Appeninn Vagyonkezelo Nyilvánosan Muködo Reszvenytársaság : Könyvizsgálói jelentés egyedi Auditors report standalone

Ernst & Young Kft.	Tel: [phone]
Ernst & Young Ltd.	Fax: [phone]
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1399 Budapest 62. Pf.632, Hungary	Cg. 01-09-267553

This is a translation of the Hungarian Report

Independent Auditor's Report

To the Shareholders of Appeninn Holding Asset Management Plc.

Report on the audit of the annual financial statements

Qualified opinion

We have audited the 2023 annual financial statements of Appeninn Holding Asset Management Plc. ("the Company") included in the accompanying 52990047YWS5LT39HV26-2023-12-31-hu.zip1 digital file, which comprise the statement on the financial position as at 31 December 2023 - showing total assets of HUF 45,214,370 thousand -, the related comprehensive income statement

• showing a total loss for the year of HUF 157,168 thousand -, statement of changes in equity, statement of cash flows for the year then ended and notes to the annual financial statements, including material accounting policy information.

In our opinion, except for the effect on the corresponding figures of the matter described in the Basis for qualified opinion section of our report, the annual financial statements give a true and fair view of the financial position of the Company as at 31 December 2023 and of its financial performance and its cash flows for the financial year then ended in accordance with International Financial Reporting Standards as adopted by the EU ("EU IFRSs") and have been prepared, in all materials respects, in accordance with the supplementary requirements of Act C of 2000 on Accounting ("Hungarian Accounting Law") relevant for annual financial statements prepared in accordance with EU IFRSs.

Basis for qualified opinion

The liability from corporate bond debt was classified as Long-term liability in value HUF 20,125,900 thousand which was not in line with IAS 1 Section 69 of EU IFRSs. EU IFRS require that an entity has an unconditional right to defer settlement of the liability for at least twelve months after the reporting period in order for such liability to be classified as long-term. As at 31 December 2022, the Company did not have such unconditional right as an upgrade of the senior unsecured debt rating was required in order to maintain the original payment term of the corporate bond debt. Had the liability been presented in accordance with EU IFRS, Short-term liabilities would have been increased by HUF 20,125,900 thousand and Long-term liabilities would have been decreased by HUF 20,125,900 in the financial position as at 31 December 2022. Our audit opinion on the financial statements for the period ended 31 December 2022 was modified accordingly. Our opinion on the current period's annual financial statements is also modified because of the comparability of the

1 Digital identification of the above referred digital file using SHA 256 HASH algorithm is: BB491F37DE08550FDE4FBE864FC4377D4E9653071048C0A4CC7E51B78133E935

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current period's figures and corresponding figures as the classification error is unresolved in the corresponding figures.

We conducted our audit in accordance with Hungarian National Auditing Standards and with applicable laws and regulations in Hungary, including also Regulation (EU) No. 537/2014 of the European Parliament and of the Council of 16 April 2014 on specific requirements regarding statutory audit of public-interest entities ("Regulation (EU) No. 537/2014"). Our responsibilities under those standards are further described in the "Auditor's responsibilities for the audit of the annual financial statements" section of our report.

We are independent of the Company in accordance with the applicable ethical requirements according to relevant laws in effect in Hungary and the policy of the Chamber of Hungarian Auditors on the ethical rules and disciplinary proceedings and, concerning matters not regulated by any of these, with the International Ethics Standards Board of Accountants' (IESBA) International Code of Ethics for Professional Accountants (including International Independence Standards) (IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the annual financial statements of the current period. In addition to the matter described in the Basis for qualified opinion section, we have determined the matters described below to be the key audit matters to be communicated in our report. These matters were addressed in the context of our audit of the annual financial statements, as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have fulfilled the responsibilities described in the "Auditor's responsibilities for the audit of the annual financial statements section" of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the annual financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying annual financial statements.

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Impairment test of investments in subsidiaries

The

Company's

investment

in

We involved valuation specialists to

subsidiaries amount to HUF 8,153,554

assist us in evaluating the key

thousand, and represents 18% of the

assumptions

and

methodologies

used

total assets. Valuation of investments in

for the determination of the fair values

subsidiaries is a significant judgmental

of

the investment

properties

in

the

area.

subsidiaries.

