Ronson Development SE

CONTENTS

Interim Financial Report for the six months ended 30 June 2023

Including the Interim Condensed Consolidated Financial Statements of Ronson Development SE for the six months ended 30 June 2023 and the Interim Condensed Company Financial Statements of Ronson Development SE for the six months ended 30 June 2023

Management Board Report	3
Interim Condensed Consolidated Financial Statements for the six months ended 30 June 2023	23
Interim Condensed Consolidated Statement of Financial Position	23
Interim Condensed Consolidated Statement of Comprehensive Income	24
Interim Condensed Consolidated Statement of Changes in Equity	25
Interim Condensed Consolidated Statement of Cash Flows	26
Notes to the Interim Condensed Consolidated Financial Statements	27
Interim Condensed Standalone Financial Statements for the six months ended 30 June 2023	63
Interim Condensed Standalone Statement of Financial Positions	63
Interim Condensed Standalone Statement of Comprehensive Income	64
Interim Condensed Standalone Statement of Changes in Equity	65
Interim Condensed Standalone Statement of Cash Flows	66
Notes to the Interim Condensed Standalone Financial Statements	67

Management Board Report Introduction

Ronson Development SE ("the Company"), formerly named Ronson Europe N.V., is an European Company with its statutory seat in Warsaw, Poland at al. Komisji Edukacji Narodowej 57. The Company was incorporated in the Netherlands on 18 June 2007 as Ronson Europe N.V. with statutory seat in Rotterdam. During 2018, the Company changed its name and was transformed into an European Company (SE) and, effectively as of 31 October 2018, transferred its registered office of the Company from the Netherlands to Poland.

The shares of the Company were traded on the Warsaw Stock Exchange until 28 April 2022. As at 30 June 2023, 100% of the Company's shares are controlled by Amos Luzon Development and Energy Group Ltd. ("A. Luzon Group"), whereas 32.98% of the shares are held directly by A. Luzon Group, 66.06% of the shares are held via I.T.R. Dori B.V., a fully owned subsidiary of A. Luzon Group and 0.96% of the shares are own shares of the Company.

Overview of the Activity of the Company and the Group

The Company together with its subsidiaries, ('the Group') is active in the development and sale of residential units, primarily apartments, in residential real-estate projects to individual customers in Poland as well as in the PRS ("Private Rented Sector") where development first started in 2021. The Company has been operating through its subsidiaries on the following markets in Poland: Warsaw, Wrocław, Poznań and Szczecin.

During the six months ended 30 June 2023, the Group realized sales of 494 units with the total value of PLN 274.7 million, which is an increase of 132% (in number of units) comparing to sales of 213 units with the total value PLN 96.1 million during the six months ended 30 June 2022.

Until 30 June 2023 the Group delivered 383 units in 100% owned projects which represent a total revenue of PLN 176.4 million comparing to delivery of 339 units in 100% owned projects with a total revenue value of PLN 137.7 million during six months ended 30 June 2022.

As at 30 June 2023, the Group has 897 units available for sale in 12 locations, of which 810 units are in ongoing projects and the remaining 87 units are in completed projects. The ongoing projects comprise a total of 1,191 units, with an aggregate floor space of 64,371 m2 . The construction of 459 units with a total area of 25,509 m2 is expected to be completed during remaining period of 2023.

The Group has a pipeline of 16 projects in different stages of preparation, representing approximately 4,834 units with an aggregate floor space of approximately 268,288 m2 for future development of the residential activity, in such cities as: Warsaw, Poznań, Wrocław, Szczecin and 4 projects representing approximately 677 units with an aggregate floor space of 25,272 m2 for future development of PRS in Warsaw.

During the remaining period of 2023, the Group is considering commencement of two projects comprising 152 units with a total area of 10,087 m2 .

In addition to the above as at 30 June 2023 the Group is in different stages of process for finalizing the purchase of 4 plots located in Warsaw with a total projected PUM of 97,959 m2 with an estimated 2,244 units for construction for a total purchase price of PLN 168.5 million.

A. Results breakdown by project

The following table specifies revenue, cost of sales, gross profit and gross margin during the six months ended 30 June 2023 on a project by project basis:

	Information on the delivered units		Revenue (1)		Cost of sales (2)		Gross profit	Gross margin
Project	Number of units	Area of units (m2)	PLN thousands	%	PLN thousands	%	PLN thousands	%
Miasto Moje VI	149	6,717	62,944	35.7%	41,842	34.8%	21,101	33.5%
Ursus Centralny IIb	115	6,320	60,249	34.1%	38,424	32.0%	21,825	36.2%
Viva Jagodno IIb	45	2,210	18,149	10.3%	11,148	9.3%	7,001	38.6%
Nowe Warzymice IV	34	1,498	12,954	7.3%	9,245	7.7%	3,709	28.6%
Miasto Moje V	14	981	8,041	4.6%	7,042	5.9%	1,000	12.4%
Grunwaldzka	12	483	4,726	2.7%	3,791	3.2%	935	19.8%
Viva Jagodno IIa	5	354	2,873	1.6%	2,183	1.8%	691	24.0%
Nowe Warzymice III	3	225	1,663	0.9%	1,150	1.0%	513	30.9%
Others (4)	6	418	4,832	2.7%	5,434	4.5%	(602)	n.a.
Total / Average	383	19,206	176,431	100%	120,259	100%	56,173	31.8%
Impairment recognized	n.a.	n.a.	n.a.				n.a.	n.a.
Results after write-down adjustment	383	19,206	176,431		120,259		56,173	31.8%
Wilanów Tulip(3)	2	144	1,473		3,114		(1,641)	-111.4%
Economic results	385	19,350	177,904		123,372		54,532	30.7%

the transfer of the key of the residential unit to the buyer and total payment obtained.

(2) Cost of sales allocated to the delivered units proportionally to the total expected revenue of the project.

(3) The project presented in the Interim Condensed Consolidated Financial Statements under investment in joint ventures; the Company's share is 50%. Amount recognised using the equity method in accordance with IAS 28.

(4) The amount include old projects delivery of units and parking places as well as revenue from leasing of buildings.

Revenue from the sale of residential units is recognized when the customer takes control of the unit, i.e. when the technical acceptance protocol is signed, the keys to the unit are handed over and full payment is received. Revenue from sales of apartments and service units of residential projects recognized during the six months ended 30 June 2023 amounted to PLN 176.43 million, whereas cost of sales before write-down adjustment amounted to PLN 120.26 million. Resulting in a gross profit before write-down adjustment amounting to PLN 56.17 million and a gross margin of 31.8%. Total economic revenue from sales of residential projects, when results from joint ventures are presented on a fully consolidated basis, amounted to PLN 177.90 million, whereas cost of sales amounted to PLN 123.37 million, that resulted in a gross profit amounting to PLN 54.53 million and a gross margin of 30.7%.

Projects completed during the six months ended on 30 June 2023

The table below presents information on the projects that were completed (i.e. completing all construction works and receiving occupancy permit) during the six months ended 30 June 2023:

Project name	Location	Number of units	Area of units (m2)	Total units sold until 30 June 2023	Units delivered in 2023	Units sold not delivered as at 30 June 2023
Miasto Moje VI	Warsaw	227	11,722	202	149	53
Ursus Centralny IIb	Warsaw	206	11,758	205	115	90
Viva Jagodno IIb	Wrocław	152	8,876	132	45	87
Nowe Warzymice IV	Szczecin	75	3,818	66	34	32
Grunwaldzka	Poznań	70	3,351	58	12	46
Total		730	39,525	663	355	308

A. Results breakdown by project

Projects completed in previous years with their impact on current year results

The table below presents information on the projects that were completed (i.e. construction works are finished and the occupancy permit was received) in previous years and the income that was recognized based on units delivered during the six months ended 30 June 2023:

Project name	Location	Completion date	Total Project Units	Total Area of units (m2)	Total units sold until 30 June 2023	Total units delivered until 31 December 2022	Units delivered during 2023	Recognised income during year 2023 (PLN'000)	Units sold not delivered as at 30 June 2023	Units for sale as at 30 June 2023	Left to sale/ deliver after 30 June 2023
Miasto Moje V	Warsaw	Q3 2022	170	8,559	170	155	14	8,041	1	-	1
Miasto Moje IV	Warsaw	Q4 2021	176	8,938	176	174	1	562	1	-	1
Sakura I-IV	Warsaw	Q3 2015	515	30,290	515	515	-	43	-	-
Sakura Idea	Warsaw	Q3 2015	26	1,854	25	25	-	28	-	1	1
Moko I	Warsaw	Q4 2016	178	11,238	178	177	1	1,159	-	-	-
Moko II	Warsaw	Q4 2016	167	12,624	167	167	-	169	-	-	-
Panoramika I	Szczecin	Q4 2012	90	5,328	90	89	1	462	-	-	-
Ursus Centralny IIa	Warsaw	Q4 2021	251	13,509	251	251	-	27	-	-	-
City Link III	Warsaw	Q4 2019	368	18,763	368	367	1	580	-	-	-
Vitalia III	Wrocław	Q1 2021	81	6,790	81	81	-	6	-	-	-
Ursus Centralny Ib	Warsaw	Q3 2022	97	5,740	97	97	-	23	-	-	-
Nowe Warzymice III	Szczecin	Q4 2021	62	3,537	61	57	3	1,663	1	1	2
Viva Jagodno I	Wrocław	Q3 2021	121	6,241	121	120	1	618	-	-	-
Viva Jagodno IIa	Wrocław	Q4 2022	76	4,329	65	59	5	2,873	1	11	12
Nowe Warzymice I	Szczecin	Q2 2021	54	3,234	53	51	1	570	1	1	2
Nowe Warzymice II	Szczecin	Q2 2022	66	3,492	64	64	-	19	-	2	2
Nova Królikarnia 1d	Warsaw	Q2 2018	12	1,488	11	11	-	-	-	1	1
Verdis I-IV	Warsaw	Q4 2015	441	26,062	441	440	-	-	1	-	1
Verdis Idea	Warsaw	Q4 2015	11	772	11	10	-	-	1	-	1
Młody Grunwald	Poznań	Q2 2014	148	8,575	148	146	-	-	2	-	2
Młody Grunwald III	Poznań	Q4 2017	108	7,091	107	107	-	-	-	1	1
Total excluding JV			3,218	188,454	3,200	3,163	28	16,842	9	18	27
Wilanów Tulip	Warsaw	Q3 2021	149	9,574	149	147	2	1,473	-	-	-
Total including JV			3,367	198,027	3,349	3,310	30	18,315	9	18	27

B. Units sold during the period

The table below presents information on the total number of units sold (i.e. total number of units for which the Company signed the preliminary sale agreements with the clients), including net saleable area (in m2 ) of the units sold and net value (without VAT) of the preliminary sales agreements (including also parking places and storages) sold by the Group during the six months ended 30 June 2023:

Project name	Location	Total Project Saleable area (m2)	Total project units	Units sold until 31 December 2022	Units sold during 6 months ended 30 June 2023	Net Sold area (m2)	Value of the preliminary sales agreements (in PLN thousands)	Units for sale as at 30 June 2023
Miasto Moje VI(1)	Warsaw	11,722	227	127	75	4,777	43,969	25
(2) Osiedle Vola	Warsaw	4,851	84	14	45	2,341	34,135	25
Viva Jagodno IIb(1)	Wrocław	8,876	152	64	68	3,844	31,305	20
Ursus Centralny IIb(1)	Warsaw	11,758	206	154	51	3,110	29,925	1
Ursus Centralny IIc(2)	Warsaw	11,124	223	74	33	2,458	25,061	116
Między Drzewami(2)	Poznań	5,803	117	24	48	2,335	24,183	45
Ursus Centralny IIe(2	Warsaw	15,628	291	5	45	1,964	22,127	241
Miasto Moje VII(2)	Warsaw	11,725	255	2	48	1,795	18,897	205
Nowe Warzymice IV(1)	Szczecin	3,818	75	31	34	1,712	13,832	10
Miasto Moje V	Warsaw	8,559	170	160	10	795	6,742	-
Nowa Północ Ia(2)	Warsaw	5,230	110	14	15	678	5,382	81
Eko Falenty I(2)	Warsaw	4,304	42	4	6	639	4,807	32
Nova Królikarnia 4b1 (Thame)(2)	Warsaw	2,566	11	-	1	217	4,776	10
Grunwaldzka(1)	Poznań	3,351	70	52	5	313	3,033	13
Viva Jagodno IIa	Wrocław	4,329	76	63	2	200	1,678	11
Nowe Warzymice III	Szczecin	3,537	62	58	3	225	1,572	1
Nowe Warzymice I	Warsaw	3,234	54	51	2	171	1,302	1
Viva Jagodno I	Wrocław	6,241	121	120	1	63	602	-
Viva Jagodno III	Wrocław	3,140	58	3	-	-	-	55
Panoramika	Szczecin	54	1	-	1	54	462	-
Moko II	Warsaw	12,624	167	167	-	-	59	-
Sakura I-IV	Warsaw	30,290	515	515	-	-	46	-
Nowe Warzymice II	Szczecin	3,492	66	64	-	-	41	2
Sakura Idea	Warsaw	1,854	26	25	-	-	38	1
Miasto Moje IV	Warsaw	8,938	176	176	-	-	28	-
Vitalia III	Wrocław	6,790	81	81	-	-	6	-
Miasto Moje I	Warsaw	10,917	205	205	-	-	4	-
Moko I	Warsaw	11,238	178	178	-	-	3	-
Nova Królikarnia 1d	Warsaw	1,488	12	11	-	-	-	1
Młody Grunwald III	Poznań	7,091	108	107	-	-	-	1
Total excluding JV		224,572	3,939	2,549	493	27,690	274,015	897
Wilanów Tulip(3)	Warsaw	9,574	149	148	1	69	714	-
Total including JV		234,145	4,088	2,697	494	27,759	274,729	897

(1) For information on the completed projects see "Business highlights during the six months ended 30 June 2023 – A. Results breakdown by project".

(2) For information on current projects under construction, see "Outlook for the remaining period of 2023 – B. Current projects under construction and/or on sale".

(3) The project presented in the Interim Condensed Consolidated Financial Statements under investment in joint ventures; the Company's share is 50%.

B. Units sold during the period

The table below presents further information on the value of the preliminary sales agreements (with a breakdown per city, without VAT) executed by the Group:

Location	Value of the preliminary sales agreements sold during the year ended	Increase/(deacrease)
In thousands of Polish Zlotys (PLN)	30 June 2023	30 June 2022	In PLN	%
Warsaw	172,953	64,795	108,158	167%
Wrocław	33,591	16,629	16,961	102%
Szczecin	40,968	11,686	29,282	251%
Poznań	27,217	2,432	24,785	1019%
other	-	602	(602)	-100%
Total	274,729	96,143	179,437	187%

C. Agreements significant for the business activity of the Group

The table below presents the summary of the signed final purchase agreements of land during the period ended 30 June 2023:

Location	Type of agreement	Signed date	Agreement net value (PLN million)	Paid net till 30 June 2023 (PLN million)	Number of units	Potential PUM
Warsaw, Dobosza	final	10 Aug 2022, 2 Mar 2023	7.1	7.1	67	3,700
Total			7.1	7.1	67	3,700

The table below presents the summary of the signed preliminary purchase agreements for which the final agreements will be signed during next periods:

Location	Type of agreement	Signed date	Agreement net value (PLN million)	Paid net till 30 June 2023 (PLN million)	Number of units	Potential PUM
Warsaw, Białołęka	preliminary	23 Nov 2020	1.5	1.5	n/a	n/a
Warsaw, Ursus	preliminary	17 Jan 2021	140.0	10.0	1,860	85,000
Warsaw, Włochy	preliminary	29 Dec 2021	16.0	2.0	142	8,400
Warsaw, Bielany(1)	preliminary	21 Mar 2022	11.0	1.0	242	4,559
Total			168.5	14.6	2,244	97,959

1) The land designated for PRS activity

Selected financial data

	Exchange rate of Polish Zloty versus Euro
PLN/EUR	Average exchange rate	Minimum exchange rate	Maximum exchange rate	Period end exchange rate
2023 (6 months)	4.6280	4.4286	4.7895	4.4503
2022 (6 months)	4.6362	4.4879	4.9647	4.6806
2022 (12 months)	4.6876	4.4879	4.9647	4.6899

Source: National Bank of Poland ("NBP")

Selected financial data

Selected financial data	EUR		PLN
	(thousands, except per share data)
	For the period ended 30 June
	2023	2022	2023	2022
Revenues	38,123	29,697	176,431	137,680
Gross profit	12,138	6,817	56,172	31,604
Profit/(loss) before taxation	7,576	2,825	35,059	13,097
Net profit/(loss) for the period attributable to the equity holders of the parent	5,719	2,119	26,465	9,825
Cash flows from/(used in) operating activities	20,158	(13,517)	93,291	(62,669)
Cash flows from/(used in) investing activities	117	(2,073)	539	(9,612)
Cash flows from/(used in) financing activities	(8,888)	6,023	(41,133)	27,922
Increase/(decrease) in cash and cash equivalents	11,387	(9,271)	52,697	(42,982)
Average number of equivalent shares (basic)	162,442,859	162,442,859	162,442,859	162,442,859
Net earnings/(loss) per share (basic and diluted)	0.035	0.013	0.163	0.060

Selected financial data	EUR		PLN
	(thousands)
	As at
	30 June 2023	31 December 2022	30 June 2023	31 December 2022

Inventory and Land designated for development	181,522	157,778	807,827	768,348
Total assets	239,578	205,779	1,066,193	1,002,103
Advances received	40,812	28,730	181,624	139,911
Long term liabilities	37,201	37,493	165,555	182,583
Short term liabilities (including advances received)	94,802	75,593	421,897	368,124
Equity attributable to the equity holders of the parent	107,575	92,693	478,742	451,396

Overview of results

The net profit attributable to the equity holders of the parent company for the six months ended 30 June 2023 was PLN 26,465 million and can be summarized as follows:

	For the period of 6 months ended
	30 June
	2023	2022	change
	PLN
	(thousands, except per share data)		nominal	%
Revenue from sales of residential units	176,431	137,680	38,751	28%
Revenue from sale of services	-	-	-	100%
Revenues	176,431	137,680	38,751	28%
Cost of sales of residential units	(120,259)	(106,076)	(14,182)	13%
Cost of sales	(120,259)	(106,076)	(14,182)	13%
Gross profit	56,172	31,604	24,569	78%
Changes in the value of investment property	(842)	(46)	(796)	-1730%
Selling and marketing expenses	(3,026)	(1,706)	(1,320)	77%
Administrative expenses	(13,310)	(12,949)	(361)	3%
Share of profit/(loss) from joint venture	(726)	1,066	(1,792)	-168%
Other Incomes /(expense)	(3,830)	(379)	(3,451)	910%
Result from operating activities	34,438	17,589	16,849	96%
Finance income	1,328	2,058	(730)	-35%
Finance expense	(7,083)	(3,571)	(6,118)	171%
Gain/(loss) on a financial instrument measured at fair value through profit and loss	6,376	(2,979)	11,961	-402%
Net finance income/(expense)	621	(4,492)	5,113	-114%
Profit/(loss) before taxation	35,059	13,097	21,962	168%
Income tax benefit/(expenses)	(8,594)	(3,272)	(5,322)	163%
Net profit/(loss) for the period before non-controlling interests	26,465	9,825	16,640	169%
Net profit/(loss) for the period attributable to the equity holders of the parent	26,465	9,825	16,640	169%
Net earnings/(loss) per share attributable to the equity holders of the parent (basic and diluted)	0.163	0.060	0.103	172%

Overview of results

Revenue from sales of residential units

The revenue from sales in residential units increased by PLN 38.7 million (28%) from PLN 137.7 million during the six months ended 30 June 2022 to PLN 176.4 million during the six months ended 30 June 2023, which is explained by higher amount of units delivered – 383 units delivered to the customers during the six months ended 30 June 2023, comparing to the 339 units delivered during the six months ended 30 June 2022 (in terms of project 100% owned by the Group), as well as increase in sale prices over the period

Cost of sales of residential units

Cost of sales of residential units increased by PLN 14.2 million (13%) from PLN 106.1 million during the six months ended 30 June 2022 to PLN 120.3 million during the six months ended 30 June 2023. The increase relates to a higher amount of delivered units in projects fully owned by the Group from 339 units during the six months ended 30 June 2022 compared to 383 units delivered to customers during the six months ended 30 June 2023.

Gross margin

The gross margin from sales of residential units during the six months ended 30 June 2023 was 31.8% which increased comparing to 23.0% during the six months ended 30 June 2022. The change in gross margin relates to a different mix of projects delivered to the customers characterized by a different profitability during the six months ended 30 June 2023 compared to the mix of projects delivered to customers during the six months ended 30 June 2022.

During six months ended 30 June 2023 the projects that significantly impacted revenues and profitability of the Group were Miasto Moje VI, Ursus Centralny IIb and Viva Jagodno IIb (contributed respectively PLN 21.1 million, PLN 21.8 million and PLN 7.0 million to the gross profit representing a gross margin of 33.5%, 36.2% and 38.6%).

During six months ended 30 June 2022 the projects that significantly impacted revenues and profitability of the Group were Ursus Centralny IIa, Nowe Warzymice II and Miasto Moje IV (contributed respectively PLN 19.8 million, PLN 5.4 million and PLN 4.1 million to the gross profit representing a gross profit margin of 24.2%, 27.9% and 24.4%).

Selling and marketing expenses

Selling and marketing expenses increased by PLN 1.3 million (77%) from PLN 1.7 million during the six months ended 30 June 2022 to PLN 3 million during the six months ended 30 June 2023, is reflecting the higher invested marketing resources in the company running projects and opening new stages in ongoing projects, in order to achieve higher sales. As a result higher number of units sold during the reporting period, increase of 132% (494 units sold during the period ended 30 June 2023 comparing to 213 units sold during the period ended 30 June 2022).

Administrative expenses

Administrative expenses increased by PLN 0.4 million (3%) from PLN 12.9 million in the period ended 30 June 2022 to PLN 13.3 million ended 30 June 2023, which is primarily explained by increase in remuneration costs, and increase in taxes and charges due to non-deductible VAT costs, property taxed and perpetual usufruct fees on project completed.

Net finance income/(expenses)

Finance income and expenses are accrued and capitalized as part of the cost price of inventory to the extent that is directly attributable to the construction of residential units. Unallocated finance income/(expenses) not capitalized is recognized in the statement of comprehensive income. In the six months period ended 30 June 2023 the Group recorded a net income on financial operations of PLN 0.6 million compared to a net expense of PLN 4.5 million in the corresponding period of 2022. This variation is mainly due to a net profit on fair value measurement of a financial instrument generated as well as a gain on foreign exchange rates totaling 6.4 million, compared to a loss of 3.0 million on this account in the corresponding period of 2022. For more information of Finance expenses that took place please see Note 17.

