Echo Investment S.A.

STANDALONE FINANCIAL REPORT OF ECHO INVESTMENT S.A. FOR 2020 About Echo Investment S.A. Information on the financial statement CHAPTER 1 Statement of financial position Profit and loss account Statement of financial result and other comprehensive income Cash flow statement Statement of changes in equity CHAPTER 2 EXPLANATORY NOTES Explanatory notes to the statement of financial position Explanatory notes to profit and loss account Explanatory notes to cash flow statement CHAPTER 3 INFORMATION ON THE FINANCIAL STATEMENTS Application of new and amended standards and interpretations issued by the IFRS Interpretations Committee Published standards and interpretations which are not effective yet and have not been adopted by the Company Main accounting principles Methods of determining the financial result Error correction – changing the presenting principles - restatement of statements for previous period Material estimates of the Company’s management board Financial risk management Capital risk management Material agreements concluded with related entities Material post-balance sheet events Remuneration of the Management Board and Supervisory Board Agreements concluded with an entity authorised to audit financial statements STATEMENT OF THE MANAGEMENT BOARD Contact STANDALONE ANNUAL REPORT OF ECHO INVESTMENTS.A. 22 CONTENT STANDALONE FINANCIAL REPORT OF ECHO INVESTMENTS.A. FOR 2020 4 About Echo Investment S.A. 5 Information on the ﬁnancial statement 5 CHAPTER 1 6 Statement of ﬁnancial position 7 Proﬁt and loss account 9 Statement of ﬁnancial result and other comprehensive income 10 Cash ﬂow statement 11 Statement of changes in equity 13 CHAPTER 2 14 EXPLANATORY NOTES 14 Explanatory notes to the statement ofﬁnancial position 15 Explanatory notes to proﬁt and loss account 74 Explanatory notes to cash ﬂow statement 83 CHAPTER 3 87 INFORMATION ON THE FINANCIAL STATEMENTS 87 Application of new and amended standards and interpretations issued by the IFRS Interpretations Committee 88 Published standards and interpretations which are not eective yet and have not been adopted by the Company 89 Main accounting principles 91 Methods of determining the ﬁnancial result 99 Error correction – changing the presenting principles - restatement of statements for previous period 101 01. 02. 03. 04. 05. 06. 07. 08. 09. 10. 11. 12. Material estimates of the Company’s management board 103 Financial risk management 105 Capital risk management 110 Material agreements concluded with related entities 111 Material post-balance sheet events 113 Remuneration of the Management Board and Supervisory Board 114 Agreements concluded with an entity authorised to audit ﬁnancial statements 116 STATEMENT OF THE MANAGEMENT BOARD 117 Contact 119 STANDALONE FINANCIAL REPORT OF ECHO INVESTMENTS.A. FOR 2020 5 Standalone nancial report of Echo Investment S.A. for 2020 About Echo Investment S.A. Information on the ﬁnancial statement Echo Investment S.A.’s core activity consists in the construction, lease and sale of oce and retail build - ings, construction and sale of residential buildings as well as trade in real estate. Echo Investment S.A. (later referred to as Echo or the Company), with its registered oce in Kielce, al. Solidarności 36, was registered in Kielce on 23 July 1992. Echo is a Joint Stock Company entered into the National Court Reg- ister under no. 0000007025 by the District Court in The statements of the Echo Investment S.A. pres- ent ﬁnancial data for the 12-month period ending on 31 December 2020 and comparative data for the 12-month period ending on 31 December 2019. The ﬁnancial statements have been drawn up in accord- ance with the historical cost principle with the ex- ception of investment property, which was measured at fair value. The reporting currency in the ﬁnancial statements and the functional currency of Echo Investment S.A. is Polish zloty (PLN). Unless indi- cated otherwise, all ﬁnancial data in the Company’s ﬁnancial statements has been presented in thousand zlotys (PLN). DECLARATION OF CONFORMITY The statements have been prepared in compliance with the International Financial Reporting Standards (IFRS), as adopted by the European Commission. To fully understand the ﬁnancial situation and business results of the Company as the parent company of the Echo Investment Capital Group, these ﬁnancial statements should be read together with the full con - solidated ﬁnancial statements for the 12-month peri- od ending on 31 December 2020. The consolidated ﬁnancial statements are available at the Company’s website https://en.echo.com.pl/. Kielce, 10th Economic Department of the National Court Register. Since 5 March 1996, the Company’s shares are quoted at the Warsaw Stock Exchange on the regulated market. They are included into Warsaw Stock Exchange Index WIG, mWIG40 subindex, WIG ESG social responsible companies index as well as sector index WIG-Real Estate. The Company was es- tablished for an indeﬁnite period of time. ASSUMPTION OF CONTINUITY IN OPERATIONS The statements have been drawn up according to the going concern principle as there are no circumstanc- es indicating a threat to continued activity. Due to the correction of the incorrect presentation of loans previously presented as short-term for long-term loans, the Company presents negative working capi- tal as at the balance sheet date. In the opinion of the Management Board, this fact does not constitute a threat to the going concern, as the true picture of the Company’s ﬁnancial situation should be considered from the perspective of the entire group. APPROVAL OF FINANCIAL STATEMENTS The Company drew up the Separate Financial State- ment for the year ended 31 December 2020, which was approved for publication on 30 March 2021. The Management Board of the Company has used its best judgment regarding the application of stand- ards and interpretations, as well as the methods and principles of measurement of individual items of sep- arate ﬁnancial statements. CHAPTER 1 | Financial statement 7 Standalone nancial report of Echo Investment S.A. for 2020 Statement of ﬁnancial position STATEMENT OF FINANCIAL POSITION PLN ‘000 NOTE As at 31.12.2020 As at 31.12.2019 – restated As at 1.01.2019 – restated ASSETS Non-current assets Intangible assets 1 3 447 3 614 2 445 Property, plant and equipment 2 20 340 21 766 5 284 Investment property 3 2 212 2 212 2 212 Investments in subsidiaries, jointly controlled entities and associates 4 1 073 287 1 021 440 975 449 Long-term ﬁnancial assets 5 314 772 487 387 796 125 Loans granted 6 954 425 805 027 440 586 Deferred tax asset 7 - - - 2 368 483 2 341 446 2 222 101 Current assets Inventory 8 198 504 212 191 201 445 Current tax receivables 9 205 - - Other taxes receivable 9 1 205 - 248 Trade and other receivables 9 83 979 121 507 109 224 Short-term ﬁnancial assets 5 183 438 - - Loans granted 10 294 909 9 845 46 539 Other ﬁnancial assets * 11 42 444 17 720 7 389 Cash and cash equivalents 11 107 437 232 147 181 977 912 121 593 410 546 822 Total assets 3 280 604 2 934 856 2 768 923 * Mainly cash in escrow accounts paid by residential clients | Financial statement 8 Standalone nancial report of Echo Investment S.A. for 2020 STATEMENT OF FINANCIAL POSITION CONT. PLN ‘000 NOTE As at 31.12.2020 As at 31.12.2019 – restated As at 1.01.2019 – restated EQUITY AND LIABILITIES Equity Share capital 12 20 635 20 635 20 635 Supplementary capital 13 1 054 295 1 054 295 1 054 295 Dividend fund 186 051 164 639 326 309 Proﬁt / (loss) from previous years - - 2 243 Net proﬁt 57 825 21 412 42 432 1 318 806 1 260 981 1 445 914 Long-term liabilities Loans, borrowings and bonds 14 872 941 1 063 866 903 448 - including subsidiaries: - 127 007 - Long-term provisions 17 - Deferred tax liabilities 7 19 534 4 639 1 468 Deposits and advances received 14 1 113 1 492 746 Lease liabilities 14 13 567 12 645 - Derivative ﬁnancial instruments 1 624 - - 908 779 1 082 642 905 662 Short-term liabilities Loans, borrowings and bonds 16 839 569 362 212 267 725 - including subsidiaries: 208 179 - - Current income tax payable 15 5 3 215 1 219 Other taxes liabilities 15 8 706 12 100 1 678 Trade payable 15 26 389 53 402 32 595 Deposits and advances received 15 89 791 104 940 74 795 Lease liabilities 15 9 530 13 274 - Short-term provisions 17 11 304 15 507 17 317 Other liabilities 15 67 725 26 583 22 018 1 053 019 591 233 417 347 Total equity and liabilities 3 280 604 2 934 856 2 768 923 | Financial statement 9 Standalone nancial report of Echo Investment S.A. for 2020 PROFIT AND LOSS ACCOUNT PLN ‘000 NOTE 1.01.2020- 31.12.2020 1.01.2019- 31.12.2019 Revenue 19 329 559 312 924 Cost of sales 20 (253 744) (224 388) Gross proﬁt 75 815 88 536 Proﬁt (loss) on investment property - - Administrative costs associated with project implementation (7 836) (10 588) Selling expenses 20 (22 828) (19 340) General and administrative expenses 20 (66 792) (91 967) Other operating income 21 178 750 120 382 - including interest on loans and bonds 59 464 53 005 Other operating expenses 21 (12 778) (3 527) Operating proﬁt 144 331 83 496 Financial income 22 3 804 11 089 Financial cost 22 (70 447) (64 778) Proﬁt before tax 77 688 29 807 Income tax 23 (19 863) (8 395) Net proﬁt 57 825 21 412 Net proﬁt 57 825 21 412 Weighted average number of ordinary shares 412 690 582 412 690 582 Proﬁt per one ordinary share (in PLN) 0,14 0,05 Diluted weighted average number of ordinary share 412 690 582 412 690 582 Diluted proﬁt per one ordinary share (PLN) 0,14 0,05 Proﬁt and loss account | Financial statement 10 Standalone nancial report of Echo Investment S.A. for 2020 STATEMENT OF FINANCIAL RESULT AND OTHER COMPREHENSIVE INCOME PLN ‘000 NOTE 1.01.2020- 31.12.2020 1.01.2019- 31.12.2019 Net proﬁt 57 825 21 412 Other comprehensive income for the year: - - Other comprehensive income for the year, net of tax - - Total comprehensive income 57 825 21 412 Statement of ﬁnancial result and other comprehensive income | Financial statement 11 Standalone nancial report of Echo Investment S.A. for 2020 CASH FLOW STATEMENT PLN ‘000 NOTE 1.01.2020- 31.12.2020 1.01.2019- 31.12.2019 Operating cash ﬂow – indirect method I. Proﬁt before tax 77 688 29 807 II. Adjustments (93 709) (46 770) Depreciation 9 516 8 071 FX gains / (losses) (3 316) - Interest and proﬁt sharing (dividends) (105 052) (57 355) Proﬁt / (loss) on revaluation of assets and liabilities 5 151 2 738 Proﬁt / (loss) from the sale of ﬁxed assets and investment real estate (8) (224) III. Changes in working capital (16 815) 25 911 Change in provisions (4 203) (1 810) Change in inventories 10 454 (2 415) Change in receivables 13 026 (28 687) Change in short–term liabilities, except for loans and borrowings (11 368) 69 154 Change in other ﬁnancial assets (24 724) (10 331) IV. Net cash generated from operating activities (I+/-II+/-III) (32 836) 8 948 V. Income tax paid (8 382) (3 228) VI. Net cash generated from operating activities ( IV+/-V) (41 218) 5 720 Cash ﬂows from investing activities I. Inﬂows 302 852 430 350 Disposal of intangible assets and tangible ﬁxed assets 3 717 Disposal of investments in property - - From ﬁnancial assets, including: 302 849 429 633 a) in related entities 302 849 429 633 - disposal of ﬁnancial assets 15 641 564 - dividends and proﬁt sharing 21B 151 041 22 879 - repayment of loans granted 95 795 212 094 - interest 24 621 27 756 - purchase of certiﬁcates 3 751 28 400 - other proceeds from ﬁnancial assets 12 000 137 940 b) in other entities - - - disposal of ﬁnancial assets - - - repayment of loans granted - - - interest - - Other investment incomes - - Cash ﬂow statement | Financial statement 12 Standalone nancial report of Echo Investment S.A. for 2020 CASH FLOW STATEMENT PLN ‘000 NOTE 1.01.2020- 31.12.2020 1.01.2019- 31.12.2019 II. Outﬂows (589 071) (500 019) Purchase of intangible assets and tangible ﬁxed assets (2 066) (2 773) Investment in property - - For ﬁnancial assets, including: (524 667) (497 246) a) in related entities (524 667) (497 246) - purchase of ﬁnancial assets (9 963) (7 248) - loans granted (514 704) (489 998) b) in other entities - - - purchase of ﬁnancial assets - - - loans granted - - Other investment expenses (62 338) - Net cash ﬂow from investing activities (286 219) (69 669) Cash-ﬂows from ﬁnancial activities I. Inﬂows 25 605 909 634 648 Net proceeds from issuing shares (issue of shares) and other equity instru- ments and capital contributions - - Loans and borrowings 113 726 500 816 Issue of debt securities 492 183 133 832 Other ﬁnancial inﬂows - - II. Outﬂows 25 (403 183) (520 529) Purchase of own shares - - Dividends and other payments to equity holders - (206 345) Proﬁt distribution expenses other than payments to owners - - Repayment of loans and borrowings (123 959) (80 000) Redemption of debt securities (206 940) (170 500) Due to other ﬁnancial liabilities - - Payments of leasing liabilities (8 087) (6 269) Interest (62 869) (54 825) Other ﬁnancial expenses (1 328) (2 590) Net cash ﬂow from ﬁnancing activities 202 726 114 119 Total net cash ﬂows (124 710) 50 170 Balance sheet change in cash, including: (124 710) 50 170 - change in cash due to exchange rate dierences - - Cash and cash equivalents at the beginning of the period 25 232 147 181 977 Cash and cash equivalents at the end of the period 25 107 437 232 147 | Financial statement 13 Standalone nancial report of Echo Investment S.A. for 2020 STATEMENT OF CHANGES IN EQUITY PLN ‘000 NOTE Share capital Supplementary capital Dividend fund Prot (loss) from previous years Prot for the current year Equity total As of January 1, 2020 20 635 1 054 295 164 639 21 412 - 1 260 981 Changes during the period: distribution of the result from previous years 13 21 412 (21 412) - - dividend paid 13 - dividend approved for payment 13 - - net proﬁt for the period - - - - 57 825 57 825 Changes in total - - 21 412 (21 412) 57 825 57 825 As of December 31, 2020 20 635 1 054 295 186 051 - 57 825 1 318 806 As of January 1, 2019 20 635 1 054 295 326 309 44 675 - 1 445 914 Changes during the period: distribution of the result from previous years 13 - - 44 675 (44 675) - - dividend paid 13 - (206 345) (206 345) dividend approved for payment 13 - - Net proﬁt for the period - - - - 21 412 21 412 Changes in total - - (161 670) (44 675) 21 412 (184 933) As of December 31, 2019 20 635 1 054 295 164 639 - 21 412 1 260 981 Statement of changes in equity * In accordance with the resolution of the Ordinary General Meeting of Shareholders, Echo Investment S.A. paid dividends to shareholders in the amount of PLN206345 291, which constituted the amount of PLN 0.50 per share. The dividend was fully settled with the advance payment for the dividend for the ﬁnancial year 2019 paid by the Company on October 21, 2019, pursuant to the resolution of the Management Board of the Company of September 11, 2019. CHAPTER 2 EXPLANATORY NOTES | Financial statement 15 Standalone nancial report of Echo Investment S.A. for 2020 Explanatory notes to the statement ofﬁnancial position NOTE 1A INTANGIBLE ASSETS PLN ‘000 31.12.2020 31.12.2019 Purchased permits, patents, licences and similar assets, including: 2 654 3 051 Software 2 070 2 097 Intangible assets in development 793 563 Total intangible assets 3 447 3 614 The Company did not recognise impair- ment losses of intangible assets item dur- ing the periods covered by the ﬁnancial statements. The company has no con- tractual obligations as at 31 December 2020. NOTE 1B CHANGES IN INTANGIBLE ASSETS BY TYPES PLN ‘000 Purchased permits, patents, licences and similar assets Total intangible assetsFor the period 1.01.2020 – 31.12.2020 Software Other Gross value of intangible assets at the beginning of the period 7 004 2 710 9 711 Increases 1 811 - 1 811 due to purchase 1 811 - 1 811 Decreases - - - due to sales - - Gross value of intangible assets at the end of the period 8 815 2 710 11 522 - Accumulated amortisation at the beginning of the period (4 907) (1 424) (6 660) Amortisation for the period (1 838) (370) (2 208) planned (1 838) (370) (2 208) due to sale - - Accumulated amortisation at the end of the period (6 745) (1 794) (8 868) Net value of intangible assets at the end of the period 2 070 916 2 654 All intangible assets owned by the Com- pany were acquired. Depreciation methods used and adopt- ed periods of use or depreciation rates applied for: − acquired concessions, patents, licens- es and similar values – the straight-line method, 50%, depreciation booked on general administrative costs, − other intangible assets – not transferred for use as at 31 December 2020 are not depreciated. | Financial statement 16 Standalone nancial report of Echo Investment S.A. for 2020 NOTE 2A PROPERTY, PLANT AND EQUIPMENT PLN ‘000 31.12.2020 31.12.2019 PP&E, including: 20 340 21 669 land 180 183 buildings, premises, civil and water engineering structures 15 023 16 152 plant and machinery 107 151 means of transport 4 800 4 849 other PP&E 230 334 PP&E under construction - 97 Advances on PP&E under construction - - Total PP&E 20 340 21 766 The Company did not make any impair- ment losses on property, plant and equip- ment in the periods covered by these ﬁ- nancial statements. The Company has no collateral established on ﬁxed assets. CHANGES IN INTANGIBLE ASSETS BY TYPES PLN ‘000 Purchased permits, patents, licences and similar assets Total intangible assetsFor the period 1.01.2019 – 31.12.2019 Software Other Gross value of intangible assets at the beginning of the period 4580 2710 7290 Increases due to purchase 2424 - 2424 Decreases due to sale 2424 - 2424 Decreases - - (3) due to sales - (3) Gross value of intangible assets at the end of the period 7004 2710 9711 Accumulated amortisation at the beginning of the period (4566) (1051) (5617) Amortisation for the period (341) (373) (1043) planned (341) (373) (1046) due to sale - 3 Accumulated amortisation at the end of the period (4907) (1424) (6660) Net value of intangible assets at the end of the period 2097 1286 3051 | Financial statement 17 Standalone nancial report of Echo Investment S.A. for 2020 CHANGES IN PP&E  BY TYPES PLN ‘000 For the period 1.01.2020 – 31.12.2020 Own land Buildings and structures Technical equipment and machines Means of transport Other PP&E Total Gross value of PP&E at the beginning of the period 193 20 503 3 496 9 465 3 730 37 386 Increases - 2 698 25 1 487 - 4 210 due to purchase - 97 25 - - 122 due to lease - 2 601 - 1 487 - 4 088 Decreases - - (22) - (173) (195) due to liquidation - - - - (44) (44) due to sale - - (22) - (129) (151) Gross PP&E at the end of the period 193 23 201 3 499 10 952 3 557 41 401 Accumulated depreciation at the beginning of the period (11) (4 351) (3 347) (4 633) (3 376) (15 717) Depreciation for the period (2) (3 827) (45) (1 519) 49 (5 344) due to depreciation (2) (256) (67) (208) (122) (655) decrease due to sale - - 22 - 127 149 due to lease - (3 571) - (1 311) - (4 882) due to liquidation - - - - 44 44 Accumulated depreciation at the end of the period (13) (8 178) (3 392) (6 152) (3 327) (21 061) Net value of ﬁxed assets 180 15 023 107 4 800 230 20 340 including asset on lease - 11 522 - 4 800 - 16 322 CHANGES IN PP&E  BY TYPES PLN ‘000 For the period 1.01.2019 – 31.12.2019 Own land Buildings and structures Technical equipment and machines Means of transport Other PP&E Total Gross value of PP&E at the beginning of the period 258 4266 4479 2665 4364 16032 Due to leasing as at 1.01.2019 - 7895 - 6439 - 14334 Gross value of PP&E at the beginning of the period 258 12161 4479 9104 4364 30366 Increases - 8763 200 752 576 10291 due to purchase - 760 200 - 576 1536 due to lease - 8003 - 752 - 8755 Decreases (64) (421) (1183) (392) (1211) (3271) due to liquidation - (190) (782) - (578) (1550) due to sale (64) (231) (401) (392) (633) (1721) Gross PP&E at the end of the period 194 20503 3496 9464 3729 37386 Accumulated depreciation at the beginning of the period (8) (776) (4322) (2160) (3726) (10992) Depreciation for the period (3) (3575) 977 (2455) 331 (4725) due to depreciation (3) (227) (204) (278) (370) (1082) decrease due to sale - 13 416 391 194 1014 due to lease (3406) (2568) (5974) due to liquidation 45 765 507 1317 Accumulated depreciation at the end of the period (11) (4351) (3345) (4615) (3395) (15717) Net value of ﬁxed assets 183 16152 151 4849 334 21669 including asset on lease - 12492 - 4623 - 17115 NOTE 2B There are no contractual obligations related to the acquisition of tangible ﬁxed assets. | Financial statement 18 Standalone nancial report of Echo Investment S.A. for 2020 NOTE 3A NOTE 3B The Company Company presents investment properties at the mo- ment of their posting to the books at purchase price / production cost. After the initial posting, the Company measures properties at fair value at the end of each cal- endar quarter. Proﬁt/loss on val- uation is disclosed under „Proﬁt/ loss on investment property” in the proﬁt and loss account. The fair value was determined us- ing a market comparison model based on current market prices. In the hierarchy of fair value for investment properties, the Com - pany assigned level 3. The Company has no collateral established on investment prop- erties. The Company has no con- tractual obligations as at 31 De- cember 2020. CHANGES IN INVESTMENT PROPERTY PLN ‘000 1.01.2020- 31.12.2020 1.01.2019- 31.12.2019 Value of property investments at the beginning of the period 2212 2212 Increases due to: - - inventories taking - - revaluation of property - - Decreases due to: - - sale - - transfer of assets for sale - - revaluation of property - - Value of property investments at the end of the period 2212 2212 INVESTMENT PROPERTY  INFLUENCE ON THE RESULT PLN ‘000 1.01.2020- 31.12.2020 1.01.2019- 31.12.2019 Revenue from investment property rents 18 27 Direct operating expenses (including repair and maintenance costs) on investment property generating rent revenue in the period - (34) Direct operating expenses (including repair and maintenance costs) on investment property not generating rent revenue in the period - - NOTE 4A The Company’s share in the ﬁnan- cial result of associates is equal to the total number of votes at their general meeting. INTERESTS AND SHARES PLN ‘000 31.12.2020 31.12.2019 Investments in subsidiaries, joint ventures and associates in subsidiaries 951 898 964 015 in joint-ventures - - in associates 121 389 57 425 Total 1 073 287 1 021 440 | Financial statement 19 Standalone nancial report of Echo Investment S.A. for 2020 NOTE 4B CHANGES IN INTERESTS AND SHARES PLN ‘000 1.01.2020- 31.12.2020 1.01.2019- 31.12.2019 Balance at the beginning of the period, including: 1 021 440 975 449 shares and interests 1 021 440 975 449 Increases due to: 78 385 202 740 purchase of interests 11 113 149 069 increase in capital 67 272 53 671 advances on capital increase - - Decreases due to: (26 538) (156 749) sale of interests (15 029) (141) capital decrease (6 000) - advances on capital increase - (46 066) subsidiary liquidation - (106 413) write–down on assets (5 509) (4 129) Balance at the end of the period, including: 1 073 287 1 021 440 shares and interests 1 073 287 1 021 440 | Financial statement 20 Standalone nancial report of Echo Investment S.A. for 2020 WRITEDOWNS ON INTERESTS Company Value of shares [PLN ‘000] Metropolis - Projekt Echo 121 Sp. zo.o. SKA 1 581 Projekt Echo - 115 Sp. zo.o. 1 375 Projekt Echo - 122 Sp. zo.o. 748 Projekt Echo - 120 Sp. zo.o. 393 Projekt Echo - 131 Sp. zo.o. 276 Projekt Echo - 113 Sp. zo.o. 248 Echo - Opolska Business Park Sp. zo.o. 233 Echo - Property Poznań 1 Sp. zo.o. 197 Projekt Echo - 111 Sp. zo.o. 72 Malta Oce Park - Grupa Echo Sp. zo.o. SKA 49 Projekt Echo - 93 Sp. zo.o. 35 Projekt Echo - 121 Sp. zo.o. 31 PPR-PE-77 Sp. zo.o. SKA 26 Projekt 13 - GE Sp. zo.o. SKA 24 Projekt 14 - GE Sp. zo.o. SKA 24 Projekt 21 - GE SKA 20 Galeria Tarnów Grupa Echo SKA 16 Bełchatów Ge Sp. zo.o. SKA 16 Echo - Babka Tower Sp. zo.o. 15 Selmer Investments Sp.K. 15 Selmer Investments Sp. zo.o. 12 Projekt K-6 GE SKA 11 Kielce - Projekt Echo 129 SKA 11 Echo - Pod Klonami Sp. zo.o. Sp.K. 10 Shanklin Sp. zo.o. 10 Projekt 147 Grupa Echo Sp. zo.o. Sp.K. 6 Projekt 148 Grupa Echo Sp. zo.o. Sp.K. 6 Projekt 150 - Shanklin Sp. zo.o. Sp.K. 6 Projekt 151 – PE-13 Ge Sp. zo.o. SKA Sp.K. 6 Projekt 152 – PE-14 Ge Sp. zo.o. SKA Sp.K. 6 Projekt 153 – PE-21 Ge Sp. zo.o. SKA Sp.K. 6 Projekt 154 - PK-6 Ge Sp. zo.o. SKA Sp.K. 6 Fianar Investments Sp. zo.o. 6 Projekt Echo - 119 Sp. zo.o. 5 Gleann Sp. zo.o. 5 Echo-Klimt House Sp. zo.o. Sp.K. 2 CONTRIBUTION REDUCTION Company Value of shares [PLN ‘000] Echo - Browary Warszawskie Sp. zo.o. Sp.K. 6 000 PAYMENT AND CAPITAL INCREASE IN THE FOLLOWING SUBSIDIARIES Company Value of shares [PLN ‘000] Rosehill Investments Sp. zo.o. 58 829 R4R Poland Sp. zo.o. 5 135 Projekt Echo - 115 Sp. zo.o. 1 375 Projekt Echo - 122 Sp. zo.o. 748 Projekt Echo - 120 Sp. zo.o. 393 Projekt Echo - 131 Sp. zo.o. 276 Projekt Echo - 113 Sp. zo.o. 248 Echo - Opolska Business Park Sp. zo.o. 233 Projekt Echo - 139 Sp. zo.o. 5 Projekt Echo - 140 Sp. zo.o. 5 Projekt Echo - 141 Sp. zo.o. 5 Projekt Echo - 142 Sp. zo.o. 5 Projekt Echo - 143 Sp. zo.o. 5 Projekt Echo - 144 Sp. zo.o. 5 Projekt Echo - 145 Sp. zo.o. 5 ACQUISITION OF SHARES IN THE FOLLOWING COMPANIES Company Value of shares [PLN ‘000] M2 Hotel Sp. zo.o. 11 113 SALE OF SHARES IN THE FOLLOWING COMPANIES Company Value of shares [PLN ‘000] Projekt Echo - 132 Sp. zo.o. 3 902 M2 Hotel Sp. zo.o. 11 113 Projekt 18 - GE Sp. zo.o. SKA 14 CHANGES IN THE ECHO INVESTMENT CAPITAL GROUP IN 2020 | Financial statement 21 Standalone nancial report of Echo Investment S.A. for 2020 NOTE 4C PLEDGES ON INTERESTS AND SHARES Subject of the pledge Entity that shares or interests was subject of pledge Value of pledge Collateral for a loan granted to the subsidiary Galeria Libero - Projekt Echo 120 Sp. z o.o. Sp.K. issued by Santander Bank Polska S.A. Projekt Echo 120 Sp. zo.o. EUR 101 mn Collateral for a loan granted to the subsidiary Galeria Libero - Projekt Echo 120 Sp. z o.o. Sp.K. issued by Santander Bank Polska S.A. Projekt Echo 120 Sp. zo.o. PLN 18 mn Collateral for a loan granted to the subsidiary Berea Sp. z o.o. Sp.K. issued by CBRE Loan Services Limited. Rosehill Investments Sp. zo.o. EUR 16 mn Collateral for a loan granted to the subsidiary Dellia Investments - Projekt Echo 115 Sp. z o.o. Sp.K. issued by Bank Pekao S.A. Projekt Echo 115 Sp. zo.o. EUR 131 mn Collateral for a loan granted to the subsidiary Dellia Investments - Projekt Echo 115 Sp. z o.o. Sp.K. issued by Bank Pekao S.A. Projekt Echo 115 Sp. zo.o. PLN 26 mn Collateral for a loan granted to the subsidiary Projekt Beethovena - Projekt Echo - 122 Sp. z o.o. Sp.K. issued by PKO Bank Polski S.A. Projekt Beethovena - Projekt Echo - 122 Sp. zo.o. SKA EUR 75 mn Collateral for a loan granted to the subsidiary Projekt Beethovena - Projekt Echo - 122 Sp. z o.o. Sp.K. issued by PKO Bank Polski S.A. Projekt Beethovena - Projekt Echo - 122 Sp. zo.o. SKA EUR 75 mn Collateral for a loan granted to the subsidiary Projekt Beethovena - Projekt Echo - 122 Sp. z o.o. Sp.K. issued by PKO Bank Polski S.A. Projekt Beethovena - Projekt Echo - 122 Sp. zo.o. SKA PLN 24 mn Collateral for a loan granted to the subsidiary Projekt Beethovena - Projekt Echo - 122 Sp. z o.o. Sp.K. issued by PKO Bank Polski S.A. Projekt Echo - 122 Sp. zo.o. EUR 75 mn Collateral for a loan granted to the subsidiary Projekt Beethovena - Projekt Echo - 122 Sp. z o.o. Sp.K. issued by PKO Bank Polski S.A. Projekt Echo - 122 Sp. zo.o. EUR 75 mn Collateral for a loan granted to the subsidiary Projekt Beethovena - Projekt Echo - 122 Sp. z o.o. Sp.K. issued by PKO Bank Polski S.A. Projekt Echo - 122 Sp. zo.o. EUR 24 mn Collateral for a loan granted to the subsidiary Projekt Beethovena - Projekt Echo - 122 Sp. z o.o. Sp.K. issued by PKO Bank Polski S.A. Projekt Echo - 122 Sp. zo.o. EUR 75 mn Collateral for a loan granted to the subsidiary Projekt Beethovena - Projekt Echo - 122 Sp. z o.o. Sp.K. issued by PKO Bank Polski S.A. Projekt Echo - 122 Sp. zo.o. EUR 75 mn Collateral for a loan granted to the subsidiary Projekt Beethovena - Projekt Echo - 122 Sp. z o.o. Sp.K. issued by PKO Bank Polski S.A. Projekt Echo - 122 Sp. zo.o. PLN 11 mn Collateral for a loan granted to the subsidiary Face2Face - Stranraer Sp. z o.o. SKA issued by Bank Pekao S.A. Stranraer Sp. zo.o. PLN 36 mn Collateral for a loan granted to the subsidiary Face2Face - Stranraer Sp. z o.o. SKA issued by Bank Pekao S.A. Stranraer Sp. zo.o. PLN 130 mn Collateral for a loan granted to the subsidiary Face2Face - Stranraer Sp. z o.o. SKA issued by Bank Pekao S.A. Face2Face - Stranraer Sp. zo.o. SKA PLN 36 mn Collateral for a loan granted to the subsidiary Face2Face - Stranraer Sp. z o.o. SKA issued by Bank Pekao S.A. Face2Face - Stranraer Sp. zo.o. SKA PLN 130 mn Collateral for a loan granted to the subsidiary React - Dagnall Sp. z o.o. SKA issued by BNP Paribas Bank Polska S.A. Dagnall Sp. zo.o. EUR 29 mn Collateral for a loan granted to the subsidiary React - Dagnall Sp. z o.o. SKA issued by BNP Paribas Bank Polska S.A. Dagnall Sp. zo.o. PLN 1 mn Collateral for a loan granted to the subsidiary Midpoint 71 - Cornwall Invest- ments Sp. z o.o. SKA issued by Bank Pekao S.A. Cornwall Investments Sp. zo.o. EUR 82 mn Collateral for a loan granted to the subsidiary Midpoint 71 - Cornwall Invest- ments Sp. z o.o. SKA issued by Bank Pekao S.A. Cornwall Investments Sp. zo.o. EUR 82 mn Collateral for a loan granted to the subsidiary Midpoint 71 - Cornwall Invest- ments Sp. z o.o. SKA issued by Bank Pekao S.A. Cornwall Investments Sp. zo.o. PLN 11 mn Collateral for a loan granted to the subsidiary Midpoint 71 - Cornwall Invest- ments Sp. z o.o. SKA issued by Bank Pekao S.A. Midpoint 71 - Cornwall Investments Sp. zo.o. SKA EUR 82 mn Collateral for a loan granted to the subsidiary Midpoint 71 - Cornwall Invest- ments Sp. z o.o. SKA issued by Bank Pekao S.A. Midpoint 71 - Cornwall Investments Sp. zo.o. SKA EUR 82 mn Collateral for a loan granted to the subsidiary Midpoint 71 - Cornwall Invest- ments Sp. z o.o. SKA issued by Bank Pekao S.A. Midpoint 71 - Cornwall Investments Sp. zo.o. SKA PLN 11 mn | Financial statement 22 Standalone nancial report of Echo Investment S.A. for 2020 INTERESTS OR SHARES IN SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES AS AT 31 DECEMBER 2020 No. Company name and legal form Registered oce Business activity Value of shares/intere- sts according to the purchase price Revaluation adjustments – opening balance Revaluation adjustments – movement Revaluation adjustments – closing balance Carrying value of interests/shares % Share capital held Share in total numer of votes at the general meeting Another basis for control INTERESTS OR SHARES IN SUBSIDIARIES 1 Projekt Echo - 93 Sp. zo.o. Kielce lease and property management 51 - (34) (34) 17 99,00% 99,00% none 2 Echo - Aurus Sp. zo.o. Kielce lease and property management 199 021 - - 199 021 99,99% 99,99% none 3 Princess Investment Sp. zo.o. Kielce execution of construction projects related to buildings 5 063 (5 063) (5 063) - 99,99% 99,99% none 4 Bełchatów - Grupa Echo Sp. zo.o. SKA Kielce lease and property management 73 (35) (16) (51) 22 99,95% 99,95% none 5 PPR - Grupa Echo Sp. zo. o. SKA Kielce lease and property management 160 (89) (28) (117) 43 99,95% 99,95% none 6 Echo - SPV 7 Sp. zo. o. Kielce lease and property management 189 018 - - 189 018 100,00% 100,00% none 7 Grupa Echo Sp. zo.o. Kielce business and management consultancy activities 52 (52) (52) - 100,00% 100,00% none 8 Kielce - Grupa Echo Sp. zo.o. SKA Kielce lease and property management 153 - (11) (11) 142 99,95% 99,95% none 9 Echo Investment ACC - Grupa Echo Sp. zo.o. Sp.K. Kielce accounting and bookkeeping activities 51 - - 51 