Management annually assesses if the

We

tested

the

input

data

for

the

investments are impaired by comparing

investment properties fair value models

the book value of investment to

recoverable amount in accordance with

in the subsidiaries. We evaluated the

the EU IFRSs.

qualification,

expertise

and

independence of

the

management

Recoverable amount is mostly influenced

experts for performing such valuations.

by the fair value of investment

We assessed whether the investments in

properties held by the subsidiaries,

whose fair value highly depends on key

subsidiaries are properly assessed for

assumptions

that

are

inherently

impairment and impairment allowance

uncertain such as future rental revenue,

is recognized, if needed.

void period costs, non-recoverable costs

and yields used for discounting. Fair

We assessed the adequacy of the

value is determined by management with

Company's

disclosures

about

involvement

of

external

valuation

investments

in

subsidiaries

in

experts.

accordance with EU IFRSs including the

Due to the significance of investments in

information how the impairment is

subsidiaries and the related estimation

evaluated by the Company.

uncertainty

we considered

impairment

The Company's accounting policy and

test of investments in subsidiaries as a

key audit matter.

disclosures about

its investments in

subsidiaries and related impairment are

included in Note 2.1.4. Measurement of investments, Note 2.3.3 Impairment of investments and Note 19. Investments in subsidiaries.

Determination of fair value of investment properties

The Company's investment properties	We involved valuation specialists to assist
amount to HUF 8,884,324 thousand,	us in evaluating the key assumptions and
and represents 20% of the total assets.	methodologies used by management,
Fair value is determined by	testing input data of the valuation model
management	with	involvement	of	and also evaluating the qualification,
external valuation experts annually as	expertise and independence of the
the Company	chose	to measure	its	management experts for performing such

valuations.

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investment properties applying	fair	We assessed completeness and the
value model in accordance with IAS40.	adequacy of the Group's disclosures about
				those assumptions to which the outcome
Valuation of investment properties is	of the valuation model is the most
a significant area of judgement, as the	sensitive.
estimated fair value highly depends on
key assumptions that are inherently	These disclosures are included in Note
uncertain such as future rental	2.1.6. Investment properties, 2.3.2. Fair
revenue, void period costs, non-	value of investment properties, Note 9.
recoverable costs and yields used for	Profit from Fair Valuation of Income-
discounting.				generating Investment Properties and
				Note 15. Revenue-generating investment
Therefore,	we	considered	properties.
determination	of fair	value	of

investment properties as a key audit matter.

Other information

Other information consists of the 2023 business report of the Company. Management is responsible for the preparation of the business report in accordance with the Hungarian Accounting Law and other relevant legal requirements, if any. Our opinion on the annual financial statements does not cover the business report.

In connection with our audit of the annual financial statements, our responsibility is to read the business report and, in doing so, consider whether 1) the business report is materially inconsistent with the annual financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated and 2) the business report has been prepared in accordance with the Hungarian Accounting Law and other relevant legal requirements, if any.

Our opinion on the business report should include the information required according to Subsections (2) e) and f) of Section 95/B of the Hungarian Accounting Law and we are required to confirm also whether the information prescribed in Subsections

1. a)-d)and g)-h) of Section 95/B of the Hungarian Accounting Law have been made available.

When fulfilling this responsibility we have considered the following law: Commission Delegated Regulation (EU) 2019/815 of 17 December 2018 on Supplementing Directive 2004/109/EC of the European Parliament and of the Council with regard to regulatory technical standards on the specification of a single electronic reporting format ("ESEF Regulation"), as such prescribing specific requirements for the business report, in relation with forming our opinion on the business report.

In our opinion, the business report of the Company, including the information required according to Subsections (2) e) and f) of Section 95/B of the Hungarian Accounting Law for 2023 is consistent, in all material respects, with the 2023 annual financial statements of the Company and the relevant requirements of the Hungarian Accounting Law.

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We also confirm that the Company have made available the information required according to Subsections (2) a)-d) and g)-h) of Section 95/B of the Hungarian Accounting Law.

Further to the above, based on the knowledge we have obtained about the Company and its environment in the course of the audit we are required to report whether we have identified any material misstatement in the business report, and if so, the nature of the misstatement in question. As described in the Basis for qualified opinion section above the liability from corporate bond debt is incorrectly classified as Long-term liability as at 31 December 2022. We have concluded that the other information is materially misstated, because of the effect of this unresolved matter on the comparability of the current period's figures and comparative corresponding figures.