Overview of selected details from the Interim Condensed Consolidated Statement of Financial Position

The following table presents selected details from the Interim Condensed Consolidated Statement of Financial Position in which material changes had occurred.

	As at 30 June 2023	As at 31 December 2022
		PLN (thousands)
Inventory and Residential landbank	807,827	768,348
Investment properties	62,884	63,139
Advances received	181,624	139,911
Loans, bonds and borrowings	205,120	219,667
Financial liability measured at FVPL	-	70,506
Liability to shareholder measured at amortized costs	39,258	-

Inventory and residential landbank

The value of inventories and residential landbank at 30 June 2023 amounted to PLN 807.8 million compared to PLN 768.3 million at 31 December 2022.The increase is mainly due to direct construction costs occurred in the total amount of PLN 132.9 million, transfer of land from land design for development PLN 9.2 million. This increase was partly offset by recognized costs of sales in the total amount of PLN 113.1 million

Investment properties

The balance of Investment properties is PLN 62.9 million as at 30 June 2023 compared to PLN 63.1 million as at 31 December 2022. The decrease is primarily explained by expenditures incurred mainly related to planning process of investments in the total amount of PLN 0.6 million and with a new valuation of real estate at ul. Gwiaździsta, where a company from the Group (Ronson Development Horizon) has offices for lease - a decrease in value by PLN 0.8 million. As at 30 June 2023 the balance consists of property held for long-term rental yields and capital appreciation as well as investment lands purchased to build investment property for long-term so-called institutional rental and capital appreciation.

Advances received

The balance of advances received is PLN 181.6 million as at 30 June 2023 compared to PLN 139.9 million as at 31 December 2022. The increase is explained by advances received from clients regarding sales of units during the period ended 30 June 2023 for a total amount PLN 213.6 million which was offset by the revenues recognized from the sale of residential units for a total amount of PLN 176.4 million during the three months ended 30 June 2023.

Loans, bonds and borrowings

The total of short-term and long-term loans and bonds is PLN 205.1 million as at 30 June 2023 compared to PLN 219.7 million as at 31 December 2022. The decrease in loans and bonds is primarily explained by change in bank loans of PLN 14.9 million (loans received and the use of credit lines in the amount of PLN 44.7 million with a simultaneous bank loans repayments of PLN 59.5 million and interests accrued of PLN 0.6 million). The level of debt from bond loans as at 30 June 2023 amounted to PLN 203.7 million, out of which an amount of PLN 105 million comprises facilities maturing no later than 30 June 2024. The balance of bond loans comprises of: principal amount of PLN 200.0 million plus accrued interest of PLN 5.0 million minus one-time costs directly attributed to the bond issuances which are amortized based on the effective interest method (PLN 1.3 million). For additional information see Note 15 of the Interim Condensed Consolidated Financial Statements.

Financial liability measured at FVPL

Overview of selected details from the Interim Condensed Consolidated Statement of Financial Position

Financial liability measured at FVPL

On the 25 may 2023 the company and its main shareholder (Amos Luzon Development and Energy Group Ltd.) signed a settlement agreement which together with original SAFE Agreements resulted in derecognition of financial liability measured at FVPL.

Following to the signing of the SAFE settlement agreement by Ronson and Luzon with verbal consent of the Investors on 25 May 2023, Ronson recognized new financial liability at amortized cost from its shareholder and made partial repayment of the liability in the amount of PLN 25 million. For further information regarding the SAFE agreement as well as the settlement agreement and valuation method used please see Note 14 of the Interim Condensed Consolidated Financial Statements.

Liability to shareholder measured at amortized costs

On the basis of the SAFE agreement, the Company undertook to return to Luzon Group the financing received from Investors in the total amount of ILS 60 million (sixty million Israeli shekels), to satisfy Luzon Group's claims against the Company under the SAFE Agreements and applicable Israeli law. Payments to Luzon Group in the total amount of PLN 25 million (approx. ILS 21.7 million) were made in May 2023 resulting in the balance of Liability to shareholder measured at amortized costs in amount of PLN 39.2 million. For more information please see Note 14 of the Interim Condensed Consolidated Financial Statements.

Overview of cash flow results

The Group funds its day-to-day operations principally with funds generated from sales, as well as proceeds from loans and borrowings and bonds.

The following table sets forth the cash flow on a consolidated basis:

	For the period of six months ended 30 June
	2023	2022
	PLN (thousands)
Cash flows from/(used in) operating activities	93,291	(62,669)
Cash flow from/(used in) investing activities	539	(9,612)
Cash flow (used in)/from financing activities	(41,133)	27,922

Cash flow from/(used in) operating activities

The Company's positive net cash flow from operating activities for the six months ended 30 June 2023 amounted to PLN 93.3 million compared to negative net cash flows from these activities in the corresponding period ended 30 June 2022 of PLN 62.7 million. The increase of PLN 156 million is primarily explained by:

- an increase in cash inflow of PLN 93.4 million due to an increase in advances received from customers from having a receivable of PLN 120.1 million in the 6 months ended 30 June 2022 to balance of PLN 213.6 million received in the 6 months ended 30 June 2023;
- increase in cash inflow of PLN 15 million due to amounts received for VAT return during in the net total amount of 21.1 million during the 6 months ended 30 Jun 2023 comparing to VAT return of 6.0 million during the 6 month ended 30 June 2022;
- decrease in cash outflow related to land purchase and advances for land purchase of PLN 28.9 million during the 6 months ended on 30 Jun 2022 , comparing to no purchase of land during the 6 months of 30 June 2023;
- decrease in cash outflow related to corporate income tax payment in the amount of PLN 0.7 million from PLN 6.1 million for the 6 months ended on 30 June 2022 to PLN 5.4 million during the six months ended on 30 June 2023.

Overview of cash flow results

Cash flow from/(used in) operating activities

The above mentioned positive effect on the operational cash flow was partly offset by:

increase of cash outflow in the amount of PLN 6.1 million related to interest payments in the amount of PLN 12.2 million in the 6 month ended on 30 June 2023 comparing to interest payment of PLN 6.1 million during the 6 months ended on 30 June 2022.

Cash flow from investing activities

The Company's net cash inflow used in investing activities amounted to PLN 0.54 million during the six months ended 30 June 2023 compared to net inflow from investing activities in comparative period in the amount of PLN 9.6 million. The increase of PLN 10.1 million is primarily explained by cash inflow due to dividends received from joint ventures in the total amount of PLN 1.1 million. Purchase of investment property in the total amount of PLN 9.6 million during the 6 months ended on 30 June 2022 comparing to no purchase of land during the 6 months ended of 30 June 2023.

Cash flows from financial activities

The Company's net cash outflow from financing activities amounted to PLN 41.1 million during the six months ended 30 June 2023 compared to a net cash inflow from financing activities amounted to PLN 27.9 million during the six months ended 30 June 2022.

The change of PLN 69 million is primarily explained by:

Proceeds from SAFE agreement in the total amount of PLN 74.6 million compared to cash outflow advance paid in the amount of PLN 25 million on the account of SAFE settlement agreement;
Net cash outflow related to repayments of bank loans during the period of 6 months ended 30 June 2023 in the total amount of PLN 14.8 million compared to PLN 4.5 million net inflow during 6 months ended on 30 June 2022;
Cash out flow in the amount of PLN 50 million related to repayment of Bonds during the 6 months ended on 30 June 2022 comparing to no bonds repayments during the 6 months ended on 30 June 2023.

Outlook for the remaining period of 2023

A. Completed projects

The table below presents information on the total residential units in the completed projects/stages that the Group expects to sell and deliver during the remaining period of 2023:

		Number of residential units delivered (1)			Number of residential units expected to be delivered (1)
Project name	Location	Until 31 December 2022	During the period ended 30 June 2023	Total units delivered	Units sold not delivered as at 30 June 2023	Units for sale as at 30 June 2023	Total units expected to be delivered	Total project
Nova Królikarnia 1d	Warsaw	11	-	11	-	1	1	12
Miasto Moje IV	Warsaw	174	1	175	1	-	1	176
Miasto Moje V	Warsaw	155	14	169	1	-	1	170
Miasto Moje VI	Warsaw	-	149	149	53	25	78	227
Ursus Centralny IIb	Warsaw	-	115	115	90	1	91	206
Viva Jagodno I	Wrocław	120	1	121	-	-	-	121
Viva Jagodno IIa	Wrocław	59	5	64	1	11	12	76
Viva Jagodno IIb	Wrocław	-	45	45	87	20	107	152
City Link III	Warsaw	367	1	368	-	-	-	368
Nowe Warzymice I	Szczecin	51	1	52	1	1	2	54
Nowe Warzymice II	Szczecin	64	-	64	-	2	2	66
Nowe Warzymice III	Szczecin	57	3	60	1	1	2	62
Nowe Warzymice IV	Szczecin	-	34	34	31	10	41	75
Moko I	Warsaw	177	1	178	-	-	-	178
Grunwaldzka	Poznań	-	12	12	45	13	58	70
Młody Grunwald I	Poznań	146	-	146	2	-	2	148
Młody Grunwald III	Poznań	107	-	107	-	1	1	108
Verdis I-IV	Warsaw	440	-	440	1	-	1	441
Verdis Idea	Warsaw	10	-	10	1	-	1	11
Sakura Idea	Warsaw	25	-	25	-	1	1	26
Panoramika	Warsaw	89	1	90	-	-	-	90
Total excluding JV		2,052	383	2,435 -	315	87	402	2,837
Wilanów Tulip(2)	Warsaw	147	2	149	-	-	-	149
Total including JV		2,199	385	2,584	315	87	402	2,986

(1) For the purpose of disclosing information related to the particular projects, the word "sell" ("sold") is used, with relation to signing the preliminary sale agreement with the client for the sale of the apartment; whereas the word "deliver" ("delivered") relates to the transferring of significant risks and rewards of the ownership of the residential unit to the client.

(2) The project presented in the Interim Condensed Consolidated Financial Statements under investment in joint ventures; the Company's share is 50%.

For information on the completed projects see "Business highlights during the six months ended 30 June 2023- A. Results breakdown by project".

Outlook for the remaining period of 2023

B. Current projects under construction and/or on sale

The table below presents information on projects for which completion is scheduled in the remaining period of 2023, and for the years 2024-2025. The Company has obtained valid building permits for all projects/stages and has commenced construction and /or sales.

Project name	Location	Start date of construction	Units sold until 30 June 2023	Units for sale as at 30 June 2023	Total units	Total area of units (m2 )	Expected completion of construction
Ursus Centralny IIc	Warsaw, Ursus, Gierdziejewskiego st.	Q4 2021	107	116	223	11,124	Q3 2023
Eko Falenty I	Falenty Nowe, Droga Hrabska st.	Q1 2022	10	32	42	4,304	Q3 2023
Nowa Północ Ia	Szczecin, Bogusława Świątkiewicza st.	Q3 2022	29	81	110	5,230	Q4 2023
Osiedle Vola	Warsaw, Wola, Studzienna st.	Q2 2022	59	25	84	4,851	Q4 2023
Nova Królikarnia 4b1 (Thame)	Warsaw, Srebrnych Świerków	Q1 2023	1	10	11	2,566	Q2 2024
Między Drzewami	Poznań, Smardzewska st.	Q2 2022	72	45	117	5,803	Q3 2024
Miasto Moje VII	Warsaw, Bialoleka, Marwilska st.	Q2 2022	50	205	255	11,725	Q4 2024
Ursus Centralny IIe	Warsaw, Ursus, Gierdziejewskiego st.	Q2 2022	50	241	291	15,628	Q4 2024
Viva Jagodno III(1)	Wrocław, Jagodno, Buforowa st.	Q3 2023	3	55	58	3,140	Q2 2025
Subtotal			381	810	1,191	64,371

(1) Project where the Company started the sales but did not start construction process until 30 June 2023. The construction completion date is expected date based on current Management estimations.

C. Projects for which construction work is planned to commence during the remaining period of 2023

During the remaining period of 2023, the Company is considering the commencement of the further projects:

Project name	Location	Total units	Total area of units (m2 )
Nowe Warzymice V	Szczecin	60	4,563
Zielono Mi I	Warsaw	92	5,524
Total		152	10,087

Outlook for the remaining period of 2023

D. Value of the preliminary sales agreements signed with clients for which revenue has not been recognized in the Consolidated Statement of Comprehensive Income

The current volume and value of the preliminary sales agreements signed with the clients do not impact the Interim Condensed Consolidated Statement of Comprehensive Income immediately but only after final settlement (i.e upon signing of protocol for technical acceptance and transfer of the key to the client as well as obtaining full payment for the unit purchased) of the contracts with the customers. The table below presents the value of the preliminary sales agreements of units (without VAT) executed with the Company's clients that have not been recognized in the Interim Condensed Consolidated Statement of Comprehensive Income:

Project name	Location	Number of the sold but not delivered units signed with Clients	Value of the preliminary sales agreements signed with clients	Completed / expected completion of construction
Ursus Centralny IIb(1)	Warsaw	90	51,716	Completed
Miasto Moje VI(1)	Warsaw	53	31,392	Completed
Viva Jagodno IIa	Wrocław	1	891	Completed
Miasto Moje V	Warsaw	1	1,227	Completed
Nowe Warzymice III	Szczecin	1	520	Completed
Młody Grunwald I	Poznań	2	964	Completed
Miasto Moje IV	Warsaw	1	958	Completed
Nowe Warzymice I	Szczecin	1	731	Completed
Verdis Idea	Warsaw	1	437	Completed
Verdis I-IV	Warsaw	1	277	Completed
Ursus Centralny IIa	Warsaw	-	51	Completed
Miasto Moje III	Warsaw	-	39	Completed
Nowe Warzymice II	Szczecin	-	22	Completed
Sakura I-IV	Warsaw	-	10	Completed
Moko I	Warsaw	-	22	Completed
Sakura Idea	Warsaw	-	10	Completed
Miasto Moje I	Warsaw	-	4	Completed
Viva Jagodno IIb(1)	Wrocław	87	39,845	Completed
Grunwaldzka(1)	Poznań	45	19,666	Completed
Nowe Warzymice IV(1)	Szczecin	31	13,457	Completed
Subtotal completed projects		315	162,240
Ursus Centralny IIc(2)	Warsaw	107	59,626	2023
Eko Falenty I(2)	Warsaw	10	8,640	2023
Nowa Północ Ia(2)	Szczecin	29	9,404	2023
Osiedle Vola(2)	Warsaw	59	44,500	2023
Nova Królikarnia 4b1 (Thame) (2)	Warsaw	1	4,776	2024
Między Drzewami(2)	Poznań	72	34,794	2024
Miasto Moje VII(2)	Warsaw	50	19,466	2024
Ursus Centralny IIe(2)	Warsaw	50	23,676	2024
Viva Jagodno III(2) (3)	Wrocław	3	923	2025
Subtotal ongoing projects		381	205,805
Total		696	368,045

(1) For information on the completed projects see "Business highlights during the six months ended 30 June 2023–A. Results breakdown by project".

(2) For information on current projects under construction and/or on sale, see under "B".

(3) Project where the Company started the sales but did not start construction process until 30 June 2023

Additional information about the Company

The Company is mainly a holding company and management services provider with respect to the development of residential projects for its subsidiaries. The majority of the Company income are from the following sources: (i) interests from loans granted to subsidiaries for the development of projects, (ii) management fee received from subsidiaries for the provision of projects management services, and (iii) dividend received from subsidiaries. All above revenues are being eliminated on a consolidation level.

Below section presents main data on the Company activity that were not covered in other sections of this Management Board Report.

	Exchange rate of Polish Zloty versus Euro
PLN/EUR	Average exchange rate	Minimum exchange rate	Maximum exchange rate	Period end exchange rate
2023 (6 months)	4.6280	4.4286	4.7895	4.4503
2022 (6 months)	4.6362	4.4879	4.9647	4.6806
2022 (12 months)	4.6876	4.4879	4.9647	4.6899
Source: National Bank of Poland ("NBP")
Selected financial data	EUR		PLN
		(thousands, except per share data)
		For the 6 months ended 30 June
	2023	2022	2023	2022
Revenues from management services	367	401	1,701	1,860
Financial income (Wise majority from loans granted to subsidiaries)	2,922	1,760	13,522	8,160
Financial expences (Wise majority from Interest on bonds and fair value measurement of the financial instrument)	(1,300)	(1,827)	(6,017)	(8,471)
Profit including results from subsidiaries	5,720	1,885	26,470	8,740
Cash flows from/(used in) operating activities	(2,313)	(1,313)	(10,705)	(6,088)
Cash flows from/(used in) investing activities	6,936	(3,917)	32,100	(18,158)
Cash flows from/(used in) financing activities	(5,402)	5,312	(25,000)	24,626
Increase/(decrease) in cash and cash equivalents	(779)	82	(3,605)	381
Average number of equivalent shares (basic)	162,442,859	162,442,859	162,442,859	162,442,859
Net earnings/(loss) per share (basic and diluted)	0.035	0.012	0.163	0.054

Selected financial data		EUR	PLN
	(thousands)
	As at
	30 June 2023	31 December 2022	30 June 2023	31 December 2022
Investment in subsidiaries	105,159	94,943	467,987	445,275
Loan granted to subsidiaries	57,248	58,974	254,771	276,581
Total assets	163,501	155,582	727,628	729,664
Long term liabilities	32,324	34,421	143,851	161,433
Short term liabilities	23,843	25,142	106,111	117,914
Equity	107,334	96,019	477,666	450,317

Additional information to the report

Major shareholders and disclosure obligations of controlling shareholder

Due to the exceeding of the threshold 95% of shares owned by one shareholder, on 14 February 2022, the Company's shareholder, Amos Luzon Development and Energy Group Ltd., announced a request for a compulsory buyout of the Company's shares belonging to all its other shareholders. After the compulsory buyout (settlement was made on 17 February 2022), Luzon Group now holds (directly and indirectly), 100% of the share capital of the Company. On 8 March 2022, the General Meeting of the Company was held, at which the shareholders adopted a resolution on withdrawing the Company's shares from trading on the regulated market. In connection with the adoption of the above resolution, on 9 March 2022, the Company submitted an application to the Polish Financial Supervision Authority for authorization to withdraw the Company's shares from trading on the regulated market. On 14 April 2022 the Polish Financial Supervision Authority issued a consent to the withdrawal of the Company's shares from trading on the market regulated by the Warsaw Stock Exchange S.A. ("WSE") as of 28 April 2022. The respective resolution was also adopted by the Management Board of WSE on 25 April 2022.

A. Luzon Group, the Company's controlling shareholder, is a company listed on the Tel Aviv Stock Exchange with the registered office in Raanana, Israel, and is subject to certain disclosure obligations. Some of the documents published by A. Luzon Group in performance of such obligations are available here: http://maya.tase.co.il (some of which are only available in Hebrew), may contain certain information relating to the Company.

According to the information provided to the Company by I.T.R. Dori B.V., on all shares of the Company held by I.T.R. Dori B.V., a registered pledge has been established to secure receivables from bonds issued by Amos Luzon Development and Energy Group Ltd, the maturity of which is scheduled for 2026. The value of these bonds is ILS 50,644,539 and the bonds are repaid gradually - ILS 9,208,000 every 6 months.

To the best of the Company's knowledge, as at 10 August 2023, there were no changes in the Company's shareholders structure.

The total number of own shares held by the Company as at 30 June 2023 was equal to 1,567,954 shares, which constitute 0.96% of the share capital of the Company and votes at the General Meeting. There were no changes in own shares in the period six months ended 30 June 2023 and until the publication date.

Changes in the Management and Supervisory Board during the six months ended 30 June 2023 and until the date of publication of this report

During the period ended 30 June 2023 and until the date of publication of this report, there were no changes in the Company's Management Board or Supervisory Board.

Changes in ownership of shares and rights to shares by Management and Supervisory Board members during the six months ended 30 June 2023 and until the date of publication of this report

Mr Amos Luzon (Member of the Supervisory Board) holds a majority (99%) of the shares in a private company under Israeli law, A. Luzon Properties and Investments Ltd.. A. Luzon Properties and Investments Ltd, according to publicly available information, holds a majority (in addition to 60%, this number is variable and as of the date prior to the publication of this report was 66.49%) of the shares and votes in A. Luzon Group.

On 29 June, 2023, the shareholders of the Company, i.e. Amos Luzon Development and Energy Group Ltd. and I.T.R. Dori B.V. entered into an agreement to reorganize the activities of Amos Luzon Development and Energy Group Ltd. As part of the reorganization, a new Israeli company will be created, wholly owned by Amos Luzon Development and Energy Group Ltd., to which a separated part of the business covering the real estate area of Amos Luzon Development and Energy Group Ltd. will be transferred, including the Issuer's shares held directly by Amos Luzon Development and Energy Group Ltd. Then, Amos Luzon Development and Energy Group Ltd. will transfer all of its shares in a newly established Israeli company to I.T.R. Dori B.V. The entry into force of the agreement is subject to obtaining corporate approvals of the bodies of Amos Luzon Development and Energy Group Ltd. and decisions of tax authorities and other relevant institutions, which should take place within 90 days from the date of conclusion of the contract.

The conclusion of the said agreement does not cause any changes in the manner of controlling the Company.

Additional information to the report

Changes in ownership of shares and rights to shares by Management and Supervisory Board members during the six months ended 30 June 2023 and until the date of publication of this report

A. Luzon Group, holds 100% of the Company's shares - directly and indirectly through I.T.R Dori B.V. and the Company (own shares).

Based on the above structure, Mr Amos Luzon controls the Company and is its sole beneficial owner.

Changes in the Company's group structure

In the period of six months ended June 30, 2023, the following changes took place in the structure of the Group:

1) On the 27 January 2023 the following companies were merged into Ronson Development South Sp. z o.o:
- • Ronson Development Sp. z o.o. – Home sp. k.,
- • Ronson Development Sp. z o.o. – Idea sp. k.,
- • Ronson Development Sp. z o.o. – Impressio sp. k.,
- • Ronson Development Sp. z o.o. – Gemini 2 sp. k.,
- • Ronson Development Sp. z o.o. – 2011 sp. k.,
- • Ronson Development Sp. z o.o. – Verdis sp. k.,
- • Ronson Development Partner 2 Sp. z o.o. – Capital 2011 sp. k.,
- • Ronson Development Partner 2 Sp. z o.o. – Destiny 2011 sp. k.,
- • Ronson Development Partner 2 Sp. z o.o. – Enterprise 2011 sp. k.,
- • Ronson Development Partner 3 Sp. z o.o. – Sakura sp. k.,
- • Ronson Development Partner 4 Sp. z o.o. – Panoramika sp. k.,
2) On the 16 March 2023 the following companies were merged into Wrocław 2016 Sp. z o.o:
- • Darwen Sp. z o.o.
- • Truro Sp. z o.o.
- • Totton Sp. z o.o
3) On 19 April 2023, shares in Ronson Development SPV12 sp. z o.o. (current name LivinGO Ursus Sp. z o.o.) were sold and its current sole shareholder is LivinGO Holding sp. z o.o. (previous name: Ronson Development SPV13 sp. z o.o.).
4) On 27 April 2023, a change of name of Ronson Development SPV13 sp. z o. o. has been registered in the National Court Register. – currently it is called LivinGO Holding sp. z o.o.
5) On 12 May 2023, Ronson Development SPV12 sp. z o. o. has been registered in the National Court Register. currently it is called LivinGO Ursus sp. z o.o.