99,00% 99,00% none 10 Malta Oce Park - Grupa Echo Sp. zo.o. SKA Kielce lease and property management 2 469 (2 301) (48) (2 349) 120 99,95% 99,95% none 11 Echo - Arena Sp. zo.o. Kielce execution of construction projects related to buildings 1 008 (1 008) (1 008) - 99,95% 99,95% none NOTE 4D | Financial statement 23 Standalone nancial report of Echo Investment S.A. for 2020 INTERESTS OR SHARES IN SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES AS AT 31 DECEMBER 2020 No. Company name and legal form Registered oce Business activity Value of shares/intere- sts according to the purchase price Revaluation adjustments – opening balance Revaluation adjustments – movement Revaluation adjustments – closing balance Carrying value of interests/shares % Share capital held Share in total numer of votes at the general meeting Another basis for control 12 Echo - Galaxy Sp. zo.o. Kielce execution of construction projects related to buildings 51 - - 51 99,00% 99,00% none 13 Echo - Opolska Biznes Park Sp. zo.o. Kielce lease and property management 285 (52) (233) (285) - 100,00% 100,00% none 14 Projekt Saska Sp. zo.o. Kielce real estate brokerage 20 419 (20 419) (20 419) - 95,00% 95,00% none 15 Echo -Advisory Services Sp. zo.o. Kielce lease and property management 100 (100) (100) - 99,00% 99,00% none 16 Echo - Browary Warszawskie Sp. zo.o. Kielce lease and property management 100 (71) (71) 29 99,00% 99,00% none 17 Echo -Kasztanowa Aleja Sp. zo.o.Sp.K. Kielce lease and property management 452 - - 452 99,90% 99,90% none 18 Klimt House -Grupa Echo Sp. zo.o. Sp.K. Kielce lease and property management 501 (222) (2) (224) 277 99,90% 99,90% none 19 Echo - Browary Warszawskie Sp. zo.o. Sp.K. Kielce lease and property management 14 001 - - 14 001 100,00% 100,00% none 20 53 - Grupa Echo Sp. zo.o. SKA Kielce lease and property management 1 316 - - 1 316 100,0000% 100,0000% none 21 Echo - Galaxy Sp. zo.o. SKA Kielce lease and property management 8 611 (8 611) (8 611) - 99,95% 99,95% none 22 Galeria Tarnów - Grupa Echo Sp. zo.o. SKA Kielce lease and property management 576 (52) (16) (68) 508 99,95% 99,95% none 23 Duże Naramowice - Projekt Echo - 111 Sp. zo.o. SKA Kielce lease and property management 130 909 - - 130 909 100,00% 100,00% none 24 Avatar - Projekt Echo - 119 Sp. zo.o. SKA Kielce other business and management consultancy activities 17 665 17 665 99,95% 99,95% none 25 Projekt Naramowice - Grupa Echo Sp. zo.o. SKA Kielce execution of construction projects related to buildings 63 753 - - 63 753 100,00% 100,00% none 26 Oxygen - Grupa Echo Sp. zo.o. SKA Kielce lease and property management 27 (27) (27) - 99,95% 99,95% none | Financial statement 24 Standalone nancial report of Echo Investment S.A. for 2020 INTERESTS OR SHARES IN SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES AS AT 31 DECEMBER 2020 No. Company name and legal form Registered oce Business activity Value of shares/intere- sts according to the purchase price Revaluation adjustments – opening balance Revaluation adjustments – movement Revaluation adjustments – closing balance Carrying value of interests/shares % Share capital held Share in total numer of votes at the general meeting Another basis for control 27 Park Postępu - Grupa Echo Sp. zo.o. SKA Kielce lease and property management 1 587 (130) (130) 1 457 99,95% 99,95% none 28 Echo - Nowy Mokotów Sp. zo.o. Kielce lease and property management 94 (76) (76) 18 99,90% 99,90% none 29 Metropolis - Grupa Echo 121 Sp. zo. o. SKA Kielce lease and property management 18 156 (349) (1 581) (1 930) 16 226 100,00% 100,00% none 30 Galeria Nova - Grupa Echo Sp. zo.o. S.K.A Kielce execution of construction projects related to buildings 16 - - 16 100,00% 100,00% none 31 Echo Investment Projekt Management SRL Brasov real estate management 4 129 (4 129) (4 129) - 100,00% 100,00% none 32 Projekt Echo - 99 Sp. zo. o. Kielce buying and selling of property on own account 97 (42) (42) 55 99,80% 99,80% none 33 Projekt 1 -Grupa Echo Sp. z. o. o. SKA Kielce lease and property management 4 007 (78) (78) 3 929 99,95% 99,95% none 34 Pod Klonami - Grupa Echo Sp. zo. o. Sp.K. Kielce buying and selling of property on own account 10 - (10) (10) - 99,00% 99,00% none 35 Projekt CS Sp. zo.o. Kielce other ﬁnancial brokerage 122 (97) (97) 25 99,00% 99,00% none 36 Taśmowa - Projekt Echo - 116 Sp. zo.o. SKA Kielce lease and property management 11 - - 11 100,00% 100,00% none 37 Projekt 5 - Grupa Echo Sp. zo.o. SKA Szczecin lease and property management 51 (51) (51) - 99,95% 99,95% none 38 Echo - Nowy Mokotów Sp. zo. o. Sp.K. Kielce buying and selling of property on own account 1 251 - - 1 251 99,00% 99,00% none 39 Projekt Echo - 104 Sp. zo. o. Kielce lease and property management 50 (50) (50) - 99,90% 99,90% none 40 Projekt Echo - 108 Sp. zo. o. Kielce lease and property management 65 65 100,00% 100,00% none 41 Echo - Babka Tower Sp. zo. o. Kielce lease and property management 51 (35) (16) (51) - 100,00% 100,00% none | Financial statement 25 Standalone nancial report of Echo Investment S.A. for 2020 INTERESTS OR SHARES IN SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES AS AT 31 DECEMBER 2020 No. Company name and legal form Registered oce Business activity Value of shares/intere- sts according to the purchase price Revaluation adjustments – opening balance Revaluation adjustments – movement Revaluation adjustments – closing balance Carrying value of interests/shares % Share capital held Share in total numer of votes at the general meeting Another basis for control 42 Echo - Property Poznan 1 Sp. zo. o. Kielce other business and management consultancy activities 197 - (197) (197) - 99,00% 99,00% none 43 Projekt K-6 - Grupa Echo Sp. zo.o. SKA Kielce other business and management consultancy activities 61 (50) (11) (61) - 100,00% 100,00% none 44 Projekt 12 - Grupa Echo Sp. zo.o. SKA Kielce lease and property management 25 - - 25 100,00% 100,00% none 45 Projekt 13 - Grupa Echo Sp. zo.o. SKA Kielce lease and property management 24 - (24) (24) - 100,00% 100,00% none 46 Projekt 14 - Grupa Echo Sp. zo.o. SKA Kielce other ﬁnancial brokerage 24 - (24) (24) - 100,00% 100,00% none 47 Projekt 16 - Grupa Echo Sp. zo.o. SKA Kielce real estate brokerage 50 - - 50 100,00% 100,00% none 48 Projekt 17 - Grupa Echo Sp. zo.o. SKA Kielce real estate brokerage 46 050 - - 46 050 100,00% 100,00% none 49 Cinema Asset Manager - Grupa Echo Sp.zo.o. SKA Kielce real estate brokerage 50 (30) (30) 20 100,00% 100,00% none 50 Face2Face - Stranraer Sp. zo.o. SKA Kielce real estate brokerage 50 050 - - 50 050 100,00% 100,00% none 51 Projekt 21 - Grupa Echo Sp. zo.o. SKA Kielce real estate brokerage 50 (30) (20) (50) - 100,00% 100,00% none 52 Midpoint 71 - Cornwall Investments Sp.zo.o. SKA Kielce real estate brokerage 49 050 - - 49 050 100,00% 100,00% none 53 Pure Systems Sp. zo.o. Kraków other ﬁnancial service activities, except insurance and pension funding 1 1 99,90% 99,90% none 54 Projekt Echo - 111 Sp. zo.o. Kielce lease and property management 101 (29) (72) (101) - 99,95% 99,95% none 55 Projekt Echo - 112 Sp. zo.o. Kielce lease and property management 31 (31) (31) - 100,00% 100,00% none 56 Projekt Echo - 113 Sp. zo.o. Kielce lease and property management 279 (31) (248) (279) - 100,00% 100,00% none 57 Projekt Echo - 115 Sp. zo.o. Kielce lease and property management 1 406 (31) (1 375) (1 406) - 99,83% 99,83% none 58 Projekt Echo - 116 Sp. zo.o. Kielce lease and property management 31 - - 31 99,83% 99,83% none | Financial statement 26 Standalone nancial report of Echo Investment S.A. for 2020 INTERESTS OR SHARES IN SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES AS AT 31 DECEMBER 2020 No. Company name and legal form Registered oce Business activity Value of shares/intere- sts according to the purchase price Revaluation adjustments – opening balance Revaluation adjustments – movement Revaluation adjustments – closing balance Carrying value of interests/shares % Share capital held Share in total numer of votes at the general meeting Another basis for control 59 Projekt Echo - 119 Sp. zo.o. Kielce lease and property management 25 (20) (5) (25) - 99,80% 99,80% none 60 Projekt Echo - 120 Sp. zo.o. Kielce lease and property management 424 (31) (393) (424) - 100,00% 100,00% none 61 Projekt Echo - 121 Sp. zo.o. Kielce lease and property management 31 - (31) (31) - 100,00% 100,00% none 62 Projekt Echo - 122 Sp. zo.o. Kielce lease and property management 779 (31) (748) (779) - 100,00% 100,00% none 63 Projekt Echo - 127 Sp. zo.o. Kielce lease and property management 31 - - 31 100,00% 100,00% none 64 Projekt Echo - 128 Sp. zo.o. Kielce lease and property management 31 (31) - (31) - 100,00% 100,00% none 65 Projekt Echo - 130 Sp. zo.o. Kielce lease and property management 41 (31) - (31) 10 100,00% 100,00% none 66 Projekt Echo - 131 Sp. zo.o. Kielce lease and property management 307 (31) (276) (307) - 100,00% 100,00% none 67 Projekt Echo - 135 Sp. zo.o. Kielce lease and property management 31 (31) - (31) - 100,00% 100,00% none 68 Projekt Echo - 136 Sp. zo.o. Kielce lease and property management 31 - - 31 100,00% 100,00% none 69 Projekt Echo - 137 Sp. zo.o. Kielce lease and property management 31 - - 31 100,00% 100,00% none 70 Projekt Echo - 136 Sp. zo.o. Sp.K. Kielce lease and property management 84 006 - - 84 006 99,00% 99,00% none 71 Villea investments Sp. zo.o. Warsaw lease and property management 5 5 100,00% 100,00% none 72 Selmer Investments Sp. zo.o. Warsaw other business and management consultancy activities 12 - (12) (12) - 100,00% 100,00% none 73 Selmer Investments Sp.K. Warsaw other business and management consultancy activities 15 - (15) (15) - 100,00% 100,00% none | Financial statement 27 Standalone nancial report of Echo Investment S.A. for 2020 INTERESTS OR SHARES IN SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES AS AT 31 DECEMBER 2020 No. Company name and legal form Registered oce Business activity Value of shares/intere- sts according to the purchase price Revaluation adjustments – opening balance Revaluation adjustments – movement Revaluation adjustments – closing balance Carrying value of interests/shares % Share capital held Share in total numer of votes at the general meeting Another basis for control 74 Cornwall Investments Sp. zo.o. Warsaw other business and management consultancy activities 12 - - 12 100,00% 100,00% none 75 Gosford Investments Sp. zo.o. Warsaw lease and property management 5 5 100,00% 100,00% none 76 Fianar Investments Sp. zo.o. Warsaw other business and management consultancy activities 6 (6) (6) - 100,00% 100,00% none 77 Doxent Investments Sp. zo.o. Warsaw lease and property management 5 5 100,00% 100,00% none 78 City Space - GP Sp. zo.o. Warsaw lease and property management 137 (137) - (137) - 100,00% 100,00% none 79 City Space - Management Sp. zo.o. Warsaw other activities related to employees outsourcing 937 (937) - (937) - 100,00% 100,00% none 80 Gleann Sp. zo.o. Warsaw lease and property management 5 (5) (5) - 100,00% 100,00% none 81 Perth Sp. zo.o Warsaw lease and property management 5 5 100,00% 100,00% none 82 Potton Sp. zo.o. Warsaw lease and property management 5 5 100,00% 100,00% none 83 Pudsey Sp. zo.o. Warsaw other business and management consultancy activities 82 82 100,00% 100,00% none 84 Seaford Sp. zo.o. Warsaw other business and management consultancy activities 5 5 100,00% 100,00% none 85 Elektrownia RE Sp. zo.o. Kielce buying and selling of property on own account 36 286 36 286 100,00% 100,00% none 86 Projekt 140 Grupa Echo Sp. zo.o. Sp.K. Kielce lease and property management 15 006 15 006 99,99% 99,99% none | Financial statement 28 Standalone nancial report of Echo Investment S.A. for 2020 INTERESTS OR SHARES IN SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES AS AT 31 DECEMBER 2020 No. Company name and legal form Registered oce Business activity Value of shares/intere- sts according to the purchase price Revaluation adjustments – opening balance Revaluation adjustments – movement Revaluation adjustments – closing balance Carrying value of interests/shares % Share capital held Share in total numer of votes at the general meeting Another basis for control 87 GRO Nieruchomości Sp. zo.o. Kraków lease and property management 10 10 100,00% 100,00% none 88 Projekt 147 Grupa Echo Sp. zo.o. Sp.K. Kielce lease and property management 6 (6) (6) - 99,99% 99,99% none 89 Projekt 148 Grupa Echo Sp. zo.o. Sp.K. Kielce lease and property management 6 (6) (6) - 99,99% 99,99% none 90 Swanage Sp. zo.o. Warsaw lease and property management 10 (10) (10) - 100,00% 100,00% none 91 Stranraer Sp. zo.o. Warsaw lease and property management 10 10 100,00% 100,00% none 92 Dagnall Sp. zo.o. Warsaw lease and property management 10 10 100,00% 100,00% none 93 Shanklin Sp. zo.o. Warsaw lease and property management 10 (10) (10) - 100,00% 100,00% none 94 Strood Sp. zo.o. Warsaw lease and property management 27 125 27 125 100,00% 100,00% none 95 RPGZ Sp. zo.o. Kraków projects execution related to building construction 21 21 100,00% 100,00% none 96 Projekt Beethovena - Projekt Echo - 122 Sp. zo.o, SKA Kielce lease and property management 3 430 - - - 3 430 99,95% 99,95% none 97 Projekt 150 - Shanklin Sp. zo.o. SKA SP.K. Kielce lease and property management 6 (6) (6) - 99,99% 99,99% none 98 Projekt 151 - PE13 GE Sp. zo.o. SKA SP.K. Kielce lease and property management 6 (6) (6) - 99,99% 99,99% none 99 Projekt 152 - PE14 GE Sp. zo.o. SKA SP.K. Kielce lease and property management 6 (6) (6) - 99,99% 99,99% none 100 Projekt 153 - PE21 GE Sp. zo.o. SKA SP.K. Kielce lease and property management 6 (6) (6) - 99,99% 99,99% none 101 Projekt 154 - PK-6 GE Sp. zo.o. SKA SP.K. Kielce lease and property management 6 (6) (6) - 99,99% 99,99% none 102 Projekt Echo - 139 Sp. zo.o. Kielce buying and selling of property on own account 6 6 99,99% 99,99% none | Financial statement 29 Standalone nancial report of Echo Investment S.A. for 2020 INTERESTS OR SHARES IN SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES AS AT 31 DECEMBER 2020 No. Company name and legal form Registered oce Business activity Value of shares/intere- sts according to the purchase price Revaluation adjustments – opening balance Revaluation adjustments – movement Revaluation adjustments – closing balance Carrying value of interests/shares % Share capital held Share in total numer of votes at the general meeting Another basis for control 103 Projekt Echo - 140 Sp. zo.o. Kielce buying and selling of property on own account 6 6 100,00% 100,00% none 104 Projekt Echo - 141 Sp. zo.o. Kielce buying and selling of property on own account 6 6 100,00% 100,00% none 105 Projekt Echo - 142 Sp. zo.o. Kielce buying and selling of property on own account 6 6 100,00% 100,00% none 106 Projekt Echo - 143 Sp. zo.o. Kielce buying and selling of property on own account 6 6 100,00% 100,00% none 107 Projekt Echo - 144 Sp. zo.o. Kielce buying and selling of property on own account 6 6 100,00% 100,00% none 108 Projekt Echo - 145 Sp. zo.o. Kielce buying and selling of property on own account 6 6 100,00% 100,00% none Total 1 002 068 (44 661) (5 509) (50 170) 951 898 INTERESTS OR SHARES IN ASSOCIATED ENTITIES 1 SPC S.A Warsaw management of other entities 34 (34) - (34) - 34,00% 34,00% none Total 34 (34) - (34) - INTERESTS OR SHARES IN JOINT-VENTURES 1 Rosehill Investments Sp. zo.o. Warsaw lease and property management 103 410 103 410 30,00% 30,00% none 2 Projekt Echo - 138 Sp. zo.o. Warsaw lease and property management 2 2 30,00% 30,00% none 3 R4R Poland Sp. zo.o. Warsaw lease and property management 17 977 17 977 30,00% 30,00% none Total 121 389 - - - 121 389 TOTAL INTERESTS OR SHARES IN SUBSIDIARIES 1 123 491 (44 695) (5 509) (50 204) 1 073 287 | Financial statement 30 Standalone nancial report of Echo Investment S.A. for 2020 In the chart the Company presented a re- valuation write-down of the value of owned shares and stocks in subsidiaries, joint-ven- tures and associates, which was made dur- ing the ﬁnancial year. If the write-down is not made, in opinion of the Company, there were no indications as at the balance sheet date that the need to change the value of adjust- ments have to be made. The change in the value of adjustments up- dating the value of shares was recognised in the result as at 31 December 2020 in the ‘revaluation of investments’ item in ﬁnan- cial revenue/ expenses. The costs included the amount of the impairment loss created amounting to PLN 5,509,000. According to IFS 12 paragraph 44, the Company analyzed an asset on owned shares in subsidiaries and does not create it, due to lack of possibility to reversal of its value in predictable future. The Company has control over entities listed above directly – by holding its shares or indi- rectly, by other subsidiaries controlled by the Company. The exemptions of this are compa- nies: Rosehill Investments Sp. z o.o., Projekt Echo - 138 Sp. z o.o. and R4R Poland Sp. z o.o. | Financial statement 31 Standalone nancial report of Echo Investment S.A. for 2020 INTERESTS OR SHARES IN SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES AS AT 31 DECEMBER 2019 No. Company name and legal form Registered oce Business activity Value of shares /interests according to the purchase price Revaluation adjustments – opening balance Revaluation adjustments – movement Revaluation adjustments – closing balance Carrying value of interests / shares % of share capital held Share in total number of votes at the general meeting Another basis for control INTERESTS OR SHARES IN SUBSIDIARIES 1 Projekt Echo - 93 Sp. zo.o. Kielce lease and property management 51 - - 51 99,00% 99,00% none 2 Echo - Aurus Sp. zo.o. Kielce lease and property management 199021 - - - 199021 99,99% 99,99% none 3 Princess Investment Sp. zo.o. Kielce execution of construction projects related to buildings 5063 (5063) (5063) - 99,99% 99,99% none 4 Bełchatów - Grupa Echo Sp. zo.o. S.K.A. Kielce lease and property management 73 - (35) (35) 38 99,95% 99,95% none 5 PPR - Grupa Echo Sp. zo.o. S.K.A. Kielce lease and property management 160 (89) (89) 71 99,95% 99,95% none 6 Echo - SPV 7 Sp. zo.o. Kielce lease and property management 189018 - - 189018 100,00% 100,00% none 7 Grupa Echo Sp. zo.o. Kielce business and management consultancy 52 - (52) (52) - 100,00% 100,00% none 8 Kielce - Grupa Echo Sp. zo.o. S.K.A. Kielce lease and property management 153 - - 153 99,95% 99,95% none 9 Echo Investment ACC - Grupa Echo Sp.zo.o. Sp.K. Kielce accounting and bookkeeping activities 51 - - 51 99,00% 99,00% none 10 Malta Oce Park - Grupa Echo Sp.zo.o.S.K.A. Kielce lease and property management 2469 - (2301) (2301) 168 99,95% 99,95% none 11 Echo - Arena Sp. zo.o. Kielce execution of construction projects related to buildings 1008 (1008) (1008) - 99,95% 99,95% none 12 Echo - Galaxy Sp. zo.o. Kielce execution of construction projects related to buildings 51 - - 51 99,00% 99,00% none 13 Echo - Opolska Biznes Park Sp. zo.o. Kielce lease and property management 52 - (52) (52) - 100,00% 100,00% none | Financial statement 32 Standalone nancial report of Echo Investment S.A. for 2020 INTERESTS OR SHARES IN SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES AS AT 31 DECEMBER 2019 No. Company name and legal form Registered oce Business activity Value of shares /interests according to the purchase price Revaluation adjustments – opening balance Revaluation adjustments – movement Revaluation adjustments – closing balance Carrying value of interests / shares % of share capital held Share in total number of votes at the general meeting Another basis for control 14 Projekt Saska Sp. zo.o. Kielce real estate brokerage 20420 (20419) (20419) 1 95,00% 95,00% none 15 Echo - Advisory Services Sp. zo.o. Kielce lease and property management 100 (100) (100) - 99,00% 99,00% none 16 Echo - Browary Warszawskie Sp. zo.o. Kielce lease and property management 100 (71) (71) 29 99,00% 99,00% none 17 Echo - Kasztanowa Aleja Sp.zo.o.Sp.K. Kielce lease and property management 451 - - 451 99,90% 99,90% none 18 Klimt House - Grupa Echo Sp.zo.o.Sp.K. Kielce lease and property management 501 (200) (22) (222) 279 99,90% 99,90% none 19 Echo - Browary Warszawskie Sp.zo.o.Sp.K. Kielce lease and property management 20002 - - 20002 100,00% 100,00% none 20 53 - Grupa Echo Sp. zo.o. S.K.A. Kielce lease and property management 1317 - - 1317 100,0000% 100,0000% none 21 Echo - Galaxy Sp. zo.o. S.K.A. Kielce lease and property management 8611 (8611) (8611) - 99,95% 99,95% none 22 Galeria Tarnów - Grupa Echo Sp.zo.o.S.K.A. Kielce lease and property management 577 - (52) (52) 525 99,95% 99,95% none 23 Duże Naramowice - Projekt Echo - 111 Sp. zo.o. S.K.A. Kielce lease and property management 130908 - - 130908 100,00% 100,00% none 24 Avatar - Projekt Echo - 119 Sp.zo.o.S.K.A. business and management consultancy 17665 17665 99,95% 99,95% none 25 Projekt Naramowice - Grupa Echo Sp.zo.o. S.K.A. Kielce execution of construction projects related to buildings 63753 - - 63753 100,00% 100,00% none 26 Oxygen - Grupa Echo Sp. zo.o. S.K.A. Kielce lease and property management 27 - (27) (27) - 99,95% 99,95% none 27 Park Postępu - Grupa Echo Sp.zo.o.S.K.A. Kielce lease and property management 1587 (130) (130) 1457 99,95% 99,95% none 28 Echo - Nowy Mokotów Sp. zo.o. Kielce lease and property management 94 (76) (76) 18 99,90% 99,90% none 29 Metropolis - Grupa Echo 121 Sp.zo.o.S.K.A. Kielce lease and property management 18156 - (349) (349) 17807 100,00% 100,00% none | Financial statement 33 Standalone nancial report of Echo Investment S.A. for 2020 INTERESTS OR SHARES IN SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES AS AT 31 DECEMBER 2019 No. Company name and legal form Registered oce Business activity Value of shares /interests according to the purchase price Revaluation adjustments – opening balance Revaluation adjustments – movement Revaluation adjustments – closing balance Carrying value of interests / shares % of share capital held Share in total number of votes at the general meeting Another basis for control 30 Galeria Nova - Grupa Echo Sp.zo.o.S.K.A Kielce execution of construction projects related to buildings 16 - - 16 100,00% 100,00% none 31 Echo Investment Projekt Management SRL Brasov property management 4129 (4135) 6 (4129) - 100,00% 100,00% none 32 Projekt Echo - 99 Sp. zo.o. Kielce buying and selling of property on own account 97 (42) (42) 55 99,80% 99,80% none 33 Projekt 1 - Grupa Echo Sp. z. o.o. S.K.A. Kielce lease and property management 4007 (78) (78) 3929 99,95% 99,95% none 34 Pod Klonami - Grupa Echo Sp.zo.o.Sp.K. Kielce buying and selling of property on own account 10 - - 10 99,00% 99,00% none 35 Projekt CS Sp. zo.o. Kielce other ﬁnancial broke- rage 122 (43) (54) (97) 25 99,00% 99,00% none 36 Taśmowa - Projekt Echo - 116 Sp.zo.o.S.K.A. Kielce lease and property management 11 - - 11 100,00% 100,00% none 37 Projekt 5 - Grupa Echo Sp. zo.o. S.K.A. Szczecin lease and property management 51 (51) (51) - 99,95% 99,95% none 38 Echo - Nowy Mokotów Sp. zo.o. Sp. K. Kielce buying and selling of property on own account 1251 - - 1251 99,00% 99,00% none 39 Projekt Echo - 104 Sp. zo.o. Kielce lease and property management 50 (50) (50) - 99,90% 99,90% none 40 Projekt Echo - 108 Sp. zo.o. Kielce lease and property management 65 65 100,00% 100,00% none 41 Echo - Babka Tower Sp. zo.o. Kielce lease and property management 51 (35) (35) 16 100,00% 100,00% none 42 Echo - Property Poznan 1 Sp. zo.o. Kielce business and management consultancy 197 - - 197 99,00% 99,00% none 43 Projekt K-6 - Grupa Echo Sp.zo.o.S.K.A. Kielce business and management consultancy 61 (50) (50) 11 100,00% 100,00% none 44 Projekt 12 - Grupa Echo Sp. zo.o.S.K.A. Kielce lease and property management 24 - - 24 100,00% 100,00% none | Financial statement 34 Standalone nancial report of Echo Investment S.A. for 2020 INTERESTS OR SHARES IN SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES AS AT 31 DECEMBER 2019 No. Company name and legal form Registered oce Business activity Value of shares /interests according to the purchase price Revaluation adjustments – opening balance Revaluation adjustments – movement Revaluation adjustments – closing balance Carrying value of interests / shares % of share capital held Share in total number of votes at the general meeting Another basis for control 45 Projekt 13 - Grupa Echo Sp. zo.o. S.K.A. Kielce lease and property management 24 - - 24 100,00% 100,00% none 46 Projekt 14 - Grupa Echo Sp. zo.o. S.K.A. Kielce other ﬁnancial brokerage 24 - - 24 100,00% 100,00% none 47 Projekt 16 - Grupa Echo Sp. zo.o.S.K.A. Kielce real estate brokerage 50 - - 50 100,00% 100,00% none 48 Projekt 17 - Grupa Echo Sp. zo.o.S.K.A. Kielce real estate brokerage 46050 - - 46050 100,00% 100,00% none 49 Projekt 18 - Grupa Echo Sp. zo.o. S.K.A. Kielce real estate brokerage 50 (36) (36) 14 100,00% 100,00% none 50 Projekt 19 - Grupa Echo Sp. zo.o. S.K.A. Kielce real estate brokerage 50 (30) (30) 20 100,00% 100,00% none 51 Face2Face - Stranraer Sp. zo.o. S.K.A. Kielce real estate brokerage 50050 - - 50050 100,00% 100,00% none 52 Projekt 21 - Grupa Echo Sp. zo.o.S.K.A. Kielce real estate brokerage 50 (30) (30) 20 100,00% 100,00% none 53 Projekt 22 - Grupa Echo Sp. zo.o. S.K.A. Kielce real estate brokerage 49050 - - 49050 100,00% 100,00% none 54 Pure Systems Sp. zo.o. Cracow other ﬁnancial services, except insurance and retirement funds 1 1 99,90% 99,90% none 55 Projekt Echo - 111 Sp. zo.o. Kielce lease and property management 101 (29) (29) 72 99,95% 99,95% none 56 Projekt Echo - 112 Sp. zo.o. Kielce lease and property management 31 - (31) (31) - 100,00% 100,00% none 57 Projekt Echo - 113 Sp. zo.o. Kielce lease and property management 31 - (31) (31) - 100,00% 100,00% none 58 Projekt Echo - 115 Sp. zo.o. Kielce lease and property management 31 - (31) (31) - 99,83% 99,83% none 59 Projekt Echo - 116 Sp. zo.o. Kielce lease and property management 31 - - 31 99,83% 99,83% none 60 Projekt Echo - 119 Sp. zo.o. Kielce lease and property management 25 (20) (20) 5 99,80% 99,80% none 61 Projekt Echo - 120 Sp. zo.o. Kielce lease and property management 31 - (31) (31) - 100,00% 100,00% none | Financial statement 35 Standalone nancial report of Echo Investment S.A. for 2020 INTERESTS OR SHARES IN SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES AS AT 31 DECEMBER 2019 No. Company name and legal form Registered oce Business activity Value of shares /interests according to the purchase price Revaluation adjustments – opening balance Revaluation adjustments – movement Revaluation adjustments – closing balance Carrying value of interests / shares % of share capital held Share in total number of votes at the general meeting Another basis for control 62 Projekt Echo - 121 Sp. zo.o. Kielce lease and property management 31 - - 31 100,00% 100,00% none 63 Projekt Echo - 122 Sp. zo.o. Kielce lease and property management 31 - (31) (31) - 100,00% 100,00% none 64 Projekt Echo - 127 Sp. zo.o. Kielce lease and property management 31 - - 31 100,00% 100,00% none 65 Projekt Echo - 128 Sp. zo.o. Kielce lease and property management 31 - (31) (31) - 100,00% 100,00% none 66 Projekt Echo - 130 Sp. zo.o. Kielce lease and property management 41 (31) - (31) 10 100,00% 100,00% none 67 Projekt Echo - 131 Sp. zo.o. Kielce lease and property management 31 (21) (10) (31) - 100,00% 100,00% none 68 Projekt Echo - 132 Sp. zo.o. Kielce lease and property management 5373 (1472) (1472) 3901 100,00% 100,00% none 69 Projekt Echo - 135 Sp. zo.o. Kielce lease and property management 31 - (31) (31) - 100,00% 100,00% none 70 Projekt Echo - 136 Sp. zo.o. Kielce lease and property management 31 - - 31 100,00% 100,00% none 71 Projekt Echo - 137 Sp. zo.o. Kielce lease and property management 31 - - 31 100,00% 100,00% none 72 Projekt Echo - 136 Sp. zo.o.Sp. K. Kielce lease and property management 84006 - - 84006 99,00% 99,00% none 73 Villea investments Sp. zo.o. Warsaw lease and property management 6 6 100,00% 100,00% none 74 Selmer Investments Sp. zo.o. Warsaw business and management consultancy 12 - - 12 100,00% 100,00% none 75 Selmer Investments Sp. K. Warsaw business and management consultancy 14 - - 14 100,00% 100,00% none 76 Cornwall Investments Sp. zo.o. Warsaw business and management consultancy 12 - - 12 100,00% 100,00% none 77 Gosford Investments Sp.zo.o. Warsaw lease and property management 5 5 100,00% 100,00% none | Financial statement 36 Standalone nancial report of Echo Investment S.A. for 2020 INTERESTS OR SHARES IN SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES AS AT 31 DECEMBER 2019 No. Company name and legal form Registered oce Business activity Value of shares /interests according to the purchase price Revaluation adjustments – opening balance Revaluation adjustments – movement Revaluation adjustments – closing balance Carrying value of interests / shares % of share capital held Share in total number of votes at the general meeting Another basis for control 78 Fianar Investments Sp. zo.o. Warsaw business and management consultancy 5 5 100,00% 100,00% none 79 Doxent Investments Sp. zo.o. Warsaw lease and property management 5 5 100,00% 100,00% none 80 City Space - GP Sp. zo.o. Warsaw lease and property management 137 (37) (100) (137) - 100,00% 100,00% none 81 City Space - Management Sp. zo.o. Warsaw other activities related to the provision of employees 937 (37) (900) (937) - 100,00% 100,00% none 82 Gleann Sp. zo.o. Warsaw lease and property management 5 5 100,00% 100,00% none 83 Perth Sp. zo.o. Warsaw lease and property management 5 5 100,00% 100,00% none 84 Potton Sp. zo.o. Warsaw lease and property management 5 5 100,00% 100,00% none 85 Pudsey Sp. zo.o. Warsaw business and management consultancy 82 82 100,00% 100,00% none 86 Seaford Sp. zo.o. Warsaw business and management consultancy 6 6 100,00% 100,00% none 87 Elektrownia RE Sp. zo.o. Warsaw buying and selling of property on own account 36286 36286 100,00% 100,00% none 88 Projekt 140 Grupa Echo Sp. zo.oSp. K. Kielce lease and property management 15006 15006 99,99% 99,99% none 89 GRO Nieruchomości Sp. zo.o. Cracow lease and property management 10 10 100,00% 100,00% none 90 Projekt 147 Grupa Echo Sp. zo.oSp. K. Kielce lease and property management 6 6 99,99% 99,99% none 91 Projekt 148 Grupa Echo Sp. zo.oSp. K. Kielce lease and property management 6 6 99,99% 99,99% none 92 Swanage Sp. zo.o. Warsaw lease and property management 10 (10) (10) - 100,00% 100,00% none | Financial statement 37 Standalone nancial report of Echo Investment S.A. for 2020 INTERESTS OR SHARES IN SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES AS AT 31 DECEMBER 2019 No. Company name and legal form Registered oce Business activity Value of shares /interests according to the purchase price Revaluation adjustments – opening balance Revaluation adjustments – movement Revaluation adjustments – closing balance Carrying value of interests / shares % of share capital held Share in total number of votes at the general meeting Another basis for control 93 Stranraer Sp. zo.o. Warsaw lease and property management 10 10 100,00% 100,00% none 94 Dagnall Sp. zo.o. Warsaw lease and property management 10 10 100,00% 100,00% none 95 Shanklin Sp. zo.o. Warsaw lease and property management 10 10 100,00% 100,00% none 96 Strood Sp. zo.o. Warsaw lease and property management 27125 27125 100,00% 100,00% none 97 RPGZ Sp. zo.o. Cracow execution of construction projects related to buildings 21 21 100,00% 100,00% none 98 Projekt Beethovena - Projekt Echo - 122 Sp. zo.o- S.K.A. Kielce lease and property management 3430 - - 3430 99,95% 99,95% none 99 Projekt 150 - Shanklin zo.o. S.K.A. Sp.K. Kielce lease and property management 6 6 99,99% 99,99% none 100 Projekt 151 - PE13 GE zo.o. S.K.A. Sp.K. Kielce lease and property management 6 6 99,99% 99,99% none 101 