polska

BDO spółka z ograniczoną odpowiedzialnością spółka komandytowa

, Sąd Rejonowy dla m. st. Warszawy, XIII Wydział Gospodarczy, KRS: 0000729684,

REGON: 141222257, NIP: 108-000-42-12. Wartość wkładu kapitałowego wynosi 10.037.500 zł. Biura BDO w Polsce: Katowice 40-

007,

ul. Uniwersytecka 13, tel.:+48 32 661 06 00, katowice@bdo.pl; Kraków 31-548, al. Pokoju 1, tel.: +48 12 378 69 00, krakow@bdo.pl; Poznań 60-

650,

ul. Piątkowska 165, tel.:+48 61 622 57 00, poznan@bdo.pl; Wrocław 53-332, ul. Powstańców Śląskich 7a, tel.: +48 71 734 28 00, wroclaw@bdo.pl

BDO spółka z ograniczoną odpowiedzialnością spółka komandytowa jest członkiem BDO International Limited, brytyjskiej spółki i częścią

międzynarodowej sieci BDO, złożonej z niezależnych spółek członkowskich.

Independent Auditor’s Report

to the General Meeting and Supervisory Board

of Globe Trade Centre S.A.

Report on the Audit of the Year-end Consolidated Financial Statements

Opinion

We have audited the annual consolidated financial statements of the group, where the parent company

is Globe Trade Centre S.A. located in Warsaw at Komitetu Obrony Robotników 45A (“the Company”)

(“the Group”), which comprise the consolidated statement of financial position as at 31 December

2020, the consolidated income statement, the consolidated statement of comprehensive income,

the consolidated statement of changes in equity and the consolidated statement of cash flows

for the year then ended, as well as notes to the consolidated financial statements including

a description of accounting methods and other explanations (“the consolidated financial statements”).

In our opinion, the accompanying consolidated financial statements:

- give a true and fair view of the Group’s consolidated financial position as at 31 December 2020,

as well as of its consolidated financial result and consolidated cash flows for the year then ended,

in accordance with the applicable International Financial Reporting Standards endorsed

by the European Union, as well as the adopted accounting methods (policies);

- are consistent, in content and in form, with the applicable laws and regulations and with the

Company’s Statute.

The present opinion is consistent with the additional report to the Audit Committee, which we issued

on 22 March 2021.

Basis for Opinion

We conducted our audit in accordance with the International Standards on Auditing adopted

by the National Council of Certified Auditors as National Standards on Auditing (“NSA”)

and in compliance with the Act on Certified Auditors, Audit Firms and on Public Oversight

(“the Certified Auditors Act” – 2020 Journal of Laws, item 1415) and Regulation (EU) No. 537/2014

of 16 April 2014 on specific requirements regarding statutory audit of public interest entities

(“Regulation EU” – OJ L 158). Our responsibilities under those standards are further described

in the “Responsibilities of the Auditor for the Audit of the Consolidated Financial Statements” section

of this report.

We are independent of the Group’s companies in accordance with the International Code of Ethics

for Professional Accountants (including International Independence Standards) of the International

Ethics Standards Board for Accountants (“the IESBA Code”) and adopted by resolutions of the National

Chamber of Certified Auditors, and with other ethical requirements relevant to the audit of financial

statements in Poland. We have fulfilled our other ethical responsibilities in accordance with these

requirements and the IESBA Code. During the audit, the auditor in charge and the audit firm remained

independent of the Company in accordance with the independence requirements laid down

in the Certified Auditors Act and Regulation EU.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis

for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of the most significance

in the audit of the consolidated financial statements for the current reporting period. They include

the most significant assessed types of risks of material misstatements, including assessed types of risks

of material misstatements resulting from fraud. We addressed these matters in the context of our audit

of the consolidated financial statements as a whole and in forming our opinion thereon, and have

summarized our response to these types of risks, and where relevant, presented our key observations

relating to those risks. We do not express a separate opinion on these matters.

1 Valuation of investment property

Investment property amounts to 2,125,128 thousand euro and constitutes more than 85% of total

assets of the Group as at 31 December 2020 (31 December 2019: over 89%). It comprises mainly of two

categories: completed investment property, which are measured at fair value and investment property

under construction, measured either at cost or at fair value, if certain criteria specified in the Group’s

accounting policies are met.

The fair value of the investment property depends in general on external valuations, which take into

account the Company Management’s judgements, assumptions and estimates such as current

and expected future rents, occupancy levels, rent-free periods and expected market yields. Inputs

used to determine the fair value of the Group’s investment property are classified into Levels 2 and 3

of the fair value hierarchy.