The Company's group structure as at 30 June 2023 and 31 December 2022 is presented in the Note 7 to the Interim Condensed Consolidated Financial Statements.

Seasonality

The Group's activities are not of a seasonal nature. Therefore, the results presented by the Group do not fluctuate significantly during the year due to the seasonality.

Influence of results disclosed in the report on fulfillment of result forecasts

The Management Board of Ronson Development SE does not publish any financial forecasts concerning the Group and the Company.

Related parties transactions

On 25 May, 2023, the Company and Luzon Group entered into an agreement for settling the return of the amounts received related to the SAFE Agreements and releasing the Company from its obligation towered the SAFE Investors. The SAFE Agreements granted the Investors certain rights applicable after the Issuer is delisted from the regulated market of the Warsaw Stock Exchange, including the right to subscribe for shares of the Company at a discounted price and for instruments convertible into shares in the Company, if the shares in the Company are admitted to trading on the Tel-Aviv Stock Exchange, secured by the right to convert their investments into shares or bonds of the Luzon Group if the shares in the Company were not admitted to trading on the Tel-Aviv Stock Exchange.

Additional information to the report

Related parties transactions

Conclusion of this agreement results from Due to the fact that the Company has decided that within the period specified in the Investment SAFE Agreements it will not apply for admission of the Company's shares to trading on the Tel Aviv Stock Exchange. On the basis of the agreement, the Company undertook to return to Luzon Group (with the consent of the Investors that from this date Ronson shall have no more liability towards the investors) the financing received from Investors under the Investment SAFE Agreements in the total amount of ILS 60 million (sixty million Israeli shekels), to satisfy Luzon Group's claims against the Company under the Investment SAFE Agreements and applicable Israeli law. Payments to Luzon Group in the total amount of PLN 25 million (approx. ILS 21.7 million) were made in May 2023, and subsequent payments will be made in accordance with the schedule agreed by the parties to the agreement, determined taking into account the capital needs of Luzon Group and the liquidity and financial situation of the Company, with the proviso that these payments will become due no earlier than 1 January, 2024, and the total amount of payments to Luzon Group in 2024 will not exceed PLN 25 million (approx. ILS 22 million) and the remaining amount will be repaid in 2025. The Company points out that the financing granted on the basis of SAFE Agreements, since its receipt, has been classified in the financial statements as a financial liability of the Company.

On 7 July, 2023, the Company and Luzon Group signed an annex to the above agreement, on the basis of which, after conducting analyses in the field of transfer pricing, they agreed that the remaining amount to be repaid will bear interest at 3% per annum.

The remuneration of the Management Board, loans granted to related parties within the Group, the reimbursement of audit review costs and the consulting services agreement with A. Luzon Group, the major (indirect) shareholder, for a total monthly amount of PLN 70 thousand and covering travel and out of pocket expenses. All transactions with related parties were performed based on market conditions. During 6 month period ended 30 June 2023 company paid PLN 421 thousand.

There were no transactions and balances with related parties during the six months ended 30 June 2023 other than described above.

Option program

On November 28, 2022, A. Luzon Group announced a private issuance of options for shares of A. Luzon Group ("Options"). According to the allocation, Mr. Boaz Haim received 9,817,868 Options. Options were allotted free of charge.

Each Option entitles to one ordinary share of A. Luzon Group of ILS 0.01 par value, for an exercise price of 0,2 ILS (which however will be settled on a net basis, i.e. final number of received shares will be decreased by a number of shares which market value is equal to full exercise price to be paid).

Mr Haim will be entitled to exercise the Options as follows:

(i) after 24 months from the allotment date - up to 40% of allocated Options
(ii) after 36 months from the allotment date - up to 20% of allocated Options
(iii) after 48 months from the allotment date - up to 20% of allocated Options
(iv) after 60 months from the allotment date - up to 20% of allocated Options

The Options can be exercised until the end of 7 years from the date of their allocation. Options that were not exercised within the above mentioned period, expire. Assuming all the Options are exercised, Mr. Haim will hold c.a. 2.38% of the issued and paid-up capital of A. Luzon Group and about 1.89% of the issued and paid-up capital of A. Luzon Group on a full dilution basis. The Option program envisages adjustments in case of various corporate events in A. Luzon Group (such as the issuance of shares or other options, merger, dividend distribution, etc.).

Quarterly reporting by the Company

As a result of requirements pertaining to A. Luzon Group, the Company's controlling shareholder, whose ultimate parent company is listed on the Tel Aviv Stock Exchange, the first quarter reports, semi-annual reports and third quarter reports are subject to a full scope review by the Company's auditors. For the Company itself, being domiciled in Poland and until 28 April 2022 listed on the Warsaw Stock Exchange, only the semi-annual and yearly report is subject to a review/audit.

Additional information to the report

Quarterly reporting by the Company

The Company has agreed with A. Luzon Group that the costs for the first and third quarter review will be shared between the Company and its shareholder. The Company considers having its first and third quarter report provided with a review report a benefit to all of its bondholders. The Company prepared this Interim Financial Report for the six months ended 30 June 2023 in both English and Polish languages, while the Polish version is binding.

Material court cases

There is no proceeding pending before a court, a complement arbitration authority or a public administration authority concerning liabilities or claims of Ronson Development SE or its subsidiaries, the value of which equaled at least 10% of the Company's equity.

Guarantees / Securities provided by the Company or its subsidiaries

During the six months ended 30 June 2023 the Group provided the security due to issuing the bonds series X, however the issuance took place in July 2023. More information according in the Note 28 – Subsequent events to the Interim Condensed Consolidated Financial Statements.

Employees

The average number of personnel employed by the Group – on a fulltime equivalent basis – during the six months ended 30 June 2023 was 64 during comparing to 76 during the six months ended 30 June 2022. There were no personnel employed in the Company.

Responsibility statement

The Management Board of Ronson Development SE hereby declares that:

a) to the best of its knowledge, the Interim Condensed Consolidated Financial Statements and Interim Condensed Company Financial Statements and comparative data have been prepared in accordance with the applicable accounting principles and that they reflect in a true, reliable and clear manner financial position of the Company, the Group and its financial result;
b) the Management Board Report contains a true picture of the Company's and Group's development and achievements, as well as a description of the main threats and risks.

This Management Board Report of activities of the Company and the Group during the six months period ended 30 June 2023 was prepared and approved by the Management Board of the Company on 10 August 2023.

The Management Board

Boaz Haim President of the Management Board ___________________ ___________________

Yaron Shama Finance Vice-President of the Management Board

Andrzej Gutowski Sales Vice-President of the Management Board,

Warsaw, 10 August 2023

Karolina Bronszewska Member of the Management Board for Marketing and Innovation ___________________ ___________________

Interim Condensed Consolidated Financial Statements for the six months ended 30 June 2023 Interim Condensed Consolidated Statement of Financial Position

	As at 30 June 2023		As at 31 December 2022
In thousands of Polish Zlotys (PLN)	Note	(Reviewed/Unaudited)	(Audited)
Assets
Property and equipment		7,044	7,556
Investment property	9	62,884	63,139
Intangible fixed assets		572	686
Investments in joint ventures	25	532	2,331
Deferred tax assets	18	8,310	8,830
Land designated for development	10	21,369	21,094
Total non-current assets		100,711	103,636

Inventory	10	786,458	747,254
Trade and other receivables and prepayments	11	48,004	65,620
Advances for Land	12	13,550	20,650
Income tax receivable		1,110	691
Loans granted to third parties		-	1,717
Loans granted to joint ventures	25	139	133
Other current financial assets		12,339	11,217
Cash and cash equivalents		103,882	51,185
Total current assets		965,482	898,467
Total assets		1,066,193	1,002,103

Equity
Share capital		12,503	12,503
Share premium		150,278	150,278
Share based payment		879	-
Treasury shares		(1,732)	(1,732)
Retained earnings		316,814	290,347
Total equity/Equity attributable to equity holders of the parent		478,742	451,396

Liabilities
Floating rate bond loans	15	98,665	158,110
Liability to shareholders measured at amortised costs	14	39,258	-
Deferred tax liability	18	26,968	23,809
Lease liabilities related to perpetual usufruct of	13	663	663
investment properties Total non-current liabilities		165,555	182,583

Trade and other payables and accrued expenses	16	99,849	75,055
Floating rate bond loans	15	100,000	40,000
Other payables - accrued interests on bonds	15	5,001	5,260
Secured bank loans	15	1,454	16,297
Advances received	19	181,624	139,911
Income tax payable		94	70
Provisions		3,169	3,704
Lease liabilities related to perpetual usufruct of land	13	30,706	17,322
Financial liability measured at FVPL	14	-	70,506
Total current liabilities		421,897	368,124
Total liabilities		587,452	550,707
Total equity and liabilities		1,066,193	1,002,103

The notes included on pages 27 to 62 are an integral part of these Interim Condensed Consolidated Financial Statements

Interim Condensed Consolidated Statement of Comprehensive Income

PLN (thousands, except per share data and number of shares)	Note	For the 6 months ended 30 June 2023 (Reviewed) /	For the 3 months ended 30 June 2023 (Reviewed) /	For the 6 months ended 30 June 2022 (Reviewed) /	For the 3 months ended 30 June 2022 (Unaudited) /
		(unaudited)	(unaudited)	(unaudited)	(unreviewed)
Revenue from residential projects Revenue from sale of services	21	176,431 -	154,599	137,680 -	25,295
Revenue		176,431	154,599	137,680	25,295
Cost of sales	21	(120,259)	(105,023)	(106,076)	(18,890)
Gross profit		56,172	49,576	31,604	6,405
Changes in the fair value of investment property		(842)	(842)	(46)	(46)
Selling and marketing expenses Administrative expenses		(3,026) (13,310)	(1,672) (6,955)	(1,706) (12,949)	(801) (6,712)
Share of profit/(loss) in joint ventures		(726)	(79)	1,066	371
Other expenses		(4,799)	(4,452)	(1,712)	(497)
Other income Result from operating activities		969 34,438	365 35,941	1,332 17,589	947 (333)

Finance income Finance expense	17	1,328 (7,083)	972 (4,965)	2,058 (3,571)	768 (2,228)
Gain (loss) on financial instrument measured at fair value through profit and loss	14	6 376	736	(2,979)	1,397
Net finance income/(expense)		621	(3,257)	(4,492)	(63)

Profit/(loss) before taxation Income tax (expense)	18	35,059 (8,594)	32,684 (6,709)	13,097 (3,272)	(396) 635
Profit for the period		26,465	25,975	9,825	239

Other comprehensive income Total comprehensive income/(expense)		-	-	-
for the period, net of tax		26,465	25,975	9,825	239
Total profit/(loss) for the period attributable to:
Equity holders of the parent Non-controlling interests		26,465 -	25,975 -	9,825 -	239
Total profit/(loss) for the period, net of		26,465	25,975	9,825	239
tax
Total profit/(loss) for the period attributable to:
equity holders of the parent		26,465	25,975	9,825	239
Non-controlling interests		-	-	-
Total comprehensive income/(expense) for the period, net of tax		26,465	25,975	9,825	239
Weighted average number of ordinary shares (basic and diluted)		162,442,859	162,442,859	162,442,859	162,442,859
In Polish Zlotys (PLN)
Net earnings/(loss) per share
attributable to the equity holders of the parent basic		0.163	0.160	0.060	0.001
Net earnings/(loss) per share
attributable to the equity holders of the parent diluted		0.163	0.160	0.060	0.001

The notes included on pages 27 to 62 are an integral part of these Interim Condensed Consolidated Financial Statements

Interim Condensed Consolidated Statement of Changes in Equity

	Attributable to the Equity holders of parent
In thousands of Polish Zlotys (PLN)	Share capital	Share premium	Share based payment	Treasury shares	Retained earnings	Total equity
Balance at 1 January 2023	12,503	150,278		(1,732)	290,349	451,398
Comprehensive income:
Profit for the six months ended 30 June 2023	-	-		-	26,465	26,465
Total comprehensive income/(expense)	-	-		-	26,465	26,465
Share based payment		-	879	-	-	879
Balance at 30 June 2023 (Reviewed/ Unaudited)	12,503	150,278	879	(1,732)	316,814	478,742

	Attributable to the Equity holders of parent
In thousands of Polish Zlotys (PLN)	Share capital	Share premium	Treasury shares	Retained earnings	Total equity
Balance at 1 January 2022	12,503	150,278	(1,732)	258,996	420,045
Comprehensive income:
Profit for the six months ended 30 June 2022	-	-	-	9,825	9,825
Total comprehensive income/(expense)	-	-	-	9,825	9,825
Balance at 30 June 2022 (Reviewed/ Unaudited)	12,503	150,278	(1,732)	268,821	429,870

The notes included on pages 27 to 62 are an integral part of these Interim Condensed Consolidated Financial Statement

Interim Condensed Consolidated Statement of Cash Flows

In thousands of Polish Zlotys (PLN) Note Cash flows from/(used in) operating activities Profit/(loss) for the period 26,465 9,825 Adjustments to reconcile profit for the period to net cash used in operating activities Depreciation 493 417 (Increase)/decrease in fair value of investment property 819 45 Write-down of inventory 482 Finance expense 17 6,556 3,571 Finance income (824) (644) Purchase of land - Foreign exchange rates differences gain/(loss) 21 (1,423) (Gain)/loss on a financial instrument measured at fair value through profit and loss 14 (6,376) 2,979 Share of loss /(profit) from joint ventures 726 (1,090) Share based payment 879 Income tax expense/(benefit) 8,594 3,272 Subtotal 37,353 17,434 Decrease/(increase) in inventory and land designated for (11,432) 883 development Profit on sale of property, plant and equipment (49) - Purchases of land - (28,879) Decrease/(increase) in trade and other receivables and prepayments 19,131 (17,780) Decrease/(increase) in other current financial assets (1,122) (1,283) Increase/(decrease) in trade and other payables and accrued expenses 25,023 (3,257)























Increase/(decrease) in provisions (535) (425)
Increase/(decrease) in advances received 20 41,713 (17,686)
Subtotal 110,082 (50,993)
Interest paid (12,187) (6,069)
Interest received 761 489
Income tax received/(paid) (5,365) (6,096)
Net cash from/(used in) operating activities 93,291 (62,669)

Cash flows from/(used in) investing activities
Acquisition of property and equipment (30) (235)
Payments for investment property 9 (569) (9,631)
Loans repayment/ (granted) to JV - 254
Dividends received from joint ventures 1,073 -
Proceeds from sale of property and equipment 65 -
Net cash from investing activities 539 (9,612)
Cash flows (used in)/from financing activities
Proceeds from bank loans, net of bank charges 15 44,687 37,147
Repayment of bank loans 15 (59,531) (32,645)
Repayment of bond loans 15 - (50,000)
Repayment of Liability to shareholders measured at amortized costs 14 (25,000) -
Payment of perpetual usufruct rights 13 (1,290) (1,206)
SAFE Agreement 14 - 74,626
Net cash (used in)/from financing activities (41,133) 27,922

Net change in cash and cash equivalents 52,697 (44,359)
Cash and cash equivalents at beginning of period 51,185 133,434
Effects of exchange rate changes on cash and cash equivalents - 1,377 Cash and cash equivalents at end of period * 103,882 90,452

* including restricted cash that amounted to PLN 14,313 thousand and PLN 11,464 thousand as 30 June 2023 and as 30 June 2022, respectively.

The notes included on pages 27 to 62 are an integral part of these interim condensed consolidated Financial Statements

Notes to the Interim Condensed Consolidated Financial Statements

Note 1 – General and principal activities

The Company together with its subsidiaries ("the Group") is active in the development and sale of residential units, primarily apartments, in multi-family residential real-estate projects to individual customers in Poland. In 2021 the Management Board of the Company decided to start developing a new activity, so-called Private Rent Sector (PRS). PRS is sector of Poland's residential market in which buildings are designed and built specifically for renting. As at 30 June 2023 and the date of publication of these financial statements, Amos Luzon Development and Energy Group Ltd. ("A. Luzon Group"), the ultimate parent company, holds indirectly, through its subsidiary I.T.R. Dori B.V., 66.06% of the Company's shares and owns 32.98% directly. The remaining 0.96% of the shares are treasury shares. The beneficial owner of the Company is Mr Amos Luzon, Chairman of the Supervisory Board.

The Interim Condensed Consolidated Financial Statements of the Company have been prepared for the six months ended 30 June 2023 and contain comparative data for the six months ended 30 June 2022 and as at 31 December 2022. The Interim Condensed Consolidated Financial Statements of the Company for the six months ended 30 June 2023 with all its comparative data have been reviewed by the Company's external auditors.

The information about the companies from which the financial data are included in these Interim Condensed Consolidated Financial Statements and the extent of ownership and control are presented in Note 7.

The Interim Condensed Consolidated Financial Statements for the six months ended 30 June 2023 were authorized for issuance by the Management Board on 10 August 2023 in both English and Polish languages, while the Polish version is binding.

Note 2 – Basis of preparation of Interim Condensed Consolidated Financial Statements

These Interim Condensed Consolidated Financial Statements have been prepared in accordance with IAS 34 "Interim financial reporting".

The Interim Condensed Consolidated Financial Statements do not include all the information and disclosures required in annual consolidated financial statements, and should be read in conjunction with the Group's annual consolidated financial statements as at 31 December 2022 prepared in accordance with International Financial Reporting Standards ("IFRS") as endorsed by the European Union. At the date of authorization of these Interim Condensed Consolidated Financial Statements, in light of the nature of the Group's activities, the IFRSs issued by IASB are not different from the IFRSs endorsed by the European Union.

Interim Condensed Consolidated Financial Statements for the six months ended 30 June 2023

Notes to the Interim Condensed Consolidated Financial Statements

Note 2 – Basis of preparation of Interim Condensed Consolidated Financial Statements

IFRSs comprise standards and interpretations accepted by the International Accounting Standards Board ("IASB") and the International Financial Reporting Interpretations Committee ("IFRIC"). The Consolidated Financial Statements of the Group for the year ended 31 December 2022 are available upon request from the Company's registered office at Al. Komisji Edukacji Narodowej 57, Warsaw, Poland or at the Company's website: ronson.pl

These Interim Condensed Consolidated Financial Statements have been prepared on the assumption that the Group is a going concern, meaning it will continue in operation for the foreseeable future and will be able to realize assets and discharge liabilities in the normal course of its operations. Further explanation and analyzes on significant changes in financial position and performance of the Company during the six months ended 30 June 2023 are included in the Management Board Report on pages 3 through 22.

Note 3 – Summary of significant accounting policies

Except as described below, the accounting policies applied by the Company and the Group in these Interim Condensed Consolidated Financial Statements are the same as those applied by the Company in its Consolidated Financial Statements for the year ended 31 December 2022.

The following standards and amendments became effective as of 1 January 2023:

• Amendments to IAS 1 - "Presentation of Financial Statements" and the IFRS Board's guidance on disclosure of accounting policies in practice;
• Amendments to IAS 8 - "Accounting Policies, Changes in Accounting Estimates and Errors";
• Amendments to IAS 12 – "Income Taxes",
• IFRS 17 "Insurance contracts" and changes to IFRS 17.

The impact of the above amendments and improvements to IFRSs was analyzed by the Management. Based on the assessment the amendments do not impact the annual consolidated financial statements of the Group nor the interim condensed consolidated financial statements of the Groups.

New standards and interpretations not yet adopted

Certain new accounting standards and interpretations have been published that are not mandatory for 2023 reporting periods and have not been early adopted by the Group. These standards are not expected to have a material impact on the entity or the Group in the current or future reporting periods and on foreseeable future transactions.

Note 4 – The use of estimates and judgments

The preparation of financial statements in conformity with IFRS requires Management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results may differ from these estimates.

In preparing these Interim Condensed Consolidated Financial Statements, the significant judgments made by the Management Board in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those applied to the Consolidated Financial Statements for the year ended 31 December 2022.

Notes to the Interim Condensed Consolidated Financial Statements

Note 5 – Functional and reporting currency

Items included in the financial statements of each entity in the Group are measured using the currency of the primary economic environment in which the entity operates (the "functional currency"). The Interim Condensed Consolidated Financial Statements are presented in thousands of Polish Zloty ("PLN"), which is the functional currency of the Parent Company and the Group's presentation currency.

Transactions in currencies other than the functional currency are accounted for at the exchange rates prevailing at the date of the transactions. Gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in currencies other than the functional currency are recognized in the statement of comprehensive income.

Note 6 – Seasonality

The Group's activities are not of a seasonal nature. Therefore, the results presented by the Group do not fluctuate significantly during the year due to the seasonality.

Note 7 – Composition of the Group

The details of the companies whose financial statements have been included in these Interim Condensed Consolidated Financial Statements, the year of incorporation and the percentage of ownership and voting rights directly held or indirectly by the Company, are presented below and on the following page.