Projekt 152 - PE14 GE zo.o. S.K.A. Sp.K. Kielce lease and property management 6 6 99,99% 99,99% none 102 Projekt 153 - PE21 GE Sp. zo.o. S.K.A. Sp.K. Kielce lease and property management 6 6 99,99% 99,99% none 103 Projekt 154 - PK-6 GE Sp. zo.o. S.K.A. Sp.K. Kielce lease and property management 6 6 99,99% 99,99% none 104 Projekt Echo - 139 Sp. zo.o. Kielce buying and selling of property on own account 1 1 99,99% 99,99% none 105 Projekt Echo - 140 Sp. zo.o. Kielce buying and selling of property on own account 1 1 100,00% 100,00% none 106 Projekt Echo - 141 Sp. zo.o. Kielce buying and selling of property on own account 1 1 100,00% 100,00% none 107 Projekt Echo - 142 Sp. zo.o. Kielce buying and selling of property on own account 1 1 100,00% 100,00% none | Financial statement 38 Standalone nancial report of Echo Investment S.A. for 2020 INTERESTS OR SHARES IN SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES AS AT 31 DECEMBER 2019 No. Company name and legal form Registered oce Business activity Value of shares /interests according to the purchase price Revaluation adjustments – opening balance Revaluation adjustments – movement Revaluation adjustments – closing balance Carrying value of interests / shares % of share capital held Share in total number of votes at the general meeting Another basis for control 108 Projekt Echo - 143 Sp. zo.o. Kielce buying and selling of property on own account 1 1 100,00% 100,00% none 109 Projekt Echo - 144 Sp. zo.o. Kielce buying and selling of property on own account 1 1 100,00% 100,00% none 110 Projekt Echo - 145 Sp. zo.o. Kielce buying and selling of property on own account 1 1 100,00% 100,00% none 1010184 (42004) (4165) (46169) 964015 INTERESTS OR SHARES IN ASSOCIATED ENTITIES 1 SPC S.A Warsaw management of other entities 34 (34) - (34) - 34,00% 34,00% none Total 34 (34) - (34) - INTERESTS OR SHARES IN CO-CONTROLLED ENTITIES 1 Rosehill Investments Sp. zo.o. Warsaw lease and property management 44581 44581 30,00% 30,00% none 2 Projekt Echo - 138 Sp. zo.o. Warsaw lease and property management 2 2 30,00% 30,00% none 3 R4R Poland Sp. zo.o. Warsaw lease and property management 12842 12842 30,00% 30,00% none Total 57425 - - - 57425 TOTAL INTERESTS OR SHARES IN SUBSIDIARIES 1067643 (42038) (4165) (46203) 1021440 * companies acquired and established in 2019 | Financial statement 39 Standalone nancial report of Echo Investment S.A. for 2020 In the chart the Company presented a re- valuation write-down of the value of owned shares and stocks in subsidiaries, jointly con- trolled entities and associates, which was made during the ﬁnancial year. If the revaluation write-down is not made, in opinion of the Company, there were no indications as at the balance sheet date that the need to change the value of adjustments have to be made. The change in the value of adjustments up- dating the value of shares was recognised in the result as at 31 December 2019 in the ‘revaluation of investments’ item in ﬁnan- cial revenue/expenses. The costs included the amount of the impairment loss created amounting to PLN 4,165,000. According to IFS 12 paragraph 44, the Com- pany analyzed an asset on owned shares in subsidiaries and does not create it, due to lack of possibility to reversal of its value in predictable future. The Company has control over entities listed above directly – by holding its shares or indi- rectly, by other subsidiaries controlled by the Company. The exemptions of this are compa- nies: Rosehill Investments Sp. z o.o., Projekt Echo - 138 Sp. z o.o. and R4R Poland Sp. z o.o. | Financial statement 40 Standalone nancial report of Echo Investment S.A. for 2020 On June 1, 2020 the Company redeemed 4,010 certiﬁcates issued by Forum 60 Funduszu Inwestycyjnego Zamkniętego for PLN 3,752 million. As at December 31, 2020, the Company estimated the value of bonds impairment loss in the amount PLN 29 million and as at December 31, 2019 at PLN 29 million. Bonds meet the SPPI test according to IFRS 9 par. 4.1.2., therefore they are not measured at fair value, but at amortised cost. The valuation does not dier sig- niﬁcantly from the valuation at fair val- ue. The bonds were granted to related entities with good ﬁnancial standing. In relation to related entities, credit risk, in the opinion of the Management Board, is minimized through current control of operating activity and evaluation of in- vestment projects of these companies. In NOTE 5 LONGTERM AND SHORTTERM FINANCIAL ASSETS PLN ‘000 31.12.2020 31.12.2019 Advances received - - Investment certiﬁcates - 4 791 In associates 495 221 473 564 Bonds 495 221 473 564 – long-term 311 783 473 654 – short-term 183 438 - Receivables for the repurchase of certiﬁcates and interest sale 2 989 9 032 Total long-term and short-term ﬁnancial assets 498 210 487 387 the opinion of the Management Board, through the possibility of monitoring op- erations of subsidiaries and periodically conﬁrming the proﬁtability of their pro- jects, the Company is able to assess and identify receivables for which credit risk has signiﬁcantly increased. The Compa- ny’s Management Board did not ﬁnd such bonds. The Management Board assessed the bonds granted in terms of creating a write-down for expected credit losses based on the evaluation of Echo Invest- ment Capital Group’s credibility. In ac- cordance with the requirements of IFRS 9, a write-down for expected credit losses was created. As at 31 December 2019, the write-down amounted PLN 287 thousand and as at 31 December 2018, the write-down amount- ed PLN 288 thousand. After the analysis, the Management Board of the Company decided to correct the presentation of long-term and short-term KEY DATA ON BONDS AS AT 31 DECEMBER 2020 Contractor Value [PLN ‘000] Interest Redemption date Classication by maturity Swanage Sp. zo.o. 197 560 Wibor 6M + margin 28.12.2021 Long- and short-term Strood Sp. zo.o. 154 781 EURIBOR 6M + margin 20.12.2021 Long-term Echo - Galaxy Sp. zo.o. SKA 47 500 Wibor 6M + margin 14.12.2021 Long- and short-term Taśmowa - Projekt Echo 116 Sp. zo.o. SKA 40 810 Wibor 6M + margin 10.09.2023 Long-term Projekt Beethovena - Projekt Echo 122 Sp. zo.o. SKA 34 975 Wibor 6M + margin 05.11.2023 Short-term Projekt Beethovena - Projekt Echo 122 Sp. zo.o. SKA 27 000 Wibor 6M + margin 01.01.2024 Short-term Gosford Investments Sp. zo.o. - Euribor 6M + margin 27.12.2021 Short-term bonds without interest and write-os 502 626 interest and write-os (7 405) Total bonds with interest and write-os 495 221 loans. The classiﬁcation of loans now de- pends on the actual repayment date. | Financial statement 41 Standalone nancial report of Echo Investment S.A. for 2020 The loans meet the SPPI test and are maintained in line with the business model it aims at maintenance of ﬁnancial assets for obtaining contractual cash ﬂows in accordance with IFRS 9 and therefore are not meas- ured at fair value, and the amortized cost method. Valuation does not dier materially from the meas- urement at fair value. The maximum value of credit risk related to loans equals their carrying value. The loans granted are not secured. The loans granted are not overdue and the value of the loans has not been lost. Loans were grant- ed to related entities with good ﬁnancial condition. In respect of aliated companies, the risk is minimised through the control of their operations on a regular ba- sis and through the evaluation of investment projects in the aforementioned companies. In the opinion of NOTE 6 LONGTERM LOANS GRANTED PLN ‘000 31.12.2020 31.12.2019 In subsidiaries 755 590 641 819 In joint-ventures 198 835 163 208 Total long-term loans granted 954 425 805 027 the Management Board, through the ability to monitor the operations of subsidiaries and periodically conﬁrm the proﬁtability of their projects, the Company has the opportunity to assess and identify loans for which the credit risk has increased signiﬁcantly. The Management Board of the Company did not ﬁnd such loans. The Management Board assessed the loans in terms of cre- ating a write-down for expected loan losses based on the assessment of Echo Investment Capital Group’s credibility. In accordance with the requirements of IFRS 9, a write- down for expected credit losses was created. As at De - cember 31, 2020 its value was estimated at the amount of PLN 1,481 thousand, and as at December 31, 2019 - in the amount of PLN 1,078 thousand. LONGTERM BORROWINGS AS AT 31 DECEMBER 2020 PLN ‘000 Contractor Amount Interest Repayment date Projekt 12 - Grupa Echo Sp. zo.o. Sp.K. 122 718 Wibor 3M + margin 30.09.2021 Galeria Libero Sp. zo.o. Sp.K. 97 507 Wibor 3M + margin 10.10.2026 Echo - SPV 7 Sp. zo.o. 72 875 Wibor 3M + margin 31.12.2021 Fianar Investments Sp. zo.o. 71 360 Wibor 3M + margin 31.12.2021 Villea Investments Sp. zo.o. 68 375 Wibor 3M + margin 31.03.2021 R4R Poland Sp. zo.o. 61 518 margin 31.03.2029 RPGZ IX Sp. zo.o. 47 465 Wibor 3M + margin 31.12.2021 Senja 2 Sp. zo.o. 43 052 Wibor 3M + margin 31.03.2021 Echo Aurus Sp. zo.o. 42 029 Wibor 3M + margin 31.12.2021 R4R Poland Sp. zo.o. 35 151 margin 30.09.2026 Perth Sp. zo.o. 25 990 Wibor 3M + margin 31.12.2021 Projekt Echo - 130 Sp. zo.o. 25 860 Wibor 3M + margin 30.09.2021 Rosehill Investments Sp. zo.o. 25 703 Euribor 3M + margin 31.12.2025 Berea Sp. zo.o. 24 550 margin 31.12.2025 Projekt Echo - 123 Sp. zo.o. 22 700 Wibor 3M + margin 30.06.2021 GRO Nieruchomości Sp. zo.o. 21 642 Wibor 3M + margin 31.12.2021 Berea Sp. zo.o. 20 079 Euribor 3M + margin 31.12.2025 Projekt Echo 135 Sp. zo.o. Sp.K. 19 000 Wibor 3M + margin 30.09.2021 Park Rozwoju III - Projekt Echo 112 Sp. zo.o. Sp.K. 17 000 Wibor 3M + margin 30.09.2021 R4R Poland Sp. zo.o. 16 128 margin 31.03.2030 Strood Sp. zo.o. 9 890 Wibor 3M + margin 30.06.2021 RPGZ IX Sp. zo.o. 1 900 Wibor 3M + margin 30.09.2021 Gro Nieruchomości Sp. zo.o. 1 590 Wibor 3M + margin 31.03.2021 loans without interest and write-os 894 082 interest and write-os 60 343 Total loans with interest and write-os 954 425 | Financial statement 42 Standalone nancial report of Echo Investment S.A. for 2020 The Management Board of the Company decided to change the incorrect presentation of some loans previously presented as short-term into long-term. The change was introduced due to the inability to repay these loans in the short term, which is caused by the business considerations of the borrowers. The Management Board of the Company decided to change the incorrect presentation of some loans pre- viously presented as short-term into long-term. The The maximum value of credit risk related to loans is equal to their carrying amount. The loans granted are not secured. The loans granted are not past due and there was no impairment. LONGTERM BORROWINGS AS AT 31 DECEMBER 2019 PLN ‘000 Contractor Amount Interest Repayment date Projekt 12 - Grupa Echo Sp. zo.o. Sp.K. 121 073 Wibor 3M + margin 30.09.2020 Galeria Libero Sp. zo.o. Sp.K. 97 507 Wibor 3M + margin 10.10.2026 R4R Poland Sp. zo.o. 77 251 Wibor 3M + margin 1.07.2026 Fianar Investments Sp. zo.o. 71 360 Wibor 3M + margin 31.12.2020 Villea Investments Sp. zo.o. 63 375 Wibor 3M + margin 31.03.2020 RPGZ IX Sp. zo.o. 47 465 Wibor 3M + margin 31.12.2021 Berea Sp. zo.o. 46 703 Wibor 3M + margin 30.06.2020 Berea Sp. zo.o. 683 Euribor 3M + margin 30.06.2020 Projekt 144 - Grupa Echo Sp. zo.o. Sp.K. 43 770 Wibor 3M + margin 31.03.2020 Echo Aurus Sp. zo.o. 37 034 Wibor 3M + margin 31.12.2020 Zam - Projekt Echo 127 Sp. zo.o. Sp.K. 27 725 Wibor 3M + margin 31.12.2020 Perth Sp. zo.o. 25 990 Wibor 3M + margin 31.12.2020 Rosehill Investments Sp. zo.o. 25 702 Wibor 3M + margin 31.12.2021 GRO Nieruchomości Sp. zo.o. 21 657 Wibor 3M + margin 31.12.2021 Dellia Investments - Projekt Echo - 115 Sp. zo.o. Sp.K. 19 365 Wibor 3M + margin 31.12.2020 Echo - SPV 7 Sp. zo.o. 16 196 Wibor 3M + margin 31.12.2020 Gosford Investments Sp. zo.o. 15 725 Wibor 3M + margin 31.12.2020 City Space Management Sp. zo.o. 5 029 Wibor 3M + margin 30.06.2020 Rondo 1 City Space GP Sp. zo.o. Sp.K. 4 051 Wibor 3M + margin 30.09.2020 GRO Nieruchomości Sp. zo.o. 1 415 Wibor 3M + margin 31.03.2020 Plac Unii City Space GP Sp. zo.o. Sp.K. 499 Wibor 3M + margin 30.09.2020 142 – City Space GP Sp. zo.o. Sp.K. 440 Wibor 3M + margin 30.09.2020 Elektrownia Sp. zo.o. 109 Wibor 3M + margin 30.06.2020 loans without interest and write-os 770 123 interest and write-os 34 904 Total loans with interest and write-os 805 027 LONGTERM LOANS GRANTED BY CURRENCY PLN ‘000 31.12.2020 31.12.2019 In Polish currency 917 134 804 344 In foreign currencies (after translation into PLN) 37 291 683 Total long-term loans granted 954 425 805 027 NOTE 6A The note contains long-term loans with interests. change was introduced due to the inability to repay these loans in the short term, which is caused by the business considerations of the borrowers. | Financial statement 43 Standalone nancial report of Echo Investment S.A. for 2020 MOVEMENT IN DEFERRED TAX ASSETS/PROVISION PLN ‘000 1.01.2020- 31.12.2020 1.01.2019- 31.12.2019 Deferred tax assets/provision at the beginning of the period (4 639) (1 468) ﬁnancial instruments - - investment property 513 513 receivables and liabilities due to borrowings (7 167) (3 701) liabilities due to loans and bonds (405) (779) tax loss 4 816 3 454 Inventories 2 163 3 602 Interests and shares - - leasing 72 - other (4 631) (4 557) Increases 308 1 808 ﬁnancial instruments 308 - investment property - - receivables and liabilities due to borrowings - - liabilities due to loans and bonds - 374 tax loss - 1 362 Inventories - - Interests and shares leasing - 72 other - - Decreases (13 672) (4 979) ﬁnancial instruments - - investment property - - receivables and liabilities due to borrowings (5 419) (3 466) liabilities due to loans and bonds (2 141) - tax loss (2 355) - Inventories (2 246) (1 439) Interests and shares - - leasing (46) - other (2 996) (74) Deferred tax assets/provision at the end of the period (19 534) (4 639) ﬁnancial instruments 308 - investment property 513 513 receivables and liabilities due to borrowings (12 586) (7 167) liabilities due to loans and bonds (2 546) (405) tax loss 2 461 4 816 Inventories (83) 2 163 Interests and shares - - leasing 26 72 other (7 627) (4 631) NOTE 7 Tax loss amount from which no assets were created, amounts to PLN 9,390 thousand. Time limit for lapse of the right to reduc- tion tax due to tax loss falls in 2025. | Financial statement 44 Standalone nancial report of Echo Investment S.A. for 2020 NOTE 8A NOTE 8B INVENTORY PLN ‘000 31.12.2020 31.12.2019 Semi-ﬁnished products and work-in-progress 145 824 190 186 Land-use right asset 5 098 8 331 Finished products 52 680 16 365 Goods - 5 640 Total 198 504 212 191 INVENTORIES  INFLUENCE ON THE RESULT PLN ‘000 31.12.2020 31.12.2019 Inventories write-os recognised as cost in the period - - Value of the reversal of write-os, that decrease the value of inventory recognized as a cost of sales adjustment for the period 11 574 7 088 Movement in write-down on inventories 11 574 7 088 Inventories are measured at production or purchase cost, but not higher than the net realisable value of sales. This value is obtained from current market prices from primary housing market. Reversal of inventory write-down takes place either in connection with sale of inventories or in connection with increase of net sale price. The amounts of inventory write- downs recognised as cost in the period and amounts of reversals of write-downs of values decreasing the value of inven- tories recognised as cost reductions in the period are presented in the income statement under „cost of sales”. Inventory write-downs and their reversals apply to residential projects and are in- tended to write down the value to the level of obtainable price. The value of inventories recognized as income/cost in the period is disclosed in the income statement under „cost of sales”. The ‘ﬁnished products’ item contains completed residential units intended for sale. The ‘products and products in progress’ item contains mainly real estate and ex- penditures on residential projects under preparation and construction. The ‘goods’ item contains land for sale. The change in the inventory write-down in 2020 concerns, among others, resi- dential projects of Grota – Roweckiego 111 in Wrocław and Nowa Dzielnica in Łódź. The change in the inventory write- down as at December 31, 2020 amounted to PLN 11,574 thousand, and PLN 7 088 thousand as at 31 December 2019. | Financial statement 45 Standalone nancial report of Echo Investment S.A. for 2020 SHORTTERM TRADE RECEIVABLES, TAXES AND OTHER PLN ‘000 31.12.2020 31.12.2019 Receivables from subsidiaries 43 199 75 269 Trade, with maturity: 25 432 21 436 up to 12 months 25 432 21 436 Other: 17 767 53 833 due to proﬁt from limited partnerships 17 767 53 833 Receivables from other parties 42 190 46 238 Trade, with maturity: 12 910 21 310 up to 12 months 12 910 21 310 over 12 months - - Due to taxes 1 410 - Other 8 812 718 paid securities 595 132 receivables due to leasing 1 010 94 deposit paid - - Advances on deliveries 19 058 24 210 Total net short–term trade receivables, taxes and other 85 389 121 507 total write–downs on expected loans losses (2 076) (1 319) Total gross short–term trade receivables, tax-es and other 87 464 122 826 NOTE 9A The maximum value of credit risk related to trade receivables does not signiﬁcantly dier from the carrying amount. The estimated fair value of trade receivables is the current value of future expected discounted cash ﬂows and it does not deviate sig- niﬁcantly from the balance sheet value of these re- ceivables. Receivables from aliated companies are not se- cured. In relation to related entities, credit risk, in the opinion of the Management Board, is minimised by the ongoing control of operating activities and as- sessment of investment projects of these companies. By monitoring the operations of subsidiaries and pe- riodically conﬁrming the proﬁtability of their pro- jects, the Company has the opportunity of assessing receivables for which the credit risk has signiﬁcantly increased. The Management Board of the Compa- ny did not ﬁnd such receivables, even with respect to overdue receivables over 30 days, based on the assessment of investment projects of subsidiaries. Trade receivables from others entities result from the rental of oce space and residential premises and the provision of services implementation of invest- ments and other services. The Company constantly controls the condition and payment capacity of its contractors. In relation to any of the clients outside the Echo Investment Group no signiﬁcant risk con- centration is observed. As at December 31, 2020, the Company estimated the value of the impairment loss for trade receivables, using a provision matrix developed on the basis of historical data regarding the repayment of receivables by counterparties. | Financial statement 46 Standalone nancial report of Echo Investment S.A. for 2020 CHANGES IN WRITEDOWNS ON SHORTTERM RECEIVABLES PLN ‘000 1.01.2020- 31.12.2020 1.01.2019- 31.12.2019 Opening balance 1 319 1 545 Increases 865 77 due to recognition of a write-down 865 77 Decreases (108) (303) due to repayment - (30) due to release (108) (273) Write-downs on short-term receivables at the end of the period 2 076 1 319 The impairment loss expected credit losses on receivables has been disclosed under ‘other operating revenue/ costs’ in the proﬁt and loss account of the Company. NOTE 9B GROSS SHORTTERM TRADE RECEIVABLES, TAXES AND OTHER  CURRENCY STRUCTURE PLN ‘000 31.12.2020 31.12.2019 In the Polish currency (PLN) 85 904 105 089 In foreign currencies, after translation into PLN 1 559 17 737 unit/currency EUR 338 4 158 PLN '000 1 559 17 707 unit/currency USD - 8 PLN '000 - 30 Total Gross Short-Term Trade Receivables, Taxes and Other 87 464 122 826 NOTE 9C NOTE 9D OVERDUE GROSS TRADE RECEIVABLES, WITH REMAINING MATURI TY FROM THE BALANCE SHEET DATE PLN ‘000 31.12.2020 31.12.2019 up to 1 month 28 616 8 477 between 1 month and 3 months 5 815 31 054 between 3 month and 6 months - - between 6 month and 12 months - - over 12 months - - overdue receivables 5 987 4 534 Total (gross) trade receivables 40 418 44 065 write-downs for expected credit losses of re-ceivables due to delivery and services (2 076) (1 319) Total (net) trade receivables 38 342 42 746 | Financial statement 47 Standalone nancial report of Echo Investment S.A. for 2020 OVERDUE GROSS TRADE RECEIVABLES, WITH REMAINING MATURITY FROM THE BALANCE SHEET DATE PLN ‘000 31.12.2020 31.12.2019 up to 1 month 2 428 1 406 between 1 month and 3 months 388 543 between 3 month and 6 months 166 211 between 6 month and 12 months 419 717 over 12 months 2 586 1 657 Total (gross) overdue trade receivables 5 987 4 534 write-downs for expected credit losses and val-uation of overdue receivables for supplies and services (2 075) (1 319) Total (net) overdue trade receivables 3 912 3 215 NOTE 9E GROSS TRADE RECEIVABLES PLN ‘000 31.12.2020 31.12.2019 Unimpaired current receivables 34 431 39 531 Unimpaired overdue receivables 3 912 3 215 Impaired overdue receivables 2 075 1 319 Total 40 418 44 065 NOTE 9F DISPUTED AND OVERDUE RECEIVABLES PLN ‘000 31.12.2020 31.12.2019 Disputed receivables - - Other - - not covered by write-down - - Overdue receivables 5 987 4 534 Trade 5 987 4 534 not covered by write-down 3 912 3 215 NOTE 9G | Financial statement 48 Standalone nancial report of Echo Investment S.A. for 2020 SHORTTERM LOANS GRANTED PLN ‘000 31.12.2020 31.12.2019 In subsidiaries loans granted 294 909 9 845 294 909 9 845 In joint-ventures loans granted - - - - Total 294 909 9 845 NOTE 10A The note includes short-term loans with interest and a write-down. Loans meet the SPPI test and are held in accordance with the business model where its objective is to hold ﬁnancial assets to obtain con- tractual cash ﬂows in accordance with IFRS 9 and therefore are not measured at fair value but using the amortized cost method. The maximum value of credit risk related to loans equals their carrying value. The loans granted are not secured. The loans granted are not overdue and the value of the loans has not been lost. They were grant- ed to aliated companies, that have good ﬁnancial position. Credit risk in respect to those entities is minimised through the constant control of their op- erations and through the evaluation of investment projects. In the opinion of the Management Board, through the ability to monitor the operations of subsidiar- ies and periodically conﬁrm the proﬁtability of their projects, the Company has the opportunity to as- sess and identify loans for which the credit risk has increased signiﬁcantly. The Management Board of the Company did not ﬁnd such loans. The Manage- ment Board assessed the loans in terms of creat- ing a write-down for expected loan losses based on the assessment of Echo Investment Capital Group’s credibility. In accordance with the requirements of IFRS 9, a write-down for expected credit losses as at December 31, 2020 was created in the amount of PLN 1,481 thousand, and as at December 31, 2019 - in the amount of PLN 1,078 thousand. | Financial statement 49 Standalone nancial report of Echo Investment S.A. for 2020 SHORTTERM LOANS GRANTED  CURRENCY STRUCTURE PLN ‘000 31.12.2020 31.12.2019 In the Polish currency (PLN) 244 063 9 845 In foreign currencies (after translation into PLN) 50 846 - Total 294 909 9 845 NOTE 10B The note includes short-term loans with interest. BASIC DATA ON SHORTTERM BORROWINGS AS AT 31 DECEMBER 2020 PLN ‘000 Contractor Amount Interest rate Repayment deadline Pudsey Sp. zo.o. 49 402 Euribor 3M + margin 31.03.2021 Gosford Investments Sp. zo.o. 46 397 Wibor 3M + margin 30.09.2021 Projekt 144 - Grupa Echo Sp. zo.o. Sp.K. 43 770 Wibor 3M + margin 31.03.2021 Echo - SPV 7 Sp. zo.o. 36 122 Wibor 3M + margin 31.12.2021 Zam - Projekt Echo - 127 Sp. zo.o. Sp.K. 35 882 Wibor 3M + margin 31.12.2021 Elektrownia Sp. zo.o. 33 102 Wibor 3M + margin 31.03.2021 Zam - Projekt Echo - 127 Sp. zo.o. Sp.K. 16 190 Wibor 3M + margin 31.03.2021 Pudsey Sp. zo.o. 9 740 Wibor 3M + margin 30.06.2021 City Space Management Sp. zo.o. 6 500 Wibor 3M + margin 30.06.2021 Dellia Investments - Projekt Echo 115 Sp. zo.o. Sp.K. 5 945 Wibor 3M + margin 31.12.2021 Projekt Naramowice Sp. zo.o. SKA 5 400 Wibor 3M + margin 30.09.2021 Rondo 1 City Space GP Sp. zo.o. Sp.K. 4 051 Wibor 3M + margin 30.09.2021 Echo - Advisory Services Sp. zo.o. 3 397 Wibor 3M + margin 30.06.2021 Echo Property Poznań 1 Sp. zo.o. 2 070 Wibor 3M + margin 30.09.2021 Projekt Echo - 111 Sp. zo.o. 620 Wibor 3M + margin 30.09.2021 Plac Unii City Space GP Sp. zo.o. Sp.K. 499 Wibor 3M + margin 30.09.2021 142 – City Space GP Sp. zo.o. Sp.K. 440 Wibor 3M + margin 30.09.2021 City Space Management Sp. zo.o. 29 Wibor 3M + margin 30.09.2021 Projekt Echo 141 Sp. zo.o. 15 Wibor 3M + margin 30.09.2021 Projekt Echo 142 Sp. zo.o. 15 Wibor 3M + margin 30.09.2021 Projekt Echo 143 Sp. zo.o. 15 Wibor 3M + margin 30.09.2021 Projekt Echo 144 Sp. zo.o. 15 Wibor 3M + margin 30.09.2021 Projekt Echo 145 Sp. zo.o. 15 Wibor 3M + margin 30.09.2021 loans without interest and write-os 299 631 interest and write-os (4 722) loans with interest and write-os 294 909 The maximum value of credit risk associated with the loans equals their carrying amount. The grant- ed loans are not secured, they are not overdue or impaired. The loans were granted to related entities with good ﬁnancial standing. In relation to aliated companies, the credit risk, in the opinion of the Man- agement Board, is minimized through current control of operating activity and evaluation of investment projects of these companies. In the opinion of the Management Board, through the possibility of mon- itoring the operations of subsidiaries and periodical- ly conﬁrming the proﬁtability of their projects, the Company is able to evaluate and identify the loans for which the credit risk has signiﬁcantly increased. | Financial statement 50 Standalone nancial report of Echo Investment S.A. for 2020 BASIC DATA ON SHORTTERM BORROWINGS AS AT 31 DECEMBER 2019 PLN ‘000 Contractor Amount Interest rate Repayment deadline Echo - SPV 7 Sp. zo.o. 2 208 Wibor 3M + margin 31.12.2020 Echo Aurus Sp. zo.o. 6 535 Wibor 3M + margin 31.12.2020 loans without interest and write-os 8 744 interest and write-os 1 101 loans with interest and write-os 9 845 The maximum value of credit risk associated with the loans equals their carrying amount. The grant- ed loans are not secured, they are not overdue or impaired. The loans were granted to related entities with good ﬁnancial standing. In relation to aliated companies, the credit risk, in the opinion of the Man- agement Board, is minimized through current control of operating activity and evaluation of investment projects of these companies. In the opinion of the Management Board, through the possibility of mon- itoring the operations of subsidiaries and periodical- ly conﬁrming the proﬁtability of their projects, the Company is able to evaluate and identify the loans for which the credit risk has signiﬁcantly increased. | Financial statement 51 Standalone nancial report of Echo Investment S.A. for 2020 NOTE 11A CASH AND CASH EQUIVALENTS PLN ‘000 31.12.2020 31.12.2019 Other ﬁnancial assets 42 444 17 720 - inﬂows from residential clients on escrow account, being release by bank in line with the projects development 42 444 17 720 Cash and cash on accounts 107 437 232 147 Total cash and other ﬁnancial assets 149 881 249 867 As at December 31, 2020 the Company has cash at renowned banks, mainly mBank S.A., PKO BP S.A. and DNB Bank Polski S.A. The maximum value of credit risk related to cash equals its balance sheet value. Cash in the bank bears interest at variable interest rates, the amount of which depends on the interest rate on one-day bank deposits. Short-term deposits are made for various periods, from one day to one month, de- pending on the current demand of the Company for cash and they bear interest according to the interest rates set for them. NOTE 11B CASH AND CASH EQUIVALENTS  CURRENCY STRUCTURE PLN ‘000 31.12.2020 31.12.2019 In the Polish currency (PLN) 137 802 119 549 In foreign currencies (after translation into PLN) 12 079 130 318 unit/currency EUR 2 611 30 602 PLN '000 12 049 130 317 unit/currency HUF 2 295 - PLN '000 29 - unit/currency USD - - PLN '000 1 1 Total 149 881 249 867 | Financial statement 52 Standalone nancial report of Echo Investment S.A. for 2020 NOTE 12 SHARE CAPITAL Nominal value per 1 share = 0,05 PLN Series / Issue Type of share Type of limited rights to shares No. of shares Nominal value of series / issues [PLN ‘000] Capital coverage A, B, C, D, E, F bearer shares none 412690582 20635 cash Total no. of shares 412690582 Total share capital 20635 SUPPLEMENTARY CAPITAL PLN ‘000 31.12.2020 31.12.2019 Share premium 100 748 100 748 Statutory 6 878 6 878 Created from generated proﬁts according to the statute/articles, above the statuto- rily required (minimum) value 946 647 946 647 Other 22 22 Total 1 054 295 1 054 295 NOTE 13 SHAREHOLDERS OF ECHO INVESTMENT S.A. HOLDING MORE THAN 5% OF THE SHARE CAPITAL AS AT 31 DECEMBER 2020 Shareholders No. of shares and votes % of shareholding capital % of votes on GMS Lisala Sp. z o.o. (Wing IHC Zrt and Grin Real Estate partners) 272 375 784 66,0 66,0 Nationale-Nederlanden OFE 55 833 698 13,53 13,53 Aviva Otwarty Fundusz Emerytalny Aviva Santander 27 350 695 6,63 6,63 Nicklas Lindberg 538 676 0,13 0,13 Maciej Drozd 221 765 0,05 0,05 Péter Kocsis 44 000 0,01 0,01 Other 56 325 964 13,65 13,65 Total 412 690 582 100,00% 100,00% – Lisala Sp. z o.o. (Wing IHC Zrt and Grin Real Estate partners) – Nationale-Nederlanden OFE – Aviva Otwarty Fundusz Emerytalny Aviva Santander – Nicklas Lindberg – CEO – Maciej Drozd – Vice-President, CFO – Péter Kocsis – Member of the Supervisory Board – Other Number of shares: 272 375 784 – 55 833 698 – 27 350 695 – 538 676 – 221 765 – 44 000 – 56 325 964 –  66% 6.63% 13.53% 13.53% 0.13% 0.05% 0.01% | Financial statement 53 Standalone nancial report of Echo Investment S.A. for 2020 On 26 April, 2017 the Management Board of Echo Investment adopted a resolution on the Company’s dividend policy. The adopted dividend policy states that from the proﬁt in 2018 and subsequent years the Management Board will be recom- mending the payment of the dividend up to amount of 70% of the consolidated net proﬁt of the Capital Group attributable to shareholders of the parent company. When recommending the dividend pay- ment the Management Board will take CHANGES ON DIVIDEND FUND PLN ‘000 1.01.2020- 31.12.2020 1.01.2019- 31.12.2019 Opening balance 164 639 326 309 Changes in the period - - share capital - - dividend fund - (206 345) allocation of proﬁt from previous years 21 412 44 675 Closing balance 186 051 164 639 NOTE 13A into consideration the current and ex- pected condition of the Company and the Capital Group as well as their devel- opment strategy, in particular: − safe and the most eective man- agement of debt and liquidity in the Group; − investment plans resulting from the development strategy, purchase of land in particular. CHANGES ON PROFIT / LOSS FROM PREVIOUS YEARS PLN ‘000 1.01.2020- 31.12.2020 1.01.2019- 31.12.2019 Opening balance 21 412 44 675 Changes in the period adjustments of the result from previous years - - allocation of proﬁt from previous years (21 412) (44 675) Closing balance - - NOTE 13B | Financial statement 54 Standalone nancial report of Echo Investment S.A. for 2020 NOTE 14A LONGTERM LIABILITIES WITHOUT INCOME TAX PROVISION PLN ‘000 31.12.2020 31.12.2019 Due to subsidiaries - - on loans and borrowings - 127 007 - 127 007 Due to other entities on leasing 13 567 12 645 security deposits received 1 113 1 492 ﬁnancial derivative instruments - IRS 1 624 - due to