The valuations have been performed by third party appraisers. The appraisers were engaged

by the Group to carry out the valuations in accordance with applicable valuation and professional

standards.

We consider valuation of investment property as a key audit matter taking into account the significant

impact on the Group’s financial statements as well as high dependency on estimates and judgements

of the Group’s Management and valuation experts.

Disclosures in the Financial Statements

The disclosures and accounting policies relating to the valuation of investment property,

incl. assumptions made, are presented in notes 7c, 7d, 17 and 36 of the consolidated financial

statements.

Audit Procedures Performed in Response to the Risk

We documented our understanding of the investment valuation process. We also discussed

with the Management current situation in markets where the Group operates in. We engaged our

internal real estate and valuation specialists to verify properties’ valuations performed by the Group.

Our audit procedures included, among others, the following:

- understanding of the process and control systems related to valuation of both investment property

and investment property under construction;

- evaluation of the objectivity and expertise of the external appraisers;

- analysis of the properties selected on a sample basis, including assets that are of the highest value

or those showing significant changes in carrying value;

- review of the valuation reports and applied valuation models for selected properties and assessment

of valuation approach used for determining the carrying value;

- substantive audit procedures to evaluate the accuracy of the property information provided

to the appraisers by the Management, as well as verification of mathematical accuracy

of the valuation models;

- evaluation of the appropriateness of the property related data for selected properties, including

estimates as used by the external appraisers, in particular, comparison of the applied investment

yields to an expected estimated range, including reference to published benchmarks;

- assessment of other assumptions that are not so readily comparable with published benchmarks, such

Estimated

ent

Value,

void

rates

and

periods.

Where

assumptions

were

outside

the

expected

range

or otherwise unusual, and/or valuations showed unexpected movements, we undertook further

investigations and, when necessary, held further discussions with the external appraisers

and the Management;

- analytical review, including the reasonableness of fair value movements in comparison

with expectations built on the knowledge gained during the audit process;

- assessment of the appropriateness and completeness of the disclosures relating to the investment

property valuation presented in notes of the consolidated financial statements.

2 Financing and debt covenants

The outstanding bonds, loans and borrowings amount to 1,261,292 thousand euro and constitute 50.8%

of total assets of the Group as at 31 December 2020 (31 December 2019: 47.8%).

For the majority of loans and bonds, the entities of the Group have to meet certain covenants

specified in the loan and bond agreements.

Covenants’ calculation depends to a large extent on investment property valuations as described

in “Valuation of investment property” point above. These valuations are based on estimates

and assumptions, including expectations of future economic and market developments which may be

uncertain and, therefore, may change in the future. Additionally, the ability of the Group’s entities

to meet debt covenants in the foreseeable future may depend also on events after reporting date,

including effect of the Covid-19 pandemic. Finally, covenants’ calculation results may affect

the Group’s liquidity, as well as current and non-current liabilities presentation.

The availability of adequate financing and the assessment whether the Group will continue to meet its

financial covenants are significant aspects of our audit due to possible impact on the Group’s ability

to continue as a going concern. Therefore, we consider this to be a key audit matter.

Disclosures in the Financial Statements

The disclosures regarding the covenants, loan and bond agreements and amendments are presented in

notes 9, 28 and 37 of the consolidated financial statements. In the notes 4 and 36 the Group presented

its assessment of the going concern assumption, including Covid-19 effects on the Group’s operations,

financial position and performance.

Audit Procedures Performed in Response to the Risk

We documented our understanding of the financing process and the Group’s control systems

on the debt covenants’ compliance and liquidity management. We also documented our understanding

of the Group Management’s calculation process of the debt covenant ratios in accordance

with the loan and bonds agreements.

Our audit procedures, among others, included:

- analysis of debt covenants’ requirements resulting from the loan and bond agreements, including

the covenant ratios and potential events of default;

- analysis of the Group’s assessment of debt covenants’ compliance and going concern assumption;

- assessment of compliance - estimated by the Group’s Management - with applicable financial

covenants’ requirements by performing recalculation of these covenants as at 31 December 2020

on a sample basis of covenants;

- consideration of the events after the reporting date, including potential impact of the Covid-19

pandemic (i.a. decrease in shopping malls turnover on the future investment property valuations,

which are subject to financing collaterals), on the uncertainty of meeting debt covenants

and the Group liquidity in the foreseeable future and, consequently, the impact of this events

on the going concern assumption assessment;

- analysis of the Group’s stress tests - the cash flow projections based on certain hypothetical

defensive assumptions to assess the reasonableness of the going concern assumption in view

of the cur

rent development

on the market

;

- assessment of the appropriateness and completeness of the disclosures relating to the covenants,

loan and bond agreements as well as going concern assumption in notes of the consolidated financial

statements.