	Entity name	Year of incorporation		Share of ownership & voting rights at the end of
			30 June 2023	31 December 2022
	a. held directly by the Company:
1	Ronson Development Management Sp. z o.o.	1999	100%	100%
2	Ronson Development Sp. z o.o.	2006	100%	100%
3	Ronson Development Construction Sp. z o.o.	2006	100%	100%
4	City 2015 Sp. z o.o.	2006	100%	100%
5	Ronson Development Village Sp. z o.o.(1)	2007	100%	100%
6	Ronson Development Skyline Sp. z o.o.	2007	100%	100%
7	Ronson Development Universal Sp. z o.o.(1)	2007	100%	100%
8	Ronson Development South Sp. z o.o.(4)	2007	99,66%	100%
9	Ronson Development Partner 5 Sp. z o.o.	2007	100%	100%
	10 Ronson Development Partner 4 Sp. z o.o.	2007	100%	100%
	11 Ronson Development Providence Sp. z o.o.	2007	100%	100%
	12 Ronson Development Finco Sp. z o.o.	2009	100%	100%
	13 Ronson Development Partner 2 Sp. z o.o.	2009	100%	100%
	14 Ronson Development Partner 3 Sp. z o.o.	2012	100%	100%
	15 Ronson Development Studzienna Sp. z o.o.	2019	100%	100%
	16 Ronson Development SPV1 Sp. z o.o.	2021	100%	100%
	17 Ronson Development SPV2 Sp. z o.o.	2021	100%	100%
	18 Ronson Development SPV3 Sp. z o.o.	2021	100%	100%
	19 Ronson Development SPV4 Sp. z o.o.	2021	100%	100%
	20 Ronson Development SPV5 Sp. z o.o.	2021	100%	100%
	21 Ronson Development SPV6 Sp. z o.o.	2021	100%	100%
	22 Ronson Development SPV7 Sp. z o.o.	2021	100%	100%
	23 Ronson Development SPV8 Sp. z o.o.	2021	100%	100%
	24 Ronson Development SPV9 Sp. z o.o.	2021	100%	100%
	25 Ronson Development SPV10 Sp. z o.o.	2021	100%	100%
	26 Ronson Development SPV11 Sp. z o.o.	2021	100%	100%
	27 LivinGO Ursus sp. z o.o.(5)	2022	100%	100%
	28 LivinGO Holding sp. z o.o.(6)	2022	100%	100%

Notes to the Interim Condensed Consolidated Financial Statements

Note 7 – Composition of the Group

	Entity name	Year of incorporation	Share of ownership & voting rights at the end of
			30 June 2023	31 December 2022
	b. held indirectly by the Company :
29	(2) Ronson Development Partner 4 Sp. z o.o. – Panoramika Sp.k.	2007	-	100%
30	Ronson Development Sp z o.o. - Estate Sp.k.	2007	100%	100%
31	(2) Ronson Development Sp. z o.o. - Home Sp.k.	2007	-	100%
32	Ronson Development Sp z o.o. - Horizon Sp.k.	2007	100%	100%
33	(2) Ronson Development Partner 3 Sp. z o.o. - Sakura Sp.k.	2007	-	100%
34	Ronson Development Partner 3 sp. z o.o. – Viva Jagodno sp. k.	2009	100%	100%
35	Ronson Development Sp. z o.o. - Apartments 2011 Sp.k.	2009	100%	100%
36	(2) Ronson Development Sp. z o.o. - Idea Sp.k.	2009	-	100%
37	(2) Ronson Development Partner 2 Sp. z o.o. – Destiny 2011 Sp.k.	2009	-	100%
38	(2) Ronson Development Partner 2 Sp. z o.o. - Enterprise 2011 Sp.k.	2009	-	100%
39	Ronson Development Partner 2 Sp. z o.o. - Retreat 2011 Sp.k.	2009	100%	100%
40	Ronson Development Partner 5 Sp. z o.o - Vitalia Sp.k.	2009	100%	100%
41	(2) Ronson Development Sp. z o.o. - 2011 Sp.k.	2009	-	100%
42	(2) Ronson Development Sp. z o.o. - Gemini 2 Sp.k.	2009	-	100%
43	(2) Ronson Development Sp. z o.o. - Verdis Sp.k.	2009	-	100%
44	Ronson Development Sp. z o.o. - Naturalis Sp.k.	2011	100%	100%
45	(2) Ronson Development Sp. z o.o. - Impressio Sp.k.	2011	-	100%
46	Ronson Development Partner 3 Sp. z o.o.- Nowe Warzymice Sp. k	2011	100%	100%
47	Ronson Development Sp. z o.o. - Providence 2011 Sp.k.	2011	100%	100%
48	(2) Ronson Development Partner 2 Sp. z o.o. - Capital 2011 Sp. k.	2011	-	100%
49	Ronson Development Partner 5 Sp. z o.o. - Miasto Marina Sp.k.	2011	100%	100%
50	Ronson Development Partner 5 Sp. z o.o. - City 1 Sp.k.	2012	100%	100%
51	Ronson Development Partner 2 Sp. z o.o. - Miasto Moje Sp. k.	2012	100%	100%
52	Ronson Development sp. z o.o. – Ursus Centralny Sp. k.	2012	100%	100%
53	Ronson Development Sp. z o.o. - City 4 Sp.k.	2016	100%	100%
54	Ronson Development Partner 2 Sp. z o.o. – Grunwald Sp.k.	2016	100%	100%
55	Ronson Development Sp. z o.o. Grunwaldzka" Sp.k.	2016	100%	100%
56	Ronson Development Sp. z o.o. - Projekt 3 Sp.k.	2016	100%	100%
57	Ronson Development Sp. z o.o. - Projekt 4 Sp.k.	2017	100%	100%
58	Ronson Development Sp. z o.o. - Projekt 5 Sp.k.	2017	100%	100%
59	Ronson Development Sp. z o.o. - Projekt 6 Sp.k.	2017	100%	100%
60	Ronson Development Sp. z o.o. - Projekt 7 Sp.k.	2017	100%	100%
61	Ronson Development Sp. z o.o. - Projekt 8 Sp.k.	2017	100%	100%
62	Bolzanus Limited (Company with the registered office in Cyprus)	2013	100%	100%
63 64	Park Development Properties Sp. z o.o. - Town Sp.k. Tras 2016 Sp. z o.o.	2007 2011	100% 100%	100% 100%
65	Park Development Properties Sp. z o.o.	2011	100%	100%
66	Wrocław 2016 Sp. z o.o.	2016	100%	100%
67	(3) Sp. z o.o. Darwen	2018	-	100%
68	(3) Truro Sp. z o.o.	2017	-	100%
69	Tregaron Sp. z o.o.	2017	100%	100%
70	(3) Totton Sp. z o.o.	2017	-	100%
71	Tring Sp. z o.o.	2017	100%	100%
72	Thame Sp. z o.o.	2017	100%	100%
73	Troon Sp. z o.o.	2017	100%	100%
74	Tywyn Sp. z o.o.	2018	100%	100%
c.	other entities not subject to consolidation:
75	Coralchief sp. z o.o.	2018	50%	50%
76	Coralchief sp. z o.o. - Projekt 1 sp. k.	2016	50%	50%
77	Ronson IS sp. z o.o.	2009	50%	50%
78	Ronson IS sp. z o.o. sp. k.	2012	50%	50%

1) The Company has the power to govern the financial and operating policies of this entity and to obtain benefits from its activities, whereas Kancelaria Radcy Prawnego Jarosław Zubrzycki holds the legal title to the shares of this entity.

2) Companies merged with Ronson Development South Sp. z o.o. on 27 January 2023

3) Companies merged with Wrocław 2016 Sp. z o.o. on 16 March 2023

4) 99.66% of shares in the company are held by Ronson Development SE, the remaining 0.34% of shares are held by: Ronson Development sp. z o.o. (0.19%), Ronson Development Partner 2 sp. z o.o. (0.09%), Ronson Development Partner 3 sp. z o.o. (0.03%) and Ronson Development Partner 4 sp. z o.o. (0.03%) all of this companies are held 100% by Ronson Development SE.

5) The company's business name has been changed to LivinGO Ursus sp. z o.o. from Ronson Development SPV12 Sp. z o.o.

6) The company's business name has been changed to LivinGO Holding sp. z o.o. from Ronson Development SPV13 Sp. z o.o.

Interim Condensed Consolidated Financial Statements for the six months ended 30 June 2023

Notes to the Interim Condensed Consolidated Financial Statements

Note 8 – Segment reporting

The Group's operating segments are defined as separate entities developing particular residential projects, which for reporting purposes were aggregated. The aggregation for reporting purpose is based on geographical locations (Warsaw, Poznań, Wrocław and Szczecin) and type of development (apartments, of houses). Moreover, for particular assets the reporting was based on type of income: rental income from investment property or from socalled Private Rent Sector. The segment reporting method requires also the Company to present separately joint venture within Warsaw segment. There has been no changes in the basis of segmentation or in the basis of measurement of segment profit or loss from the last Annual Consolidated Financial Statements. There is no aggregation of the revenues to one Client, the revenue is distracted to many clients, mostly individual clients.

According to the Management Board's assessment, the operating segments identified have similar economic characteristics. Aggregation based on the type of development within the geographical location has been applied since primarily the location and the type of development determine the average margin that can be realized on each project and the project's risk factors. Considering the fact that the construction process for apartments is different from that for houses and considering the fact that the characteristics of customers buying apartments slightly differ from those of customers interested in buying houses, aggregation by type of development within the geographical location has been used for segment reporting and disclosure purposes.

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated indirectly based on reasonable criteria. Unallocated assets comprise mainly fixed assets and income tax assets. Unallocated liabilities comprise mainly income tax liabilities, deferred tax liabilities, bond loans and financial liability measured at FVPL. The unallocated result (loss) comprises mainly head office expenses. IFRS adjustments represent the elimination of the Joint venture segment for reconciliation of the profit (loss), assets and liabilities to the consolidated numbers as well as the effect of measurement of liability at fair value. Joint ventures are accounted using the equity method.

The Group evaluates its performance on a segment basis mainly based on sale revenues, own cost of sales from residential projects and rental activity, allocated marketing costs and others operating costs/income assigned to each segment. Additionally the Group analyses the profit and gross margin on sales, as well as result before tax (including financial costs and income assigned to the segment) generated by the individual segments.

Data presented in the table below are aggregated by type of development within the geographical location:

	In thousands of Polish Zlotys (PLN)				As at 30 June 2023
		Warsaw				Poznań Wrocław			Szczecin		Unallocated	IFRS adjustments	Total
	Apartments	Houses	Joint venture	Rental	Apartments	Houses	Apartments	Houses	Apartments	Houses
Segment assets	560,138	116,492	1,723	70,689	128,750	9,295	63,080	-	93,240	-	-		(997) 1,042,411
Unallocat ed assets	-	-	-	-	-	-	-	-	-	-	23,782	-	23,782
Total assets	560,138	116,492	1,723	70,689	128,750	9,295	63,080	-	93,240	-	23,782		(997) 1,066,193
Segment liabilities	203,596	11,177	718	24,220	31,334	59	29,943	-	13,955	-	-	(718)	314,283
Unallocat ed liabilities	-	-	-	-	-	-	-	-	-	-	273,169	-	273,169
Total liabilities	203,596	11,177	718	24,220	31,334	59	29,943	-	13,955	-	273,169	(718)	587,452

Notes to the Interim Condensed Consolidated Financial Statements

Note 8 – Segment reporting

In thousands of Polish Zlotys (PLN)						As at 31 December 2022
		Warsaw				Poznań Wrocław			Szczecin		Unallocated	IFRS adjustments	Total
	Apartments Houses		Joint venture	Rental	Apartments	Houses	Apartments	Houses	Apartments	Houses
Segment assets	530,898	100,278	5,570	70,605	122,968	8,953	58,431	-	86,801	-	-	(3,123)	981,382
Unallocated assets	-	-	-	-	-	-	-	-	-	-	20,721	-	20,721
Total assets	530,898	100,278	5,570	70,605	122,968	8,953	58,431	-	86,801	-	20,721		(3,123) 1,002,103
Segment liabilities Unallocated	160,174	5,216	955	24,376	24,320	(0)	17,278	-	17,050	-	-	(955)	248,414
liabilities	-	-	-	-	-	-	-	-	-	-	302,293	-	302,293
Total liabilities	160,174	5,216	955	24,376	24,320	(0)	17,278	-	17,050	-	302,293	(955)	550,707

In thousands of Polish Zlotys (PLN)						For the six months ended 30 June 2023
		Warsaw			Poznań Wrocław			Szczecin		Unallocated	IFRS Adjust ments	Total
	Apartments	Houses	Joint venture	Rental(2)	Apartments	Houses	Apartments	Houses	Apartments	Houses
Revenue/Revenue from external services(1)	133,908	-	1,473	484	4,726	-	21,646	-	15,206	-	462	(1,473)	176,431
Segment result	36,732	(599)	(1,757)	(549)	316	(0)	7,055	-	3,575	-		1,757	46,530
Unallocated result	-	-		-	-	-	-	-	-	-	(11,666)	-	(11,666)
Depreciation	(176)	-	-	-	-	-	-	-	(2)	-	(248)		(426)
Result from operating activities	36,556	(599)	(1,757)	(549) -	316	(0) -	7,055	- -	3,572	-	(11,914)	1,757	34,438
Net finance income/expenses Gain/loss on a	218	(21)	42	18 -	(57)	(2) -	(33)	- -	(126)	-	623	(42)	621
financial instrument measured at fair value through profit and loss											6,376		6,376
Profit/(loss) before tax	36,775	(620)	(1,715)	(531)	260	(2)	7,022	-	3,446	-	(11,291)	1,715	35,059
Income tax expenses													(8,594)
Profit/(loss) for the period													26,465

(1) Revenue is recognized when the customer takes control of the premises, i.e. on the basis of a signed protocol of technical acceptance, handover of keys to the purchaser of the premises and receipt of full payment. (2) Performance obligation fulfilled over time.

Notes to the Interim Condensed Consolidated Financial Statements

Note 8 – Segment reporting

In thousands of Polish Zlotys (PLN)					For the six months ended 30 June 2022
	Warsaw				Poznań Wrocław		Szczecin		Unallocated	IFRS adjustments	Total
	Apartments	Houses	Joint	venture Rental(2)	Apartments Houses		Apartments	Houses	Apartments	Houses
Revenue/Revenue from external services(1)	105,480	-	14,060	410	2,325	-	176	-	29,288	-	-	(14,060)	137,680
Segment result	23,966	1,305	2,841	319	(2,540)	1,376	(299)	-	5,964	-	-	(2,841)	30,089
Unallocated result	-	-	-	-	-	-	-	-	-	-	(12,500)	-	(12,500)
Result from operating activities	23,966	1,305	2,841	319	(2,540)	1,376	(299)	-	5,964	-	(12,500)	(2,841)	17,589
Net finance income/ (expenses)	37	(29)	(48)	55	(20)	(1)	(23)	-	35	-	(4,547)	48	(4,492)
Profit/(loss) before tax	24,003	1,276	2,793	374	(2,560)	1,375	(323)	-	5,999	-	(17,047)	(2,793)	13,097

Income tax expenses													(3,272)
Profit/(loss) for the

period 9,825

(2) Performance obligation fulfilled over time.

Note 9 – Investment properties

In thousands of Polish Zlotys (PLN)	For the 6 months ended 30 June 2023	For the year ended 31 December 2022

Balance at 1 January	63,139	28,595
IFRS 16 adjustment	17	128
Purchase of investment property land	-	34,113
Investment expenditures incurred	569	-
Change in fair value during the period	(842)	303
Balance as at 30 June, including:	62,884	63,139
Cost at the time of purchase	58,264	57,695
IFRS 16	691	673
Fair value adjustments	3,928	4,771

As at 30 June 2023, the investment property balance included:

• property held for long-term rental yields and capital appreciation, and were not occupied by the Group;
• four investment land purchased to build investment property for long-term so-called institutional rental and capital appreciation.

Interim Condensed Consolidated Financial Statements for the six months ended 30 June 2023

Notes to the Interim Condensed Consolidated Financial Statements

Note 9 – Investment properties

Measurement of the fair value

Investment properties and investment properties under construction are measured initially at cost, including transaction costs.

At the end of each reporting period, the Management Board conducts an assessment of the fair value of each property, taking into account the most up-to-date appraisals. Profits or losses resulting from changes in the fair value of investment properties are recognized in the statement of comprehensive income in the period in which they arise. The result on the valuation of investment properties is presented in the increase/ decrease in fair value of investment property.

The Management Board determines the value of the property within the range of reasonable estimates of the fair value. The best evidence to determine the fair value is the current prices of similar properties in an active market.

In the absence of such information, management analyzes information from various sources, including:

• current prices from an active market for other types of real estate or recent prices of similar properties from a less active market, adjusted to take account of these differences (comparison method),
• discounted cash flow forecasts based on reliable estimates of future cash flows (income approach),
• capitalized income forecasts based on net market income and capitalization rate estimates derived from market data analysis.

All fair value estimates of real estate determined in this way, except for investment land, are included in level 3. In this method, the key input data are prices per square meter of comparable (in terms of location and size) plots in the same region obtained in sales transactions in the current year (Level 2 of the fair value hierarchy). The unobservable input data on the Level 3 was average period of comparable transactions. For the comparison approach the external appraiser used the transactions from the period 2021-2023 to perform the valuation.

Note 10 – Inventory and Residential landbank

Inventory

Movements in Inventory during the six months ended 30 June 2023 were as follows:

In thousands of Polish Zlotys (PLN)	As at 1 January 2023	Transferred from land designated for development	Transferred to finished units	Additions	As at 30 June 2023
Land and related cost	421,324	7,441	(28,437)	1,539	401,867
Construction costs	205,595	45	(178,807)	114,297	141,130
Planning and permits	22,322	615	(5,096)	1,653	19,494
Borrowing costs	48,453	925	(8,325)	6,064	47,116
Borrowing costs on lease and depreciation perpetual usufruct right (1)	3,923		(1,224)	1,002	3,700
Other	3,755	180	(9,346)	8,301	2,890
Work in progress	705,372	9,206	(231,236)	132,855	616,197

In thousands of Polish Zlotys (PLN)	Recognized in the As at Transferred from work statement of 1 January 2023 in progress comprehensive income			As at 30 June 2023
Finished goods	28,059	231,236		(113,164)	146,131
In thousands of Polish Zlotys (PLN)	As at 1 January 2023	Transferred from land designated for development	Increase	Revaluation write-down recognized in statement of comprehensive income Utilization/ Reversal	As at 30 June 2023
Write-down	(2,970)	(1,608)			(4,577)

Notes to the Interim Condensed Consolidated Financial Statements

Note 10 – Inventory and Residential landbank

Inventory

In thousands of Polish Zlotys (PLN)	As at 1 January 2023	Recalculation (2) adjustment	Depreciation	Transferred to Land designated for development	Transfer to Other receivables	As at 30 June 2023
Perpetual usufruct right (2)	16,793	14,669	(293)	(1,674)	(786)	28,708

Inventory, valued at lower of - cost and net realisable value	747,254					786,458

(1) For additional information see note 13.

(2) Relates to change in the perpetual usufruct payments from 2023 and purchased land with perpetual usufruct. Amount of PLN 14,221 thousand of the recalculation adjustments is described in Note 23 (iv) Litigation- Ursus Centralny.

For the year ended 31 December 2022:

As at In thousands of Polish Zlotys 1 January 202 2 (PLN		Transferred to finished goods		Additions	As at 31 December 2022

Land and related expense Construction costs	358,975 115,557		(17,261) (111,696)	79,610 201,734	421,324 205,595
Planning and permits	17,131		(3,412)	8,604	22,322
Borrowing costs (2)	38,432		(5,310)	15,331	48,453
Borrowing costs on lease
and depreciation perpetual	3,039		(350)	1,234	3,923
usufruct right (1)
Other	3,647		(2,263)	2,371	3,755
Work in progress	536,780		(140,293)	308,884	705,372

In thousands of Polish Zlotys (PLN	As at 1 January 202 2	Transferred from work in progress		Recognized in the statement of comprehensive income	As at 31 December 2022
Finished goods	105,681		140,293	(217,915)	28,059
In thousands of Polish Zlotys	As at 1 January 2022	Revaluation write-down recognized in statement of comprehensive income			As at 31 December 2022
(PLN		Increase		Utilization/Reversal
Write-down	(4,118)			1,148	(2,970)
In thousands of Polish Zlotys (PLN	As at 1 January 2022	Recalculation adjustment (3)	Depreciation	Transfer to Other receivables	As at 31 December 2022
Perpetual usufruct right (2)	17,199	1,447	(215)	(1,638)	16,793
Inventory, valued at lower of cost and net realisable value (1) For additional information see Note 24.	655,542				747,254

(2) Borrowing costs are capitalized to the value of inventory with 9.912% average effective capitalization interest rate.

(3) Relates to change in the perpetual usufruct payments from 2022

Notes to the Interim Condensed Consolidated Financial Statements

Note 10 – Inventory and Residential landbank

Residential landbank

Plots of land purchased for development purposes on which construction is not planned within a period of three years has been reclassified as Residential landbank presented within Non-current assets. The table below presents the movement in the Residential landbank:

In thousands of Polish Zlotys (PLN)	For the 6 months ended 30 June 2023	For the year ended 31 December 2022
Opening balance	21,094	10,041
Moved from perpetual land use assets	1,674	-
Capital expenditure	531	-
Transferred from work in progress and advances for land to land designated for development	7,276	12,335
Transferred to Inventory	(9,206)	-
Write-down adjustment	-	(1,282)
Total closing balance	21,369	21,094
Closing balance includes:
Book value	28,349	29,681
Write-down	(6,980)	(8,587)
Total closing balance	21,369	21,094

During the period ended 30 June 2023, the Group decided to reclassify from the inventory line to land designated for development line the perpetual usufruct assets related to KEN project with a total value of PLN 1,674 thousand. In the period ended 30 June 2023 the company finalized the purchase of a plot in Ochota district in Warsaw with a total amount of PLN 7,2 million which resulted in the movement from the advances for land to land designated for development. Due to changes in project schedule (Skyline, Poznań) PLN 9.2 million was moved to inventory.

Note 11 - Trade and other receivables and prepayments

In thousands of Polish Zlotys (PLN)	As at 30 June 2023	As at 31 December 2022

Value added tax (VAT) receivables	18,954	39,204
Trade receivables	3,460	1,565
Other receivables	14,189	13,689
Trade and other receivables - IFRS 16 (impact of perpetual usufruct)	778	980
Notary's deposit	1,100	1,100
Prepayments(1)	9,523	9,082
Total trade and other receivables and prepayments	48,004	65,620

(1)The capitalized costs relating to signed agreements with clients have been presented in this line and amounted to PLN 1.9 million for the 6 months ended 30 June 2023 and PLN 1.6 million for the year ended 31 December 2022.

Notes to the Interim Condensed Consolidated Financial Statements

Note 11 - Trade and other receivables and prepayments

During the period ended 30 June 2023 and the year ended 31 December 2022, the Group booked allowance for doubtful accounts in the amount of PLN 1.836 million and PLN 518 thousand respectively as irrecoverable debts included in trade and other receivables.

Notary's deposits represents paid amount for the preliminary purchase agreements of lands. The balance of the deposit related to preliminary purchase agreement of land, as notarial deposit for the purchase of land in Warsaw, located in Bielany.

VAT receivables balance decrease by PLN 20.25 million due to VAT return on previously purchased lands, in amount of PLN 21.1 million. The VAT return process takes up to 180 days.