issue of debt securities 872 941 936 859 889 245 950 996 Total long-term liabilities 889 245 1 078 003 Interest rates used to discount the expected cash ﬂows from the lease from 1,77% to 3,03% from 3,43% to 3,61% According to the best information and data of the Company, there were no breaches of terms of loan agreements and established security levels during the ﬁnancial year and until the date of signing of the ﬁnancial statement. NOTE 14B LONGTERM LIABILITIES WITHOUT INCOME TAX PROVISION WITH REMAINING MATURITIES FROM THE BALANCE SHEET DATE PLN ‘000 31.12.2020 31.12.2019 Between 1 to 3 years 466 750 898 021 Between 3 to 5 years 422 292 177 985 Over 5 years 203 1 997 Total Long-Term Liabilities 889 245 1 078 003 Interest rates applied for discounting the ex-pected cash ﬂows 4,25% 5,15% Long-term liabilities in nominal value were presented by the Company in note 14E. | Financial statement 55 Standalone nancial report of Echo Investment S.A. for 2020 LONGTERM LIABILITIES WITHOUT INCOME TAX PROVISION  CURRENCY STRUCTURE PLN ‘000 31.12.2020 31.12.2019 In the Polish currency (PLN) 712 900 1 078 003 In foreign currencies (after translation into PLN) 176 345 - Total 889 245 1 078 003 NOTE 14C Financial liabilities due to debt ﬁnancial instruments are measured at amortized cost of a liability component, in accord- ance with IFRS 9. The fair value of long- term liabilities does not dier signiﬁcant- ly from their carrying amount. The total outﬂow of cash under the lease as at December 31, 2020 amounted to PLN 8,433 thousand PLN. According to the best information and data of the Management Board of the Company, there was no breach of terms of loan agreements and established se- curity levels during the ﬁnancial year and until the date of signing of the ﬁnancial statement. NOTE 14D LONGTERM LIABILITIES  CHANGE RELATED TO IFRS 16 PLN ‘000 31.12.2020 31.12.2019 Opening balance 12 645 8 843 Changes in the period 922 3 802 new purchases 922 8 756 ﬁnancial costs - 657 payment - (5 611) completion of project or its sale Closing balance 13 567 12 645 COSTS DUE TO LEASING PLN ‘000 1.01.2020- 31.12.2020 1.01.2019- 31.12.2019 Cost associated with leasing low-value assets 281 878 Cost related to short-term leasing 6 575 6 285 Total 6 856 7 163 | Financial statement 56 Standalone nancial report of Echo Investment S.A. for 2020 NOTE 14E Credit lines are secured with standard security features, such as a power of at- torney to a bank account or a declaration of submission to enforcement. The loan value corresponds to undis- counted cash ﬂows. CREDIT FACILITIES AS AT 31 DECEMBER 2020 ‘000 PLN Bank Contractual amount of loan Outstanding loan amount Interest rate Repayment deadline PKO BP S.A. 75 000 63 458 WIBOR 1M + margin 31.10.2022 Alior Bank S.A. 35 000 35 000 WIBOR 3M + margin 14.04.2021 Santander Bank Polska S.A. 100 000 39 523 WIBOR 1M + margin 30.11.2022 Total 210 000 137 981 * The available loan amount as on 31 December 2020 is decreased by the guarantees issued and amounts to PLN 1,9 million PLN. ** Under the credit limit of PLN 100 million, the Company has been granted a sublimit for current loan up to PLN 75 million and a sublimit up to PLN 25 million for guarantees. As at 31 December 2020, the whole guarantee limit is available. CREDIT FACILITIES AS AT 31 DECEMBER 2019 PLN ‘000 Bank Contractual amount of loan Outstanding loan amount Interest rate Repayment deadline PKO BP S.A. 75000 65452 WIBOR 1M + margin 30.10.2020 Alior Bank S.A. 75000 75000 WIBOR 3M + margin 26.03.2020 Santander Bank Polska S.A. 100000 73 423 WIBOR 1M + margin 30.11.2020 Total 250000 213 875 * The available loan amount as at 31/12/2019 is reduced by the issued guarantees and amounts to PLN 0.2 million. ** Within the credit limit of PLN 100 million, the Company is granted a sublimit for a current loan of up to PLN 75 million and a sublimit of up to PLN 25 million for guarantees. As at 31/12/2019, the utilization of the guarantee limit was PLN 24.2 million. | Financial statement 57 Standalone nancial report of Echo Investment S.A. for 2020 NOTE 14F Value of the bonds corresponds to un - discounted cash ﬂows without interests. Change of business and economic con- ditions had no signiﬁcant eect on the ﬁnancial obligations’ fair value. Bonds issued by Echo Investment S.A. are not secured. With an exception of 2P/2020-series, they are all quoted in Alternative Exchange System (ASO) Cat- alyst: bonds for individual investors on GPW ASO Catalyst platform and for in- stitutional investors – on BondSpot ASO Catalyst. COMPANY’S LIABILITIES DUE TO BONDS ISSUED AS AT 31 DECEMBER 2020 Bonds for institutional investors [‘000 PLN] Series ISIN code Bank / brokerage house Nominal value Maturity Interest rate 1/2017 PLECHPS00225 mBank S.A. 155000 31.03.2021 WIBOR 6M + margin 2,9% 2/2017 PLECHPS00258 mBank S.A. 139950 30.11.2021 WIBOR 6M + margin 2,9% 1/2018 PLECHPS00282 mBank S.A. 46600 25.04.2022 WIBOR 6M + margin 2,9% 1/2019 PLECHPS00308 mBank S.A. 96510 11.04.2023 WIBOR 6M + margin 4,25% 1/2020 PLO017000012 mBank S.A. 150000 31.05.2024 WIBOR 6M + margin 4,50% 1P/2020 PLO017000020 PKO TFI Parasolowy and Michael / Ström Dom Maklerski S.A. as an agent 100000 5.08.2024 WIBOR 6M + margin 4,50% Total 688060 Bonds for individual investors [‘000 PLN] E-series PLECHPS00217 DM PKO BP S.A. 100000 6.07.2021 WIBOR 6M + margin 2,9% F-series PLECHPS00233 DM PKO BP S.A. 125000 11.10.2022 WIBOR 6M + margin 2,9% G-series PLECHPS00241 DM PKO BP S.A. 75000 27.10.2022 WIBOR 6M + margin 2,9% H-series PLECHPS00266 DM PKO BP S.A. 50000 22.05.2022 WIBOR 6M + margin 2,8% I-series PLECHPS00274 Consortium: DM PKO Banku Polskiego S.A., Noble Securities S.A. and Centralny Dom Maklerski Pekao S.A 50000 8.11.2023 WIBOR 6M + margin 3,4% J and J2-series PLECHPS00290 J-series: consortium Noble Securities S.A., Michael / Ström Dom Maklerski S.A., Dom Maklerski Banku Ochrony Środowiska S.A 33832 21.09.2023 WIBOR 6M + margin 3,4% J2-series: DM PKO Banku Polskiego S.A. Total 433832 Total PLN-denominated bonds 1 121 892 Bonds for institutional investors EUR-denominated [‘000 EUR] 1E/2020 PLECHPS00316 Bank Pekao S.A. 40 000 23.10.2024 ﬁxed interest rate 4,5% 2P/2020 PLO017000038 Michael/Ström DM 12 800 31.10.2021 ﬁxed interest rate 6% Total EUR-denominated bonds 52 800 * Issue beyond the bond issue program in EUR of September 3, 2020. | Financial statement 58 Standalone nancial report of Echo Investment S.A. for 2020 Issuance of bonds denominated in EUR The Management Board of Echo Invest- ment on September 3, 2020 concluded an issue agreement with Bank Pekao S.A., establishing a program for the issuance of unsecured ordinary bearer bonds up to the total amount of the issued and out- standing bonds of EUR 100 million. Bonds issued pursuant to the Issuance Program will be oered for purchase without the need to draw up a prospectus or informa- tion memorandum. On the issuance date the Bonds will be registered in the de- pository maintained by Krajowy Depozyt Papierów Wartościowych S.A. and it will be introduced to trading in an alterna- tive trading system operated by Warsaw Stock Exchange (Giełda Papierów War- tościowych w Warszawie S.A.). Bonds will be issued as unsecured ordinary bearer bonds denominated in EUR and bearing interest at a ﬁxed or variable interest rate, with a maturity not exceeding 5 years. The ﬁnal parameters of the bonds will be determined through talks with investors and will be subject to approval of the Company’s Management Board. Euro-denominated bonds will help sta- bilize Echo Investment’s balance sheet in terms of exchange rate ﬂuctuations. A signiﬁcant part of the Group’s assets are under construction and ﬁnished commer- cial properties denominated on the mar- ket in EUR. On the liabilities side, the debt in euro is proportionally smaller, thus dis- torting the group’s results by ﬂuctuations in exchange rates. Private bond issue On October 28, 2020, Echo Investment has also issued short-term bonds for a private investor in a total value of EUR 12,8 million (the euro-bonds issuance program described above). BONDS ISSUED BY THE COMPANY IN 2020 IN PLN Series Date Nominal value [‘000 PLN] Bonds for institutional investors – series 1/2020 2.06.2020 150 000 Bonds for institutional investors – series 1P/2020 5.08.2020 100 000 Total 250 000 BONDS ISSUED BY THE COMPANY IN 2020 IN EUR Series Date Nominal value [‘000 PLN] Bonds for institutional investors – series 1E/2020 23.10.2020 40 000 Bonds for institutional investors – series 2P/2020 28.10.2020 12 800 Total 52 800 Issue out of the issuance program with Bank Pekao S.A. | Financial statement 59 Standalone nancial report of Echo Investment S.A. for 2020 BONDS REDEEMED BY THE COMPANY IN 2020 Series Date Nominal value [‘000 PLN] Bonds for institutional investors – series 1/2016 18.11.2020 100 000 Bonds for institutional investors – series 2/2017 1.06.2020 10 050 Bonds for institutional investors – series 1/2018 1.06.2020 93 400 Bonds for institutional investors – series 1/2019 1.06.2020 3 490 Total 206 940 LONG AND SHORTTERM LIABILITIES DUE TO THE DEBT FINANCIAL INSTRUMENTS ISSUED AS AT 31 DECEMBER 2019 Series ISIN code Bank/brokerage house Nominal value Maturity Interest rate Securities Quotation market Bonds purchased by the company in 2019 1/2016 PLECHPS00209 mBank S.A. 100000 18.11.2020 WIBOR 6M + margin 3,0% none ASO CATALYST 1/2017 PLECHPS00225 mBank S.A. 155000 31.03.2021 WIBOR 6M + margin 2,9% none ASO CATALYST 2/2017 PLECHPS00258 mBank S.A. 150000 30.11.2021 WIBOR 6M + margin 2,9% none ASO CATALYST 1/2018 PLECHPS00282 mBank S.A. 140000 25.04.2022 WIBOR 6M + margin 2,9% none ASO CATALYST 1/2019 PLECHPS00308 mBank S.A. 100000 11.04.2023 WIBOR 6M + margin 4,25% none ASO CATALYST Total 645000 Bonds for individual investors E-series issue PLECHPS00217 DM PKO BP S.A. 100000 06.07.2021 WIBOR 6M + margin 2,9% none CATALYST regulated market F-series issue PLECHPS00233 DM PKO BP S.A. 125000 11.10.2022 WIBOR 6M + margin 2,9% none CATALYST regulated market G-series issue PLECHPS00241 DM PKO BP S.A. 75000 27.10.2022 WIBOR 6M + margin 2,9% none CATALYST regulated market H-series issue PLECHPS00266 DM PKO BP S.A. 50000 22.05.2022 WIBOR 6M + margin 2,8% none CATALYST regulated market I-series issue PLECHPS00274 Consortium: DM PKO Bank Polski S.A., Noble Securities S.A. and Centralny Dom Maklerski Pekao S.A. 50000 08.11.2023 WIBOR 6M + margin 3,4% none CATALYST regulated market J and J2-series issue PLECHPS00290 J-series: consortium of Noble Securities S.A., Michael / Ström Dom Maklerski S.A., Dom Maklerski Banku Ochrony Środowiska S.A 33832 21.09.2023 WIBOR 6M + margin 3,4% none CATALYST regulated market J2 series: DM PKO Bank Polski S.A. Total 433832 Bonds in total 1078832 | Financial statement 60 Standalone nancial report of Echo Investment S.A. for 2020 SHORTTERM TRADE LIABILITIES, TAXES, SECURITY DEPOSITS RECEIVED, ADVANCES RECEIVED AND OTHER  WITHOUT PROVISIONS PLN ‘000 31.12.2020 31.12.2019 Trade, due to subsidiaries, with maturity: 1 937 2 590 up to 12 months 1 937 2 590 over 12 months - - Trade, due to other companies, with maturity: 24 452 50 812 up to 12 months 24 452 50 812 over 12 months - - Total short-term trade liabilities 26 389 53 402 Advances received (contractual liability) 83 253 100 163 Security deposits received 6 538 4 777 Total security deposits and advances received 89 791 104 940 Taxes, customs duties, insurance and other beneﬁts 8 706 12 100 Current portion of income tax 5 3 215 Total tax 8 711 15 315 Leasing liabilities 9 530 13 274 Total liability for leasing and conversion fees 9 530 13 274 Other liabilities 67 725 26 583 payroll 4 10 other (due to) 67 721 26 573 dividend - - cash on escrow account 42 444 17 720 acquisition of shares - 370 Other 25 277 8 483 bonuses for Management and employees 6 572 5 940 Total other short-term liabilities 67 725 26 583 Total 202 146 213 514 Interest rates used to discount the expected cash ﬂows from the lease from 1,77% to 6,94% 6,94% The fair value of trade and other liabili - ties does not dier materially from their carrying value. NOTE 15A | Financial statement 61 Standalone nancial report of Echo Investment S.A. for 2020 SHORTTERM TRADE LIABILITIES, TAXES, SECURITY DEPOSITS RECEIVED, ADVANCES RECEIVED AND OTHER  WITHOUT PROVISIONS PLN ‘000 31.12.2020 31.12.2019 In the Polish currency (PLN) 199 757 199 729 In foreign currencies (after translation into PLN) 2 389 13 785 unit/currency EUR 518 3 237 PLN '000 2 389 13 785 unit/currency USD - - PLN '000 - - Total 202 146 213 514 NOTE 15B NOTE 15C NOTE 16A SHORTTERM LOANS, BORROWINGS AND BONDS PLN ‘000 31.12.2020 31.12.2019 Due to subsidiaries borrowings 208 179 - 208 179 - Due to other parties loans and borrowings 137 981 213 874 due to issue of debt securities 493 409 148 338 631 390 362 212 Total 839 569 362 212 According to the best information and data of the Company, there were no breaches of terms of loan agreements and established security levels during the ﬁnancial year and until the date of signing of the ﬁnancial statement. The changes related to the introduction of IFRS 16 are described in the chapter “Main accounting principles” in the item of leasing. SHORTTERM LIABILITIES  CHANGE RELATED TO IFRS 16 PLN ‘000 31.12.2020 31.12.2019 Opening balance 13 274 15 048 Changes in the period (3 744) (1 774) new purchases 4 916 - ﬁnancial costs 955 450 payment (6 841) (647) completion of project or its sale (2 774) (1 577) Closing balance 9 530 13 274 | Financial statement 62 Standalone nancial report of Echo Investment S.A. for 2020 SHORTTERM LOANS, BORROWINGS AND BONDS  CURRENCY STRUCTURE PLN ‘000 31.12.2020 31.12.2019 In the Polish currency (PLN) 572 321 362 212 In foreign currencies (by currency and after translation into PLN) 267 248 - Total 839 569 362 212 NOTE 16B BASIC DATA ON MAJOR SHORTTERM BORROWINGS AS AT 31 DECEMBER 2020 Contractor Value ['000 PLN] Interest rate Repayment rate Projekt Echo - 129 Sp. zo.o. 192 666 Wibor 3M + margin 30.09.2021 loans without interest and write-os 192 666 interest and write-os 15 513 loans with interest and write-os 208 179 | Financial statement 63 Standalone nancial report of Echo Investment S.A. for 2020 NOTE 17 Provision for penalties and costs includes the value of any penalties and costs with which the Company may be charged due to contracts concluded, with a probabil- ity of charging that exceeds 50%. The amount of the provision was estimated based on the best knowledge of the Com- pany and based on its past experience. The provision for projected costs of war- ranty repairs includes the value of repairs or compensation for sold premises and projects with a probability of charging that exceeds 50%. The amount of the pro- vision was estimated based on the best knowledge of the Company and based on its past experience. The provision for guarantees includes the value of expected losses due to the issu- ing by the Company of guarantees and sureties for the beneﬁt of subsidiaries, which constitute security related to the implementation of projects or post-sale security for new investors. The amount of the provision was estimated in accord- ance with the requirements of IFRS 9. The dates of crystallising of the provi- sions for penalties and costs, warranty costs and court cases are not possible to be estimated, however, there is a high probability of their implementation within 12 months from the balance sheet date. MOVEMENT IN SHORTTERM PROVISIONS  DUE TO PLN ‘000 31.12.2020 31.12.2019 At the beginning of the period provisions for penalties 2 000 2 000 provisions for guarantees 514 270 provisions for repair - court proceedings - - provision for costs 12 993 15 047 15 507 17 317 Increases provisions for guarantees 76 244 provisions for repair 794 provision for costs 1 333 4 003 court proceedings 272 - 2 475 4 247 Utilisation due to provision for costs - (4 840) provision for penalties - - - (4 840) Release due to provision for costs (6 678) (1 217) provisions for repair - - (6 678) (1 217) At the end of the period provisions for penalties 2 000 2 000 provisions for repair 794 provisions for guarantees 590 514 court proceedings 272 - provision for costs 7 648 12 993 11 304 15 507 | Financial statement 64 Standalone nancial report of Echo Investment S.A. for 2020 NOTE 18 OFFBALANCE ITEMS PLN ‘000 31.12.2020 31.12.2019 Contingent receivables - - Contingent liabilities 1 968 163 1 941 756 For related parties 1 968 163 1 941 756 due to guarantees and sureties granted 1 968 163 1 941 756 For other parties - - due to guarantees and sureties granted - - Other 664 719 due to court proceedings against Echo Investment 664 719 Total 1 968 827 1 942 475 IFRS 9 introduced a model based on the expected loss concept, also for the issu- er of ﬁnancial guarantees. The Company does not conduct separate activities in this area, but is only a party to guarantees and sureties in relation to oce and com- mercial projects carried out by subsidiar- ies. Such guarantees constitute a security related to the implementation of projects or after-sale security for new investors and constitute a form of security com- monly used in the market. In the opinion of the Management Board, through the ability to monitor the activities of sub- sidiaries, the Company has the full ability to monitor the credit risk related to the issued guarantees. The entities of the Echo Investment Group have full ability and readiness to fulﬁl the concluded contractual obligations, there- fore the Management Board of the Com- pany did not ﬁnd signiﬁcant expected losses due to the issuance of guarantees and sureties by the Company. In accord- ance with the requirements of IFRS 9, a provision for expected credit losses was created as at December 31, 2020 in the amount of PLN 590 thousand and as at December 31, 2019 - in the amount of PLN 514 thousand. | Financial statement 65 Standalone nancial report of Echo Investment S.A. for 2020 SURETY AGREEMENTS ISSUED BY ECHO INVESTMENT GROUP AS AT 31 DECEMBER 2020 PLN ‘000 For Beneciary Value [‘000] Expiry date Description Plac Unii City Space - GP Sp. zo.o. Sp.K. Bletwood Investments Sp. zo.o. 1 552 The entire period of le- ase agreement validity and three consecutive months from its termi- nation. Surety for liabilities of Cogl II Poland Limited Sp. z o.o. as a collateral of liabilities resulting from the lease agreement of 6.11.2015. Issued in EUR. Echo – Browary War- szawskie Sp. zo.o. Sp.K. oraz Dellia Investments – Projekt Echo – 115 Sp. zo.o. Sp.K. HPO AEP Sp. zo.o. Sp.J. 11 537 Until the date of obta- ining a permit for use for the projects being carried out, but not later than 7.12.2031. Surety for liabilities of Echo – Browary Warszawskie Sp. z o.o. Sp.K. and Dellia Investments – Projekt Echo – 115 Sp. z o.o. Sp.K. as a collateral of liabilities resulting from the lease agreement of 7.12.2016. Mutual surety issued in EUR. Sagittarius - Projekt Echo - 113 Sp. zo.o. Sp.K. Human Oce Polska Sp. zo.o. 100 until the expiry of lease obligations Surety for liabilities of Sagittarius – Projekt Echo – 113 Sp. z o.o. Sp.K. resulting from the lease agreement concluded on 2.08.2018. Projekt Beethovena - Projekt Echo - 122 Sp. zo.o. SKA PKO BP S.A. 373 805 until 31.12.2026 Surety for particular liabilities of Projekt Beethovena - Projekt Echo – 122 Sp. z o.o. SKA as a collateral of claims resulting from housing project and mortgage separation of real estate. Issued in EUR. Dellia Investments - Pro- jekt Echo - 115 Sp. zo.o. Sp.K. Bank Pekao S.A. 420 270 until 31.12.2030 Surety for particular liabilities of Dellia Investments - Projekt Echo - 115 Sp. z o.o. Sp.K. as a collateral of claims resulting from housing projects and sold oce building, as well as fulﬁlling the terms of the lease agreement with one of the tenants. Issued in EUR. Projekt Echo 130 Sp. zo.o. PKO BP S.A. 23 074 unitl 31.01.2024 Surety for the repayment of the loan in connection with the disbursement of the construction loan up to the limit of EUR 5 million without completion of transferring a part of the property to the Company. Total 830 338 SURETY AGREEMENTS ISSUED BY ECHO INVESTMENT GROUP AS AT 31 DECEMBER 2019 PLN ‘000 For Value [PLN ‘000] Validity Description Bletwood Investments Sp. zo.o. 1432 The entire duration of the lease and three consecutive months from the date of its termination Surety for liabilities of the company Cogl II Limited Poland Sp. z o.o. as security for the obligations arising from the lease agreement concluded on 6.11.2015. Issued in EUR. HPO AEP Sp. zo.o. Sp. J. 10646 Until obtaining the occupan- cy permit for projects carried out, however not later than until 07.12.2031. Surety for liabilities of Echo – Browary Warszawskie Sp. z o.o. Sp.K. and Dellia Investments - Projekt Echo - 115 Sp. z o.o. Sp. K. as security for the obligations arising from the contract concluded on 7.12.2016. Mutual guarantee issued in EUR. Human Oce Polska Sp. zo.o. 100 Until the expiry of the lease contract Surety for liabilities of Sagittarius - Sagittarius - Projekt Echo-113 Sp. z o.o. Sp.K. resulting from the lease contract PKO BP S.A. 344944 until 31.12.2026 Surety for liabilities of Projekt Beethovena - Projekt Echo – 122 Sp. z o.o. S.K.A. as a collateral of claims resulting from housing project in the Company and mortgage separation of real estate. Issued in EUR PeKaO S.A. 389135 until 31.12.2030 Surety for liabilities Dellia Investments - Projekt Echo - 115 Sp. z o.o. S.K. as a collateral of claims resulting from housing projects, sold oce building in the Company and fulﬁlling the terms of the lease agreement with one of the tenants. Issued in EUR. Total 746 258 | Financial statement 66 Standalone nancial report of Echo Investment S.A. for 2020 GUARANTEE AGREEMENTS ISSUED BY ECHO INVESTMENT S.A. AS AT 31 DECEMBER 2020 PLN ‘000 For Beneciary Value [PLN ‘000] Validity Due Projekt 104 Sp. zo.o. Skua Sp. zo.o. 27 689 until 31.07.2021 Security of the proper performance of the ﬁnal sale con- tract and the master lease contract for the Aquarius Busi- ness House II oce building in Wrocław. Issued in EUR. Echo Investment S.A. IREEF – Stryków Propco Sp. zo.o. 553 until 31.07.2021 Guarantee for the obligations of Echo Investment S.A. resulting from the lease contract concluded on 24.10.2016. Issued in EUR. Q22 - Projekt Echo - 128 Sp. zo.o. Sp.K. IREEF – Stryków Propco Sp. zo.o. 81 until 31.05.2022 Rental guarantee related to the sale of the oce building Q22 in Warsaw. The guarantee is issued in EUR. The amo- unt of the guarantee is updated as the liability decreases. Echo - Opolska Business Park Sp. zo.o. Sp.K. issued for Ventry Invest- ments Sp. z o.o. Sp. k. (currently entitled EPP Oce O3 Business Cam- -pus Sp. z o.o.) 42 108 until 21.12.2026 Construction guarantee related to the sale of the O3 Business Campus I oce building in Kraków. The con- struction guarantee is secured by a corporate guarantee issued by Echo Investment S.A. The guarantee issued in EUR. ZAM - Projekt Echo - 127 Sp. zo.o. Sp.K. issued for Emfold Investments Sp. z o.o. (currently entitled Tryton Business Park Sp. z o.o.) 43 925 until 21.12.2026 Construction guarantee related to the sale of the Tryton oce building in Gdańsk. The construction guarantee is secured by a corporate guarantee issued by Echo Invest- ment S.A. Guarantee issued in EUR. Symetris - Projekt Echo - 131 Sp. zo.o. Sp.K. issued for Flaxton Invest- ments Sp. z o.o. (curren- tly entitled EPP Oce – Symetris Business Park Sp. z o.o.) 18 789 until 21.12.2026 Construction guarantee related to the sale of the Syme- tris I oce building in Łódź. The construction guarantee is secured by a corporate guarantee issued by Echo Investment S.A. Guarantee issued in EUR. Projekt Echo 135 Sp. zo.o. Sp.K. A4 Business Park Sp. zo.o. 25 382 until 26.04.2027 Construction guarantee related to the sale of the A4 Business Park III oce building in Katowice. The guaran- tee is secured by a corporate guarantee issued by Echo Investment S.A. Guarantee issued in EUR. Echo - Opolska Business Park Sp. zo.o. Sp.K. EPP Oce O3 Business Campus Sp. zo.o 40 148 until 21.12.2027 Construction guarantee related to the sale of the O3 Business Campus II oce building in Kraków. The guaran- tee is secured by a corporate guarantee issued by Echo Investment S.A. Guarantee issued in EUR. Echo - Opolska Business Park Sp. zo.o. Sp.K. EPP Oce O3 Business Campus Sp. zo.o 383 until 28.05.2021 Corporate guarantee of Echo Investment S.A. securing rental guarantee related to the sale of O3 Business Cam- pus II in Kraków. Partially issued in EUR. The maximum amount of the liability shall be successively reduced as the amount of the liability secured by the guarantee decreases. Direct guarantee of Echo Investment S.A. Nobilis - Projekt Echo - 117 Sp. zo.o. Sp.K. 40 000 until 31.10.2026 Quality guarantee for construction work related to the Nobilis oce building in Wrocław. Grupa Echo Sp. zo.o. IB 14 FIZAN 82 495 until 24.05.2024 Security for the proper performance of the obligations arising from the contract for the sale of the West Link of- ﬁce building in Wrocław. Issued in EUR. After 24.05.2021 the maximum amount of the liability will be reduced by 80 percent. Midpoint 71-Cornwall Investments Sp. z o.o. SKA (previously Projekt 22 – Grupa Echo Sp. z o.o. S.K.A.) A19 Sp. zo.o. 27 689 until 4.07.2038 Guarantee for the obligations of Midpoint 71-Cornwall Investments Sp. z o.o. SKA (Midpoint 71 project) arising from the good neighborly agreement concluded on 4.07.2018. Issued in EUR. Symetris - Projekt Echo - 131 Sp. zo.o. Sp.K. issued for Flaxton Invest- ments Sp. z o.o. (curren- tly entitled EPP Oce – Symetris Business Park Sp. z o.o.) 17 618 until 31.08.2023 Construction guarantee related to the sale of the oce building Symetris II in Łódź. Issued in EUR. The maximum amount of the liability will be successively reduced as the amount of the liability that is secured by the guarantee decreases. Symetris - Projekt Echo - 131 Sp. zo.o. Sp.K. issued for Flaxton Invest- ments Sp. z o.o. (curren- tly entitled EPP Oce – Symetris Business Park Sp. z o.o.) 112 until 27.12.2021 Rental guarantee related to the sale of the oce building Symetris II in Łódź. Partially issued in EUR. The maximum amount of the liability will be successively reduced as the amount of the liability that is secured by the guarantee decreases. | Financial statement 67 Standalone nancial report of Echo Investment S.A. for 2020 GUARANTEE AGREEMENTS ISSUED BY ECHO INVESTMENT S.A. AS AT 31 DECEMBER 2020 PLN ‘000 For Beneciary Value [PLN ‘000] Validity Due R4R Łódź Wodna Sp. zo.o. R4R Wrocław Kępa Sp. zo.o. R4R Wrocław- skie Rychtalska Sp. zo.o. R4R Warszawa Browary Sp. zo.o. Bank Pekao S.A. 14 147 until 30.09.2021 Guarantee securing exceeding the costs of performing Resi4REnt projects: Łódź Wodna, Wrocław Rychtalska, Warsaw Brewery, Wrocław Kępa. Rosehill Investments Sp. zo.o. IB 6 FIZAN / GPF 3 FIZAN 105 783 until 31.03.2023 Security for the proper performance of the obligations of Rosehill Investments Sp. z o.o. resulting from the program contract concluded on 31.08.2017. Issued in EUR. Projekt Beethovena – Projekt Echo – 122 Sp. zo.o. SKA PKO BP S.A. 36 000 until 30.06.2023 Security for exceeding the costs of performing the Moje Miejsce oce project in Warsaw. Echo Investment S.A. LUX Europa III S.a.r.l. 6 450 until 7.05.2021 Security for the liabilities of Dellia Investments - Projekt Echo - 115 Sp. z o.o. Sp.K. arising from the contract of quality guarantee concluded on 27.03.2019. Dellia Investments - Pro- jekt Echo - 115 Sp. zo.o. Sp.K. LUX Europa III S.a.r.l. 101 249 until 31.12.2024 Security for the proper performance of Dellia Investments - Projekt Echo - 115 Sp. z o.o. Sp.K. arising from the sale contract of the Gatehouse Oces building being part of the Warsaw Brewery complex. Issued in EUR. Dellia Investments - Pro- jekt Echo - 115 Sp. zo.o. Sp.K. LUX Europa III S.a.r.l. 117 until 30.06.2029 Security for the proper performance of Dellia Investments - Projekt Echo - 115 Sp. z o.o. Sp.K. liabilities, arising from the sale agreement of the Gatehouse Oce building in the Warsaw Brewery complex. Rental guarantee issued in EUR. The maximum amount of the liability will be successively reduced as the amount of the liability that is secured by the guarantee decreases. Dellia Investments - Pro- jekt Echo - 115 Sp. zo.o. Sp.K. LUX Europa III S.a.r.l. 163 550 until 30.06.2030 Security for the proper performance of Dellia Investments - Projekt Echo - 115 Sp. z o.o. Sp.K. liabilities, arising from the sale agreement of the Gatehouse Oce building in the Warsaw Brewery complex. Issued in PLN. Dellia Investments - Pro- jekt Echo - 115 Sp. zo.o. Sp.K. LUX Europa III S.a.r.l. 50 763 until 3.03.2027 Security for the proper performance of the liabilities of Dellia Investments - Projekt Echo - 115 Sp. z o.o. Sp.K. arising from the sale contract of the Gatehouse Oces building being part of the Warsaw Brewery complex. Issued in EUR. Echo Investment S.A. LUX Europa III S.a.r.l. 25 until 30.06.2021 Security of the liabilities of Dellia Investments - Projekt Echo - 115 Sp. z o.o. Sp.K. arising from the rental guaran- tee contract. The maximum amount of the liability will be successively reduced as the amount of the liability that is secured by the guarantee decreases. Dellia Investments - Pro- jekt Echo - 115 Sp. zo.o. Sp.K. Bank Pekao S.A. 73 738 until conversion from construction into investment loan Guarantee securing the costs exceed of the oce project in the Warsaw Brewery complex in Warsaw. Issued in EUR. Projekt 17 - Grupa Echo Sp. zo.o. SKA Bank Millennium S.A. 8 045 until conversion from construction into investment loan Guarantee of exceeding the costs of performing the West 4 Business Hub oce project in Wrocław. Projekt 17 - Grupa Echo Sp. zo.o. SKA Bank Millennium S.A. 4 938 until conversion from construction into investment loan Guarantee securing rent proceeds during the performan- ce of the West 4 Business Hub oce project in Wrocław. Issued in EUR. Projekt 132 - City Space - GP Sp. zo.o. Sp.K. issued for Echo - Opol- ska Business Park Sp. z o.o. Sp.K. (currently enti- tled EPP Development 6 Sp. z o.o.) 2 147 until 30.06.2021 Security for the liabilities of Projekt 132 - City Space - GP Sp.z o.o. Sp.K. arising from the lease agreement conc- luded on 4.06.2019. Issued in EUR. Face2Face – Stranraer Sp. z o.o. SKA (previo- usly na-med Projekt 20 - Grupa Echo Sp. z o.o. SKA) Bank Pekao S.A. 70 000 until 29.12.2023 Guarantee securing cost overrun, covering interests on minimal level and securing own contribution on Face2Fa- ce oce project in Katowice. Issued in PLN. | Financial statement 68 Standalone nancial report of Echo Investment S.A. for 2020 GUARANTEE AGREEMENTS ISSUED BY ECHO INVESTMENT S.A. AS AT 31 DECEMBER 2020 PLN ‘000 For Beneciary Value [PLN ‘000] Validity Due Echo - Opolska Business Park Sp. zo.o. Sp.K. EPP Development 6 Sp. zo.o. 4 027 until 11.02.2025 Corporate guarantee of Echo Investment S.A. securing the rent guarantee related to the sale of O3 Business Campus III in Cracow. Partly issued in EUR. The maximum amount of liability will be successively reduced as the amount of liability secured by the guarantee decreases. Echo - Opolska Business Park Sp. zo.o. Sp.K. EPP Development 6 Sp. zo.o. 37 226 until 9.08.2028 Construction guarantee related to the sale of the O3 Bu- siness Campus III oce building in Kraków. The guaran- tee is secured by a corporate guarantee issued by Echo Investment S.A. Guarantee issued in EUR. Galeria Libero - Projekt Echo - 120 Sp. zo.o. Sp.K. Tax Administration Oce Director in Kielce 873 until 10.02.2021 Lottery guarantee for Galeria Libero - Projekt Echo - 120 Sp. z o.o. Sp.K. 143 - City Space - GP Sp. zo.o. Sp.K. Berea Sp. zo.o. 21 until 22.06.2024 Security for the liabilities of Projekt 142 - City Space - GP Sp.z