Other matter

The Group's financial statements for the year ended 31 December 2019 were audited by an auditor

acting on behalf of another audit firm, who expressed an unqualified opinion on those financial

statements on 18 March 2019.

Responsibilities of the Company’s Management and Supervisory Board for the Consolidated

Financial Statements

The Company’s Management is responsible for the preparation of the consolidated financial statements

that give a true and fair view of the Group’s financial position and financial result in accordance

with International Financial Reporting Standards endorsed by the European Union, the adopted

accounting methods (policies), the applicable binding regulations and the Statute. The Company’s

Management is also responsible for such internal controls as it considers necessary to ensure that

the consolidated financial statements are free from material misstatements resulting from fraud

or error.

In preparing the consolidated financial statements the Company’s Management is responsible

for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, any matters

related to going concern and using the going concern basis of accounting, except in situations where

the Management intends to either liquidate the Group or discontinue its operations, or has no realistic

alternative but to do so.

The Company’s Management and members of the Company’s Supervisory Board are required to ensure

that the consolidated financial statements meet the requirements of the Accounting Act

of 29 September 1994 (“the Accounting Act” – 2021 Journal of Laws, item 217). Members

of the Company’s Supervisory Board are responsible for overseeing the financial reporting process.

Responsibilities of the Auditor for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements

as a whole are free from material misstatements due to fraud or error, and to issue an independent

auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but it is

not a guarantee that an audit conducted in accordance with NSA will always detect an existing material

misstatement. Misstatements can arise from fraud or error and are considered material if it could be

reasonably expected that they, individually or in the aggregate, could influence the economic decisions

of users made on the basis of these consolidated financial statements.

The concept of materiality is applied by the auditor at the planning stage and when performing

the audit and evaluating the effect of identified misstatements on the audit and of uncorrected

misstatements, if any, on the financial statements, as well as when formulating the auditor’s opinion.

In view of the above, all of the opinions and statements contained in the auditor’s report are expressed

subject to the qualitative and quantitative level of materiality set in accordance with the applicable

standards on auditing and the auditor’s professional judgement.

The scope of the audit does not include an assurance regarding the Group’s future profitability,

or regarding the effectiveness of the Company’s Management in the handling of the Group’s affairs now

or in the future.

Throughout an audit in accordance with NSA we exercise professional judgement and maintain

professional skepticism, as well as:

- identify and assess the risks of a material misstatement of the consolidated financial statements

resulting from fraud or error, design and perform audit procedures in response to such risks and

obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk

of not detecting a material misstatement resulting from fraud is higher than the risk of not

detecting a material misstatement resulting from error, because fraud may involve collusion,

forgery, deliberate omission, misrepresentation or override of internal controls;

- obtain an understanding of the internal controls relevant to the audit in order to plan our audit

procedures, but not to express an opinion on the effectiveness of the Group’s internal controls;

- evaluate the appropriateness of the accounting policies used and the reasonableness of the

estimates and related disclosures made by the Company’s Management;

- conclude on the appropriateness of the Company Management’s use of the going concern basis of

accounting and, based on the audit evidence obtained, whether material uncertainty exists related

to events or conditions that may cast significant doubt on the Group’s ability to continue as a going

concern. If we conclude that a material uncertainty exists, we are required to draw attention in our

auditor’s report to the related disclosures in the consolidated financial statements or, if such

disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence

obtained up to the date of our auditor’s report. However, future events or conditions may cause the

Group to cease to continue as a going concern;

- evaluate the overall presentation, structure and contents of the consolidated financial statements,

including the disclosures, and whether the consolidated financial statements represent the

underlying transactions and events in a manner that achieves fair presentation;

- obtain sufficient appropriate audit evidence regarding the financial information of the entities or

business activities within the Group in order to express an opinion on the consolidated financial

statements. We are responsible for the direction, supervision and performance of the Group’s audit

and remain solely responsible for our audit opinion.

We provide the Company’s Audit Committee with information about, among others, the planned scope

and timing of the audit and significant audit findings, including any significant weaknesses of internal

controls that we identify during our audit.