As at 30 June 2023 and at the time of preparing the financial statements there are two ongoing customs and revenue tax inspections in the companies: Ronson Development Sp. z o.o. - Projekt 3 Sp. k. ("Projekt 3") and Ronson Development Sp. z o.o. - Projekt 6 Sp. k. ("Projekt 6").

On 17 January 2022 Projekt 6 received an authorization to carry out a tax inspection in terms of the accuracy of the declared tax as well as for the correctness of calculating and paying the tax on goods and services for the month August 2021. The amount of VAT audited by the tax authorities amounts to PLN 2.6 million.

On 3 February 2022, Projekt 3 received an authorization to carry out a tax inspection in terms of the accuracy and correctness of the declared VAT return for the months from February to April 2021. The amount of VAT audited by the tax authority amounts to PLN 2.6 million.

Since 2021, the above mentioned companies have completed purchases of land in Warsaw. The purchase agreements were concluded with group IŁ Capital. As a result the Companies have applied for a VAT refund on the above transactions. By order dated 28 April 2023, the scheduled date for completion of the tax inspection at Project 3 was set for 8 August 2023. By order of 13 July 2023, the planned date for the completion of the tax inspection at Project 6 was set for 17 October 2023. The indicated dates for the completion of the inspections are not binding and are subject to change.

Other receivables relate to advance payments for land whose purchase transaction in the amount of PLN 4.9 million (including VAT) has not been finalized in the subsidiary company Ronson Development Sp. z o. o. – Projekt 4 sp. k. In addition, other receivables in the amount of PLN 6.4 million (including VAT) arose in the subsidiary Ronson Development Sp. z o. o. – Projekt 3 sp. k. as part of the advance payment for the purchase of the property at Epopei Street in Warsaw.

Note 12 – Advances for land

The table below presents the lists of advances for land paid as at 30 June 2023 and 31 December 2022:

Investment location	As at 30 June 2023	As at 31 December 2022
In thousands of Polish Zlotys (PLN)
Warsaw, Białołęka	1,450	1,450
Warsaw, Ursus	10,000	10,000
Warsaw, Ursynów	2,100	2,100
Warsaw, Ochota	-	7,100
Total	13,550	20,650

For more information about purchase of plots during the period ended 30 June 2023 please refer to Note 26 to the Interim Condensed Consolidated Financial Statements.

Notes to the Interim Condensed Consolidated Financial Statements

Note 13 – Right-of-use assets and lease liabilities (IFRS 16)

The movement on the right-of-use assets and lease liabilities during the period ended 30 June 2023 is presented below:

In thousands of Polish Zlotys (PLN)	1 January 2023	Transferred to Land designated for development	Depreciation charge	Fair value adjustment	Recalculation adjustment (1)	Transfer to trade receivables	30 June 2023
Right of use assets related to inventory	16,793	(1,674)	(293)	-	14,669	(786)	28,708
Right of use assets related to investment property	673	-	-	18	-	-	691
Right of use assets related to land designated for development	-	1,674	(12)	-	-	-	1,662
Right of use assets related to fixed assets	364	-	28	-	-	-	392

In thousands of Polish Zlotys (PLN)	1 January 2023	Transferred to Land designated for development	Finance expense	Payments	Recalculation adjustment (1)	Transfer to trade payables	30 June 2023
Lease liabilities related to inventory	16,888	-	1,358	(1,244)	14,221	(756)	30,467
Lease liabilities related to fixed assets	434	-	1	-	-	-	435
Lease liabilities related to investment property	663	-	46	(46)	-	-	663

(1)Relates to change in the perpetual usufruct payments from 2023 and purchased land with perpetual usufruct. Amount of PLN 14,221 thousand of the recalculation adjustments is described in Note 22 (iv) Litigation- Ursus Centralny

The movement on the right of use assets and lease liabilities during the period ended 31 December 2022 is presented below:

In thousands of Polish Zlotys (PLN)	1 January 2022	Additions	Depreciation charge	Fair value adjustment	Recalculation adjustment (1)	Transfer to trade receivables	31 December 2022
Right of use assets related to inventory	17,199	1,674	(215)	-	(227)	(1,638)	16,793
Right of use assets related to investment property	545	-	(10)	-	138	-	673
Right of use assets related to fixed assets	296	154	(86)	-	-	-	364
In thousands of Polish Zlotys (PLN)	1 January 2022	Additions	Finance expense	Payments	Recalculation adjustment (1)	Transfer to trade payables	31 December 2022
Lease liabilities related to inventory	17,231	1,674	1,049	(1,162)	(265)	(1,639)	16,888
Lease liabilities related to fixed assets	292	142	-	-	-	-	434
Lease liabilities related to investment property	553	-	34	(45)	121	-	663

Notes to the Interim Condensed Consolidated Financial Statements

Note 14 – Investors agreement ("SAFE Agreement")

Conclusion of this agreement results from the fact that the Company has decided that within the period specified in the SAFE Agreements it will not apply for admission of the Company's shares to trading on the Tel Aviv Stock Exchange. On the basis of the agreement, the Company undertook to return to Luzon Group the financing received from Investors under the SAFE Agreements in the total amount of ILS 60 million (sixty million Israeli shekels), to satisfy Luzon Group's claims against the Company under the SAFE Agreements and applicable Israeli law. Payments to Luzon Group in the total amount of PLN 25 million (approx. ILS 21.7 million) were made in May 2023, and subsequent payments will be made in accordance with the schedule agreed by the parties to the agreement, determined taking into account the capital needs of Luzon Group and the liquidity and financial situation of the Company, with the provision that these payments will become due no earlier than 1 January, 2024, and the total amount of payments to Luzon Group in 2024 will not exceed PLN 25 million (approx. ILS 22 million) and the remaining amount will be repaid in 2025. Based on the Company's Management judgment, it was concluded th signing of the agreement of May 25, 2023 resulted in the extinguishments of the liability to investors and the recognition of a new liability to Luzon Group, which was recognized as a financial liability measured at amortized cost with a discounted cash flow rate of 7,14% per annum.

The table below presents the movement on the new liability to Luzon Group for the period from May 25, 2023 to the end of the reporting period, i.e. June 30, 2023:

Investor	Liability at amortized cost [in PLN]	Liability recognition date	Repayment of liability [in PLN]	Interest accrued [in PLN]	Exchange differences [in PLN]	Value of the liability at amortized cost June 30, 2023 [in PLN]	Sensitivity analysis of the discount rate +1% [in PLN]	Sensitivity analysis of the discount rate - 1% [in PLN]
Amos Luzon Development and Energy Group Ltd.	64,372,242	25 maja 2023	25,000,000	131,508	(245,544)	39,258,206	(708,683)	729,455

The difference between the fair value of the financial liability to investors, which was derecognized, and the fair value of the new liability to Luzon Group as at the date of recognition (25 May 2023), resulted in a financial cost of PLN 2.6 million, recognized in the income statement under Gain/(loss) on a financial instrument measured at fair value through profit and loss, resulting from a change in the discount rate depending on the interest rate on Luzon bonds groups. The Company points out that the financing granted under the SAFE Agreements has been classified in the financial statements as a financial liability of the Company since it was obtained.

As at 25 May 2023, the fair value of the liability towards SAFE Investors was 54,601 thousand Israeli shekels (PLN 61,524 thousand) assuming market conditions of the transaction as at the valuation date with a discounted rate of 9,3% per annum. At the moment of derecognition of liabilities to investors, gain on fair value measurement in the amount of PLN 8.9 million was recognized in the income statement in line gain(loss) in fair value of financial instrument at fair value through profit and loss, no value was recognized in other comprehensive income.

On July 7, 2023, the Company and Luzon Group signed an annex to the above agreement, on the basis of which, after carrying out transfer pricing analyses, they agreed that the remaining amount to be repaid would bear interest at 3% per annum. Interests were already considered in initial recognition of liability towards Luzon. The value of the liability does not differ significantly from the value measured at fair value.

SAFE Agreement - description of the background of financial liability measured at fair value until derecognition

On 1 February 2022 and 22 February 2022 the Company entered into 5 separate SAFE agreements with Israeli institutional investors ("SAFE Agreements") raising a total amount of ILS 60 million, equivalent of PLN 61.5 million in FVPL as at 25 May 2023 and equivalent of PLN 70.5 million in FVPL as at 31 December 2022. On the 25 may 2023 the company and its main shareholder (Amos Luzon Development and Energy Group Ltd.) signed a settlement agreement which together with original SAFE Agreements resulted in derecognition of financial liability measured at FVPL, please refer to note 14 to the interim condensed consolidated financial statements.

Notes to the Interim Condensed Consolidated Financial Statements

Note 14 – Investors agreement ("SAFE Agreement")

SAFE Agreement - description of the background of financial liability measured at fair value until derecognition

The SAFE Agreements granted the Investors certain rights applicable after the Issuer is delisted from the regulated market of the Warsaw Stock Exchange, including the right to subscribe for shares of the Company at a discounted price and for instruments convertible into shares in the Company, if the shares in the Company are admitted to trading on the Tel-Aviv Stock Exchange, secured by the right to convert their investments into shares or bonds of the Luzon Group if the shares in the Company were not admitted to trading on the Tel-Aviv Stock Exchange.

The above agreements do not impose any restrictive covenants or onerous undertakings on the part of the Group as well as it does not bear any interest.

The respective instrument should be classified as a financial liability because it includes the obligation to deliver cash to investors in the event of change of control and it includes a conversion option that does not meet the fixedfor-fixed criteria. The Group designated the financial liability as measured at FVPL entirely, on initial recognition. No amount was recognized through the other comprehensive income.

The table below presents payments made by Investors and the valuation of the financial liability as at the date of derecognition of the liability (May 25, 2023) and as at December 31, 2022:

Investor	Amount of the investment in Ronson [in ILS]	Date of payment	Paid to Ronson [in EUR]		Fair value 31.12.2022 [in PLN]	Fair value 25.05.2023 [in PLN]	Gain(loss) in fair value of financial instrument at fair value through profit and loss [in PLN]
EJS Galatee Holdings	1,500,000	23 February 2022	413,232	1,876,734	1,773,104	1,547,231	225,873
Sphera Master Fund L.P	26,500,000	18 February 2022	7,264,254	32,753,070	30,944,513	27,002,544	3,941,970
Sphera Small Cap L.P	2,000,000	18 February 2022	551,953	2,488,646	2,351,228	2,051,709	299,519
Moore Provident Funds	15,000,000	23 February 2022	-	18,656,716	17,626,531	15,381,117	2,245,414
Klirmark Opportunity Fund III	15,000,000	24 February 2022	-	18,851,326	17,810,395	15,541,558	2,268,836
L.P
Razem	60,000,000		8,229,439	74,626,492	70,505,771	61,524,159	8,981,612

Valuation process and valuation techniques

The valuations of the SAFE agreements until 25 May 2023 was performed by external advisors Prometheus Financial Advisory, which specializes in financial accounting and complex financial instruments. The valuation of the instrument was determined in accordance with the guidelines outlined in the American Institute of Certified Public Accountants Practice Aid, Valuation of Privately-Held-Group Equity Securities Issued as Compensation, (the "AICPA Practice Aid") and according to the principles of valuation of equity securities of private companies issued as part of compensation. The assumptions used in the valuation model are based on the future expectations combined with the Group's management judgement. Numerous objective and subjective factors to determine the fair value of the ordinary shares as of the date of each option grant, including the following factors:

a) the prices, rights, preferences and privileges of the preferred shares;
b) current business and market conditions and projections;
c) the Group's stage of development;
d) the likelihood of a liquidity event for the ordinary shares underlying these options, such as an initial public offering or sale of the Group, given prevailing market conditions.

For valuation purposes, each of the SAFE agreements consists of two components: equity (assuming a public offering of the Company's shares in Israel and listing of the Company's shares on the Tel Aviv Stock Exchange (collectively, the "IPO")) and debt. As at the valuation date, i.e. May 25, 2023, the company's Management Board estimates that the probability of an IPO has decreased to 0% due to significant formal complications, in particular tax complications (the obligation to pay capital gains tax by investors; the obligation to pay dividend tax in Poland; registration for tax purposes in Poland and having a taxpayer number; submitting reports on your income on an annual basis) for potential shareholders purchasing the Company's shares on the Tel Aviv Stock Exchange.

Notes to the Interim Condensed Consolidated Financial Statements

Note 14 – Investors agreement ("SAFE Agreement")

Valuation process and valuation techniques

Accordingly, Group management does not envisage an IPO on the Israeli Stock Exchange before finding possible solutions to these issues. The valuation focused solely on the valuation of the debt component.

In order to estimate the fair value of SAFE at the date of derecognition of the liability, the investors' loss was reduced by the original amount of SAFE. This amount, which is reflected in the gain on fair value measurement of SAFE liabilities, amounted to PLN 6,376 thousand and was recognized in the Consolidated Statement of Comprehensive Income. The main factor causing the change in the fair value of the financial liability was the change in the YTM of Luzon bonds (series 10) from 6.54% as at December 31, 2022 to 9.3% as at May 25, 2023.

The following table summarizes the quantitative information about the significant unobservable inputs used in level 3 fair value measurements:

		Fair Value as at		Range of input (probability weighted average)
Description	25 May 2023 [PLN thousands]	31 December 2022 [PLN thousands]	Unobservable input	25.05.2023	31.12.2022	Relationship of unobservable inputs to fair value
Financial liability at fair value through profit or loss (SAFE agreement)	61,524	70,506	YTM (Yield to Maturity) discount rate	3%-9.3%	3%-6.54%	A shift of the YMT rate by +1 p.p. results in a lower value of 768 thousands PLN (2022: change in default rate by +1 p.p. decreased FV by PLN ('000) 1,168) A shift of the YMT rate by -1 p.p. results in a higher in value of 768 thousands PLN (2022: change in default rate by - 1 p.p. increased FV by PLN('000) 1,168)

Changes in the other factors do not materially affect the valuation, as it is linked to the observable transaction that was the transfer of cash by Investors.

Note 15 – Loans and Bonds

Bond loans

The table below presents the movements in bond loans during the six months ended 30 June 2023 and during the year ended 31 December 2022 as well as the Current and Non-currents balances as at the end of respective periods:

	For the period ended 30 June 2023	For the year ended 31 December 2022
In thousands of Polish Zloty (PLN)	(Reviewed/ Unaudited)	(Audited)
Opening balance	203,370	249,238
Repayment of bond loans	-	(50,000)
Issue cost amortization	555	1,349
Accrued interest	11,194	18,086
Interest repayment	(11,453)	(15,303)
Total closing balance	203,666	203,370
Closing balance includes:
Current liabilities	105,001	45,260
Non-current liabilities	98,665	158,110
Total Closing balance	203,666	203,370

Notes to the Interim Condensed Consolidated Financial Statements

Note 15 – Loans and Bonds

Bonds as at 30 June 2023:

In thousands of Polish Zlotys (PLN)	Currency	Nominal interest rate	Year of maturity	Capital	Accrued interest	Charges and fees	Carrying value	Fair value(3)
Bonds loans series V(1)	PLN	6 month Wibor + 4.30%	2024	100,000	2,731	(494)	102,237	99,490
Bonds loans series W(2)	PLN	6 month Wibor + 4.00%	2025	100,000	2,270	(841)	101,429	98,500
Total				200,000	5,001	(1,335)	203,666	197,990

1)The series V b onds a re subject t o repayment in 2 tra nches 40% (PL N 40 mill ion) of the amou nt to ge the r w ith ac c umul ate d in terest t o be repaid by October 2023) 1) Series V bonds are repayable in two tranches: 40% (PLN 40.0 million) of the value plus accrued interest will be repaid in October 2023, the remaining 60% (PLN 60.0 million) plus accrued interest will be repaid in April 2024.

2)The series W bonds are subject to repayment in 2 tranches 40% (PLN 40 million) of the amount together with accumulated interest to be repaid by October 2024 and the remaining amount of 60% (PLN 60 million) together with accumulated interest to be paid by April 2025.

3) The fair value is set based on the bond price on Catalyst as at 30 June 2023. classified as level 1 of fair value hierarchy.

Bonds as at 31 December 2022:

In thousands of Polish Zlotys (PLN)	Currency	Nominal interest rate	Year of maturity	Capital	Accrued interest	Charges and fees	Carrying value	Fair value(3)
Bonds loans series V(1)	PLN	6 month Wibor + 4.30%	2024	100,000	2,865	(817)	102,049	95,480
Bonds loans series W(2)	PLN	6 month Wibor + 4.00%	2025	100,000	2,394	(1,073)	101,321	89,200
Total				200,000	5,260	(1,890)	203,370	184,680

1)The series V bonds are subject to repayment in 2 tranches 40% (PLN 40 million) of the amount together with accumulated interest to be repaid by October 2023)

and the remaining amount of 60% (PLN 60 million) together with accumulated interest to be paid by April 2024.

3) The fair value is set based on the bond price on Catalyst as at 31 December 2022, classified as level 1 of fair value hierarchy.

Financial ratio covenants

Based on the conditions of bonds V and W in each reporting period the Company shall test the ratio of Net debt to Equity (hereinafter "Net Indebtedness Ratio"). The Ratio shall not exceed 80% on the Check Date.

Until the publication date, as at 30 June 2023 and as at 31 December 2022 the Company did not breach any bonds loan covenants, which will expose the Company or the Group for risk of obligatory and immediate repayment of any loan.

The table presenting the Net Indebtedness Ratio as at 30 June 2023 and 31 December 2022:

In thousands of Polish Zlotys (PLN)	As at 30 June 2023	As at 31 December 2022
Loans and Bonds	203,666	203,370
Secured bank loans	1,454	16,297
Accrued interests on liability to shareholders measured at amortized costs	-	70,506
Liability to shareholders measured at amortized costs	39,258	-
IFRS 16 - Lease liabilities related to cars	363	363
Less: cash on individual escrow accounts (other current financial assets)	(12,339)	(11,217)
Less: Cash and cash equivalents	(103,882)	(51,185)
Net Debt	128,520	228,134
Equity	478,742	451,396
Ratio	26.8%	50.5%
Max Ratio	80.0%	80.0%

Notes to the Interim Condensed Consolidated Financial Statements

Note 15 – Loans and Bonds

Other covenants

Based on the conditions of bonds V and W transactions with related-parties (shareholders holding more than 25% of the shares in the Company "within the meaning of IAS 24 or with related parties "including with entities controlling the Company whether jointly or individually, whether directly or indirectly or with their subsidiaries which are not members of the Group) shall not exceed the aggregate amount of PLN 1.0 million during any given calendar year.

During the period ended 30 June 2023 and year ended 31 December 2022, the consulting fees related to A. Luzon Group amounted to PLN 420,7 thousand and PLN 900 thousand respectively.

Impact of the implementation of IFRS 16 on financial ratios in bond covenants

Terms and conditions of issuance of Bonds of the Company ("T&C's") provide that only certain, specified types of financial indebtedness should be taken into account when determining the level of financial indebtedness for the purpose of calculating financial ratios in accordance with T&C's. In particular, certain T&C's require that financial indebtedness resulting from finance lease agreements (in Polish: umowy leasingu finansowego) should be included in calculation of the financial indebtedness. Those T&C's do not provide that the indebtedness resulting from finance lease agreements shall also include other financial indebtedness which is recognized as lease liability in accordance with IFRS 16.

Given the above, and taking into the account the type of activities carried out by the Group, despite changes in the IFRS in this respect, the Company concluded that inclusion of other type of financial indebtedness, in particular liabilities from annual fees for perpetual usufruct, for the purposes of calculations of financial ratios would not be in line with T&C's and therefore the Company does not include such finance lease alike items in such calculations.

For additional information about IFRS 16 see Note 13.

Secured bank loans

	For the period ended 30 June 2023	For the year ended 31 December 2022
In thousands of Polish Zloty (PLN)	(Reviewed/ Unaudited)	(Audited)
Opening balance	16,297	1,568
New bank loan drawdown	44,687	97,934
Bank loans repayments	(59,531)	(83,205)
Bank charges paid	-	(2,150)
Bank charges presented as prepayments	636	1,273
Bank charges amortization (capitalized on Inventory)	(636)	876
Total closing balance	1,454	16,297
Closing balance includes:
Current liabilities	1,454	16,297
Non-current liabilities	-	-
Total closing balance	1,454	16,297

Notes to the Interim Condensed Consolidated Financial Statements

Note 15 – Loans and Bonds

Bank loans as at 30 June 2023:

Investment	Currency	Nominal interest rate	Year of maturity	Credit line amount in ('000 PLN)	Unpaid amount as at 30 June 2023 ('000 PLN)	Balance as at 30 June 2023 ('000 PLN)
Ursus IIC	PLN	3 Month Wibor + 2.50%	2023	61,900	1,454	1,454
Osiedle Vola	PLN	1 Month Wibor + 2.80%	2026	44,779	-	-
Thame	PLN	1 Month Wibor + 2.80%	2026	29,000	-	-
Między Drzewami	PLN	1 Month Wibor + 2.80%	2026	40,500	-	-
Total				176,179	1,454	1,454

Bank loans as at 31 December 2022:

					Unpaid amount as at
Investment	Currency	Nominal interest rate	Year of maturity	Credit line amount in ('000 PLN)	31 December 2022 ('000 PLN)	Balance as at 31 December 2022 ('000 PLN)
Grunwaldzka	PLN	3 Month Wibor + 2.90%	2025	20,880	11	11
Miasto Moje VI	PLN	3 Month Wibor + 2.50%	2023	59,600	11,755	11,755
Ursus IIC	PLN	3 Month Wibor + 2.50%	2023	61,900	-	-
Nowe Warzymice IV	PLN	3 Month Wibor + 2.20%	2023	20,000	2,604	2,604
Viva Jagodno IIB	PLN	3 Month Wibor + 2.20%	2023	38,850	1,928	1,928
Total				201,230	16,297	16,297

In the case of bank loans, the fair value does not differ significantly from the carrying amount because the interest payable on these liabilities is close to the current market rates or the liabilities are short-term. For unquoted financial instruments, the discounted cash flow model was used and classified to the second level of the fair value hierarchy.

All credit bank loans are secured. For additional information about unutilized credit loans see Note 22. The bank loans are presented as short-term due to the fact that those are the credit lines used by the Group and repaid during normal course of business (up to 12 months).

Note 16 – Trade and other payables and accrued expenses

In thousands of Polish Zlotys (PLN)	As at 30 June 2023	As at 31 December 2022
Trade payables	31,009	22,681
including a credit line from the General Contractor(2)	1,303	-
Trade payable related to purchase of land(1)	23,450	23,450
Accrued expenses	36,851	24,020
Guarantees for construction work	3,338	1,472
Value added tax (VAT) and other tax payables	3,719	1,778
Non-trade payables	731	674
Other trade payables - IFRS 16	752	981
Total trade and other payables and accrued expenses	99,849	75,055

(1) The balance relates to land purchase transaction held on 19 September 2022 in which the Group via its subsidiary signed final agreement for the purchase of the land on Wolska Street Warsaw, the payment is deferred to 30 August 2023.