o.o. Sp.K. arising from the lease agreement conc- luded on 21.05.2019. Issued in EUR. 143 - City Space - GP Sp. zo.o. Sp.K. Berea Sp. zo.o. 112 until 29.09.2024 Security for the liabilities of Projekt 142 - City Space - GP Sp. z o.o. Sp.K. arising from the lease agreement conc- luded on 21.05.2019. Issued in EUR. Aquarius - City Space - GP Sp. zo.o. Sp.K. Skua Sp. zo.o. 26 until 31.12.2021 Bank guarantee issued by PKO Bank Polski S.A. at the request of Echo Investment securing the liabilities of Aquarius - City Space - GP Sp. z o.o. Sp.K. under the lease agreement of 5.09.2018. Aquarius - City Space - GP Sp. zo.o. Sp.K. Horta Sp. zo.o. 608 until 31.12.2021 Bank guarantee issued by PKO Bank Polski S.A. at the request of Echo Investment securing the liabilities of Aquarius - City Space - GP Sp. z o.o. Sp.K. under the lease agreement of 5.09.2018. Projekt 12 - Grupa Echo Sp. zo.o. SKA Tesco (Polska) Sp. zo.o. na until 30.06.2025 Echo Investment S.A. corporate guarantee securing performance of obligations of Project 12 - Grupa Echo Sp. z o.o. SKA regarding priority to lease space in the new shopping center, resulting from the preliminary sales contract of real estate concluded on 30.07.2019. Due to business and legal arrangements the warranty has no upper limit potential liability. Tryton City Space - GP Sp. zo.o. Sp.K. Tryton Business Park Sp. zo.o. 1 245 until 31.01.2021 Security for the liabilities of Tryton City Space - GP Sp.z o.o. Sp.K. arising from the lease contract concluded on 12.06.2018. Issued in EUR. Supersam City Space - GP Sp. zo.o. Sp.K. DH Supersam Katowice Sp. zo.o. Sp.K. 389 until 31.01.2021 Security for the liabilities of Supersam City Space - GP Sp. z o.o. Sp.K. arising from the lease agreement conc- luded on 28.02.2017. Issued in EUR. Sagittarius - Projekt Echo - 113 Sp. zo.o. Sp.K. Warburg-HiH Invest Real Estate GmbH 1 082 until 05.05.2021 Security of the liabilities of Sagittarius-Projekt Echo - 113 Sp.z o.o. Sp.k. arising from the rental guarantee contract. The maximum amount of the liability will be successively reduced as the amount of the liability that is secured by the guarantee decreases. Nobilis - City Space GP Sp. zo.o. Sp.K. Nobilis - Business House sp. zo.o. 602 until 31.10.2027 Guarantee securing liabilities of Nobilis – City Space GP Sp. z o.o. Sp.K. resulting from the annex to leasing agreement. Issued in EUR. Midpoint 71 – Cornwall Investments Sp. zo.o. SKA PKO BP S.A. 39 000 until 31.12.2026 Guarantee securing cost overrun and maintanance of unleased area on Midpoint 71 oce project in Wroclaw. Issued in PLN. Midpoint 71 – Cornwall Investments Sp. zo.o. SKA PKO BP S.A. 20 051 until 31.12.2029 Guarantee securing debt service cover ratio and covering rent-free periods in lease agreements on Midpoint 71 oce project in Wroclaw. Issued in EUR. Gosford Investment Sp. zo.o. Womak Delta Sp. zo.o. 29 until 14.07.2021 Rent guarantee - apartment sales oce in Wrocław Projekt Echo - 130 Sp. zo.o. Bank Pekao S.A. 28 609 until 31.01.2024 Guarantee securing cost overrun of the construction of Fuzja CDJ complex oce project. Issued in PLN. | Financial statement 69 Standalone nancial report of Echo Investment S.A. for 2020 GUARANTEE AGREEMENTS ISSUED BY ECHO INVESTMENT S.A. AS AT 31 DECEMBER 2020 PLN ‘000 For Beneciary Value [PLN ‘000] Validity Due Cinema Asset Manager – Grupa Echo Sp. zo.o. SKA Pearl Jewel Sp. zo.o. na earlier of the dates: handover of the space in accordance with the future lease agreement or 8 years from the date of concluding the future lease agreement. Corporate guarantee of Echo Investment S.A. securing performance of obligations of Cinema Asset Manager - Grupa Echo Sp. z o.o. SKA concerning provision of substitute premises and premises under the future lease agreement in a new oce building, resulting from the property sales agreement signed on 1.12.2020. Due to business and legal arrangements, the guarantee has no upper limit of potential liability. Total 1 137 824 | Financial statement 70 Standalone nancial report of Echo Investment S.A. for 2020 GUARANTEE AGREEMENTS ISSUED BY ECHO INVESTMENT S.A. AS AT 31 DECEMBER 2019 PLN ‘000 For Beneciary Value [PLN ‘000] Validity Due Projekt 1 - Grupa Echo Sp. zo.o. SKA Horta Sp. zo.o. 21293 until 02.07.2020 Performance bond for the ﬁnal sale agreement of the Aquarius Business House I oce building in Wrocław. Issued in EUR. Projekt 104 Sp. zo.o. Skua Sp. zo.o. 25551 until 31.07.2021 Performance bond for the ﬁnal contract sales and the master lease agreements for the Aquarius Business oce building House II in Wrocław. Issued in EUR. Echo Investment S.A. IREEF – Stryków Propco Sp. zo.o. 997 until 15.12.2019 Construction work quality guarantee related to the Q22 oce building in Warsaw. Q22 - Projekt Echo - 128 Sp. zo.o. Sp.K. IREEF – Stryków Propco Sp. zo.o. 1187 unti 31.05.2022 Rental guarantee related to the sale of the oce building Q22 in Warsaw. The guarantee is issued in EUR. The amo- unt of the guarantee is updated as the liability decreases. Echo - Opolska Business Park Sp. zo.o. Sp.K. issued to Ventry Invest- ments Sp. z o.o. Sp.K. (currently authorized entity of EPP Oce O3 Business Campus sp.z o.o) 38857 until 21.12.2026 Construction guarantee related to the sale of the O3 Bu- siness Campus I oce building in Kraków. The construc- tion guarantee is secured by is the corporate guarantee issued by Echo Investment S.A. The guarantee issued in EUR. The ma- ximum amount of responsibilities will be progressively reduced as the amount of the liability that the guarantee secures decreases. Echo - Opolska Business Park Sp. zo.o. Sp.K. issued to Ventry Invest- ments Sp. z o.o. Sp.K. (currently authorized entity EPP Oce O3 Bu- siness Campus sp.z o.o) 958 until 21.05.2020 Rental guarantee related to the sale of O3 Business Campus I in Kraków. The rental guarantee is secured by the corporate guarantee issued by Echo Investment S.A. Partly issued in EUR. The maximum amount of responsi- bilities will be progressively reduced as the amount of the liability that the guarantee secures decreases. ZAM - Projekt Echo - 127 Sp. zo.o. Sp.K. issued to Emfold Investments Sp. z o.o. (currently authorized entity Tryton Business Park sp.z o.o.) 40533 until 21.12.2026 Construction guarantee related to the sale of the Tryton oce building in Gdańsk. The construction guarantee is secured by the corporate guarantee issued by Echo Investment S.A. The guarantee is issued in EUR. ZAM - Projekt Echo - 127 Sp. zo.o. Sp.K. issued to Emfold Investments Sp. z o.o. (currently authorized entity Tryton Business Park sp.z o.o.) – until 21.05.2020 Rental guarantee related to the sale of the Tryton oce building in Gdańsk. The rental guarantee is secured by the corporate guarantee issued by Echo Investment S.A. Partly issued in EUR. The maximum amount of responsi- bilities will be progressively reduced as the amount of the liability that the guarantee secures decreases. Symetris - Projekt Echo - 131 Sp. zo.o. Sp.K. issued to Flaxton Invest- ments Sp. z o.o. (cur- rently authorized entity EPP Oce - Symetris Business Park sp. Z o.o.) 17339 until 21.12.2026 Construction guarantee related to the sale of the Syme- tris I oce building in Łódź. The construction guarantee is secured by the corporate guarantee issued by Echo Investment S.A. Issued in EUR. Symetris - Projekt Echo - 131 Sp. zo.o. Sp.K. issued to Flaxton Invest- ments Sp. z o.o. (cur- rently authorized entity EPP Oce - Symetris Business Park sp. Z o.o.) 71 until 21.05.2020 Rental guarantee related to the sale of the Symetris I oce building in Łódź. The rental guarantee is secured with the corporate guarantee issued by Echo Investment S.A. Partly issued in EUR. The maximum amount of the liability shall be decreased successively as the amount of the liability covered by the guarantee decreases. Projekt Echo 135 Sp. zo.o. Sp.K. A4 Business Park sp. zo.o. 23422 until 26.04.2027 Construction guarantee related to the sale of the A4 Business Park III stage oce building in Katowice. The guarantee is secured by the corporate guarantee issued by Echo Investment S.A. Issued in EUR Projekt Echo 135 Sp. zo.o. Sp.K. A4 Business Park sp. zo.o. – until 26.09.2020 Rental guarantee related to the sale of the A4 Business Park III stage oce building in Katowice. The rental gu- arantee is secured by the corporate guarantee issued by Echo Investment S.A. Partly issued in EUR. The maximum amount of the liability will be successively reduced as the amount of the liability that the guarantee secures decreases. | Financial statement 71 Standalone nancial report of Echo Investment S.A. for 2020 GUARANTEE AGREEMENTS ISSUED BY ECHO INVESTMENT S.A. AS AT 31 DECEMBER 2019 PLN ‘000 For Beneciary Value [PLN ‘000] Validity Due Echo - Opolska Business Park Sp. zo.o. Sp.K. EPP Oce O3 Business Campus Sp. zo.o. 37048 until 21.12.2027 Construction guarantee related to the sale of the O3 Bu- siness Campus II oce building in Kraków. The guarantee is secured by the corporate guarantee issued by Echo Investment S.A. The guarantee is issued in EUR. Echo - Opolska Business Park Sp. zo.o. Sp.K. EPP Oce O3 Business Campus Sp. zo.o. 1873 until 28.05.2021 Corporate guarantee of Echo Investment SA securing the rent guarantee related to the sale of O3 Business Campus II in Kraków. Partly issued in EUR. The maximum amount of the liability shall be successively reduced as the amo- unt of the liability secured by the guarantee decreases. Berea Sp. zo.o. Santander Bank Polska, PKO BP SA, Bank Go- spodarstwa Krajowego and mBank S.A. 39604 until credit conversion from construction into investment loan Security of overrun of costs of the construction of the Galeria Młociny project in Warsaw and obligations of Berea Sp. z o.o. resulting from the loan contract signed on 17.10.2017. Issued in EUR Direct guarantee of Echo Investment S.A. Nobilis - Projekt Echo - 117 Sp. zo.o. Sp. K. 40000 until 31.10.2026 Quality guarantee for construction work related to the Nobilis oce building in Wrocław. Direct guarantee of Echo Investment S.A. / Forum 60 FIZ Nobilis - Projekt Echo - 117 Sp. zo.o. Sp. K. 1611 until 28.12.2020 Rental guarantee related to the sale of the Nobilis oce building in Wrocław. Issued in EUR. The maximum amo- unt of liability will be successively reduced as the amount of liability secured by the guarantee decreases. Grupa Echo Sp. zo.o. / Forum 60 FIZ IB 14 FIZAN 76126 until 24.05.2024 Security of due performance of obligations resulting from the contract of sale of the West Link oce building in Wrocław. Issued in EUR. After 24.05.2021 the amount of maximum liability will be reduced by 80%. Midpoint 71-Cornwall Investments Sp. zo.o. SKA A19 Sp. zo.o. 25551 until 4.07.2038 Guarantee for obligations of Projekt 22 - „Grupa Echo” Sp. z o.o. - SKA (Midpoint 71) under the good neighbourly agreement concluded on 4.07.2018. Issued in EUR Symetris - Projekt Echo - 131 Sp. zo.o. Sp.K. issued to Flaxton Invest- ments Sp. z o.o. (cur- rently authorized entity EPP Oce - Symetris Business Park sp. Z o.o.) 16258 until 15.11.2020 Construction guarantee related to the sale of the Syme- tris II stage project in Łódź. Issued in EUR. The maximum amount of liability may be successively reduced aas the amount of liability secured by the guarantee decreases. Symetris - Projekt Echo - 131 Sp. zo.o. Sp.K. issued to Flaxton Invest- ments Sp. z o.o. (cur- rently authorized entity EPP Oce - Symetris Business Park sp. Z o.o.) 205 until 27.12.2021 Rental guarantee related to the sale of the Symetris II sta- ge in Łódź. Partially issued in EUR. The maximum amount of liability will successively decrease as the amount of liability secured by the guarantee decreases. Echo Investment S.A. PeKaO S.A. 14147 until 30.06.2029 Guarantee of exceeding costs of residential projects: R4R Łódź Wodna, R4R Wrocław Rychtalska, R4R Warszawa Browary, R4R Wrocław Kępa. Echo Property Poznań 1 Sp. zo.o. / Dellia Invest- ments - Projekt Echo - 115 Sp. zo.o. Sp.K. / Echo SPV 7 Sp. zo.o. R4R Wroclaw Kępa Sp. zo.o./R4R Warszawa Browary Sp. zo.o. 84809 until 31.07.2021 Guarantee of repayment of advance payments made by R4R companies in accordance with preliminary proper- ty sales contracts: Kępa Mieszczańska in Wrocław and Browary Warszawskie E in Warsaw, Echo SPV 7 sp. z o.o. entered into preliminary agreements as a joint and several debtor responsible for the sellers’ obligations. Rosehill Investments Sp. zo.o. IB 6 FIZAN / GPF 3 FIZAN 132733 until 31.10.2021 Security for proper performance of Rosehill Investments Sp. z o.o.’s obligations under the programme agreement concluded on 31.08.2017. Issued in EUR. Tryton City Space - GP Sp. zo.o. Sp.K. Tryton Business Park Sp. zo.o. 540 until 31.01.2020 Security for liabilities of Tryton City Space - GP sp.z o.o. sp.k. arising from the lease agreement concluded on 12/06/2018. Issued in EUR. Supersam City Space - GP Sp. zo.o. Sp.K. DH Supersam Katowice Sp. zo.o. Sp.k. 359 until 31.01.2020 Security for liabilities of Supersam City Space - GP sp. z o.o. sp.k. resulting from the lease agreement concluded on 28.02.2017. Issued in EUR. Echo Investment S.A. City of Katowice 758 until 16.01.2020 Warranty security and quality guarantee for liabilities of Galeria Libero - Projekt Echo 120 Sp. z o.o. Sp.K. arising from an agreement concluded on 16.06.2016 concerning the execution of a road investment. Echo Investment S.A. PKO BP S.A. 36000 until 30.06.2023 Securing the cost overrun of the Moje Miejsce oce project in Warsaw. | Financial statement 72 Standalone nancial report of Echo Investment S.A. for 2020 GUARANTEE AGREEMENTS ISSUED BY ECHO INVESTMENT S.A. AS AT 31 DECEMBER 2019 PLN ‘000 For Beneciary Value [PLN ‘000] Validity Due Echo Investment S.A. LUX Europa III S.a.r.l. 6 450 till 25.03.2020 Collateral for liabilities of Dellia Investments - Projekt Echo - 115 Sp. z o.o. Sp.k. arising from the quality assuran- ce agreement of 27.03.2019. Dellia Investments - Pro- jekt Echo - 115 Sp. zo.o. Sp.K. LUX Europa III S.a.r.l. 93432 until 31.12.2024 Security for proper performance of obligations of Dellia Investments - Projekt Echo - 115 Sp. z o.o. Sp. k., arising from the contract of the sale of the Gatehouse Oces building in the Browary Warszawskie complex. Issued in EUR. Dellia Investments - Pro- jekt Echo - 115 Sp. zo.o. Sp.K. LUX Europa III S.a.r.l. 570 until 30.06.2029 Security for proper performance of obligations of Dellia Investments - Projekt Echo - 115 Sp. z o.o. Sp.K. under the contract of the sale of the Gatehouse Oces building in the Browary Warszawskie complex. The rental guarantee issued in EUR. The maximum amount of liability will be successively reduced as the amount of liability covered by the guarantee decreases. Dellia Investments - Pro- jekt Echo - 115 Sp. zo.o. Sp.K. LUX Europa III S.a.r.l. 163550 until 30.06.2030 Security for proper performance of obligations of Dellia Investments - Projekt Echo - 115 Sp. z o.o. Sp.K. under the contract of the sale of the Gatehouse Oces oce buil- ding in the Browary Warszawskie complex. Issued in PLN. Dellia Investments - Pro- jekt Echo - 115 Sp. zo.o. Sp.K. LUX Europa III S.a.r.l. 46844 until 03.03.2027 Security for proper performance of obligations of Dellia Investments - Projekt Echo - 115 Sp. z o.o. Sp.K. under the contract of the sale of the Gatehouse Oces building in the Browary Warszawskie complex. Issued in EUR. Echo Investment S.A. LUX Europa III S.a.r.l. 366 till 30.06.2020 Security for liabilities of Dellia Investments - Project Echo - 115 Sp. z o.o. Sp.k. resulting from the rental guarantee agreement. The maximum amount of liability will be suc- cessively reduced as the amount of the liability that the guarantee secures. Echo Investment S.A. PeKaO S.A. 68045 until credit conversion from construction into investment loan Guarantee of exceeding the costs of the oce project in the Browary Warszawskie complex in Warsaw. Issued in EUR. Echo Investment S.A. Bank Millenium S.A. 8045 until credit conversion from construction into investment loan Guarantee of exceeding the costs of the West 4 Business Hub oce project in Wrocław. Echo Investment S.A. Bank Millenium S.A. 4557 until credit conversion from construction into investment loan Guarantee securing the income from leases during the construction of the West 4 Business Hub oce project in Wrocław. Issued in EUR Projekt 132 - City Space - GP Sp. zo.o. Sp.K. issued to Echo-Opolska Business Park Sp. z o.o. Sp.k. (currently authori- zed entity EPP DEVE- LOPMENT 6 sp.z o.o.) 1008 until 30.06.2020 Security for liabilities of Projekt 132 - City space - GP sp. z o.o. sp.k. resulting from the lease agreement concluded on 04.06.2019. Issued in EUR. Echo Investment S.A. PeKaO S.A. 70000 until 29.12.2023 Guarantee for cost overruns, minimum interest coverage and securing of own contribution for Face2Face oce project in Katowice. Issued in PLN. Echo Investment S.A. BNP Paribas Bank Polska S.A. 10499 until 1.12.2022 Security of exceeding the costs of the React oce pro- ject in Łódź. Echo-Opolska Business Park Sp. zo.o. Sp.K. EPP Development 6 Sp. zo.o. 8337 until 11.02.2025 Corporate guarantee of Echo Investment SA securing the rent guarantee related to the sale of O3 Business Campus III in Cracow. Partly issued in EUR. The maximum amount of liability will be successively reduced as the amount of liability secured by the guarantee decreases. Echo-Opolska Business Park Sp. zo.o. Sp.K. EPP Development 6 Sp. zo.o. 34352 until 9.08.2028 Construction guarantee related to the sale of the O3 Bu- siness Campus III oce building in Kraków. The guaran- tee is secured by a corporate guarantee issued by Echo Investment S.A. The guarantee is issued in EUR. Galerie Libero - Projekt Echo - 120 Sp. zo.o. Sp.K. Tax Administration Oce Director in Kielce 873 till 10.02.2021 Lottery guarantee for Galeria Libero - Projekt Echo - 120 Sp. z o.o. SK | Financial statement 73 Standalone nancial report of Echo Investment S.A. for 2020 GUARANTEE AGREEMENTS ISSUED BY ECHO INVESTMENT S.A. AS AT 31 DECEMBER 2019 PLN ‘000 For Beneciary Value [PLN ‘000] Validity Due Berea Sp. zo.o. 142 - City Space - GP Sp. zo.o. sp. K 20 until 22.06.2024 Security for liabilities of Projekt 142 - City space - GP Sp. z o.o. Sp. k. resulting from the lease agreement concluded on 21.05.2019. Issued in EUR. Berea Sp. zo.o. 142 - City Space - GP Sp. zo.o. sp. K 103 until 29.09.2024 Security for liabilities of Projekt 142 - City space - GP Sp. z o.o. Sp.K. arising from the lease agreement conc- luded on May 21, 2019. Issued in EUR. Aquarius - City Space - GP Sp. zo.o. Sp.K. Skua Sp. zo.o. 24 until 17.12.2020 Bank guarantee issued at request of Echo Investment, securing liabilities of Aquarius - City Space - GP Sp. z o.o. Sp.K. under the lease agreement of 5.09.2018. Aquarius - City Space - GP Sp. zo.o. Sp.K. Horta Sp. zo.o. 594 until 17.12.2020 Bank guarantee issued at the request of Echo Investment to secure obligations of Aquarius - City Space - GP Sp. z o.o. Sp.K. under the lease agreement of 5.09.2018. Projekt 12 - Grupa Echo Sp. zo.o. SKA Tesco (Polska) Sp. zo.o. – until 30.06.2025 Corporate guarantee of Echo Investment SA securing the performance of obligations Project 12 - Grupa Echo Sp. z o.o. S.K.A on provision of priority lease of space in the new shopping centre and resulting from the prelimi- nary property sales agreement concluded on 30.07.2019 between Projekt 12 - Grupa Echo Sp. z o.o. S.K.A a Tesco (Poland) sp. z o.o. Due to business and legal arrange- ments, the guarantee has no upper limit of potential liability. Total 1 195 499 | Financial statement 74 Standalone nancial report of Echo Investment S.A. for 2020 Explanatory notes to proﬁt and loss account REVENUE STRUCTURE  TYPES OF ACTIVITIES PLN ‘000 1.01.2020- 31.12.2020 1.01.2019- 31.12.2019 REVENUE FROM AGREEMENTS WITH CUSTOMERS 328 805 311 062 Sale of residential and commercial area 225 301 179 452 from related parties 46 465 - – from joint-ventures 46 465 - – from key Sta - Property development services 69 357 76 506 from related parties 68 625 73 573 from subsidiaries 60 116 57 873 from joint-ventures 8 509 Sale of plots 5 449 2 962 from related parties - - Legal, accounting, consulting and IT services 4 258 9 999 from related parties 4 258 9 595 from subsidiaries 4 258 9 595 from joint ventures - - Financial, marketing, securing services and other revenue 24 440 42 143 from related parties 21 927 39 932 from subsidiaries 20 447 26 031 from joint ventures 1 479 from key sta 1 58 REVENUES FROM LEASE 754 1 862 Leasing services 754 1 862 from related parties 380 1 395 from subsidiaries 380 - from joint ventures - Total operating revenue 329 559 312 924 from related parties 141 655 124 495 from subsidiaries 85 201 93 499 from joint ventures 56 453 - from key personnel 1 58 The Company did not conclude transac- tions with related parties on terms oth- er than market terms. The agreements concerning signiﬁcant transactions with related entities executed in the previous year were presented by the Company in additional explanations. NOTE 19A | Financial statement 75 Standalone nancial report of Echo Investment S.A. for 2020 NOTE 19B The Company recognizes revenue when the obliga- tion to perform the service is met. The obligation to perform the service is considered fulﬁlled upon the release of the property to the buyer, which takes place on the basis of the acceptance proto- col signed by the parties only after the completion of the property construction process and receipt of the occupancy permit, and provided that the buy- er makes 100% payments for the purchase price property. Agreements concluded within this group of revenues do not contain the element of variable The total value of revenues to be recognized in the future related to the obligations to perform the contract for the sale of residential and commercial space under contracts signed as at the balance sheet date, December 31, 2020 is PLN 299,364 thousand, of which up to the balance sheet date the Company The Company provides services for implementation of development projects: preparation and organi- sation of the investment process of projects owned by other entities - mostly subsidiaries. As part of its duties, the Company undertakes to perform supervi- sory, management, legal and other activities neces- sary to manage the investment. The process includes preparation of investments, organisation and service of tenders for construction works, supervision and coordination of construction works as well as cus- tomer. The company recognises revenues at the time The company did not conclude transactions with aliated entities on terms other than market terms. Agreements regarding signiﬁcant transactions with REVENUES BY TYPE OF ACTIVITY PLN ‘000 1.01.2020- 31.12.2020 1.01.2019- 31.12.2019 Short-term advanced payments received (note 9A) – opening balance 100 163 69 657 Increase – payments 208 391 209 958 Presented as revenue in the period (225 301) (179 452) - including revenue in the period, recognized in received advan- ced payments balance at the beginning of the period (100 163) (69 657) Short-term advanced payments received (note 9A) – closing balance 83 253 100 163 aliate entities implemented in the previous year were presented by the Company in additional ex- planations. Revenues related to development activity - sale of residential and commercial units Revenues of investment implementation services remuneration. In addition, in the Company’s opinion, the concluded contracts do not contain a signiﬁcant ﬁnancing element. Due to such nature of contracts, the Company, as a rule, does not show receivables or other assets balances under contracts related to this group of revenues. The contractual obligations reﬂect the short-term down payments made by the clients. The table below presents changes in the lia- bilities balance under agreements in relation to this group of revenues. received advance payments in the amount of PLN 83,253 thousand. These revenues will be recognized when real estate is handed over to buyers, after con- struction is completed and necessary administrative decisions are obtained, which occurs on average af- ter a period of approximately 1-3 months after the completion of construction. of fulﬁlment of the obligation to perform the ser- vice, i.e. during the service provision period. The re- muneration resulting from the concluded contracts is permanent and due to the Company monthly. In addition, in the Company’s opinion, the concluded contracts do not contain a signiﬁcant element of ﬁ- nancing. Due to such nature of the contracts signed, there are no signiﬁcant balances of assets or liabil- ities under contracts, except for trade receivables (see note 9). | Financial statement 76 Standalone nancial report of Echo Investment S.A. for 2020 The Management Board analysed the other con- tracts for the provision of services, including real estate intermediation services, book-keeping, legal, consulting, informatic, ﬁnancial, marketing and other services, most of which are carried out for aliat- ed entities within activities under Echo Investment S.A.’s holding company. The Company recognises the revenue when the obligation to perform the ser- vice is fulﬁlled, i.e. for certain contracts – at the time of completion of a given type of service (e.g. signing a real estate sale contract as a result of the real es- tate intermediation service) or during the provision of a given type of service (e.g. period of provision of bookkeeping services, marketing services, con- sultancy, legal and property management). In the majority of cases, services are provided on a month- Other revenues of the company ly basis and are thus accounted for and payable to the Company. For some contracts (e.g. real estate intermediation) the remuneration resulting from concluded contracts contains a variable element, however, the nature of these contracts shows that the Company is entitled to remuneration only when the contractual obligation is fulﬁlled, which results in the fact that the variable remuneration is known at the moment of recognizing revenue and its val- ue is not changed later. Moreover, in the Company’s opinion, the concluded agreements do not contain a signiﬁcant element of ﬁnancing. In connection with this nature of the contracts signed, there are no signiﬁcant balances of assets or liabilities under contracts, other than trade receivables (see note 9). REVENUE RELATED TO DEVELOPMENT SERVICES AS AT 31 DECEMBER 2020 PLN ‘000 Project Targeted completion Targeted revenue Total value deferred reve- nue related to liabilities resulting from concluded agreements Received advanced payments Osiedle Bonarka Living I, Kraków IV Q 2021 68 400 68 400 6 363 Puszkarska R4R, Kraków IQ 2001 – sale of landplot 5 969 5 969 5 969 Osiedle Jarzębinowe V, Łódź completed 43 911 6 - Nowa Dzielnica, Łódź completed 30 200 1 535 1 Osiedle Jarzębinowe VII, Łódź completed 36 661 4 857 2 690 Osiedle Jarzębinowe VIII, Łódź IV Q 2021 39 302 39 302 12 111 Grota - Roweckiego 111 phase III completed 16 232 60 - Nasze Jeżyce, Poznań II Q 2021 57 829 57 829 21 361 Nasze Jeżyce II, Poznań II Q 2021 64 200 64 200 18 059 Apartamenty Esencja, Poznań completed 116 366 38 110 15 204 Ogrody Graua, Wrocław completed 47 207 19 094 1 333 Other projects 2 2 162 Total 526 279 299 364 83 253 | Financial statement 77 Standalone nancial report of Echo Investment S.A. for 2020 NOTE 19D NOTE 19C REVENUE  SUBLEASING PLN ‘000 1.01.2020- 31.12.2020 1.01.2019- 31.12.2019 Leasing services 364 1 421 Total 364 1 421 REVENUE  TERRITORIAL STRUCTURE PLN ‘000 1.01.2020- 31.12.2020 1.01.2019- 31.12.2019 Domestic 329 559 312 744 from related parties 141 655 124 468 Abroad - 180 from related parties - 27 Total net revenue from sale of products 329 559 312 924 from related parties 141 655 124 495 Until March 31, 2020 the Company sublets part of the oce space rented in Q22 building in Warsaw. REVENUE RELATED TO DEVELOPMENT SERVICES AS AT 31 DECEMBER 2019 PLN ‘000 Project Targeted completion Targeted revenue Total value deferred reve- nue related to liabilities resulting from concluded agreements Received advanced payments Dom Pod Wilgą III, Kraków completed 41839 492 420 Rydla 32, Kraków completed 48557 3994 2082 Osiedle Jarzębinowe V, Łódź completed 43926 2952 936 Nowa Dzielnica, Łódź completed 30076 3503 1023 Osiedle Jarzębinowe VI, Łódź I Q 2020 20063 20063 10027 Osiedle Jarzębinowe VII, Łódź IV Q 2020 35864 35864 4493 Grota - Roweckiego 111 phase IIII, Wrocław completed 16300 8939 5851 Wodna Resi4Rent, Łódź III Q 2019 45791 45791 42168 Nasze Jeżyce, Poznań I Q 2021 57823 57823 5628 Nasze Jeżyce II, Poznań II Q 2021 63695 63695 845 Apartamenty Esencja, Poznań IVQ 2020 115398 115398 14621 Ogrody Graua, Wrocław IIQ 2020 44846 44846 11860 Other projects 209 209 209 Total 564 387 403 569 100 163 | Financial statement 78 Standalone nancial report of Echo Investment S.A. for 2020 NOTE 20A OPERATING EXPENSES BY TYPE PLN ‘000 1.01.2020- 31.12.2020 1.01.2019- 31.12.2019 The value of sold goods and materials - - Amortisation 9 516 8 071 Consumption of materials and energy 37 345 15 649 Third party services 211 359 232 889 Taxes and charges 3 477 3 172 Remunerations 51 127 71 780 Social security and other beneﬁts 10 066 11 830 Other costs by type (due to) 7 625 10 667 business travel 965 6 251 other 6 660 4 416 Total 330 515 354 058 Movement in inventories and products 20 685 (7 775) Own work capitalised (negative value) - - Administrative expenses related to projects (7 836) (10 588) Selling expenses (negative value) (22 828) (19 340) General administrative expenses (negative value) (66 792) (91 967) Manufacturing cost of products sold 253 744 224 388 * In selling costs and general and administrative costs, the Company presents the costs of employee beneﬁts and depreciation. | Financial statement 79 Standalone nancial report of Echo Investment S.A. for 2020 NOTE 21A OTHER REVENUE PLN ‘000 1.01.2020- 31.12.2020 1.01.2019- 31.12.2019 Released provisions 4 203 260 due to receivables - 260 due to expected costs 4 203 - Other, including: 68 9 214 contractual penalties and compensations 60 147 revenue from sale of debt - 7 770 revenue from sale of non-ﬁnancial non-current assets 8 224 other - 1 073 Interest on borrowings and bonds 59 464 53 005 from related parties, including: 59 464 53 005 from subsidiaries 38 934 46 006 from joint-ventures 20 530 6 999 Revaluation - - from loans and bonds granted - - Other interests 39 104 from other entities 39 104 Total 63 774 62 583 NOTE 21B OTHER OPERATING INCOME FROM DIVIDENDS AND SHARES IN PROFITS PLN ‘000 1.01.2020- 31.12.2020 1.01.2019- 31.12.2019 From related parties including 114 976 57 799 from subsidiaries 114 976 57 799 From other parties - - Total 114 976 57 799 NOTE 21C OTHER OPERATING EXPENSES PLN ’000 1.01.2020- 31.12.2020 1.01.2019- 31.12.2019 Provisions established 1 390 2 806 due to expected costs - 2 806 due to receivables 1 390 - Other, including: 781 294 donations 553 276 cost of sale of receivables - - other 228 - rental guarantee agreement compensation - 18 success fee provision utilisation - - Revaluation - - loans and bonds granted - Write-o on loans and bonds 10 607 427 from related parties 10 607 427 Total 12 778 3 527 * After reviewing the receivables from loans and bonds, based on the forecast and current results and cash ﬂows of the borrowers, the Company estimated the expected losses for individual loans and bonds. In previous periods, the Company made write-os in the amount of PLN 34 million and, after the analysis as at December 31, 2020, determined the need to increase the write-o to PLN 44 million. | Financial statement 80 Standalone nancial report of Echo Investment S.A. for 2020 NOTE 22A NOTE 22B FINANCIAL INCOME FROM INTEREST PLN ’000 1.01.2020- 31.12.2020 1.01.2019- 31.12.2019 