Responsibilities of management and those charged with governance for the annual financial statements

Management is responsible for the preparation of the annual financial statements that give a true and fair view in accordance with EU IFRSs and for the preparation in accordance with the supplementary requirements of the Hungarian Accounting Law relevant for annual financial statements prepared in accordance with EU IFRSs, and for such internal control as management determines is necessary to enable the preparation of annual financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the annual financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company's financial reporting process.

Auditor's responsibilities for the audit of the annual financial statements

Our objectives are to obtain reasonable assurance about whether the annual financial statements, as a whole, are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with Hungarian National Auditing Standards and with applicable laws and regulations in Hungary, including also Regulation (EU) No. 537/2014 will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these annual financial statements.

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As part of an audit in accordance with Hungarian National Auditing Standards and with applicable laws and regulations in Hungary, including also Regulation (EU) No. 537/2014, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the annual financial statements, whether due to fraud or error, design and perform audit procedures responsive to those 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 for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company'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 annual 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 Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the annual financial statements, including the disclosures, and whether the annual financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the annual financial statements of the current period and are therefore the key audit matters.

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Report on other legal and regulatory requirements

REPORT ON COMPLIANCE WITH THE REQUIREMENTS OF THE REGULATION ON THE EUROPEAN SINGLE ELECTRONIC FORMAT

We have undertaken a reasonable assurance engagement on the compliance of the financial statements included in the digital file - identified in our report - prepared by the Company ("financial statements in ESEF format") with the requirements set out in the ESEF Regulation.

Responsibilities of the management and those charged with governance for the financial statements in ESEF format

The Company's management is responsible for preparing the financial statements in ESEF format that comply with the ESEF Regulation. This responsibility includes:

• the preparation of financial statements in the applicable XHTML format; and
• the design, implementation and maintenance of internal control relevant to the application of the ESEF Regulation.

Those charged with governance are responsible for overseeing the Company's financial reporting process including compliance with the ESEF Regulation.

Our responsibility and summary of the work performed

Our responsibility is to express an opinion on whether the financial statements in ESEF format complies, in all material respects, with the requirements of the ESEF Regulation based on the evidence we have obtained. We conducted our reasonable assurance engagement in accordance with Hungarian National Standard on Assurance Engagements 3000 (Revised), Assurance Engagements Other than Audits or Reviews of Historical Financial Information (ISAE 3000).

A reasonable assurance engagement in accordance with ISAE 3000 involves performing procedures to obtain evidence about compliance with the ESEF Regulation. The nature, timing and extent of procedures selected depend on the auditor's judgment, including the assessment of the risks of material departures from the requirements set out in the ESEF Regulation, whether due to fraud or error. Our reasonable assurance engagement included obtaining an understanding of the Company's internal controls relevant to the application of the requirements of the ESEF Regulation and verifying whether the XHTML format was applied properly.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Opinion

In our opinion, the financial statements in ESEF format of the Company for the year ended 31 December 2023 included in the digital file - identified in our report - complies, in all material respects, with the requirements of the ESEF Regulation.

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REPORTING REQUIREMENTS ON CONTENT OF AUDITOR'S REPORT IN COMPLIANCE WITH REGULATION (EU) NO. 537/2014

Appointment and Approval of Auditor

We were appointed as the statutory auditor of the Company by the Board of Directors on behalf of the General Assembly of the Shareholder of the Company on 29 April 2022. Total uninterrupted engagement period, including previous renewals (extension of the period for which we were originally appointed) and reappointments for the statutory auditor, has lasted for five years.

Consistency with Additional Report to Audit Committee

Our audit opinion on the annual financial statements expressed herein is consistent with the additional report to the audit committee of the Company, which we issued in accordance with Article 11 of the Regulation (EU) No. 537/2014 on the same date as the date of this report.

Non-audit Services

We declare that no prohibited non-audit services referred to in Article 5(1) of Regulation (EU) No. 537/2014 were provided by us to the Company and its controlled undertakings and we remained independent from the Company in conducting the audit.

In addition to statutory audit services and services disclosed in the business report and in the annual financial statements, no other services were provided by us to the Company and its controlled undertakings.

The engagement partner on the audit resulting in this independent auditor's report is Varga János.

Budapest, 4 April 2024

(The original Hungarian version has been signed.)

Varga János	Varga János
Engagement Partner	Registered auditor
Ernst & Young Kft.	Chamber membership No.: 007319
1132 Budapest, Váci út 20.
Registration No. 001165

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