(2) Agreement with the General Contractor - Techbau Budownictwo Sp. z o. o. on Ursus 2E (VI) assumes the possibility of using a credit line according to which payment can be made in the amount of 50% of the net amount of the issued invoice. The line can be launched for up to 6 invoices, up to a total amount of PLN 20 million. The interest rate is WIBOR6M as at March 10, 2023. The final repayment of the debt must be made 30 days after the performance guarantee expires or 30 days after the quality guarantee is submitted

Trade and non-trade payables are non-interest bearing and are normally settled on 30-day terms.

Notes to the Interim Condensed Consolidated Financial Statements

Note 17 – Finance expenses

The table presents the Finance expenses as at 30 June 2023 and 30 June 2022:

In thousands of Polish Zlotys (PLN)	As at	As at
	30 June 2023	30 June 2022
Interests on bonds	5,617	2,681
Other	1,466	890
Total	7,083	3,571

Note 18 – Income tax

	For the 6 months ended 30 June	For the 3 months ended 30 June	For the 6 months ended 30 June	For the 3 months ended 30 June
	2023	2023	2022	2022
In thousands of Polish Zlotys (PLN)	(Unaudited) / (unreviewed)	(Reviewed) / (unaudited)	(Reviewed) / (unaudited)	(Reviewed) / (unaudited)
Current tax expense
Current period	5,176	3,341	3,637	2,028
Taxes in respect of previous periods	(261)	(379)	391	464
Total current tax expense	4,914	2,961	4,029	2,493
Deferred tax expense
Origination and reversal of temporary differences	5,559	4,903	1,171	(2,307)
Deffered tax asset recognized from the tax losses	(1,879)	(1,155)	(1,928)	(821)
Total deferred tax (benefit)/expense	3,680	3,747	(757)	(3,128)
Total income tax expense	8,594	6,709	3,272	(635)

The effective income tax rate in the period ended 30 June 2023 amounted to 24,01% (25% in comparative period). The effective interest rate for the period of six months ended June 30, 2023 was the result of exceeding the limits of debt financing in accordance with the provisions of the Income Tax Act and CIT adjustments from previous years.

Notes to the Interim Condensed Consolidated Financial Statements

Note 19 – Deferred tax assets and liabilities

Movements in Deferred tax assets and liabilities during the six months ended 30 June 2023 were as follows:

	Opening balance 1 January 2023	Recognized in the statement of comprehensive	Closing balance 30 June 2023
In thousands of Polish Zlotys (PLN)		income
Deferred tax assets
Tax loss carry forward	5,704	1,879	7,583
Difference between tax and accounting basis of inventory	33,963	3,834	37,797
Accrued interest	1,100	(24)	1,076
Accrued expense	1,067	(213)	854
Write-down on work in progress	2,635	-	2,635
Fair value valuation of Investment property	871	(119)	752
Other	750	258	1,008
Total deferred tax assets	46,090	5,614	51,704

Deferred tax liabilities
Difference between tax and accounting revenue recognition	48,641	9,565	58,206
Difference between tax base and carrying value of capitalized finance costs on inventory	9,129	(62)	9,067
Accrued interest	567	-	567
Fair value gain on investment property	1,611	(264)	1,347
Difference on valuation of an SAFE Agreement	783	30	813
Other	338	26	364
Total deferred tax liabilities	61,068	9,294	70,363
Total deferred tax benefit (see Note 17)		3,680
Deferred tax assets	46,090		51,704
Deferred tax liabilities	61,068		70,363
Offset of deferred tax assets and liabilities for individual companies	(37,260)		(43,394)
Deferred tax assets reported	8,830		8,310
in the statement of financial position
Deferred tax liabilities reported in the statement of financial position	23,809		26,968

Notes to the Interim Condensed Consolidated Financial Statements

Note 20 – Advances received

Payments from customers on account of the purchase of apartments and parking spaces are recorded as deferred income until the time that they are delivered to the buyer and are recognised in the income statement as "sales revenue". This balance sheet item is closely dependent over time on the relationship between the sales rate (which as it increases, increases this item) and the deliveries rate (which as it decreases, decreases this item).

In thousands of Polish Zlotys (PLN)	As at 30 June 2023	As at 31 December 2022
Deferred income related to the payments received from customers for the purchase of products, not yet included as income in the income statement
Opening balance	139,911	198,047
- increase (advances received)	213,574	242,123
- decrease (revenue recognized)	(176,429)	(300,258)
Total advances received	177,056	139,911
Other (deferred income)*	4,567	-
Total	181,623	139,911

* Deferred income from invoices issued for premises delivered but not fully paid as well as reservation fees for apartments paid at 30 June 2023.

Additional information regarding contracted proceeds not yet received which are a result of signed agreements with the clients, please see Note 22.

Revenues from contracts will be recognized at the time of handover the apartment to the client, completion of construction process and obtaining all necessary administrative decisions (occupancy permit), which usually takes from 1 to 6 months from the completion of construction stage.

Note 21 - Sales revenue and cost of sales

	For the 6 months ended 30 June	For the 3 months ended 30 June	For the 6 months ended 30 June	For the 3 months ended 30 June
	2023	2023	2022	2022
In thousands of Polish Zlotys (PLN)	(Unaudited) / (unreviewed)	(Reviewed) / (unaudited)	(Reviewed) / (unaudited)	(Reviewed) / (unaudited)
Sales revenue
Revenue from residential projects	176,431	154,599	137,680	25,295
Total sales revenue	176,431	154,599	137,680	25,295

Cost of sales
Cost of finished goods sold	(120,259)	(105,023)	(106,561)	(19,250)
Inventory write down to the net realizable value	-	-	485	360
Total cost of sales	(120,259)	(105,023)	(106,076)	(18,890)

Gross profit on sales	56,172	49,576	31,604	6,405
Gross profit on sales %	32%	32%	23%	25%

Notes to the Interim Condensed Consolidated Financial Statements

Note 22 – Impairment losses and provisions

During the six months period ended 30 June 2023, the Group analysed inventories for valuation to net realisable value and did not identify indications of an impairment of inventories and the necessity to recognise inventory write-downs.

Note 23 – Commitments and contingencies

(i) Investment commitments

The amounts in the table below present uncharged investment commitments of the Group in respect of construction services to be rendered by the general contractors:

	Commitments
In thousands of Polish Zlotys (PLN)	Contracted amount as at 30 June 2023	As at 30 June 2023	Contracted amount as at 31 December 2022	As at 31 December 2022
Karmar S.A.	141,414	5,683	142,891	41,143
Hochtief Polska S.A.	124,892	65,622	51,380	1,819
TechBau Budownictwo Sp. z o.o.	116,068	84,863	19,150	9,610
EBUD - Przemysłówka Sp. z o.o.	42,861	12,819	44,161	28,286
Leancon Sp. z o.o.	32,500	14,569	32,500	24,073
W.P.I.P. - Mardom Sp. z o.o.	36,600	25,480	36,600	35,357
Totalbud S.A.	17,434	15,387	-	-
Total	511,768	224,423	326,683	140,288

(ii) Unutilized construction loans

The table below presents the list of the construction loan facilities, which the Group arranged for in conjunction with entering into loan agreements with the banks in order to secure financing of the construction and other costs of the ongoing projects. The amounts presented in the table below include the unutilized part of the construction loans available to the Company/Group:

As at	As at
	31 December 2022
-	16,242
30,157	61,900
-	10,884
-	17,846
-	12,757
44,779	-
29,000	-
40,500	-
144,436	119,630
	30 June 2023

Notes to the Interim Condensed Consolidated Financial Statements

Note 23 – Commitments and contingencies

(iii) Contracted proceeds not yet received

The table below shows the amounts that the Group is expected to receive from clients under signed agreements for the sale of apartments, i.e. expected payments under signed agreements with clients up to 30 June 2023, net of amounts received up to the balance sheet date (which are presented in the Interim Condensed Consolidated Statement of Financial Position as advances received):

		As at 30 June 2023 (Reviewed/Unaudited)			As at 31 December 2022 (Audited)
In thousands of Polish Zlotys (PLN)	Completion date*	Total value of preliminary sales agreements signed with clients	Advances received from Clients until 30 June 2023	Contracted payments not received yet as at 30 June 2023	Total value of preliminary sales agreements signed with clients	Advances received from Clients until 31 December 2022	Contracted payments not received yet as at 31 December 2022
Ursus Centralny IIb	Q1 2023	51,716	43,799	7,917	82,039	57,579	24,460
Ursus Centralny IIc	Q3 2023	59,626	31,727	27,899	34,565	12,856	21,709
Ursus Centralny IIe	Q4 2024	23,676	2,195	21,482	1,550	126	1,423
Miasto Moje IV	Q4 2021	958	362	596	1,492	500	993
Miasto Moje V	Q3 2022	1,227	237	989	2,526	1,539	987
Miasto Moje VI	Q1 2023	31,392	18,729	12,663	50,367	28,080	22,286
Miasto Moje VII	Q4 2024	19,466	1,921	17,545	569	61	508
Viva Jagodno IIa	Q4 2022	891	12	879	2,087	1,706	381
Viva Jagodno IIb	Q2 2023	39,845	26,099	13,746	26,461	10,364	16,098
Viva Jagodno III	Q2 2025	923	92	831	923	92	831
Nowe Warzymice II	Q2 2022	22	14	9	-	6	(6)
Nowe Warzymice III	Q4 2022	520	106	414	612	61	551
Nowe Warzymice IV	Q2 2023	13,457	4,023	9,434	12,072	3,906	8,167
Nowa Północ Ia	Q4 2023	9,404	2,652	6,752	4,022	694	3,328
Osiedle Vola	Q4 2023	44,500	15,254	29,247	10,366	2,511	7,854
Eko Falenty I	Q3 2023	8,640	1,965	6,675	3,833	798	3,034
Między Drzewami	Q3 2024	34,794	6,664	28,130	10,610	1,933	8,677
Grunwaldzka	Q2 2023	19,666	17,396	2,270	21,014	14,499	6,514
Nova Królikarnia 4b1 (Thame)	Q2 2024	4,776	2,149	2,627	-	-	-
Other (old) projects		2,545	1,660	885	3,708	2,561	1,147
Total (excluding JV)		368,045	177,056	190,989	268,814	139,874	128,941
Wilanów Tulip	Q3 2021	-	-	-	8,833	5,023	3,810
Total (including JV)		368,045	177,056	190,989	277,647	144,896	132,751

*from the completion date the assumed recognition of the advances as revenue is between 3-6 months

(iv) Litigations

Ursus Centralny

In a letter dated 19 November 2021 the State Treasury (Skarb Państwa) – President of the Capital City of Warsaw notified Ronson Development sp. z o.o. – Ursus Centralny Sp. k. ("the Ursus Centralny Company") on the termination of the annual fee for perpetual usufruct of land owned by the State Treasury, located in Warsaw at 6 and 6A Taylor st. The Ursus Centralny Company received a decision to pay the annual fee in the new amount from 1 January 2022, i.e .:

• for 2022 in the amount of PLN 476 thousands
• for 2023 in the amount of PLN 2,034 thousands
• for 2024 and subsequent years in the amount of PLN 3,591 thousands

Notes to the Interim Condensed Consolidated Financial Statements

Note 23 – Commitments and contingencies

(iv) Litigations

Ursus Centralny

The Ursus Centralny Company submitted an application to the Local Government Boards of Appeal (Samorządowe Kolegium Odwoławcze) in Warsaw for a determination that the increase in the fee for perpetual usufruct was unjustified.

On 7 April 2022, the Local Government Boards of Appeal in Warsaw received a letter from the State Treasury – the President of the Capital City of Warsaw, which showed that there was no possibility of reaching a settlement in the above case.

On 1 July 2022 the Ursus Centralny Company received a judgment of 25 May 2022 from the Local Government Boards of Appeal dismissing the company's application. Therefore, on 13 July 2022, the Ursus Centralny Company submitted an objection to the District Court in Warsaw.

It should be emphasized that, already after the President of the City of Warsaw terminated the amount of the annual fee for perpetual usufruct of the real estate constituting plot of land No. 98/2 within precinct 1465128.2 09-09 of the total area of 65,198 m2 (hereinafter: "Property"), which was made by letter dated 19 November 2021, the Property was divided on the basis of division decision No. 335/2022 dated 22.07.2022. By the decision in question the Property was divided into investment plots Nos. 98/7, 98/8, 98/9, 98/10 and 98/11, a plot designated for a city square No. 98/14 as well as plots designated for public roads marked with Nos. 98/12, 98/13 and 98/15. Thus, on the day on which the above-mentioned division decision became final (i.e. on 1.09.2022) three above-mentioned road plots with a total area of 15,140 m2 became the ownership of the City of Warsaw, which means that the area of the property covered by the administrative procedure described above was reduced. The above means that if the Company's objection against the decision of the Local Government Board of Appeal in Warsaw of May 25, 2022 is dismissed, the perpetual usufruct fee in the new, increased amount will be calculated on the entire area of the Property for the period from 1.01.2022 to 1.09.2022, while from 2.09.2022 it will be calculated from the area reduced as a result of the above division.

In addition, as of 28 October 2022, the perpetual usufruct right of the newly separated investment plot marked with No. 98/7 with an area of 8,686 m2 developed with residential buildings was transformed into ownership, which will also affect the amount of the perpetual usufruct fee calculated after 28 October 2022.

Furthermore, on the basis of the agreement concluded between the Company and the State Treasury on 27.10.2022, Rep. A. 16373/2022, on change of the purpose of perpetual usufruct of a part of the property, it was established that with regard to real estate constituting plots No. 98/8 (with an area of 7,441 m2), 98/9 (with an area of 7,062 m2) and 98/10 (with an area of 9,880 m2), the annual fee rate for perpetual usufruct of land will be, starting from 1 January 2023, 1% in accordance with Article 73(2f) and Article 72(3)(4) of the Real Estate Management Act.

The resolution of this case is not expected in 2023 and as a result any assessment of the outcome of this case cannot be reliable enough at this stage. However, considering progress in changing the condition of the land and current market practices in similar cases, the Group decided to reassessed lease liability and asset from right of use, which resulted in recognition of additional right of use assets related to inventory and the lease liabilities for perpetual usufruct right related to inventory amounted to PLN 13,916 thousand.

In case the litigation would be lost in the court, the result would affect the value of the right of use asset related to inventory and lease liabilities related to inventory.

Notes to the Interim Condensed Consolidated Financial Statements

Note 23 – Commitments and contingencies

(iv) Litigations

Galileo

On 3 February 2023, in the case against Ronson Development Sp. z o. o. – Estate Sp. k., a subsidiary of the Company which ran the Galileo development project (the "Galileo Company"), a judgment was issued obliging the Galileo Company to pay the plaintiff (the buyer of the premises in this project) the amount of PLN 80,000 with statutory interest from the date of filing the lawsuit (May 28, 2013) as a reduction in the price of the premises due to its defects. The judgment was issued by the court of second instance and is final and has been executed. In connection with its issuance, the Company decided to create a provision for other similar cases in the total amount of PLN 2.1 million as at 31 December 2022 and from which an amount of PLN 535 thousand was released in Q2 2023.

In the first quarter of 2023 the Company entered into settlements in three cases whereby the price reduction claims were paid and the parties agreed to enter into court settlements whereby the actions would be withdrawn. Moreover Galileo is a defendant in 7 similar cases that are being considered by the court of first instance.

At the same time, Galileo is the plaintiff in the case against Eiffage Polska Budownictwo S.A. the general contractor of the Galileo development project ("Eiffage"), its insurer and other entities involved in the implementation of the investment and their insurers, the subject of which is recognition of the liability of Eiffage and others for damage to the Galileo Company related to the improper implementation of this project and compensation. In addition, Galileo has already obtained partial compensation from the designers and their insurer for the damage caused during the construction of this project.

Matters relating to the acquisition of certain real estate

In January 2023, the Ronson Group companies issued calls for payment to several affiliated companies that were sellers (or otherwise involved in the sale) for the return of the deposit paid or double the amount paid, for the return of the loan granted, for the return of the remainder of the deposit and for the payment of compensation for the sale of real estate with a contractual mortgage registered in section IV of the real estate register:

• Ronson Development sp. z o.o. - Projekt 3 sp.k. ("Projekt 3") issued a call for payment of PLN 6,462,113 (six million, four hundred and sixty-two thousand, one hundred and thirteen złoty) as reimbursement of a portion of the down payments made towards the price of real estate on ul. Epopei in Warsaw, addressed to the seller and the guarantors. Projekt 3's claim arises from an overpayment of the price of the purchased properties. This claim was accepted by the seller in the concluded sale agreement. In connection with the failure to pay within the time limit set out in the summons, Projekt 3 applied for enforcement clauses for declarations of voluntary submission to enforcement against the seller and the guarantors;
• Ronson Development SPV4 sp. z o.o. ("SPV4") sent requests for payment of PLN 1,600,000 (one million six hundred thousand zlotys) for the repayment of a loan granted to the company from which the property in ul. Dobosza in Warsaw was acquired (the loan was granted for purposes related to this acquisition), as well as to three other companies related to the seller who provided a guarantee for the repayment of this debt. As a result of the failure to pay within the stipulated timeframe, SPV4 applied for enforcement clauses for the declarations of voluntary submission to enforcement against both the seller and the guarantors;
• Ronson Development sp. z o.o. - Projekt 4 sp.k. ("Projekt 4") withdrew from the preliminary agreement for the acquisition of real estate on ul. Wysockiego in Warsaw due to non-performance of the conditions for conclusion of the final agreement and demanded payment of PLN 9,840,000 (nine million eight hundred and forty thousand zlotys) as reimbursement of the double amount of the deposit. Projekt 4 sent a summons for payment and then, as a result of failure to pay within the prescribed time limit, applied for an enforceability clause to be applied to the statement on voluntary submission to enforcement;

Notes to the Interim Condensed Consolidated Financial Statements

Note 23 – Commitments and contingencies

(iv) Litigations

Matters relating to the acquisition of certain real estate

• Projekt 4 issued a call for payment of PLN 861,000 (eight hundred and sixty-one thousand zlotys) as reimbursement of the remainder of the deposit paid under the preliminary agreement for the sale of the property at ul. Kasprzaka in Warsaw, which was ultimately not acquired by a Ronson Group company;
• in connection with the acquisition of the real estate at Al. Komisji Edukacji Narodowej in Warsaw with a contractual mortgage registered in Section IV, contrary to the preliminary sale agreement, Ronson Development SPV3 sp. z o.o. ("SPV3") demanded payment of damages in the amount of PLN 25,000,000 (twenty-five million zlotys) or delivery of a statement by the mortgagor (being an entity related to the seller) on the expiry of the claim secured by the contractual mortgage together with its consent to the removal of the said mortgage from the land and mortgage register. On 26 June 2023, the defendant company filed an application for the removal of the mortgage from the land and mortgage register.

The demands for payment also included calls for payment of contractual or statutory interest for late payment or reservation of the right to pursue payment of these amounts, together with court and enforcement costs, in court proceedings and information on the possibility of using the collateral established in the event of non-payment by the set deadline.

In connection with the non-payment of the above amounts, these companies proceeded to pursue their claims through court proceedings (on the basis of enforcement titles obtained) and enforcement proceedings:

• 11 enforcement proceedings were initiated, in the course of which the debtors' bank accounts, receivables due to them from other entities, as well as real estate or shares in real estate were seized; in four of the proceedings in question, minutes of description and assessment of the seized real estate were drawn up in the period from 23 May to 13 July 2023;
• 21 February 2023. Projekt 4 filed a lawsuit for payment of the amount of PLN 861,000, being the equivalent of the unsettled part of the deposit paid under the concluded preliminary agreement;
• 24 April 2023. SPV3 filed a statement of claim for reconciliation of the land and mortgage register maintained for the property located at Al. Komisja Edukacji Narodowej with the actual legal status. On 26 June 2023, the defendant company filed an application for the removal of the mortgage from the land and mortgage register.

Note 24 – Risk management

The Group's activities expose it to a variety of risks: Global risks (Effect of the War Conflict ), Market risks and Financial risk factors (currency risk, liquidity risk, fair value measurement risk, interest rate risk). The Group's overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Group's financial performance. The Management Board reviews and updates policies for managing each of these risks and they are summarized below. The Group also monitors the market price risk arising from all financial instruments.

The Group does not use derivative financial instruments to hedge currency or interest rate risks arising from the Group's operations and its sources of finance. Throughout the year ended 31 December 2022, which continued into the period ended 30 June 2023, the Group's policy was not to trade in (derivative) financial instruments.

Notes to the Interim Condensed Consolidated Financial Statements

Note 24 – Risk management

The Group's principal financial instruments comprise cash balances, other current financial assets, loans granted to JVs and third parties, bank loans, bonds, financial instruments measured at amortized cost, trade receivables and trade payables. The main purpose of these financial instruments is to manage the Group's liquidity and to raise finance for the Group's operations.

In terms of risks specific for the sector, in which the Group operates, there is a potential increase in construction costs, a significant increase in interest rates, the challenge of securing lands for reasonable prices which can lead to the significant negative impact on the margins of new phases and projects, a prolongation of administrative procedures as well as an increasing competition in the market are considered to be the most significant uncertainties for the financial period ending 30 June 2023.

Global Risks - Effect of the War Conflict on the polish economy and real estate industry

In 2022 the global economy was weakened by disruptions in trade regarding the prices of food and fuels, resulting from the ongoing war in Ukraine. In the second half of 2022, activity in the eurozone deteriorated due to disrupted supply chains, increased financial stress and a decline in consumer and business index confidence.

The trend of rising global oil, gas and coal prices, observable since early 2021, increased sharply after Russia's invasion of Ukraine due to sanctions imposed on Russia, causing inflation to rise to levels not seen in decades in Europe.

According to a recent update to a World Bank publication, Poland's economic growth in 2023 is expected to slow more than initially thought, as the ongoing war in Ukraine has dimmed prospects for a post-pandemic recovery in Europe.

In 2022 the war in Ukraine was a key factor affecting the Polish economy. It caused the rise in inflation, especially related to the rise in prices of energy and food. The level of inflation in Poland is currently one of the highest in Europe. The Polish government's decision to completely abandon the import of Russian energy resources by the end of 2022 has also influenced activities related to acquiring new sources of supply, which is particularly true of coal, and the intensification of investments aimed at energy diversification.