Other interest from other entities 55 837 Total 55 837 OTHER FINANCIAL INCOME PLN ‘000 1.01.2020- 31.12.2020 1.01.2019- 31.12.2019 Foreign exchange gains 3 316 - materialised 1 550 - Proﬁt on sale of interests - 337 Proﬁt on certiﬁcate and interests redemption 433 9 913 Other - 2 Total 3 749 10 252 * transactions are described in notes 4 and 5. NOTE 22C FINANCIAL COSTS OF INTEREST PLN’ 000 1.01.2020- 31.12.2020 1.01.2019- 31.12.2019 On borrowings, loans and bonds for related entities 9 321 771 – for subsidiaries 9 321 771 for other entities 47 694 51 553 57 015 52 324 Other interest for other entities 11 16 11 16 From lease for other entities 426 657 Total ﬁnancial costs of interest 426 657 Koszty ﬁnansowe tytułu odsetek, razem 57 452 52 997 The amount of borrowing costs capital- ised to the value of inventories as at 31 December 2020 amounted to PLN 2,493 thousand (cap rate 1,37%) and as at 31 December 2019 - PLN 3,436 thousand (cap rate 0,47%). | Financial statement 81 Standalone nancial report of Echo Investment S.A. for 2020 NOTE 22D OTHER FINANCIAL COSTS PLN ‘000 1.01.2020- 31.12.2020 1.01.2019- 31.12.2019 Foreign exchange losses - 1 235 materialised - - unmaterialised - Closing loss - exchange rate options 223 - IRS 223 - Loss on sale 2 749 - interests 2 749 - Other, including 4 398 6 446 commissions 2 731 3 798 other 1 667 244 liquidation of entities - 2 404 Revaluation of investments 5 625 4 100 IRS 1 624 - interests 4 001 4 100 Total 12 995 11 781 NOTE 23A INCOME TAX  EFFECTIVE TAX RATE PLN ‘000 1.01.2020- 31.12.2020 1.01.2019- 31.12.2019 Proﬁt before tax 77 688 29 807 Income tax according to the national rates 19% 14 761 5 663 Dividends received (9 589) (10 016) Distribution of proﬁt from limited partnerships (S.K.) (12 256) (965) Company’s tax burden relative to the result of limited partnerships (sub- sidiaries) 13 476 (1 369) Representation costs and other non-deductible costs during the year 12 642 15 372 Provision for expected cost (799) (931) Measurement of interests of a subsidiary repre-senting a permanent dierence 760 791 Write-downs on loans granted and bonds pur-chased due to which defer- red tax was not recog-nised 1 104 567 Movements in the measurement of other items (236) (717) Charges on the ﬁnancial result due to income tax 19 863 8 395 | Financial statement 82 Standalone nancial report of Echo Investment S.A. for 2020 NOTE 23B DEFERRED TAX, TERM OF SETTLEMENT PLN ‘000 31.12.2020 31.12.2019 Deferred tax liabilities to be settled within 12 months 17 752 6 982 to be settled after 12 months 1 726 (107) Deferred tax assets to be settled within 12 months - - to be settled after 12 months 56 (2 236) Total 19 534 4 639 NOTE 23C TAX BURDEN INCLUDED IN PROFIT OR LOSS PLN ‘000 31.12.2020 31.12.2019 Current income tax current tax burden due to income tax 7 203 5 352 adjustments relative to current income tax result from previous years (2 235) (129) Deered income tax relative to arises and changes of temporary dif-ferences 14 895 3 173 Total 19 863 8 395 NOTE 24 PROFIT DISTRIBUTION The net proﬁt generated by Echo In- vestment S.A. in 2019 amounting to PLN 21,412 thousand was intended for distri- bution among the Company’s sharehold- ers, according to the resolution of the Or- dinary General Meeting of Shareholders of August 13, 2020. The ﬁnancial state- ments of Echo Investment S.A. for 2019 were approved by the resolution of the Ordinary General Meeting of Sharehold- ers on August 13, 2020. In accordance with the resolution of the Ordinary General Meeting of Share- holders, Echo Investment S.A. paid div- idend to shareholders in the amount of PLN 206,345,291, which constituted the amount of PLN 0.50 per share. The divi- dend was fully settled with the advance payment for the dividend for the ﬁnancial year 2019 paid by the Company on Octo- ber 21, 2019, pursuant to the resolution of the Management Board of the Company on September 11, 2019. | Financial statement 83 Standalone nancial report of Echo Investment S.A. for 2020 Explanatory notes to cash ﬂow statement NOTE 25A CASH INCLUDED IN THE CASH FLOW STATEMENT  PLN ’000 1.01.2020- 31.12.2020 1.01.2019- 31.12.2019 Opening balance, including 232 147 181 977 cash and cash equivalents 232 147 181 977 Closing balance 107 437 232 147 cash and cash equivalents 107 437 232 147 ADDITIONAL EXPLANATIONS TO THE STRUCTURE OF THE CASH FLOW STATEMENT Investing activities comprise interest on loans granted. In the statement of cash ﬂows of ﬁnanc- ing activity, the lessee classiﬁes: − cash payments on the main part, in- cluding interest. As operational activity, the Company classiﬁes: − short-term lease payments, − lease payments for low-value assets and, − variable lease fees not included in the valuation of leasing liabilities as part of operating activity | Financial statement 84 Standalone nancial report of Echo Investment S.A. for 2020 NOTE 25B CHANGE OF LIABILITIES ARISING OUT OF FINANCIAL ACTIVITY liabilities due to loans, borrowings and bonds other liabilities – dividend included Balance at the beginning of the period 1 January 2020 1 426 078 - Financial ﬂows incomes 605 909 expenses (403 183) - Non-monetary changes 83 706 - accrued interest 59 507 Repayment of borrowing - - valuation of exchange dierences 15 555 dividend paid - - due to leasing agreements 8 087 - expenses 557 - Balance at the end of the period, 31 December 2020 1 712 510 - CHANGE OF LIABILITIES ARISING OUT OF FINANCIAL ACTIVITY liabilities due to loans, borrowings and bonds other liabilities – dividend included Balance at the beginning of the period 1 January 2019 1171173 - Financial ﬂows incomes 634648 - expenses (314184) (20 345) Non-monetary changes (65559) 206 345 accrued interest 53 074 - Repayment of borrowing (125 825) - valuation of exchange dierences 923 - dividend paid - 206 345 expenses 6 269 - Balance at the end of the period, 31 December 2019 1426078 - | Financial statement 85 Standalone nancial report of Echo Investment S.A. for 2020 NOTE 26 INFORMATION ON FINANCIAL INSTRUMENTS PLN ‘000 Type of instrument NOTE Classication according to IFRS 9 Balance value at 31.12.2020 Balance value at 31.12.2019 FINANCIAL ASSETS Long-term and short-term ﬁnancial assets 5 bonds 5 amortized cost 495 221 473 564 certiﬁcates 5 amortized cost - 4 791 Loans and receivables 1 288 686 857 712 long-term loans 6 amortized cost 954 425 281 264 short-term loans 10 amortized cost 294 909 533 608 trade payables 9 amortized cost 38 342 42 746 leasing amortized cost 1 010 94 Cash and other monetary assets 149 881 249 867 Other ﬁnancial assets amortized cost 42 444 17 720 cash and cash equivalents amortized cost 107 437 232 147 FINANCIAL LIABILITIES Other ﬁnancial liabilities 1 761 996 1 505 399 liabilities due to issue of debt securities 14,16 amortized cost 1 366 350 1 085 197 trade liabilities 15 amortized cost 26 389 53 402 loans and borrowings 16 amortized cost 346 160 340 881 Leasing 15 amortized cost 23 097 25 919 IFRS 9, which replaced IAS 39, deﬁnes three catego- ries of ﬁnancial assets, depending on the business model in terms of asset management and the char- acteristics of cash ﬂows resulting from the agree- ment: − assets measured after initial recognition at amor- tized cost - if ﬁnancial assets are held according to the business model, the purpose of which is to maintain ﬁnancial assets to obtain cash ﬂows arising from the agreement and the contractual terms relating to those ﬁnancial assets give rise to cash ﬂows that are only repayment of the prin- cipal and the interest; − assets measured after initial recognition at fair value through other comprehensive income – if ﬁnancial assets are held according to the business model, the purpose of which is both to maintain ﬁnancial assets to obtain contractual cash ﬂows and to sell ﬁnancial assets and the contractual terms relating to those ﬁnancial assets give rise to cash ﬂows, which are only repayment of the principal and the interest; − assets measured at fair value through the proﬁt and loss account - all other ﬁnancial assets. | Financial statement 86 Standalone nancial report of Echo Investment S.A. for 2020 NOTE 27 Due to the speciﬁcity of the Echo Investment Group, the impact of the COVID-19 pandemic on Echo In- vestment S.A. should be analysed from the perspec- tive of the entire group. The impact of the pandemic on the Group’s operations is described in note 35 in the Consolidated Financial Statements. The impact of the COVID-19 pandemic on the operations of Echo Investment S.A. CHAPTER 3 INFORMATION ON THE FINANCIAL STATEMENTS | Financial statement 88 Standalone nancial report of Echo Investment S.A. for 2020  Application of new and amended standards and interpretations issued by the IFRS Interpretations Committee The following amendments to existing standards issued by the International Accounting Standards Board (IASB) and endorsed for use in the EU enter into force for the ﬁrst time in the Company’s 2020 ﬁnancial statements: Amendments to IAS 1 „Presentation of Financial Statements” and IAS 8 „Accounting Policies, Changes in Accounting Estimates and Errors” – Denition of Materiality Approved in the EU on November 29, 2019. The standard is eective for annual periods begin- ning on or after January 1, 2020. Amendments to IFRS 3 „Business Combinations” – Denition of a Business Approved in the EU on April 21, 2020. The standard is eective for business combinations where the acquisition date is on or after the begin- ning of the ﬁrst annual period beginning on or after January 1, 2020, and for asset acquisitions that oc- curred on or after the beginning of the aforemen- tioned annual period. Amendments to IFRS 9 „Financial Instruments”, IAS 39 „Financial Instruments: Recognition and Measurement” and IFRS 7 „Financial Instruments: Disclosures” – Reform of the Reference Interest Rate Approved in the EU on January 15, 2020. The standard is eective for annual periods begin- ning on or after January 1, 2020. Amendments to IFRS 16 „Leasing” - Rent Reliefs in Connection with Covid-19 Approved in the EU on October 9, 2020. The standard is eective from 1 June 2020 at the latest for the ﬁnancial year beginning on 1 January 2020 or later. Changes to references to the conceptual framework in IFRS Approved in the EU on November 29, 2019. The standard is eective for annual periods begin- ning on or after January 1, 2020. The above-mentioned changes to the existing stand- ards did not have a signiﬁcant impact on the Com- pany’s ﬁnancial statements for 2020. | Financial statement 89 Standalone nancial report of Echo Investment S.A. for 2020  Published standards and interpretations which are not eective yet and have not been adopted by the Company New standards and amendments to existing standards that have already been issued by the IASB and endorsed by the EU, but not yet eective In approving these ﬁnancial statements, the follow- ing amendments to existing standards have been issued by the IASB and endorsed for use in the EU, which are eective at a later date: Amendments to IFRS 4 „Insurance Contracts” entitled „Extension of the temporary exemption from the application of IFRS 9” Approved in the EU on December 16, 2020. The expiry date of the temporary exemption from IFRS 9 has been extended from January 1, 2021 to annual periods beginning on or after January 1, 2023. Amendments to IFRS 9 „Financial Instruments”, IAS 39 „Financial Instruments: Recognition and Measurement”, IFRS 7 „Financial Instruments: Disclosures”, IFRS 4 „Insurance Contracts” and IFRS 16 „Leasing” - Reform of the Reference Interest Rate - Stage 2 Approved in the EU on January 13, 2021. The standard is eective for annual periods begin- ning on or after 1 January 2021. New standards and amendments to existing standards issued by the IASB but not yet endorsed for use in the EU The IFRS as endorsed by the EU do not currently dier signiﬁcantly from the regulations issued by the International Accounting Standards Board (IASB), except for the following new standards and amend- ments to standards, which as at March 30, 2021 have not yet been approved for use in the EU The follow- ing eective dates refer to the full version of the standards. IFRS 14 „Deferred balances from regulated activities” The standard is eective for annual periods begin- ning on or after 1 January 2016. The European Commission has decided not to ini- tiate the approval process of this interim standard for use in the EU until the ﬁnal version of IFRS 14 is issued. IFRS 17 „Insurance Contracts” as amended to IFRS 17 The standard is eective for annual periods begin- ning on or after January 1, 2023. Amendments to IAS 1 „Presentation of nancial statements” – Classication of liabilities as short- term or long-term The standard is eective for annual periods begin- ning on or after January 1, 2023. Amendments to IAS 1 „Presentation of Financial Statements” - Disclosures on the accounting policy applied The standard is eective for annual periods begin- ning on or after January 1, 2023. Amendments to IAS 8 „Accounting Policies, Changes in Accounting Estimates and Errors” - Disclosures on the Accounting Policy Applied The standard is eective for annual periods begin- ning on or after January 1, 2023. Amendments to IAS 16 „Property, Plant and Equipment” – Revenue Earned Before Accepting the Fixed Assets Component for Use The standard is eective for annual periods begin- ning on or after 1 January 2022. Amendments to IAS 37 „Provisions, Contingent Liabilities and Contingent Assets” - Onerous Contracts – Cost of Fullling the Contract The standard is eective for annual periods begin- ning on or after 1 January 2022. Amendments to IFRS 3 „Business Combinations” – Amendments to references to conceptual assumptions including amendments to IFRS 3 The standard is eective for annual periods begin- ning on or after 1 January 2022. | Financial statement 90 Standalone nancial report of Echo Investment S.A. for 2020 Amendments to IFRS 10 „Consolidated Financial Statements” and IAS 28 „Investments in Associates and Joint Ventures” – Sale or contribution of assets between an investor and its associate or joint venture and subsequent amendments The eective date of the amendments has been postponed until the completion of research work on the equity method. Amendments to various standards „Improvements to IFRS (2018-2020 cycle)” – changes made as part of the procedure of introducing annual improvements to IFRS (IFRS 1, IFRS 9, IFRS 16 and IAS 41) aimed mainly at resolving inconsistencies and clarifying the vocabulary (changes to IFRS 1, IFRS 9 and IAS 41 The standards are eective for annual periods be- ginning on or after January 1, 2022. Amendments to IFRS 16 concern only the illustrative example, and therefore the eective date is not provided. According to the Company’s estimates, the above-mentioned new standards and changes to the existing standards would not have a signiﬁcant impact on the ﬁnancial statements, if they had been applied by the Company as at the balance sheet date. Hedge accounting of the portfolio of ﬁnancial assets and ﬁnancial liabilities, the principles of which have not been approved for use in the EU, still remain outside the regulations approved by the EU. According to the Company’s estimates, the applica- tion of hedge accounting for the portfolio of ﬁnan- cial assets or liabilities in accordance with IAS 39 „Fi- nancial Instruments: Recognition and Measurement” would not have a signiﬁcant impact on the ﬁnancial statements, if applied as at the balance sheet date. | Financial statement 91 Standalone nancial report of Echo Investment S.A. for 2020  Main accounting principles INTANGIBLE ASSETS Intangible assets are recognised, if it is likely that they will result in economic beneﬁts directly attrib- utable to these assets in the future. Intangible assets are initially recognised at the purchase price or the manufacturing cost. After the initial recognition, in- tangible assets are measured at the purchase price or the manufacturing cost, less amortisation and impairment losses. Records of intangible assets are conducted analytically. The depreciation schedule corresponding to the useful life of the asset is used in the depreciation plan. Intangible assets are tested for impairment, if certain events or changes in circumstances indicate that the carrying value may not be recoverable. An impair- ment loss is disclosed in the amount by which the carrying value of an asset exceeds the recoverable value. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment include the Compa- ny’s tangible assets. The Company’s tangible assets include: − property (not leased and not intended for trad- ing) used by the Company, − machinery and equipment, − means of transport, − other complete and usable items with an expect- ed useful life of more than one year. PP&E is measured and presented in the statement at the purchase price or the manufacturing cost, less depreciation and impairment losses. Fixed assets are booked on summary accounts ac- cording to Fixed Assets Classiﬁcation groups. Fixed assets are depreciated using the straight-line meth- od with the use of rates corresponding to the period of economic utility of the asset. Depreciation rates for speciﬁc groups of ﬁxed assets are: − for buildings and structures - from 1.5% to 10%, − for means of transport - from 7% to 20%, − for technical devices and machines - from 4.5% to 25%, − for other ﬁxed assets - from 10% to 25%. Subsequent costs are included in the carrying amount of a given ﬁxed asset or are recognized as a separate ﬁxed asset (where appropriate) only when it is probable that economic beneﬁts will be obtained by the Company in relation to this item, and the cost of the given item can be reliably measured and as- sessed. All other expenses for repair and mainte- nance are recognized in the proﬁt and loss account in the ﬁnancial period in which they were incurred. PP&E is tested for impairment, if certain events or changes in circumstances indicate that the carrying value may not be recoverable. An impairment loss is disclosed in the amount by which the carrying value of an asset (or a cash-generating item to which an asset is related) exceeds the recoverable value, and is recognised in the proﬁt and loss account. The recov- erable value is one of the two amounts, whichever is higher: fair value less selling costs or use value. Proﬁts and losses on the disposal of PP&E which constitute dierences between sales revenue and the carrying value of a sold PP&E item are recog- nised in the proﬁt and loss account under other op- erating revenue/costs. LEASING e Company as a lessee In order for a contract to be classiﬁed as a leasing agreement, the following conditions must be met: − the contract must relate to an identiﬁed asset for which the supplier does not have a signiﬁcant converting right − the contract should give the beneﬁciary the right to control the use of the identiﬁed asset for a speciﬁed period of time. This means that the user has the right to take advantage of the economic Main accounting principles | Financial statement 92 Standalone nancial report of Echo Investment S.A. for 2020 beneﬁts of using a given component and the right to decide on its use − the contract must be payable. The company applies the following simpliﬁcations, based on not including the lease liability: − short-term lease - a short-term lease agreement is a contract with no option to purchase an asset, concluded for a period shorter than 12 months from the beginning of the contract − low-value lease - the basis for the assessment of the „low” value should be the value of the new asset. The Management Board of the Group has decided that this applies to lease agreements re- garding assets whose value did not exceed PLN 15,000 (when new), which can be treated as the upper limit of recognition as a low value item. The Company recognizes a right of perpetual usu- fruct of land granted by an administrative decision as a leasing contract. This applies to all land, including those related to development projects presented in stock. If leasing and non-leasing elements are identiﬁed in the contract, the Company chooses a practical solu- tion according to which it recognizes each leasing el- ement and any accompanying non-leasing elements as a single leasing element. In addition, in the case of a portfolio of leases with similar characteristics, the Company applies the standard to the entire portfolio when it reasonably expects that the impact that the application of this standard will have on the ﬁnancial statements will not be signiﬁcantly dierent from the impact of applying it to individual leases under this portfolio. The duration of the lease agreement is deﬁned as the irrevocable period of the lease agreement in- cluding also possible periods of renewal of the lease agreement if the lessee has sucient certainty that this option will be used and the possible periods of notice for the lease agreement if the lessee has suf- ﬁcient certainty that this option will be used. At the time of the ﬁrst recognition, the Company recognizes the lease liability measured at the current value of lease payments due to the lessor over the lease period discounted at the marginal lending rate typical for a given asset. Lease payments include: − ﬁxed payments less any incentives due; − variable lease payments, that depend on the in- dex or the rate, initially priced using the index or the rate eective as at the starting date of the contract; − amounts whose payment by the lessee is expect- ed within the guaranteed residual value; − the exercise price of the purchase option, if it can be assumed with sucient certainty that the les- see will use this option; − penalty payments for termination of the lease, if the lease terms stipulate that the lessee may use the option of termination of the lease. At the same time, the Group recognises an asset for the right to use in the same amount as a liability, adjusted for all lease payments paid on or before the start date, less any lease incentives received and increased by any initial direct costs incurred by the lessee. After initial recognition, the Group recognises a lease liability by: − increasing the carrying amount to reﬂect interest on a lease liability, − reducing the carrying amount to reﬂect lease pay - ments paid, and − updating the valuation of the carrying amount to take account of any reassessment or changes in the leases listed below (changes in the lease con- tract), or to reﬂect substantially updated constant lease payments. Changes to the lease agreement that make it nec- essary to update the value of the liability include: − change in the leasing period, − change in the assessment of the call option of the underlying asset. − a change in the amount expected to be paid under the guaranteed ﬁnal value − a change in future lease payments resulting from a change in the index or rate used to set those payments, including, for example, a change to take into account changes in rental rates in the free market following a review of those rentals. For the above changes, the Company applies an un- changed discount rate, unless the change in lease payments results from changes in variable interest rates. In that case, the Company shall use a revised discount rate that reﬂects changes in the interest rate. The Company shall recognise the amount of the remeasurement of the lease liability as an adjustment to the right-of-use asset. However, if the carrying amount of the right-of-use asset is reduced to zero and there is a further reduction in the measurement of the lease liability, the Company recognizes the remaining amount of the revaluation in the result. After the date of commencement of the lease, the asset under the right of use is measured at cost less total depreciation and amortization (impairment) and total impairment loss and the revised lease li- ability adjusted for any revaluation. Depreciation is calculated using the straight-line method over the estimated useful life. If the lease agreement trans - fers to the Company the title of the asset before the end of the lease period or when the cost of the asset due to the right of use reﬂects the fact that the Company will exercise the option to buy the residual value of the leased asset, the Company depreciates the asset from the right of use from the moment of commencement of the leasing contract until the end of the estimated economic useful life of the asset. | Financial statement 93 Standalone nancial report of Echo Investment S.A. for 2020 In other cases, the Company depreciates assets due to the right of use from the date of commencement of the contract to the earlier of two dates: the date of the end of the economic life of the asset or the end date of the lease. For lease contracts, the subject of which is an asset which, in accordance with the Com- pany’s accounting policies, is measured at fair value, The Company has decided to include assets due to the right of use in the same line of the statement of ﬁnancial position, in which the corresponding leased assets are presented when they are the property of the Company. Liabilities are presented appropriately in long-term - when the asset due to the right of use is classiﬁed as a ﬁxed asset, investment property or investment property under construction, or short- term - when perpetual usufruct concerns assets clas- siﬁed as inventory. Lease liabilities are covered by IFRS 9 with respect to determining when these liabilities meet the criteria for removing them from the balance sheet. A liability in accordance with IFRS 9 par. B.3.31-B.3.34 is re- moved from the balance sheet once it has been set- tled, expired or the debtor has been legally released from debt, e.g. by transferring the debt to another party. The right of perpetual usufruct of land, in re- lation to which the Company is legally released from the debt arising from the obligation to pay fees for perpetual usufruct or transformation fees only at the time of legal (notarial) transfer of a share in the land belonging to the premises sold to the buyer, is a spe- cial case. Therefore, until the transfer of the above ownership, the liabilities of the lease of land, as well as the corresponding assets due to the right to use the land in perpetual usufruct, remain on the balance sheet, although in accordance with the policies de- the Company does not depreciate such assets due to the right of use but measures them at fair value. The Company classiﬁes the right-of-use assets re- sulting from signed contracts / issued decisions to the following balance sheet items and applies an ac- counting policy appropriate for a given item: scribed in section 20. Methods for determining the ﬁnancial result, revenues from the sale of residential and service premises are recognized when the prop- erty is delivered to the buyer. For this reason, when the premises are transferred to the buyer (which is also the moment when the proceeds from the sale of the premises are recognized), a portion of the related leasing asset is transferred from inventory to receivables from the buyer, in the amount corre- sponding to the recognized liability for the leasing of the given land. Until the (notarial) transfer of the property to the purchaser, both the receivable and the liability are disclosed as short-term, because they will be settled by transfer to the buyer dur - ing the “operating cycle”. On the date of transfer of ownership to the buyer, the liability for land lease and receivables from the purchaser of premises are derecognised through the cost of sales. e company as a lessor In the case of contracts where the Company acts as a lessor, each lease contract is classiﬁed as operating or ﬁnance lease. Lease agreements under which the lessor retains a signiﬁcant portion of the risks and re- wards of ownership of the leased asset are classiﬁed as operating leases. A leasing contract is classiﬁed as a ﬁnancial leasing if, as a result of this contract, substantially all of the risk and rewards of ownership of the leased asset are transferred to the lessee. Contract type and presentation in the balance sheet Valuation method as at the balance sheet date Impact on the income statement Oce space lease agreements: - investment property, or Valuation at fair value Yes - ﬁxed assets Depreciation Ye s Rental agreement on means of transport: - ﬁxed assets Depreciation Ye s Perpetual usufruct of land: - investment property, or Valuation at fair value Yes investment property under construction, not valued at fair value, or Depreciation with simultaneous capitalization of depreciation costs in the value of investment property under construction No - ﬁxed assets Depreciation Ye s - inventory Depreciation with simultaneous capitalization of depreciation costs in inventory Yes | Financial statement 94 Standalone nancial report of Echo Investment S.A. for 2020 In the case of operating lease agreements, the Com- pany recognizes lease revenues on an ongoing basis in the statement of comprehensive income. In the case of ﬁnance leases, the Company derecognises the asset that is the subject of the agreement while recognizing the lease receivable. SUBLEASING Subleasing is a transaction for which an underlying asset is re-leased by a lessee (‘intermediate lessor’) to a third party, and the lease (‘head lease’) between the head lessor and lessee remains in eect. The Company subleasing is classiﬁed as follows: − if it was decided to choose a short-term lease ex- emption for main lease, subleasing is classiﬁed as operating lease − otherwise, sub-leasing is classiﬁed in relation to the asset due to the right to use the principal lease and not the underlying asset. If the sublease agreement is classiﬁed as operating lease, the indirect lessor (the Company) continues to recognize the lease liability and asset due to the right to use of the main lease. At the same time, it recog- nizes sublease leasing revenues on an ongoing basis. If the sublease agreement is classiﬁed as ﬁnancial lease, the indirect lessor (the Company): − ceases to recognize the asset due to the right to use the main lease as at the date of the initial sub- lease agreement − recognizes the net investment from sub-leasing instead and assesses it for impairment (lease re- ceivable) − continues to recognize the original lease liability INTERESTS AND SHARES IN SUBSIDIARIES, JOINTLY CONTROLLED ENTITIES AND ASSOCIATES Stocks and shares in subsidiaries, co-subsidiaries and associates, presented at purchase price adjusted for subsequent impairment losses. The impairment test is carried out when there are indications that the carrying amount of the investment will not be re- covered. The Company analyzes the net asset value of the companies in which it holds shares due to the fact that the main item of assets of these entities are investment properties, usually measured at fair val- ue, while the largest liability item is special purpose loans and therefore the net asset value reﬂects fair value of the shares held. In the event that the net asset value of the company in which the Company owns investments does not correspond to fair value of these net assets, the Company determines fair value based on other methods (e.g. independent ex- perts’ valuation of the company’s assets, valuation by discounted cash ﬂow, etc.). In case of impairment losses, adjustments are made in the income statement and are presented as an ex- penditure. An impairment loss is recognized for the amount by which the carrying amount exceeds the recoverable amount. If the loss is reversed, its value is recognised under ﬁnancial income. Subsidiaries are the entities controlled by the Com- pany. Executing control over subsidiaries occurs in following cases: − management