We provide the Company’s Audit Committee with a statement that we have complied with the relevant

ethical requirements relating to independence, and that we will communicate to them all relationships

and other matters that may reasonably be considered to constitute a threat to our independence, and

where applicable, inform them of the related safety measures.

From the matters communicated to the Company’s Audit Committee we determined those matters that

were of the most significance to the audit of the consolidated financial statements for the current

reporting period and were therefore chosen as key audit matters. We describe these matters in our

auditor’s report, unless law or regulations prohibit their public disclosure or when, in exceptional

cases, we find that a given matter should not be presented in our report because the adverse

consequences of doing so would reasonably be expected to outweigh the public interest benefits of

such information.

Other Information, Including Report on Activities

Other information comprises the Report on the Activities of the Group for the financial year ended 31

December 2020 (“the Report on Activities”) along with the representation on the application of

corporate governance, as well as the Annual Report for the financial year ended 31 December 2020

(“Annual Report”) (together “Other Information”).

Responsibilities of the Company’s Management and Supervisory Board

The Company’s Management is responsible for the preparation of Other Information in accordance with

binding regulations.

The Company’s Management and members of its Supervisory Board are required to ensure that the

Report on Activities along with its separate sections meets the requirements of the Accounting Act.

Responsibilities of the Auditor

Our opinion on the consolidated financial statements does not cover Other Information. In connection

with our audit of the consolidated financial statements, our responsibility is to read Other Information

and, in doing so, consider whether it is materially inconsistent with the consolidated financial

statements or with our knowledge obtained during the audit, or otherwise appears to be materially

misstated. If based on the work we have performed, we find a material misstatement of Other

Information, we are required to state this fact in our auditor’s report. In accordance

with the requirements of the Certified Auditors Act, it is also our responsibility to issue an opinion

whether the Report on Activities has been prepared in accordance with binding regulations,

and whether it is consistent with the information presented in the financial statements. We are also

required to issue an opinion whether the Company’s representation on application of corporate

governance contains the required information.

We received the Report on the Activities of the Group prior to the issue of the present auditor’s report,

whereas the Annual Report will be available after this date. In the event that we find a material

misstatement in the Annual Report, we are required to communicate this to the Company’s Supervisory

Board.

Opinion on the Report on Activities

Based on the work we have performed during the audit, in our opinion the Report on the Activities

of the Group:

- has been prepared in accordance with Article 49 of the Accounting Act and par. 71

of the Minister’s of Finance Decree of 29 March 2018 on the current and periodic information

reported by the issuers of securities and on the conditions for recognizing as equally valid

the information required by the regulations of a state that is not a member state (the “Current

Information Decree” – 2018 Journal of Laws, item 757);

- is consistent with the information presented in the consolidated financial statements.

Furthermore, based on our knowledge obtained during the audit about the Group and its environment

we have identified no material misstatements in the Report on the Activities of the Group.

Opinion on the corporate governance application representation

In our opinion, the Company’s representation on application of corporate governance contains all

of the information specified in paragraph 70 section 6 par. 5 of the Current Information Decree.

In addition, in our opinion, the information indicated in paragraph 70 section 6 point 5 letters c-f, h

and letter i of the Decree, contained in the representation on application of corporate governance is

consistent with the applicable regulations and with the information contained in the consolidated

financial statements.

Report on Other Legal and Regulatory Requirements

Declaration on the Provision of Non-audit Services

To the best of our knowledge and belief we declare that any non-audit services we have provided

to the Group were consistent with the law and the regulations binding in Poland, and that we have not

provided any non-audit services prohibited by virtue of Article 5 par. 1 of Regulation EU and Article 136

of the of the Certified Auditors Act.

The non-audit services we have provided to the Company and its subsidiaries in the audited period are

listed in the Report on the Activities of the Group.

Appointment of the Auditor

We were appointed as auditors of the Group’s consolidated financial statements in a resolution passed

by the Company’s Supervisory Board on 29 April 2020. We audited the consolidated financial

statements of the Group for the first time.

The auditor in charge of the audit resulting in this independent auditor’s report is Krzysztof Maksymik.

BDO spółka z ograniczoną odpowiedzialnością sp.k. with its registered office in Warsaw

entered on the list of audit firms in number 3355

represented by the auditor in charge

Signed with a qualified electronic signature

Krzysztof Maksymik

Certified Auditor No. 11380

Podpisano kwalifikowanym podpisem elektronicznym

Dr. André Helin

Managing Partner of the General Partner

Certified Auditor No. 90004

Warsaw, 22 March 2021