In an effort to stem rising inflation, the Monetary Policy Council of the National Bank of Poland (NBP) in September 2022 raised benchmark interest rates for the eleventh consecutive year, resulting in a huge increase in loan instalments for borrowers and consequently worsening the situation of many households. A raise in interest rates has had negative consequences for the Issuer's Group in the form of higher interest expenses on the debt held - financial costs in the first half of 2023 amounted to PLN 9.6 million, as compared to PLN 3.6 million in (including costs capitalized in stock) in the first half of 2022.

The creditworthiness of Poles has also decreased, and consequently the number of newly taken out loans has fallen. This cause a significant slowdown at the real estate market. At the same time, in terms of the housing market, the Company noted a significant trend of cash buyers outnumbering those using mortgages, resulting in a significant decline in the number of units sold by the Issuer observed since the beginning of 2022 (-50% y/y in the entire 2022).

In addition, as a consequence of the armed conflict in Ukraine, supply chains for materials from Eastern markets have been disrupted, and the need for workers at construction sites has also increased due to the exodus of workers from Ukraine. The Group has observed the above situation on the investment projects carried out by the Company, but none of the projects has seen a significant delay in schedule to the Prospectus Date.

It should be recognized that due to the growing geopolitical and economic risks, the war conflict in Ukraine will continue to intensify factors such as high inflation, increased construction costs and more restrictive financing policies for new investment projects and mortgages.

Notes to the Interim Condensed Consolidated Financial Statements

Note 24 – Risk management

Global Risks - Effect of the War Conflict on the polish economy and real estate industry

On the other hand, according to the Management Board's observation, during the first half of 2023 , the market situation started to change and gradual decrease in interest rates was observed, together with the Polish government lunching the 2% loan plan, sales have picked up to a levels which doubled the amount of sales in the same period in year 2022.

The Group monitors the situation on an ongoing basis to assess its impact on its business operations. As part of its strategy, the Group will evaluate its currently planned projects and initiate projects that have the best chance of success in the near future as well as the Group is making greater efforts to secure project implementation with bank financing to mitigate the impact of this crisis on the Group's operations as much as possible.

Significance of the above risk factor is assessed by the Issuer as high, because its occurrence has had a significant, negative impact on business activity and financial situation of the Issuer and may have such negative impact in the future. The Issuer estimates the probability of occurrence of this risk as high. A similar situation with an armed conflict did not occur in the past, or the scale of the impact of other armed conflicts did not have a significant influence on the operations of the Issuer and its Group.

Market risk - Inflation risk

According to the Statistical office of Poland (GUS) consumer prices in June 2023, compared with the corresponding month of the previous year, increased by 11.5% and the main factors influencing the high inflation rate is the increase in the prices of goods - by 11.4% and services - by 11.7%. Compared to the previous month, the prices of goods and services remained at the same level (of which goods and services decreased by 0.2%, and services prices increased by 0.6%).

The inflation growth and with it the interbank interest growth affects the polish economy in many aspects and the real estate residential sector in the following:

• the risk of average mortgage rates increases which might result in decline in volume of mortgages lending which will influence reduction of the demand from individual clients;
• risk of increase in construction costs, related to problems of manufacturing, energy and transportation;
• risk in delay or withholding of starting new projects due to high costs.

In the First half of 2023, there was an increase in sales in the six largest cities by 64% comparing to previous Year and as much as 36% increase comparing to the same period in 2022.

The increase in sales is mainly due to a concern by apartment buyers for potential increase in sale prices of apartments mainly due to increase of demand of buyers applying the 2% loans plan initiated by the government starting from the year 2023.

Additionally, the increase of credit demand due to slight decrease in the banks prudential buffer from 5% to 2.5% for loans with periodically fixed rates as well as taking advantage of the opportunity to expand individual investors portfolio of apartments before the entry of new regulations limiting the purchase of more units.

The Management Board understand that the inflation process and its stabilization is a long process that may take significant efforts and time and is continuing monitoring the situation, and adopt further actions, if necessary, in order to reduce as much as it possible the effect of the inflation and interest rates increase on the Company's operations and strategy.

Despite of the above results the significance of the above risk factor is assessed by the Company as high, because its occurrence has had a significant, negative impact on business activity and financial situation of the Company and may have such negative impact in the future. The Company estimates the probability of occurrence of this risk as high.

Notes to the Interim Condensed Consolidated Financial Statements

Note 24 – Risk management

Market risk - Construction cost risk and nonperformance by General contractors

The Group's activities expose it to a variety of construction costs risks such as construction cost increase risk, row material cost increase, shortage of qualified workforce, increase in labor costs and delay in obtaining the necessary permits to start construction.

The construction costs have significantly risen within the last two years, reaching its peak in the second half of 2022. There is a high risk that the construction costs may still rise in 2023. The increase so far has been mainly due to rising prices of construction materials and energy, which has translated directly and indirectly into production costs, in addition to the continuation of the Russian-Ukrainian conflict causing energy prices to rise across Europe and shortages of construction workers.

The Company and the Group do not conduct construction business, however, for each project an agreement with an external general contractor is concluded. The general contractor is responsible for the construction works and completion of the project, including obtaining all permits necessary for safe use of the residential units.

The risk related to improper performance of the agreement by the general contractor may cause delays in the project or have a significant impact on the Company's and Group's operations, financial conditions, or results. The Company sees potential sources of improper performance of the obligations by the general contractor in a lack of access to qualified workforce, increase in salaries/wages, costs of construction materials and increase in energy prices.

Improper performance of the agreement may result in claims against the general contractor, and the general contractor may not be able to satisfy the claims of the Company and Group. An important criterion in selecting a general contractor is its experience, professionalism and financial situation (including bank or insurance guarantees), as well as the quality of the insurance policy to cover all risks associated with the construction process.

The Interim Condensed Consolidated Financial Statements do not include all risk management information and disclosures related to the above subject required in the annual financial statements, and should be read in conjunction with the Group's Annual Consolidated Financial Statements for the year ended 31 December 2022 (Note 31). There have been no changes in the risk management measurements and risk management performed by the Company's Management since year end.

Market risk - Risk related to financing of the Group's operations

The development activities that the Company and the Group are engaged in require significant initial expenditures to purchase land and cover construction, infrastructure and project costs. Therefore, the Company and Group need substantial funds to continue to develop its business, and these needs are satisfied with external financing obtained from the banks and issue of bonds. The Company's and the Group's ability to raise such financing depends on a number of factors, particularly market conditions that are beyond the Company's and the Group's control. In case of difficulties in obtaining financing, the scale of Company's and Group's development and achievement of strategic objectives may differ from initial assumptions. It is uncertain whether the Company and the Group will be able to obtain the required financing, or whether the funds will be obtained on terms favourable to the Company and the Group. The Group constantly looks for other opportunities to obtain funds which will ensure necessary financing and their favourable conditions.

Significance of the above risk factor is defined by the Issuer as medium, because in the event of its occurrence, the scale of the negative impact on business activity and financial situation of the Issuer could be significant. The Issuer estimates the probability of occurrence of this risk as medium.

Interim Condensed Consolidated Financial Statements for the six months ended 30 June 2023

Notes to the Interim Condensed Consolidated Financial Statements

Note 24 – Risk management

Market risk - Risk related to the development of PRS Business inf the Group's structures

At the end of 2021 the Group decided to start its business activities in the Private Rented Sector – PRS. This segment has been identified as a promising and complementary one for the Group's residential business. Despite many years of business experience in the housing market, starting business in a new segment involves a number of financial, legal and image risks (including an increase in capital commitment, an increase in the level of debt, a reduction in flexibility in responding to market signals, a reduction in the competitiveness of a given company, the risk of underperformance compared to predictions, the risk of negative PR) that may arise during its operation. Despite analyses conducted in advance confirming the profitability of investments, the results of such projects may differ from the original assumptions and may adversely affect the Issuer's operations and financial position.

As at 30.06.2023, the carrying amount of land held for development in the PRS segment was PLN 54 million, representing approximately 5% of the Group's assets.

As the activities of the PRS segment are complementary to the Group's core business, the risk of lack of success in this segment will not significantly affect the Issuer's financial position. If there is no success in the rental area, the completed units will mostly be able to be sold by the Group on the market as ordinary flats. The above risk factor has not materialized in the past.

Significance of the above risk factor is assessed by the Issuer as low, because in the event of its occurrence, the negative impact on business activity and financial situation of the Issuer would not be significant. The Issuer assesses the probability of this risk as low.

Market risk - Legislation and administrative risk

During the year 2023 several changes in the polish legislation in particularly: contemplated deletion of open escrow accounts as well as introduction of compulsory contributions to the developer guarantee fund starting from 1 July 2022, the new construction law and the new local regulations related to road and infrastructure participation costs, constitute a risk that could directly or indirectly affect the Company's and the Group's activities and results.

The Management Board is in the opinion, that the introduction of such changes might have a negative impact on the Group's activities. In spite of that and taking under consideration the Company and the Group long-term experience in the market, its ability to adjust quickly to the new market conditions, its financial situation and its reputation in the market the Management Board is in the opinion that these changes are of a lesser extent than on other market operators.

The Polish legislation environment is characterized in frequent amendments, incoherence, lack of unified interpretation of legislation and tax legislations which are subject to frequent changes all which is contributing to the risks factors in which the Company and the Group operate.

Changes accrued during the reporting period or after the reporting date:

On 07 July 2023, an amendment to the Law on Planning and Spatial Development was enacted, revolutionizing the Polish legal order in this area.

Among the most important changes introduced to the Act, one should point out:

• resignation from the study of spatial development conditions and directions in favor of a general plan, which will cover the area of the entire municipality and will be an act of local law,
• establishment of new rules for issuing decisions on development conditions,
• repealing as of 31 December 2025 the so-called lex developer and introducing a new planning tool in the form of integrated investment plans, and:
• the issuing of a decision on development conditions will only be possible for land lying within the development supplement area designated in the general plan.

Notes to the Interim Condensed Consolidated Financial Statements

Note 24 – Risk management

Market risk - Legislation and administrative risk

The existing local plans will remain in force until the date of entry into force of the new plans and can be amended on the basis of the new regulations. At the same time, in principle, the adoption of new local plans will be suspended until the general plan is adopted. If the general plan has not been adopted by 31 December 2025, it will not be possible to obtain a zoning decision from 1 January 2026 until the general plan of the municipality has been adopted. Investments will only be possible on the basis of decisions that have been issued previously or on the basis of existing local plans.

In the opinion of the Company, it should be assumed that the entry into force of the above-mentioned of the provisions will significantly extend the waiting time for the issuance of a decision on development conditions, and after December 31, 2025, it will not be possible to implement the investment on real estate located in an area not covered by either the local plan or the general plan.

Financial risk factors

The Group's activities expose it to a variety of financial risks such as currency risk, liquidity risk, fair value measurement risk and interest rate risk..

The Interim Condensed Consolidated Financial Statements do not include all financial risk management information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's Annual Consolidated Financial Statements for the year ended 31 December 2022 (Note 31). There have been no changes in the risk management measurements performed by the Company since year end or in any risk management policies

(i) Currency risk

Entities within the Group are exposed to foreign exchange risk in relation to receivables, payables and financial instrument measured trough profit and loss denominated in currencies other than the Polish zloty.

The Group does not hedge its investments or liabilities in foreign operations.

The Group's functional currency is polish zloty, as at 30 June 2023 the group has a monetary liabilities to the shareholder measured at amortized costs evaluated in the amount of 39.2 million PLN (2022: PLN 70.5 million, measured in previous period at fair value through profit or loss which is evaluated every reporting period by independent valuator). For more information see Note 14.

As at 30th June 2023, if the Israeli ILS had weakened or strength by 5% against the Polish zloty with all other variables held constant, the profit/Loss attributable to shareholders of the Group would have been PLN 1.9 million (as at 31 December 2022: 3.5 million) higher/lower, arising from foreign exchange gains/Loss taken to the profit and loss account on translation. The sensitivity analysis ignores any offsetting foreign exchange factors and has been determined assuming that the change in foreign exchange rates had occurred at the balance sheet date. There are no other significant monetary balances held by Group entities at 30 June 2023 that are denominated in a non-functional currency and have material effect on the Group results .

(ii) Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group's reputation.

The Group is exposed to liquidity risk as a result of mismatching maturity of assets and liabilities.

Notes to the Interim Condensed Consolidated Financial Statements

Note 24 – Risk management

Financial risk factors

(ii) Liquidity risk

The Group monitors its risk to a shortage of funds using a recurring liquidity planning tool. This tool considers the maturity of both its financial investments and financial assets (e.g. accounts receivable, other financial assets) and projected cash flows from operations. The Group's objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts, bank loans, bond loans and financing from shareholders measured at amortized costs (SAFE Agreement).

The Group constantly looks for other opportunities to obtain funds which will ensure necessary financing and their favorable conditions.

The significance of the above risk factor is defined by the Company as medium, because in the event of its occurrence, the scale of the negative impact on business activity and financial situation of the Company could be significant. The Company estimates the probability of occurrence of this risk as medium.

(iii) Fair value measurement risk

The Investment properties and financial liabilities are valued at fair value determined by an independent appraiser (please refer to Note 10 and Note 14). During the six months ended 30 June 2023 there were no other significant changes in the business or economic circumstances that affect the fair value of the Group's financial assets, investment property and financial liabilities.

(iiii) Interest rate risk

The vast majority of loans and bonds (including under issued bonds) obtained by the Group bear interest at a floating rate based on WIBOR plus a margin. As of June 30, 2023, the WIBOR6M was 6.95% (as of December 31, 2022, it was 7.14%). The Company's bonds are based on WIBOR6M plus a margin, while bank loans are based on WIBOR3M or WIBOR1M plus a margin. Changes in the WIBOR rate will have a significant impact on the Group's cash flow and profitability.

The table below presents the sensitivity analysis and its impact on net assets and income statement assuming if the variable interest rate changes by 1% assuming that all other variables remain unchanged:

	30 June 2023		30 June 2022
In thousands of Polish Zlotys (PLN)	Increase by 1%	Decrease by 1%	Increase by 1%	Decrease by 1%
Income statement
Variable interest rate assets	882	(882)	393	(393)
Variable interest rate liabilities	(2,051)	2,051	(2,093)	2,093
Total	(1,169)	1,169	(1,700)	1,700
Net assets
Variable interest rate assets	882	(882)	393	(393)
Variable interest rate liabilities	(2,051)	2,051	(2,093)	2,093
Total	(1,169)	1,169	(1,700)	1,700

Short-term receivables and payables are not exposed to interest rate risk.

In the Company's operations to date, the above risk has materialized, as the bonds issued so far by the Company have borne floating interest rate. Significance of the above risk factor is assessed by the Company as medium. The Company estimates the probability of occurrence of this risk as high.

Notes to the Interim Condensed Consolidated Financial Statements

Note 24 – Risk management

(iiii) Interest rate risk

All the above changes and lack of unified judicial decision can have negative consequences on the Group's business, its performance, its financial standing and the development prospects.

The above changes demonstrates the dynamic environment in which the Group operates and as such requiring in some cases quick response in order to adjust its activity accordingly.

In the Company's operations to date, the above risk has not materialized, as the company land bank in all cases has valid planing conditions or master plan which are allready approved or even in process of obtaining building permits. The significance of the above risk factor is assessed by the Company as medium to low. The Issuer estimates the probability of occurrence of this risk as high.

The Management Board will continue monitoring the above mentioned issues on an on-going basis, and adopt further actions, if necessary, in order to minimize as much as it is possible their impact on the Group operations.

Note 25 – Related party transactions

Due to the fact that the Company has decided that within the period specified in the Investment SAFE Agreements it will not apply for admission of the Company's shares to trading on the Tel Aviv Stock Exchange., On the basis of the agreement, the Company undertook to return to Luzon Group the financing received from Investors under the Investment SAFE Agreements in the total amount of ILS 60 million (sixty million Israeli shekels), to satisfy Luzon Group's claims against the Company under the Investment SAFE Agreements and applicable Israeli law. Payments to Luzon Group in the total amount of PLN 25 million (approx. ILS 21.7 million) were made in May 2023, and subsequent payments will be made in accordance with the schedule agreed by the parties to the agreement, determined taking into account the capital needs of Luzon Group and the liquidity and financial situation of the Company, with the proviso that these payments will become due no earlier than 1 January, 2024 and the total amount of payments to Luzon Group in 2024 will not exceed PLN 25 million (approx. ILS 22 million) and the remaining amount will be repaid in 2025.

The Company points out that the financing granted on the basis of SAFE Agreements, since its receipt, has been classified in the financial statements as a financial liability of the Company.

In addition to the above an additional related parties transactions are related to: the remuneration of the Management Board, loans granted to related parties within the Group, the reimbursement of audit review costs and the consulting services agreement with A. Luzon Group, the major (indirect) shareholder, for a total monthly amount of PLN 70 thousand, share base payment and covering travel and out of pocket expenses. All transactions with related parties were performed based on market conditions. In the period six months ended 30 June 2023 and 30 June 2022 the total of recharged costs from A. Luzon Group amounted PLN 421 thousand and PLN 434 thousand respectively.

There were no transactions and balances with related parties during the six months ended 30 June 2023 other than described above.

Notes to the Interim Condensed Consolidated Financial Statements

Note 26 – Investment in joint ventures

Share of profit/(loss) of joint venture

In thousands of Polish Zlotys (PLN)	As at 30 June 2023	As at 31 December 2022
Loans granted	136	133
Share in net equity value of joint ventures	532	2,331
The Company's carrying amount of the investment	668	2,464
Presented as Loans granted to joint ventures (current assets)	(136)	(133)
Investment in joint ventures	532	2,331

Share of profit/(loss) from joint ventures comprise the Company's shares in four entities where the Group is holding 50% shares and voting rights in each of those entities: Ronson IS Sp. z o.o. and Ronson IS Sp. z o.o. Sp.k. which are running the first two stages of the City Link, as well as Coralchief Sp. z o.o. and Coralchief Sp. z o.o. – Projekt 1 Sp.k. which are running the Wilanów Tulip project.

Loans granted to joint venture

In thousands of Polish Zlotys (PLN)	As at 30 June 2023	As at 31 December 2022
Opening balance	133	319
Loans repaid	-	(195)
Accrued interest	3	12
Interest paid	-	(4)
Total closing balance	136	133

As of June 30, 2023, loans granted to joint ventures were presented in full as current assets. Short-term loans granted to joint ventures should not be treated as investments in joint ventures and are presented within current assets in the Interim Consolidated Financial Statements as "Loans granted to joint ventures." Loans granted to joint ventures bore interest at a fixed rate of 5%.

Note 27 – Other events during the period

Purchase of land

The below table presents signed final agreements for purchase of plots signed in the period ended 30 June 2023:

Location	Type of agreement	Signed date	Agreement net value (PLN million)	Paid net till 30 June 2023 (PLN million)	Number of units	Potential PUM
Warsaw, Ochota	Final	11 Aug 2022, 2 March 2023	7.1	7.1	67	3,700
Total			7.1	7.1	67	3,700

On 2 March 2023 the Company (via its subsidiary) signed a final agreement concerning the purchase of the ownership rights of a plot of land located in Warsaw, Ochota district, with an area of c.a. 0.2484 ha. Net price was preliminary established in amount of PLN 7.1 million.

Notes to the Interim Condensed Consolidated Financial Statements

Note 27 – Other events during the period

The below table presents signed preliminary agreements for purchase of plots signed until 30 June 2023 including advances paid:

Location	Type of agreement	Signed date	Agreement net value (PLN million)	Paid net till 30 June 2023 (PLN million)	Number of units	Potential PUM
Warsaw, Białołęka(1)	preliminary	23 Nov 2020	1.5	1.5	n/a	n/a
Warsaw, Ursus	preliminary	17 Jan 2022	140.0	10.0	1,860	85,000
Warsaw, Wlochy	preliminary	30 Dec 2021	16.0	2.0	142	8,400
Warsaw, Bielany(2)	preliminary	21 Mar 2022	11.0	1.0	242	4,559
Total			168.5	14.5	2,244	97,959

1) The remaining plot to be purchased in Epopei project.

2) The land designated for PRS activity

Occupancy permits

Project name	Location	Occupancy permit date	Number of units	Area of units (m2)
Miasto Moje VI	Warsaw	7 February 2023	227	11,722
Ursus IIB	Warsaw	30 March 2023	206	11,758
Nowe Warzymice IV	Szczecin	28 April 2023	75	3,818
Viva Jagodno IIb	Wrocław	11 May 2023	152	8,876
Grunwaldzka	Poznań	19 May 2023	70	3,351
Total			730	39,525

Conclusion of a material agreement for General contractors

Project name	Location	Number of units	General contractor	Agreement signing date	Agreement net value (million PLN)	Additional provisions
Miasto Moje VII	Warsaw	255	Hochtief Polska Sp. z o.o.	1 March 2023	70.4	none
Nova Królikarnia 4b1	Warsaw	11	Totalbud S.A.	10 March 2023	17.4	none
Ursus IIE	Warsaw	291	Techbau Budownictwo Sp. z o.o.	10 March 2023	96.9	none
Total		557			184.7

Construction Bank Loan agreements

On 12nd of April financing of Osiedle VOLA project was signed, for a total value of PLN 44,779 thousand. On 23rd of June 2023 financing of Grunwald Między Drzewami and Nova Królikarnia 4b1 was signed, respectively for a total value of PLN 40,500 thousand and 29,000 thousand.

Building permits

Project name	Location	Building permit date	Number of units	Area of units (m2 )
Miasto Moje VIII	Warsaw	20 January 2023	147	7,687
Total			147	7,687

Notes to the Interim Condensed Consolidated Financial Statements

Note 28 – Subsequent events

Bonds issuance

On 3 July, 2023, the Company issued 60,000 series X bonds with a total value of PLN 60,000 thousand. The nominal value of one bond is PLN 1,000 and is equal to its issue value.

The redemption date of series X bonds is 3 July, 2026. The interest rate on series X bonds consists of 6-month WIBOR plus a margin of 4.2%. Interest is payable semi-annually, in January and July, until the maturity date. Series X bonds are secured by a joint mortgage up to the amount of PLN 90,000 thousand rounded, established on following real estate owned by the Company's subsidiaries:

Project Name	Plot no./ unit no	Area of the plot/units (sqm)	Value PLN thousands
Marynin / Zaborowska (Ronson Development SPV7)	81, 80/4, 79, 76, 82, 83	6,289	31,656
Dudka (Ronson Development - Projekt 5)	90, 92, 94, 96, 98, 100, 102, 103, 104 115, 126, 127/1, 127/2, 88	64,403	40,373
KEN 57 Ronson headquarters (Ronson Development South)	4, U8, 45, 47, 47/A, 82, 117, 120, 1	953	11,232
Gwiaździsta Office building (Ronson Development Horizon)	1/7	1,423	7,400
Total			90,661

The value of security of the series X bonds, until the redemption date, may not be lower than PLN 75,000 thousand.