over indicated entity, − undergoing exposition for changeable returns or possessing rights to changeable returns due to its involvement in indicated entity, − possibility to execute power to inﬂuence on gen- erated returns. The Company veriﬁes the fact of exercising control over other entities, if there is a situation indicating a change in one or more of the above-mentioned conditions of exercising control. Associated companies are the units which the Com- pany has a signiﬁcant inﬂuence on yet are not sub- sidiaries or shares in joint enterprises of the Compa- ny. A signiﬁcant inﬂuence is the ability to participate in decision making regarding ﬁnancial and opera- tional policies of the business but it does not involve control or co-control of the policy. Jointly controlled entities are those entities in which all strategic ﬁnan - cial and operating decisions (including in particular: purchase of a signiﬁcant asset, conclusion of a lease agreement, etc.) require the unanimous consent of both shareholders. INVENTORIES The following items are recognised under invento- ries: semi-ﬁnished products, work-in-progress, ﬁn- ished products and goods. Given the speciﬁc nature of business, the purchased land or the incurred fees due to perpetual usufruct of land are classiﬁed as “work-in-progress” – if the land is intended for de- velopment and resale, or as “goods” – if the land is intended for sale. “Work-in-progress” also includes the incurred expenditures related to the process of implementing projects for sale (design services, con- struction works etc., performed by external contrac- tors). “Finished products” include mainly completed residential and commercial developments sold under ﬁnal agreements. Inventories of current assets are measured at the pur- chase price of land and at the manufacturing costs of products in the property development business, plus capitalised ﬁnancial costs, but not exceeding the net realisable value. This value is obtained based on information from the active market. An inventory write-o is reversed due to the sale of an inventory | Financial statement 95 Standalone nancial report of Echo Investment S.A. for 2020 item or increase in the net selling price. Inventory write-os disclosed in the period as cost and rever- sals of inventory write-downs disclosed in the period as a decrease of costs are presented in the proﬁt and loss account under ‘cost of sales’. The ‘ﬁnished goods’ item includes completed apart- ments earmarked for sale. The ‘intermediates and products in progress’ item mostly includes proper- ties held by the Company and the expenditure on residential projects under preparation or construc- tions. The ‘goods’ item includes the land earmarked for sale. FINANCIAL ASSETS In accordance with IFRS 9, the Company classiﬁes its ﬁnancial assets into the following categories: − ﬁnancial assets measured at amortized cost, − ﬁnancial assets measured at fair value through other comprehensive income, − ﬁnancial assets at fair value through proﬁt or loss. The classiﬁcation of assets takes place at the mo- ment of initial recognition. It depends on the ﬁnan- cial instruments management model adopted by the entity and analysis of the characteristics of contrac- tual cash ﬂows from these instruments. Loans granted, trade and other receivables and re- stricted cash that do not meet the deﬁnition of cash equivalents in accordance with IAS 7 Statement of Cash Flows (i.e. collateral for bank guarantees and funds held in open housing ﬁduciary accounts) are measured by the Company at amortized cost, as two conditions are met for them: the assets are held in a business model whose intention is to hold the as- sets to obtain contractual ﬂows and the contractual terms of these ﬁnancial assets give rise to cash ﬂows at certain times that are only repayments of principal and interest on outstanding capital. Assets are entered into the books on the trade date and are excluded from the balance sheet when the contractual rights to cash ﬂows from the ﬁnancial asset expire or when the ﬁnancial asset is transferred along with all the risks and rewards of ownership of the asset. The company uses a weighted average. If the renegotiation or other type of modiﬁcation of the contractual cash ﬂows generated by the ﬁnancial asset results in its derecognition in accordance with IFRS 9, the modiﬁed instrument is treated as new. In the event of a renegotiation or other modiﬁcation of the contractual cash ﬂows generated by a giv- en asset that does not result in derecognition, the Company revalues the gross carrying amount of that ﬁnancial asset (ie the amount of its amortized cost before allowance for credit losses). The revaluation is the discounting of new expected contractual cash ﬂows (after modiﬁcation) using the original eective interest rate. The resulting dierence is recognized as proﬁt / loss in proﬁt or loss. From that point on, an entity assesses whether the credit risk of the ﬁ- nancial instrument has increased signiﬁcantly after its initial recognition by comparing the credit risk at the reporting date (under the modiﬁed terms) with that at initial recognition (under the pre-modiﬁcation terms). RECEIVABLES Trade and other receivables are recognized in the balance sheet at transaction price and then at amor- tized cost using the eective interest method, reduc- ing them by impairment losses. When the dierence between the value at amortized cost and the value of the amount of the payment required does not have a signiﬁcant eect on the Company’s ﬁnancial results, such receivables are recognized in the balance sheet as the amount of the payment required. The value of receivables is updated taking into account the degree of probability of their payment by making a write-down. The rules for creating revaluation write- os are described below in the section Impairment of ﬁnancial assets. Advances for deliveries are valued according to cash disbursed and in accordance with received VAT in- voices documenting the granting of advance pay- ments. LOANS GRANTED Loans granted are debt instruments held for the pur- pose of obtaining contractual cash ﬂows that consist solely of principal and interest repayments (“SPPI”). These assets are entered into the books on the trans- action date, and excluded from the balance sheet when the contractual rights to cash ﬂows from the ﬁnancial asset expire or when the ﬁnancial asset is transferred together with all the risks and rewards of ownership of the asset. Loans granted are recog- nized as at the date of entry into the books at fair value increased by transaction costs, and later as at the balance sheet date at amortized cost determined using the eective interest rate method. The rules for creating impairment losses are de- scribed below in the “Impairment of ﬁnancial assets” section. CASH AND CASH EQUIVALENTS Cash at bank and in hand as well as short-term de- posits as well as other ﬁnancial assets that meet the deﬁnition of cash equivalents are measured at nom- inal value. At each balance sheet date, the Company assesses the premises for impairment of cash value, including the need to create a provision for expected credit losses. Foreign currency cash is measured as of the report- ing date. The same deﬁnition of cash applies to the cash ﬂow statement. According to the Company, the ﬁnancial resources of limited disposability mostly include funds consti- | Financial statement 96 Standalone nancial report of Echo Investment S.A. for 2020 tuting security for bank guarantees and funds ac - cumulated on open residential ﬁduciary accounts. LOSS OF VALUE OF FINANCIAL ASSETS (‘ECL’) Pursuant to IFRS 9, as at each reporting day, the Company estimates the amount of the impairment loss equal to the expected credit loss (‘ECL’). The Company calculates the write-o as follows for individual asset categories: Trade receivables The Company uses a simpliﬁed approach and there- fore does not monitor changes in credit risk during its lifetime and measures the impairment loss in the amount equal to the expected credit losses (‘ECL’) over the life of the debt. To calculate the value of the impairment loss for trade receivables, the Com- pany uses a provision matrix made once a year as at December 31 based on historical data regarding the payment of receivables by contractors. Impair- ment losses are updated as at each reporting day. The provision matrix is based on the analysis of the payment of receivables in individual past due groups and determining the probability of non-payment of receivables from a given age range based on his- torical data. For the purposes of the analysis, trade receivables are divided into two groups: receivables from the sale of apartments, the lease and other re- ceivables. The calculated probability of non-payment of receiv- ables in each of the past due groups for speciﬁc categories of receivables is applied to the current balance of receivables in each of the past due groups and the write-o for the expected credit losses of receivables is calculated. Additionally, the Company analyzes individual trade receivables and other receivables where it is highly probable they will become uncollectible, in cases jus- tiﬁed by the type of business or the client structure - and recognizes the write-o in a reliably estimated value. Classiﬁcation of an asset to this category is made on the basis of information about the current ﬁnancial situation of the counterparty and informa- tion about other events that may have a signiﬁcant impact on the recoverability of the asset. Such receivables are excluded from the matrix anal- ysis, and a possible write-o is recognized on the basis of an individual analysis. Loans granted and covered bonds The Company calculates the expected credit loss- es (‘ECL’) for loans and bonds as the dierence between the cash ﬂows arising from the contracts signed and the cash ﬂows that the entity expects to receive. Loans granted and covered bonds are clas- siﬁed as low risk instruments. Therefore, the write-o for expected credit losses is calculated for a period of 12 months. The Company calculates the cash ﬂows that it ex- pects to obtain based on the default ratio deter- mined on the basis of the margin on the bonds is- sued by the Company and adjusted by the recovery ratio. In addition, the Company provides the indi- vidual analysis of loans granted and bonds covered with a signiﬁcant level of probability of default, in cases justiﬁed by the type of business or the client structure - and recognizes the write-o in a reliably estimated value. Classiﬁcation of an asset to this category is made on the basis of information about the current ﬁnancial situation of the counterparty and information about other events that may have a signiﬁcant impact on the recoverability of the asset. Such loans and bonds are excluded from the matrix analysis, and a possible write-o is recognized on the basis of an individual analysis. FINANCIAL GUARANTEE AGREEMENTS Financial guarantee contracts are recognized in o-balance sheet liabilities and receivables. At each balance sheet date, the Company assesses whether there is a likelihood of a need to make a withdrawal and create a provision. The amount of the provision is determined based on estimates of the amount of probable expenditure necessary to settle the liability arising from the guarantee contract. At the same time, in accordance with the require- ments of IFRS 9, the Company creates the provision for expected credit losses (‘ECL’) due to ﬁnancial guarantees granted. The Company calculates the expected credit loss (‘ECL’) regarding the guarantees given as expect- ed payments to compensate the guarantee holder for the incurred credit loss. The Company ﬁrst de- termines the value of the Company’s exposure due to guarantees granted (the actual total value of the contingent liability as at the balance sheet date). The net exposure resulting from the guarantee thus determined is multiplied by the default ratio (deter- mined on the basis of the margin on bonds issued by the Company and adjusted for the recovery ratio). INCOME TAX Income tax on the proﬁt or loss for the ﬁnancial year includes current and deferred income tax. Income tax is recognised in the proﬁt and loss account, ex- cept for amounts related to items recognised direct- ly in equity or in other comprehensive income; in this case, income tax is disclosed in equity and other comprehensive income respectively. The current portion of income tax is the expected amount of tax on taxable income for a given year, calculated based on the tax rates determined as of | Financial statement 97 Standalone nancial report of Echo Investment S.A. for 2020 the balance sheet date along with any tax adjust- ments for previous years. Deferred tax is calculated with the balance sheet method as tax to be paid or reimbursed in the future on the dierences between the carrying values of assets and liabilities and the corresponding tax values used to calculate the tax base, except for temporary dierences which arise at the time of initial recognition of an asset or liability, and do not aect the accounting or tax result. At the commencement of the lease, the right-of-use asset and the lease liability are equal, so there is no temporary dierence and no deferred tax is created. During the lease term, a dierence arises between the value of the asset and the lease liability. The com- pany charges deferred income tax on the dierence between these values. This approach aims to reﬂect the relationship between the right-of-use asset and the lease liability, and account for deferred tax based on cumulative temporary dierences. This method provides an eective tax rate that better reﬂects the economics of the entire lease transaction. Deferred tax is not created for temporary dierenc- es on investments in subsidiaries, jointly controlled entities and associates, if the Company controls the reversal of these dierences and they will not be reversed in foreseeable future. Deferred income tax assets due to tax loss are created, if the settlement of the loss in the following years is probable. For the calculation of deferred income tax, a tax rate is used which will apply in the reporting periods in which assets will be settled or liabilities will be released. Deferred income tax is estimated on every balance sheet date by recognising dierences in the proﬁt and loss account, other comprehensive income or equity, depending where the temporary dierence from which the deferred tax is subtracted was rec- ognised. Assets and provisions on deferred income tax are presented jointly. EQUITY Share capital is measured at the nominal value dis- closed in the National Court Register. Dierences between the fair value of a payment and the nominal value of shares are recognised in the share premium. The issue costs of shares decrease the Company’s supplementary capital. PROVISIONS Provisions are established when the Company has a present obligation as a result of past events and when it is probable that the fulﬁlment of that obli- gation will involve an outﬂow of assets representing economic beneﬁts and the amount of such obliga- tion can be credibly estimated. Provisions are measured at the current value of costs estimated by the Company’s management according to its best knowledge which must be in- curred to settle a current liability as of the balance sheet date. In accordance with the adopted principle, no provi- sions are made for retirement beneﬁts. Due to the age of employees and their rotation, potential re- serves would not have a signiﬁcant impact on the presented ﬁnancial statements. Upon their occur- rence, the payment of retirement severance pays will be booked on a cash basis. FINANCIAL LIABILITIES Financial liabilities include loans, borrowings, debt securities, not payable interest on bank loans ac- counted for according to the accrual principle as well as the discount of debt securities to be settled in subsequent accounting periods. Foreign currency loans are measured at the selling rate of the bank serving the Company. Financial liabilities are initially recognized at fair val- ue less transaction costs, and then measured using the “amortized cost” method. The valuation of liabil- ities includes all costs of obtaining ﬁnancing, includ- ing directly related to ﬁnancing costs of bank fees, costs of brokers and agents, legal costs, experts, a bank monitor, and costs related to marketing at ob- taining the capital, occurring in the issue of bonds. Trade liabilities are initially measured at fair value, and subsequently, long-term liabilities are measured at amortized cost using the eective interest meth- od. In cases where the dierence between the value at amortized cost and the value in the amount of the payment required does not have a signiﬁcant eect on the ﬁnancial results of the Company, such liabilities are recognized in the balance sheet in the amount of the payment required. Trade liabilities are initially measured at fair value, and subsequently, long-term liabilities are measured at amortized cost using the eective interest meth- od. In cases where the dierence between the value at amortized cost and the value in the amount of the payment required does not have a signiﬁcant eect on the ﬁnancial results of the Company, such liabilities are recognized in the balance sheet in the amount of the payment required. CURRENCY TRANSACTIONS The functional currency of the Company is the Pol- ish Zloty (PLN, zł.). Foreign currencies as at the bal- ance sheet day are valued at the NBP exchange rate as at the balance sheet day. Exchange dierences arising as at the date of their valuation and when the payment of receivables and liabilities in foreign currencies, are included respectively in ﬁnancial income or costs, and in justiﬁed cases, the cost of manufacturing products or the purchase price of goods, as well as the purchase price or production cost of ﬁxed assets, ﬁxed assets under construction or intangible assets. | Financial statement 98 Standalone nancial report of Echo Investment S.A. for 2020 CASH FLOW STATEMENT The cash ﬂow statement is prepared using the in- direct method. Liabilities due to overdraft facilities are presented as debt due to loan and not as cash equivalents. SEGMENT REPORTING The Company does not separate segments accord- ing to IFRS 8, paragraph 4. This information is pre- sented in the consolidated ﬁnancial statements of the Echo Investment Capital Group. NET PROFIT PER SHARE The net proﬁt per share for each period is calculated by dividing the net proﬁt for a given period attrib- utable to ordinary shareholders of the parent entity by the weighted average number of shares issued during the period. | Financial statement 99 Standalone nancial report of Echo Investment S.A. for 2020  Methods of determining the ﬁnancial result The ﬁnancial result is determined from the proﬁt and loss account, applying the principles of the accruals concept and the matching principle, the yield and the precautionary principle, upon reducing gross proﬁt by input income tax, write-os on account of provi- sion for transitional dierence due to income tax and other charges of the ﬁnancial result. The ﬁnancial result is determined by the calculation method. OPERATING REVENUE In accordance with IFRS 15, the Company recognises revenues when the obligation is fulﬁlled (or in the course of fulﬁlling) by transferring a promised goods or services (i.e. an asset) to a customer. The asset is transferred when the customer obtains control of that asset. After fulﬁlling (or in the course of fulﬁlling) obli- gations, the entity recognises an amount equal to a transaction price as income, which has been as- signed to that performance obligation. To determine the transaction price, the entity shall consider the terms of the contract and its usual commercial prac- tices. The transaction price is the amount of remu- neration that the entity expects to be entitled to in exchange for the transfer of promised goods or ser- vices to the customer, excluding amounts collected on behalf of third parties (for example, certain sales taxes). The remuneration speciﬁed in the contract with the client may include ﬁxed amounts, variable amounts or both. Revenue from the sale of residen- tial and service premises are recognised on the date of handover of real estate to the buyer. This occurs on the basis of the acceptance protocol signed by the parties providing only after completion of the construction of real estate and receiving the occu- pancy permit on condition that the buyer will pay 100% towards the purchase price of real estate. Paid apartments are also considered to be cases of minor underpayments (up to PLN 500), larger un- derpayments, which the Company decides not to collect from customers, or in the event of receivables from tenant changes, which, according to arrange- ments, are payable later than the moment of hand- over of the premises . Revenues from the rental of residential and commercial space are recognised on a straight-line basis over the term of the contracts concluded. Revenue from other contracts for the provision of services (legal, consulting, IT, ﬁnancial, marketing, security and other services) is recognised by the Company when the performance obligation is met. COST OF SALES Costs of goods, products and services sold consist of costs incurred in respect of revenues of a given ﬁnancial year and overheads not yet incurred. This item also includes costs that are directly related to revenue from related entities on account of services provided (including investment services, construc- tion and engineering consultancy). The cost of goods and products sold is measured at the production cost, using the method of detailed identiﬁcation of the actual cost of assets sold or the percentage share e.g. of the land or shares sold, etc. In particular, the cost of sales of premises and land sold is determined proportionally to their share in the total cost of construction of the facility and the entire land constituting a given project. The detailed identiﬁcation of the costs associated with employ- ees’ salaries as part of the cost of sales, is made on the basis of the employee’s working time records, broken down into the individual projects developed. ADMINISTRATIVE COSTS ASSOCIATED WITH PROJECTS Project-related administrative costs include the ad- ministrative costs which are indirectly related to the execution of development projects such as: − perpetual usufruct fees, − real property taxes − operating fees − property protection − administrative staff’s remuneration, employee maintenance costs in the portion attributable to the project, and − other stock maintenance related costs. These costs, despite their indirect connection with development projects, are not capitalized in the val- ue of stock / investment property because: − in the light of IAS 2, they are excluded from the purchase price or cost of stock production as they are not incurred in order to bring the stock to its current status and location; | Financial statement 100 Standalone nancial report of Echo Investment S.A. for 2020 − IAS 40 in relations to IAS 16, does not allow to capitalize general and administrative costs in the value of investment properties. COST O FINANCING Financial costs related to the current period are rec- ognized in the proﬁt and loss account, except for costs subject to activation in accordance with the solution included in IAS 23. The Company activates the part of ﬁnancial expenses which is directly relat- ed to the acquisition and production of ﬁnancial as- sets recognized as stock and projects commenced. In case of targeted ﬁnancing, incurred to implement a project, the amount of ﬁnancial costs, less income from temporary deposits of cash (i.e. amounts of in- terest on bank deposits, except for deposits resulting from blocking accounts, letters of credit agreement) is activated. In the case of general ﬁnancing, ﬁnanc- ing costs subject to the capitalization are determined using the weighted average of all borrowing costs in relation to the expenditure incurred for a given asset. In the case of leasing, interest costs on the leasing obligation related to a speciﬁc project are capitalized in the cost of this project (targeted ﬁnancing). Pursuant to the requirements of IAS 23, the Com- pany begins to activate ﬁnancial costs when the Company undertakes actions necessary to prepare an asset for its intended use or sale. These activities involve more than just activities related to its manual construction. They also include technical and admin- istrative work preceding manual construction, such as activities related to obtaining necessary permits, design and preparation works. However, such activ- ities do not include the holding of the asset if it is not accompanied by any processes that change the condition of the asset. | Financial statement 101 Standalone nancial report of Echo Investment S.A. for 2020  Error correction – changing the presenting principles - restatement of statements for previous period The Management Board of the Group voluntarily de- cided to change the incorrect presentation of ﬁnan- cial costs and ﬁnancial revenues related to amortised costs of interests on granted borrowing, received loans and issued bonds. The Company’s Management Board decided to change the incorrect presentation of provisions in the statement of ﬁnancial position. After the analysis, the Management Board concluded that long-term provisions will be presented under long-term liabil- ities, while short-term provisions will be presented After the analysis, the Management Board decided that these costs - as the costs of acquired external ﬁnancing - should be presented as ﬁnancial costs and made an appropriate change in the presentation of the proﬁt and loss account by transferring the above-mentioned costs to the ﬁnancial costs line. under short-term liabilities. As a result, the Compa- ny made an appropriate presentation change in the statement of ﬁnancial position as at December 31, 2019 and January 1, 2019. PROFIT AND LOSS ACCOUNT Period ended December 31, 2019 Change of presentation Period ended December 31, 2019 (restated) Other operating income 121 474 (1 092) 120 382 Other operating expenses (5 390) 1 863 (3 527) Operational proﬁt 82 725 771 83 496 Financial costs (64 007) (771) (64 778) Gross proﬁt 29 807 - 29 807 STATEMENT OF FINANCIAL POSITION Period ended January 1, 2019 Change of presentation Period ended January 1, 2019 (restated) Provisions Short-term provisions 17 317 (17 317) - Long-term provisions - - - Deferred tax liabilities 1 468 (1 468) - Long-term liabilities Long-term provisions - 1 468 1 468 Deferred tax liabilities - - - Short-term liabilities Short-term provisions - 17 317 17 317 The impact of changes on the statement of ﬁnancial position for the period ended January 1, 2019: | Financial statement 102 Standalone nancial report of Echo Investment S.A. for 2020 STATEMENT OF FINANCIAL POSITION Period ended January 1, 2019 Change of presentation Period ended January 1, 2019 (restated) Assets Fixed assets Loans granted 221 504 219 082 440 586 Current assets Loans granted 265 621 (219 082) 46 539 The Management Board of the Company decided to change the incorrect presentation of some of the loans previously presented as short-term into long- term loans. The change was introduced due to the in- Impact of changes on the statement of ﬁnancial po- sition for the period ended December 31, 2019: The impact of changes on the statement of ﬁnancial position for the period ended January 1, 2019: STATEMENT OF FINANCIAL POSITION Period ended December 31, 2019 Change of presentation Period ended December 31, 2019 (restated) Assets Fixed assets Loans granted 281 264 523 763 805 027 Current assets Loans granted 533 608 (523 763) 9 845 STATEMENT OF FINANCIAL POSITION Period ended December 31, 2019 Change of presentation Period ended December 31, 2019 (restated) Provisions Short-term provisions 15 507 (15 507) - Long-term provisions - - - Deferred tax liabilities 4 639 (4 639) - Leasing lia-bilities Long-term provisions - 4 639 4 639 Deferred tax liabilities - - - PROFIT AND LOSS AC-COUNT [IN ‘000 PLN] Short-term provisions - 15 507 15 507 Impact of changes on the statement of ﬁnancial po- sition for the period ended December 31, 2019: ability to repay these loans in the short term, which is due to the business considerations of the borrowers. | Financial statement 103 Standalone nancial report of Echo Investment S.A. for 2020  Material estimates of the Company’s management board ed the discount rate used in the calculation of the lease liability - as a risk-free rate increased by the characteristic margin for the given asset component to which the lease relates. IMPAIRMENT OF INTERESTS IN SUBSIDIARIES, JOINTLY CONTROLLED ENTITIES AND ASSOCIATES An impairment test is conducted when there are in- dications that the carrying value of an investment will not be recov ered. The assessment of the impair- ment of interests in subsidiaries, jointly-con trolled and associated companies is based on an analysis of the fair value of assets and liabilities held by the compa nies and the expected prospective cash ﬂows from the operations of such com panies. In the course of the assessment, the Company also evaluates the duration and extent to which the current value of the shares is lower than its purchase price and a compa- ny’s perspectives and plans for its investment devel- opments. All material impairment of the fair value of assets in subsidiaries have been regard ed to be long- term by the Management Board and have resulted in impairment losses on interests in subsidiaries. In par ticular, for material subsidiaries which, as at 31 December 2020, did not run any material operating activity, the value of the rec ognised write-downs corresponds to the total dierence between the net value of the subsidiary’s assets and the purchase price of the interests. DEFERRED INCOME TAX The Company’s Management Board is obliged to assess the probability of the realisation of deferred INVENTORY When estimating the write-down on in ventory held by the Company as of the balance sheet date, in- formation from the active market regarding the ex- pected sales prices and current market trends as well as information from preliminary sales agreements concluded by the Company is analysed. Assumptions used when calculating the write-down mainly relate to market prices of property applica- ble in a given market segment. According to the Management Board, a change of these assumptions would not materially aect the value of the inventory write-down as of the bal ance sheet date because the adopted as sumptions and information on the value of the write-down were largely based on the con- cluded sales agreements. In the case of land recog- nised under inventory, the value of the write-downs results from the usefulness of land for the Company’s current and prospective business esti mated by the Management Board. LEASING The implementation and application of IFRS 16 re- quired the Company to make various estimates and commit professional judgment. The main area in which it concerned the assessment of lease pe- riods, in case of contracts for an indeﬁnite period and contracts for which the Company was entitled to extend the contract. When determining the leasing period, the Company had to consider all facts and circumstances, including the existence of economic incentives to use or not to extend the contract and any termination option. The Company also estimat- To prepare the ﬁnancial statements, the Company’s Management Board had to make certain estimates and assumptions, which are reﬂected in the state- ments. The actual results may dier from the esti- mates. Assumptions and estimates are based on manage- ment’s best knowledge of current and future events and activities, however actual results may dier from expectations. The estimates and related assumptions are subject to ongoing veriﬁcation. A change in ac- counting estimates is recognized in the period in which they were changed, if it concerns this period only, or in the current and future period, if the chang- es apply to both the current and future periods. The main areas where the Management Board’s es- timates materially aect the ﬁnancial statements: | Financial statement 104 Standalone nancial report of Echo Investment S.A. for 2020 and ﬁnes as well as any additional tax liability result- ing from checks must be paid with a high interest. These conditions make the tax risk in Poland higher than in the countries with more mature tax systems. Consequently, the amounts presented and disclosed in the ﬁnancial statements may change in the future as a result of the ﬁnal decision of the tax auditing authority. On 15 July 2016 changes were introduced to the Tax Code in order to reﬂect the provisions of the Gener- al Anti-Avoidance Rule (GAAR). GAAR is designed to prevent the creation and use of artiﬁcial legal structures developed in order to avoid paying taxes in Poland. GAAR deﬁnes tax evasion as an act pri- marily for the purpose of obtaining a tax advantage, contradictory in given circumstances to the subject matter and purpose of the provisions of the tax law. According to GAAR, an operation like that does not result in a tax advantage if the mode of operation was artiﬁcial. Any occurrence of: − unreasonable di- vision of operations, − involvement of intermediaries despite the lack of economic or economic justiﬁca- tion, elements that are mutually abrasive or com- pensatory and − any other actions of similar eect to the aforementioned, may be treated as a premise of the existence of artiﬁcial operations subject to GAAR regulations. The new regulations will require much greater judgment when assessing tax conse- quences of individual transactions. The GAAR clause should apply to transactions closed after it enters into force and to transactions that were closed be- fore the GAAR clause entered into force, for which advantages were or still are being achieved after the date of the clause’s entry into force. The implemen- tation of the above provisions will allow Polish tax authorities to question the legal arrangements and agreements such as restructuring and reorganization of the group. income tax assets. When preparing the ﬁnancial statements, the Company estimates the value of the deferred income tax provision and asset based on, among other things, the value of prospective income tax burden. The process involves analysing current in come tax burden and the value of tem porary dif- ferences from dierent treat ment of transactions in terms of ﬁscal and accounting aspects, resulting in the creation of deferred income tax assets and pro- visions. A number of assumptions are adopted for determin- ing the value of deferred in come tax assets and pro- visions in the assessment process described above. The above estimates take account of ﬁscal forecasts, historic tax burden, currently available strategies for planning the Com pany’s operating activity and time- lines for realising the individual temporary dierenc- es. Since the above estimates may change due to ex- ternal factors, the Company may periodically adjust the deferred income tax assets and provisions, which in turn may aect the Company’s ﬁnancial standing and performance. UNCERTAINTY CONNECTED WITH TAX SETTLEMENTS The regulations concerning the tax on goods and services, corporation tax and social security charg- es are subject to frequent changes. These frequent changes lead to the absence of relevant benchmarks, inconsistent interpretations and a few established precedents that might be applicable. Existing reg- ulations also contain ambiguities that cause dier- ences in opinions as to the legal interpretation of the tax legislation, between state authorities as well as state bodies and businesses. Tax settlements and other areas of activity (for example customs or for- eign exchange) may be subject to inspection by the authorities that are entitled to impose high penalties | Financial statement 105 Standalone nancial report of Echo Investment S.A. for 2020  Financial risk management INTEREST RATES’ RISK  LIABILITIES DUE TO LOANS PLN ‘000 Value calculated for the analysis As at 31.12.2020 As at 31.12.2019 Balance of loans and borrowings 1 249 334 814 872 Financial costs of interests 38 932 33 200 Estimated change in the interest rates +/- 1 p.p. +/- 1 p.p. Estimated ﬁnancial costs of loan interest as a result of interest rate’s change 12 493 8 149 Total impact on the gross results for the period 12 493 8 149 Income tax 2 374 1 548 Total impact on the net results for the period 10 119 6 601 The Company granted loans in PLN, where interest rates is variable depending on the WIBOR rate plus a margin. If the level of inter- est rates as at December 31, 2020 was higher or lower than an applicable level by 1 percent- age point, then the Company’s net result would be higher or lower by PLN 10,119 thous. due to higher or lower interest on loans granted in PLN. bank loans and the issued bonds. Borrowings, loans and bonds bearing a variable interest rate expose the Company to the interest rate risk, while borrow- ings and loans with a ﬁxed interest rate expose the Company to variations of the fair value of ﬁnancial instruments. In addition, the Company is exposed to the risk of interest rate variations when raising a new loan or reﬁnancing an existing long-term debt. PRICE RISK The price risk is not material. The Company does not trade in securities on any active market. The Company may conclude transactions on derivatives to hedge against the FX risk related to the forecast cash ﬂows. RISK OF CHANGES IN CASH FLOWS AND FAIR VALUE RELATED TO INTEREST RATE The Company’s exposure to the interest rate risk is related to ﬁnancial assets and liabilities, in par- ticular the granted borrowings, cash, the received | Financial statement 106 Standalone nancial report of Echo Investment S.A. for 2020 INTEREST RATES’ RISK  LIABILITIES DUE TO DEBT SECURITIES ISSUE PLN ‘000 Value calculated for the analysis As at 31.12.2020 As at 31.12.2019 Balance of liabilities on debt securities issue 1 366 350 1 085 197 Financial costs of debt securities issue’s interests (50 771) (52 612) Estimated change in the interest rates +/- 1 p.p. +/- 1 p.p. Estimated ﬁnancial costs of debt securities issue’s interests rates, taking into account increase / (decrease) of interests rates 13 664 10 852 Total impact on the gross results for the period 13 664 10 852 Income tax 2 596 2 062 Total impact on the net results for the period 11 068 8 790 INTEREST RATES’ RISK  CASH PLN ‘000 Value calculated for the analysis As at 31.12.2020 As at 31.12.2019 Balance of cash 149 881 249 867 Other operational income from interests 39 104 Estimated change in the interest rates +/- 1 p.p. +/- 1 p.p. Estimated other operational income from interests taking into account intere- sts rates’ changes 1 499 2 499 Total impact on the gross results for the period 1 499 2 499 Income tax 285 475 Total impact on the net results for the period 1 213 2 023 INTEREST RATES’ RISK  LOAN LIABILITIES PLN ‘000 Value calculated for the analysis As at 31.12.2020 As at 31.12.2019 Balance of loan liabilities 137 981 213 874 Financial costs of loans’ interests (4 447) (1 298) Estimated change in the interest rates +/- 1 p.p. +/- 1 p.p. Estimated ﬁnancial costs of interest on loans, taking into account increase / (decrease) of interests rates 1 380 2 139 Total impact on the gross results for the period 1 380 2 139 Income tax 262 406 Total impact on the net results for the period 1 118 1 733 fore, the risk was assessed as insigniﬁcant and the sensitivity of other balance sheet items to changes in currency exchange rates was not analyzed. CURRENCY RISK As at the balance sheet date and during the ﬁnancial year, the Company did not have any other signiﬁcant balances denominated in a foreign currency. There- | Financial statement 107 Standalone nancial report of Echo Investment S.A. for 2020 WRITEDOWN FOR EXPECTED CREDIT LOSSES AS OF DECEMBER 31, 2020 PLN ‘000 Period e weighted average of default rates e gross value of commercial receivables e loss allowance Current 0,00% 34 904 - 1-30 0,00% 2 428 - 31-90 3,00% 388 12 91-360 14,00% 585 90 >361 90,00% 2 113 1 975 downs on trade receivables, applying a provision matrix based on historical data regarding the repay- ment of receivables by counterparties in the division of types of sales revenues. Credit loss ratios were calculated on the basis of a model based on histor- ical repayment of receivables in individual overdue groups. The table below presents data on exposures and the amount of the loss allowance. As at December 31, 2020, the Company has PLN 1,250,815 thous. gross of loans granted, which were classiﬁed into basket 1 according to IFRS 9. As a result of the analysis of expected credit losses, the Company recognized loan write-os in basket 1 in the amount of PLN 1,481 thous. Additionally, as at December 31, 2020, the Company has PLN 15 307 thous. gross of loans granted, which were classiﬁed in basket 3. As a result of the analysis of expected credit losses, the Company recognized loan write- os in basket 3 in the amount of PLN 15,307 thous. CREDIT RISK The credit risk occurs in cash, borrowings granted, derivatives, deposits in banks and ﬁnancial institu- tions as well as, in relation to the Company’s custom- ers and tenants, in the form of unsettled amounts due. The nature of the Company’s operations in the area of the sale of residential space, lease and ser- vices means that the Company is not exposed to signiﬁcant credit risk. As at 31 December 2020, the Company estimated the value of impairment write As at December 31, 2020, the Company has PLN 216,756 thous. gross of acquired bonds, which were classiﬁed to basket 1 according to IFRS 9. As a result of the analysis of expected credit losses, the Com- pany recognized write-downs on bonds in basket 1 in the amount of PLN 289 thousa. In addition, as at December 31, 2020, the company has PLN 285,870 thous. gross of taken-up bonds that were classiﬁed into basket 3. As a result of the analysis of expected credit losses, the Company recognized write-downs on bonds in basket 3 of PLN 28,904 thous. WRITEOFF FOR EXPECTED CREDIT LOSSES AS OF DECEMBER 31, 2019 ‘000 PLN Period Weighted average default rate Gross value of trade receivables Write-o for ex-pected credit losses Current 0,00% 39 532 - 1-30 0,00% 1406 - 31-90 0,00% 543 2 91-360 1,00% 927 7 >361 75,00% 1657 1310 | Financial statement 108 Standalone nancial report of Echo Investment S.A. for 2020 With regard to all classes of ﬁnancial assets, the Company considers that the credit risk associated with ﬁnancial instruments is too low. In the opinion of the Management Board, in view of the presented activity characteristics, the risk of non-performance of contractual obligations is small, the debtors of the Company have a high short-term ability to ful- ﬁl their obligations within the scope of contracts concluded with the Company, and possible adverse changes in business and economic conditions in the long term may - but not necessarily and, in the opinion of the Management Board, they should not - limit their ability to fulﬁl their obligations within the scope resulting from concluded agreements. The Company has procedures in place to protect the credit worthiness of its customers and tenants; security deposits and guarantees are also used for tenants. There is no signiﬁcant concentration of risk in relation to any of the Company’s customers outside the Echo Investment Group. In relation to related entities, the credit risk, in the opinion of the Management Board, is minimised through regular monitoring of operating activities and the assess- ment of investment projects of these companies. For cash and deposits in ﬁnancial institutions and in banks, the Company uses the services of renowned institutions. LIQUIDITY RISK The liquidity risk occurs when the Company is una- ble to settle its ﬁnancial liabilities in due time. The Company manages the liquidity risk by maintaining an adequate amount of supplementary capital, us- ing bank services and reserve loan facilities, and by constantly monitoring the forecast and actual cash ﬂows. Given the dynamic nature of its business, the Company ensures ﬂexible funding through the availability of cash and by diversifying the sources of funding. In the opinion of the Management Board, the Com- pany has sucient cash to settle all liabilities in due time. In the long term, the liquidity risk is min- imised by the available bank loans. At any time, the Company may use sucient funds from the loan facilities granted by banks. The analyses of the Company’s ﬁnancial liabilities and derivatives settled in the net amount which will be settled at speciﬁc maturities, based on the period remaining until the contractual maturity as of the balance sheet date, have been presented in the respective notes: loans, borrowings, debt securities, trade re- ceivables and trade liabilities. The analysis of the Company’s undiscounted ﬁ- nancial liabilities which will be settled at speciﬁc maturities, based on the period remaining until the contractual maturity as of the balance sheet day 31 December 2020 and 31 December 2019: ANALYSIS OF UNDISCOUNTED FINANCIAL LIABILITIES AS AT 31.12.2020 PLN ‘000 Period Guarantees Bonds Trade, lease and other payables Leasing Loans Up to 1 year 55 757 493 409 94 114 9 530 137 981 1–3 years 229 482 459 501 - 13 567 - 3–5 years 239 588 413 441 - - - Over 5 years 1 443 336 - - - - Total 1 968 163 1 366 351 94 114 23 097 137 981 | Financial statement 109 Standalone nancial report of Echo Investment S.A. for 2020 ANALYSIS OF UNDISCOUNTED FINANCIAL LIABILITIES AS AT 31.12.2019 PLN ‘000 Period Guarantees Bonds Trade, lease and other payables Leasing Loans Up to 1 year 51 287 148338 79 985 13 274 213874 1–3 years 257730 762 995 - 12 645 - 3–5 years 275681 173 864 - - - Over 5 years 1357058 - - - - Total 1 941 756 1 085 197 79 985 25 919 213874 The debt ratios as at December 31, 2020 and December 31, 2019, respectively, were in line with the Company’s objectives. | Financial statement 110 Standalone nancial report of Echo Investment S.A. for 2020  Capital risk management DEBT RATIO PLN ‘000 NOTE 31.12.2020 31.12.2019 Total loans, borrowings and bonds 14, 16 1 712 510 1 426 078 Liability for dividend 24 - - Cash and equivalents 11 (149 881) (249 867) Net debt 1 562 629 1 176 211 Total equity 1 318 806 1 260 981 Total capital 2 881 435 2 437 192 Debt ratio 54,23% 48,26% Debt ratios as at December 31, 2020 and as at Decem- ber 31, 2019 are in line with the Company’s targets. The aim of the Company in capital management is to protect the ability to continue as a going concern, so that it is possible to realize a return for shareholders, as well as to maintain an optimal capital structure in order to reduce its cost. Managing this risk, the Company makes decisions regarding the level of ﬁnancial leverage, dividend policy, the issue of new shares or the purchase and subsequent redemption or resale of previously is- sued shares and the possible sale of assets in order to reduce debt. The company monitors capital using debt ratios. This ratio is calculated as the ratio of net debt to total equity. Net debt is calculated as the sum of credits and loans (including current and long-term credits and loans shown in the balance sheet) less cash and cash equivalents. The total value of capital is calcu- lated as equity shown in the balance sheet together with net debt. | Financial statement 111 Standalone nancial report of Echo Investment S.A. for 2020  Signiﬁcant contracts concluded with related entities MATERIAL AGREEMENTS CONCLUDED WITH RELATED ENTITIES AND PERFORMED IN 2020 ‘000 PLN Subject of the contract - liability of Echo Investment S.A. Date of agreement Contractor – investor Transac- tion value Investment project management agreement, Warsaw, Grzybowska Street, GH oce building. 31.10.2018 Dellia Investments - Projekt Echo - 115 Sp. zo.o. Sp.K. 6 455 Comprehensive project management of oce complex construction in Wrocław on ul. Powstańców Śląskich. 27.11.2019 Midpoint 71 - Cornwall Investments Sp. zo.o. SKA 6 134 Comprehensive project management and provision of advisory services in all mat- ters related to the construction of the II phase of oce complex in Katowice. 31.10.2018 Face2Face - Stranraer Sp. zo.o. SKA 4 196 Investment project management agreement – oce project with underground parking in Warsaw on ul. Beethovena. 06.05.2019 Projekt Beethovena-Projekt Echo - 122 Sp. zo.o. SKA 3 371 Investment project management agreement - construction of the residential mul- tifamily complex in Wrocław on ul. Mińska. 01.10.2019 Projekt Echo - 136 Sp. zo.o. Sp.K. 2 961 Investment project management agreement - construction of the oce complex in Gdańsk on ul. Nowomiejska. 02.12.2019 Projekt 16 - Grupa Echo Sp. zo.o. SKA 2 915 Advisory, management, legal and engeneering services. 29.06.2018 Dellia Investments - Projekt Echo - 115 Sp. zo.o. Sp.K. 2 764 Comprehensive project management and provision of advisory services in all mat- ters related to the construction of the oce building in Wrocław. 30.11.2018 Projekt 17 - Grupa Echo Sp. zo.o. SKA 2 761 Investment project management agreement - React oce complex. 01.06.2019 React - Dagnall Sp. zo.o. SKA 2 657 Investment project management agreement - construction of the residential mul- tifamily complex in Wrocław on ul. Mińska. 01.06.2019 Gosford Investments Sp. zo.o. 2 615 Real estate brokerage. 07.04.2020 Cinema Asset Manager - Grupa Echo Sp. zo.o. SKA 2 586 Investment project management agreement - Warsaw Brewery E. 02-11-2018 Dellia Investments - Projekt Echo - 115 Sp. zo.o. Sp.K. 2 295 Investment project management agreement - construction of residential complex with underground parking in Warsaw on ul. Beethovena. 01.08.2018 Projekt Beethovena-Projekt Echo - 122 Sp. zo.o. SKA 2 191 Investment project management agreement, Fuzja B, Łódź, ul. Wincentego Ty- mienieckiego. 01.04.2019 Elektrownia Re Sp. zo.o. 2 119 Leasing services. 25.05.2018 Face2Face - Stranraer Sp. zo.o. SKA 2 038 Comprehensive project management and provision of advisory services in all mat- ters related to the construction of the project in Warsaw. 01.12.2018 Taśmowa - Projekt Echo - 116 Sp. zo.o. SKA 1 815 Management of the real estate. 22.10.2018 Galeria Libero - Projekt Echo - 120 Sp. zo.o. Sp.K. 1 813 Real estate brokerage. 09.01.2018 Dellia Investments - Projekt Echo - 115 Sp. zo.o. Sp.K. 1 631 Financial intermediation agreement. 06.02.2020 Midpoint 71 - Cornwall Investments Sp. zo.o. SKA 1 492 Investment project management agreement - R4R Warszawa Browary 01.12.2017 Dellia Investments - Projekt Echo - 115 Sp. zo.o. Sp.K. 1 383 Leasing services. 01.09.2016 Dellia Investments - Projekt Echo - 115 Sp. zo.o. Sp.K. 1 354 According to the Echo Investment S.A. Group’s strat - egy for building shopping centres, oce buildings and selected residential buildings through a sepa- rate subsidiary, a large portion of Echo Investment’s transactions is concluded with related parties. | Financial statement 112 Standalone nancial report of Echo Investment S.A. for 2020 MATERIAL AGREEMENTS CONCLUDED WITH RELATED ENTITIES AND PERFORMED IN 2020 ‘000 PLN Subject of the contract - liability of Echo Investment S.A. Date of agreement Contractor – investor Transac- tion value Investment project management agreement - Osiedle Enter I in Poznań on ul. Sielawy. 06.02.2020 Duże Naramowice - Projekt Echo - 111 Sp. zo.o. SKA 1 348 Investment project management agreement - KRK I in Kraków on ul. Zapolskiej. 20.02.2020 RPGZ IX Sp. zo.o. 1 312 Comprehensive project management and provision of advisory services in all mat- ters related to the construction of the oce building in Katowice. 01.06.2018 Face2Face - Stranraer Sp. zo.o. SKA 1 046 Listed above transactions with related entities concern subsidiaries. TRANSACTION WITH RELATED ENTITIES AS AT 31 DECEMBER 2020 ‘000 PLN Related entity Sales Purchase Receivables Write-down Liabilities Subsidiaries 85 201 12 406 25 432 6 1 937 Joint-ventures 56 453 863 2 600 - - Shareholders - 14 800 - - 1 517 Management Board 1 - - - - Total 141 655 28 069 28 032 6 3 454 TRANSACTION WITH RELATED ENTITIES AS AT 31 DECEMBER 2019 ‘000 PLN Related entity Sales Purchase Receivables Write-down Liabilities Subsidiaries 93 499 15 589 21 436 17 2 590 Joint-ventures - - 19 779 - 10 646 Shareholders - 14 792 - - 3 034 Management Board 58 - - - - Total 93 557 30 381 41 215 17 16 270 | Financial statement 113 Standalone nancial report of Echo Investment S.A. for 2020  Material post-balance sheet events . Conclusion of a preliminary agreement on the acquisition of a majority stake of shares in Archicom S.A. On February 17, 2021 the Management Board of Echo Investment entered into a preliminary agreement with Dorota Jarodzka-Śródka, Kazimierz Śródka and Rafał Jarodzki on the acquisition of a stake of Archicom S.A. shares representing in total approxi- mately 66.01% of the share capital and entitling to a total of approximately 65.99% of votes. The price for the shares will be PLN 425 million. Echo Investment will pay PLN 237 million on the transaction day and the remaining PLN 188 million in bonds issued with a maturity date of 3.5 years, bearing interest at an annual rate of 5%. The signing of the ﬁnal agreement and the closing of the transaction shall be subject to the consent of the President of the Oce of Compe- tition and Consumer Protection. The transaction will exclude the development busi- ness carried out outside the Wrocław agglomeration and two development projects in Kraków, as well as the architectural design studio - these assets will re- main in the hands of the sellers. The development projects will be sold to Dorota Jarodzka-Śródka and Rafał Jarodzki for PLN 131 m million (paid in two instalments), and the design studio will be sold to Dorota Jarodzka-Śródka and Kazimierz Śródka for PLN 2.4 million. In addition, on the closing date of the transaction an option agreement shall be executed under which . Bond issue of a total value of PLN 195 million On March 17, 2021 institutional investors have ac- quired Echo Investment’s bonds with a total value of PLN 195 million. The obtained funds will be allocated to the company’s development, particularly in the promising residential sector. The bonds have a 4-year maturity. Their interest rate is based on the WIBOR 6M variable rate plus a margin for investors. The agent of this new issue is mBank S.A. Echo Investment plans to allocate the money obtained from the bond issue to ﬁnance the Echo Investment S.A. or an entity designated by the company shall be entitled to purchase the Ar- chicom S.A. shares remaining in the hands of the sellers, representing 8.31% of the share capital and carrying 13.32% of total votes at the general meeting. The option will be exercisable until March 15, 2023. At the end of 2020 in Wrocław and Kraków Archicom has c.a. 2,000 apartments under construction and 4,200 in preparation. After completion of the trans- action, the Echo-Archicom Group will be the largest residential developer in Poland, having started the construction of a total of 7 thousand apartments for sale and rent in 2021. The acquisition is in line with Echo Investment’s strategic goals of becoming a Pol- ish nationwide leader in the residential sector. Archicom has been operating mainly on the Lower Silesian market and has been listed on the Stock Ex- change since 2016. The company has grown out of a family-owned architectual design oce and has 160 completed projects to its credit, including the revital- ized Wrocław Brewery complex, the award-winning Olimpia Port estate and the ﬁrst exclusive Platinum Lofts in Wrocław. Archicom is a strong, recognizable brand with nearly 15% share in the Wrocław residen- tial market. development of its business and to repay the bonds maturing at the end of Q1 of this year. The issued bonds are not secured and will be entered into the market in the alternative trading system of the Warsaw Stock Exchange. Due to issue of bonds, the Company redeemed 1,475 own bonds with a nominal value of PLN 10,000 each (ISIN code PLECHPS00225). | Financial statement 114 Standalone nancial report of Echo Investment S.A. for 2020  Remuneration of the Management Board and Supervisory Board The information on rules of Management Board remuneration you can ﬁnd in item 26 of the Management Report. REMUNERATION OF MEMBERS OF THE MANAGEMENT BOARD PLN 2020 2019 From Echo Investment S.A. Basic remuneration From subsidiaries, joint-ventures and associates Other benets Total From Echo Investment S.A. Basic remuneration From subsidiaries, joint-ventures and associates Other benets Total Bonus Bonus Nicklas Lindberg 1 003 933 2 145 339 596 006 3 745 278 1 076 227 20 861 365 2 192 026 843 250 24 972 867 Maciej Drozd 421 672 336 000 1 224 713 35 218 2 017 603 753 413 359 100 721 999 1 080 1 835 592 Artur Langner 204 000 228 000 972 000 4 504 1 408 504 233 973 167 400 850 800 4 002 1 256 175 Marcin Materny 207 000 180 000 814 032 9 552 1 210 584 240 000 125 280 702 842 8 676 1 076 798 Rafał Mazurczak 207 000 177 120 808 992 10 052 1 203 164 200 000 180 000 814 032 8 676 1 202 708 Waldemar Olbryk 627 000 537 350 - 66 466 1 230 816 702 000 386 100 - 6 704 1 094 804 Małgorzata Turek (appointed on 7.03.2019) 204 000 114 538 739 076 4 404 1 062 018 217 857 - 467 500 3 702 689 059 Total 2 874 605 1 573 008 6 704 152 726 202 3 423 469 22 079 245 5 749 199 876 090 Total for the year 11 877 967 32 128 003 | Financial statement 115 Standalone nancial report of Echo Investment S.A. for 2020 The information on rules of Supervisory Board remuneration you can ﬁnd in item 26 of the Management Report. REMUNERATION OF MEMBERS OF THE SUPERVISORY BOARD PLN 2020 2019 From Echo Investment S.A. From subsidiaries, joint-ventures and associates Other benets From Echo Investment S.A. From subsidiaries, joint-ventures and associates Noah M. Steinberg (appointed on 9.01.2020) 137 086 - - - - Karim Khairallah (resigned on 13.12.2019) - - - - - Tibor Veres (appointed on 9.01.2020) 75 194 - - - - Laurent Luccioni (resigned on 13.12.2019) - - - - - Mark E. Abramson (resigned on 13.08.2020) 126 290 - - 180 000 - Margaret Dezse (appointed on 13.08.2020) 54 194 - - - - Maciej Dyjas 60 000 - - 60 000 - Sławomir Jędrzejczyk (appointed on 13.08.2020) 54 194 - - - - Stefan Kawalec (dismissed on 13.08.2020) 126 290 - 1 800 180 000 - Péter Kocsis (appointed on 9.01.2020) 53 710 - - - - Bence Sass (appointed on 9.01.2020) 53 710 - - - - Nebil Senman 60 000 - 825 60 000 - Sebastian Zilles (resigned on 13.12.2019) - - - - - Total 800 668 2 625 480 000 Total for the year 803 293 480 000 | Financial statement 116 Standalone nancial report of Echo Investment S.A. for 2020 Agreements concluded with an entity authorised to audit ﬁnancial statements  The Supervisory Board of Echo Invest- ment S.A., upon the recommendation of the Audit Committee, has selected Deloitte Audyt Sp. z o.o. Sp.K. based in Warsaw, al. Jana Pawła II, registered as number 73 in the list of expert auditors to audit separate ﬁnancial reports of Echo Investment and consolidated ﬁnancial reports of the Echo Investment Capi - tal Group for the years 2020-2021. The agreement was concluded by the Man- agement Board, based on the Supervi- sory Board’s authorisation. The Management Board of Echo Invest- ment S.A. informs that the selection of the auditing company conducting the audit of the annual ﬁnancial statements was made in accordance with the regu- lations, including the selection and pro- cedure for the selection of the auditing company, based on the resolution of the Supervisory Board of 14 November 2019. The auditing company and the members of the team conducting the audit met the conditions for preparing an unbiased and independent report on the audit of the annual ﬁnancial statements in accord- ance with the applicable regulations, professional standards and professional ethics. Echo Investment S.A. complies with the existing regulations related to rotation of the auditing company and the key stat- utory auditor, as well as prevailing man- date periods. Echo Investment S.A. has a policy with respect to the selection of the auditing company and a policy with respect to providing services to the issuer by the auditing company, any entity relat- ed to the auditing company or a member of its network of additional non-auditing services, including services which are conditionally excluded from the ban on such services by the auditing company. The auditing company selection policy and the non-auditing services purchase policy were approved by resolutions of the Audit Committee dated March 23, 2018 and are available on the Company’s website under Investor relations / Strat- egy and corporate governance. THE NET REMUNERATION DUE TO THE AUDITOR ENTITLED TO AUDIT FINANCIAL REPORTS OF THE COMPANY AND THE GROUP PLN Due Contractual amount [PLN] Review of the standalone and consolidated ﬁnancial statements for H1 2020 135 000 Audit of the standalone ﬁnancial statement for Q3 2020 98 000 Audit of the standalone and consolidated ﬁnancial statements for 2020 278 000 Annual audit of subsidiaries 74 250 Total 585 250 Anna Gabryszewska-Wybraniec Chief Accountant Kielce, March 30, 2021 Nicklas Lindberg President of the Board, CEO Maciej Drozd Vice-President of the Board, CFO Artur Langner Vice-President of the Board Rafał Mazurczak Member of the Board Marcin Materny Member of the Board Waldemar Olbryk Member of the Board Małgorzata Turek Member of the Board The document is signed with qualiﬁed electronic signature STATEMENT OF THE MANAGEMENT BOARD | Statement 118 Standalone nancial report of Echo Investment S.A. for 2020 Kielce, 30 March, 2021 The Management Board of Echo Investment S.A. declares that, to the best of its knowledge, the Management Board Report on operations of Echo Investment S.A. and its Group for 2020 and comparative data have been presented in compliance with the applicable accounting principles, and that they reﬂect in a true, reliable and transparent manner the economic and ﬁnancial situation of Echo Investment S.A. and its ﬁnancial result. The management report of Echo Investment S.A. presents a true view of development, accomplishments and situation of Echo Investment S.A., including a description of fundamental risks and threats. The Management Board of Echo Investment S.A. declares that the entity authorised to audit ﬁnancial statements, auditing the annual ﬁnancial statements for 2020, was selected in accordance with the laws. This entity and the statutory auditors conducting the audit fulﬁlled the conditions required to express an unbiased and independent opinion on the audited annual ﬁnancial statements, pursuant to the applicable laws and professional standards. Nicklas Lindberg President of the Board, CEO Maciej Drozd Vice-President of the Board, CFO Artur Langner Vice-President of the Board Rafał Mazurczak Member of the Board Marcin Materny Member of the Board Waldemar Olbryk Member of the Board Małgorzata Turek Member of the Board The document is signed with qualiﬁed electronic signature CONTACT Echo Investment S.A. Warsaw oce Q22 building al. Jana Pawła II 22 00-133 Warsaw Design and execution: Damian Chomątowski | be.net/chomatowski

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