Approval of Base Prospectus for Bonds issuance

On July 25, 2023, the Polish Financial Supervision Authority approved the base prospectus of the Company's Public Bond Issue Program prepared in connection with the public offering of bearer bonds with a total nominal value not exceeding PLN 175,000,000 (in words: one hundred and seventy-five million zlotys). Until the date of publication of these financial statements, Ronson SE has not issued bonds under this program.

The Management Board

Boaz Haim President of the Management Board _ _ __________________ __________________

Yaron Shama Finance Vice-President of the Management Board

Andrzej Gutowski Sales Vice-President of the Management Board, ________________ ___________________

Karolina Bronszewska Member of the Management Board Marketing and Innovation Director

Tomasz Kruczyński Person responsible for financial statements preparation

Warsaw, 10 August 2023

Interim Condensed Standalone Financial Statements for the six months ended 30 June 2023

Interim Condensed Standalone Financial Statements for the six months ended 30 June 2023 Interim Condensed Standalone Statement of Financial Positions

As of		As at 30 June 2023	As at 31 December 2022
In thousands of Polish Zlotys (PLN)	Note	(Reviewed/Unaudited)	(Audited)

Assets
Intangible assets		-	2
Investment in subsidiaries	6	467,987	445,275
Loans granted to subsidiaries	7	244,274	266,441
Total non-current assets		712,261	711,717

Trade and other receivables and prepayments		2,030	1,410
Receivable from subsidiaries		48	-
Loan granted to subsidiaries	7	10,497	10,140
Cash and cash equivalents		2,792	6,397
Total current assets		15,367	17,947
Total assets		727,628	729,664


Equity
Share capital		12,503	12,503
Share premium reserve		150,278	150,278
Share based payment		879	-
Treasury shares		(1,732)	(1,732)
Retained earnings		315,738	289,268
Total shareholders' equity		477,666	450,317

Liabilities
Long-term liabilities
Bond loans	8	98,665	158,110
Deferred tax liabilities		5,928	3,323
Liability to shareholders measured at amortised costs	11	39,258	-
Total long-term liabilities		143,851	161 433

Current liabilities
Bond loans	8	100,000	40,000
Other payables - accrued interests on bonds	8	5,001	5,260
Trade and other payables and accrued expenses		1,110	2,148
Financial liability measured at FVPL	11	-	70,506
Total current liabilities		106,111	117,914
Total liabilities		249,962	279,347
Total shareholders' equity and liabilities		727,628	729,664

The notes included on pages 67 to 74 are an integral part of these Interim Condensed Company Financial Statements

Interim Condensed Standalone Statement of Comprehensive Income

		For the 6 months ended 30 June	For the 3 months ended 30 June	For the 6 months ended 30 June	For the 3 months ended 30 June
		2023	2023	2022	2022
In thousands of Polish Zlotys (PLN)	Note	(Reviewed) / (unaudited)	(Reviewed) / (unaudited)	(Reviewed) / (unaudited)	(Reviewed) / (unaudited)
Revenues from consulting services		1,701	997	1,860	1,036
General and administrative expense		(2,799)	(1,440)	(2,679)	(1,540)
Other revenues/(expenses)		(9)	(0)	(919)	(95)
Net impairment losses on financial assets		-		(1,076)	(1)
Operating profit		(1,107)	(443)	(2,814)	(600)
Result from subsidiaries after taxation	6	22,718	25,580	13,758	661
Operating profit after result from subsidiaries		21,610	25,136	10,943	60

Finance income	9	13,522	6,765	8,160	3,736
Finance expense	9	(12,393)	(6,377)	(8,471)	(5,093)
Gain/loss on a financial instrument measured at fair value through profit and loss	11	6,376	736	(2,979)	1,397
Net finance income/(expense)		7,505	1,124	(3,290)	40

Profit/(loss) before taxation		29,115	26,260	7,653	100
Income tax benefit/(expense)		(2,645)	(281)	1,087	130
Profit for the period		26,470	25,979	8,740	230
Other comprehensive income		-		-	-
Total comprehensive income/(expense) for the period, net of tax		26,470	25,979	8,740	230
Weighted average number of ordinary shares (basic and diluted)		162,442,859	162,442,859	162,442,859	162,442,859
In Polish Zlotys (PLN) Net earnings/(loss) per share attributable to the equity holders of the parent (basic and diluted)		0.163	0.160	0.054	0.001

The notes included on pages 67 to 74 are an integral part of these Interim Condensed Company Financial Statements

Attributable to the Equity holders of parent

Interim Condensed Standalone Financial Statements for the six months ended 30 June 2023

Interim Condensed Standalone Statement of Changes in Equity

In thousands of Polish Zlotys (PLN)	Share capital	Share premium	Share based payment	Treasury shares	Retained earnings	Equity attributable to the Equity holders of the parent
Balance at 1 January 2023	12,503	150,278	-	(1,732)	289,268	450,317
Net profit for the period ended 30 June 2023	-	-	-	-	26,470	26,470
Other comprehensive income	-	-	-	-	-	-
Total comprehensive income/(expense)	-	-	-	-	26,470	26,470
Share based payment	-	-	879	-	-	879
Balance at 30 June 2023	12,503	150,278	879	(1,732)	315,738	477,666

	Attributable to the Equity holders of parent
In thousands of Polish Zlotys (PLN)	Share capital	Share premium	Treasury shares	Retained earnings	Total Equity/ Equity attributable to the Equity holders of the parent
Balance at 1 January 2022	12,503	150,278	(1,732)	258,996	420,045
Net profit for the period ended 30 June 2022	-	-	-	8,740	8,740
Other comprehensive income	-	-	-	-	-
Total comprehensive income/(expense)	-	-	-	8,740	8,740
Balance at 30 June 2022	12,503	150,278	(1,732)	267,736	428,785

The notes included on pages 67 to 74 are an integral part of these Interim Condensed Company Financial Statements

Interim Condensed Standalone Statement of Cash Flows

For the 6 months period ended 30 June		2023	2022
In thousands of Polish Zlotys (PLN)	Note

Cash flows from operating activities
Profit for the year		26,470	8,740
Adjustments to reconcile profit for the period
to net cash (used in)/from operating activities:
Finance income	9	(13,027)	(6,745)
Finance expense	9	12,393	8,470
Depreciation		1	10
(Gain)/loss on a financial instrument measured at fair value through profit and loss	11	(6,376)	2,979
Foreign exchange rates differences (gain)/loss		(495)	(1,406)
Income tax expense		2,605	(1,087)
Impairment on financial assets		-	1,076
Share based payment		879	-
Net results subsidiaries during the year		(22,713)	(13,758)
Subtotal		(262)	(1,720)
Decrease/(increase) in trade and other receivables and prepayments		(619)	(1,452)
Decrease/(increase) in receivable from subsidiaries		(48)	(105)
Increase/(decrease) in payable to subsidiaries		-	-
Increase/(decrease) in trade and other payable and accrued expense		(1,038)	357
Subtotal		(1,968)	(2,710)

Interest paid	9	(11,474)	(5,808)
Interest received	9	2,737	2,430
Net cash used in operating activities		(10,705)	(6,088)

Cash flows from investing activities
Loans granted to subsidiaries, net of issue cost	7	(4,400)	(50,850)
Repayment of loans granted to subsidiaries	7	36,500	30,202
Dividend from subsidiary		-	2,500
Investment in subsidiaries		-	(10)
Net cash used in investing activities		32,100	(18,158)

Cash flows from financing activities
Repayment of Financial liability measured at amortized cost	11	(25,000)	74,626
Repayment of bond loans	8	-	(50,000)
Net cash from financing activities		(25,000)	24,626

Net change in cash and cash equivalents		(3,605)	381
Cash and cash equivalents at 1 January		6,397	12,556
Effects of exchange rate changes on cash and cash equivalents		-	1,377
Cash and cash equivalents at the end of the period		2,792	14,314

The notes included on pages 67 to 74 are an integral part of these Interim Condensed Company Financial Statements

Notes to the Interim Condensed Standalone Financial Statements

Note 1 – General

As at 30 June 2023 and the date of publication of these financial statements, Amos Luzon Development and Energy Group Ltd. ("A. Luzon Group"), the ultimate parent company, holds indirectly, through its subsidiary I.T.R. Dori B.V., 66.06% of the Company's shares and owns 32.98% directly. The remaining 0.96% of the shares are treasury shares. The beneficial owner of the Company is Mr Amos Luzon, Chairman of the Supervisory Board.

Note 2 – Basis of preparation of Interim Condensed Company Statements

These Interim Condensed Company Financial Statements of Ronson Development SE have been prepared in accordance with IAS 34 (concerning the preparation of interim financial statements). The Interim Condensed Company Financial Statements do not include all the information and disclosures required in annual financial statements prepared in accordance with the IFRS and should be read in conjunction with the Company's annual financial statements for the year ended 31 December 2022, which have been prepared in conformity with IFRS. At the date of authorization of these Interim Condensed Company Financial Statements, the IFRSs applied by the Company are not different from the IFRSs endorsed by the European Union. IFRSs comprise standards and interpretations accepted by the International Accounting Standards Board ("IASB") and the International Financial Reporting Interpretations Committee ("IFRIC").

The Interim Condensed Company Financial Statements of Ronson Development SE have been prepared on the going concern assumption, i.e. the continuation of the Company's business activity in the foreseeable future. As at the day of the approval of these financial statements, there were no circumstances identified implying any threats to the continuation of the Company's activity.

The Company does not run separate operating segments, in the opinion of the Management Board, the only operating segment is the holding activity of the Group companies.

Notes to the Interim Condensed Standalone Financial Statements

Note 2 – Basis of preparation of Interim Condensed Company Statements

These Interim Condensed Company Financial Statements of Ronson Development SE were approved by the Management Board for publication on 10 August 2023 in both English and Polish languages, while the Polish version is binding

For additional information about significant accounting policy and the influence of the new accounting standard, see Note 3 of the Interim Condensed Consolidated Financial Statements.

Note 3 – The use of estimates and judgments

The preparation of financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results may differ from these estimates.

In preparing these Interim Condensed Company Financial Statements, the significant judgments made by the Management Board in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those applied to the Consolidated Financial Statements for the year ended 31 December 2022, except changes described in the Note 4 of the Interim Condensed Consolidated Financial Statements.

Note 4 – Functional and reporting currency

Items included in the financial statements of the Company are measured using the currency of the primary economic environment in which the Company operates (the "functional currency"). The Company Financial Statements are presented in thousands of Polish Zloty ("PLN"), which is the Company's functional and presentation currency.

Note 5 – Seasonality

The Company's activities are not of a seasonal nature. Therefore, the results presented by the Company do not fluctuate significantly during the year due to the seasonality.

Note 6 – Investment in subsidiaries

The subsidiaries of the Company are valued with equity methods.

The table below presents the movement in investment in subsidiaries during the six months ended 30 June 2023 and during the year ended 31 December 2022:

Changes in the value of shares in subsidiaries:

	For the 6 months ended 30 June	For the 12 months ended 31 December
	2023	2022
In thousands of Polish Zlotys (PLN)

Balance at beginning of the period	445,274	458,449
Investments in subsidiaries	-	10
Sale of shares	-	-
Net result subsidiaries during the period	22,713	31,660
Dividend from subsidiary	-	(44,845)
Balance at end of the period	467,987	445,275

Notes to the Interim Condensed Standalone Financial Statements

Note 6 – Investment in subsidiaries

The Company holds and owns (directly and indirectly) 64 companies. These companies are active in the development and sale of units, primarily apartments, in multi-family residential real-estate projects to individual customers in Poland as well as in development of the rental industry, so-called Private Rental Sector. For additional information see Note 7 to the Interim Condensed Consolidated Financial Statements.

The net result of the investments in subsidiaries in the period of six months ended 30 June 2023 amounted PLN 22.7 million.

Note 7 – Loans granted to subsidiaries

The table below presents movements in loans granted to subsidiaries held directly and indirectly by the Company during the six months ended 30 June 2023 and during the year ended 31 December 2022:

	For the 6 months ended 30 June 2023	For the 12 months ended 31 December 2022
In thousands of Polish Zloty (PLN)	(Reviewed/ Unaudited)	(Audited)
Opening balance	276,580	199,828
Loans granted	4,400	106,725
Loans repayment during the period	(36,500)	(43,702)
Impairment	-	(1,076)
Accrued interest	12,969	18,886
Repayment of interest	(2,679)	(4,080)
Total closing balance	254,770	276,580
Current assets	10,497	10,140
Non-current assets	244,274	266,441
Total closing balance*	254,771	276,581

* including the impairment of Loans granted to subsidiaries as at 30 June 2023 in amount of PLN 10.1 m

The loans are not secured.

All new loans granted are at the similar conditions to those presented in the Company Financial Statements for the year ended 31 December 2022 (additional information was presented in Note 10). Fair value of loans received and granted is not material different from its carrying amount

Note 8 – Bonds loans

The table below presents changes in bonds loans during the period ended 30 June 2023 and during the period ended 31 December 2022:

	For the period ended 30 June 2023	For the year ended 31 December 2022
In thousands of Polish Zloty (PLN)	(Reviewed/ Unaudited)	(Audited)
Opening balance	203,370	249,238
Repayment of bond loans	-	(50,000)
Issue cost amortization	555	1,349
Accrued interest	11,194	18,086
Interest repayment	(11,453)	(15,303)
Total closing balance	203,666	203,370
Closing balance includes:
Current liabilities	105,001	45,260
Non-current liabilities	98,665	158,110
Total Closing balance	203,666	203,370

For information about bond covenants, reference is made to Note 15 to the Interim Condensed Consolidated Financial Statements.

Notes to the Interim Condensed Standalone Financial Statements

In thousands of Polish Zlotys (PLN)	For the period of 6 months ended 30 June 2023	For the period of 3 months ended 30 June 2023	For the period of 6 months ended 30 June 2022	For the period of 3 months ended 30 June 2022

Interests and fees on granted loans to	12,969	6,252	6,671	3,424
subsidiaries
Interest income on bank deposits	57	30	75	75
Foreign exchange gain	495	482	1,414	237
Finance income	13,522	6,765	8,160	3,736

Interest expense on bonds measured
at amortized cost	(11,194)	(5,467)	(7,605)	(4,710)
Interests and fees on received loans
from subsidiaries	(132)	(132)	-	-
Bank charges	(22)	-	-	-
Foreign exchange loss	-	-	-	-
Commissions and fees	(555)	(279)	(862)	(383)
Other	(491)	(489)	(4)	-
Finance expense	(12,393)	(6,366)	(8,471)	(5,093)

Gain/loss on a financial
instrument measured at fair value	6,376	736	(2,979)	1,397
through profit and loss
Net finance income/(expense)	7,505	1,134	(3,290)	40

Note 9 – Finance costs and income

Note 10 – Related parties transactions

Conclusion of this agreement results from Due to the fact that the Company has decided that within the period specified in the Investment SAFE Agreements it will not apply for admission of the Company's shares to trading on the Tel Aviv Stock Exchange., On the basis of the agreement, the Company undertook to return to Luzon Group the financing received from Investors under the Investment SAFE Agreements in the total amount of ILS 60 million (sixty million Israeli shekels), to satisfy Luzon Group's claims against the Company under the Investment SAFE Agreements and applicable Israeli law. Payments to Luzon Group in the total amount of PLN 25 million (approx. ILS 21.7 million) were made in May 2023, and subsequent payments will be made in accordance with the schedule agreed by the parties to the agreement, determined taking into account the capital needs of Luzon Group and the liquidity and financial situation of the Company, with the proviso that these payments will become due no earlier than 1 January, 2024, and the total amount of payments to Luzon Group in 2024 will not exceed PLN 25 million (approx. ILS 22 million) and the remaining amount will be repaid in 2025.

The Company points out that the financing granted on the basis of SAFE Agreements, since its receipt, has been classified in the financial statements as a financial liability of the Company.

Notes to the Interim Condensed Standalone Financial Statements

Note 10 – Related parties transactions

The remuneration of the Management Board, loans granted to related parties within the Group, the reimbursement of audit review costs and the consulting services agreement with A. Luzon Group, the major (indirect) shareholder, for a total monthly amount of PLN 70 thousand and covering travel and out of pocket expenses. All transactions with related parties were performed based on market conditions. In the period six months ended 30 June 2023 and 30 June 2022 the total of recharged costs from A. Luzon Group amounted PLN 421 thousand and PLN 434 thousand respectively.

There were no transactions and balances with related parties during the six months ended 30 June 2023 other than described above.

Note 11 – Investors agreement ("SAFE Agreement")

Conclusion of this agreement results from the fact that the Company has decided that within the period specified in the SAFE Agreements it will not apply for admission of the Company's shares to trading on the Tel Aviv Stock Exchange. On the basis of the agreement, the Company undertook to return to Luzon Group the financing received from Investors under the SAFE Agreements in the total amount of ILS 60 million (sixty million Israeli shekels), to satisfy Luzon Group's claims against the Company under the SAFE Agreements and applicable Israeli law. Payments to Luzon Group in the total amount of PLN 25 million (approx. ILS 21.7 million) were made in May 2023, and subsequent payments will be made in accordance with the schedule agreed by the parties to the agreement, determined taking into account the capital needs of Luzon Group and the liquidity and financial situation of the Company, with the proviso that these payments will become due no earlier than 1 January, 2024, and the total amount of payments to Luzon Group in 2024 will not exceed PLN 25 million (approx. ILS 22 million) and the remaining amount will be repaid in 2025. Based on the the Company's Management judgment, it was concluded th signing of the agreement of May 25, 2023 resulted in the extinguishments of the liability to investors and the recognition of a new liability to Luzon Group, which was recognized as a financial liability measured at amortized cost with a discounted cash flow rate of 7,14% per annum.

The table below presents the movement on the new liability to Luzon Group for the period from May 25, 2023 to the end of the reporting period, i.e. June 30, 2023:

Investor	Liability at amortized cost [in PLN]	Liability recognition date	Repayment of liability [in PLN]	Interest accrued [in PLN]	Exchange differences [in PLN]	Value of the liability at amortized cost June 30, 2023 [in PLN]	Sensitivity analysis of the discount rate +1% [in PLN]	Sensitivity analysis of the discount rate -1% [in PLN]
Amos Luzon Development and Energy Group Ltd.	64,372,242	25 maja 2023	25,000,000	131,508	(245,544)	39,258,206	(708,683)	729,455

As at 25 May 2023, the fair value of the liability towards SAFE Investors was PLN 54,601 thousand Israeli shekels (PLN 61,524 thousand) assuming market conditions of the transaction as at the valuation date with a discounted rate of 9,3% per annum. At the moment of derecognition of liabilities to investors, gain on fair value measurement in the amount of PLN 8.9 million was recognized in the income statement in line gain(loss) in fair value of financial instrument at fair value through profit and loss, no value was recognized in other comprehensive income.

Notes to the Interim Condensed Standalone Financial Statements

Note 11 – Investors agreement ("SAFE Agreement")

SAFE Agreement - description of the background of financial liability measured at fair value until derecognition

The above agreements do not impose any restrictive covenants or onerous undertakings on the part of the Group as well as it does not bear any interest.

The table below presents payments made by Investors and the valuation of the financial liability as at the date of derecognition of the liability (May 25, 2023) and as at December 31, 2022:

Investor	Amount of the investment in Ronson [in ILS]	Date of payment	Paid to Ronson [in EUR]	Paid to Ronson on the transaction date [in PLN]	Fair value 31.12.2022 [in PLN]	Fair value 25.05.2023 [in PLN]	Gain/loss on a financial instrument measured at fair value through profit and loss [in PLN]
EJS Galatee Holdings	1,500,000	23 February 2022	413,232	1,876,734	1,773,104	1,547,231	225,873
Sphera Master Fund L.P	26,500,000	18 February 2022	7,264,254	32,753,070	30,944,513	27,002,544	3,941,970
Sphera Small Cap L.P	2,000,000	18 February 2022	551,953	2,488,646	2,351,228	2,051,709	299,519
Moore Provident Funds	15,000,000	23 February 2022	-	18,656,716	17,626,531	15,381,117	2,245,414
Klirmark Opportunity Fund III L.P	15,000,000	24 February 2022	-	18,851,326	17,810,395	15,541,558	2,268,836
Razem	60,000,000		8,229,439	74,626,492	70,505,771	61,524,159	8,981,612

Valuation process and valuation techniques

a) the prices, rights, preferences and privileges of the preferred shares;
b) current business and market conditions and projections;
c) the Group's stage of development;

Notes to the Interim Condensed Standalone Financial Statements

Note 11 – Investors agreement ("SAFE Agreement")

Valuation process and valuation techniques (continuing)

d) the likelihood of a liquidity event for the ordinary shares underlying these options, such as an initial public offering or sale of the Group, given prevailing market conditions.

The following table summarizes the quantitative information about the significant unobservable inputs used in level 3 fair value measurements:

Fair Value as at			Range of input (probability weighted average)
Description	25 May 2023 [PLN thousands]	31 December 2022 [PLN thousands]	Unobservable input	25.05.2023	31.12.2022	Relationship of unobservable inputs to fair value
Financial liability at fair value through profit or loss (SAFE agreement)	61,524	70,506	YTM (Yield to Maturity) discount rate	3%-9.3%	3%-6.54%	A shift of the YMT rate by +1 p.p. results in a lower value of 768 thousands PLN (2022: change in default rate by +1 p.p. decreased FV by PLN ('000) 1,168) A shift of the YMT rate by -1 p.p. results in a higher in value of 768 thousands PLN (2022: change in default rate by - 1 p.p. increased FV by PLN('000) 1,168)

Changes in the other factors do not materially affect the valuation, as it is linked to the observable transaction that was the transfer of cash by Investors.

Notes to the Interim Condensed Standalone Financial Statements

Note 12 – Subsequent events

For further subsequent events, reference is made to Note 28 to the Interim Condensed Consolidated Financial Statements.

The Management Board

___________________ Boaz Haim President of the Management Board

Yaron Shama Financial Vice-President of the Management Board

Andrzej Gutowski Sales Vice-President of the Management Board, Karolina Bronszewska Member of the Management Board Marketing and Innovation Director

___________________

Tomasz Kruczyński Person responsible for financial statements preparation

Warsaw, 10 August 2023

AI Terminal

Amos Luzon Development And Energy Group Ltd.

6899_rns_2023-08-13_ab3d2d51-3880-4ea3-a98c-05db4676a6f0.pdf

Ronson Development SE

Interim Financial Report for the six months ended 30 June 2023

CONTENTS

Management Board Report Introduction

Overview of the Activity of the Company and the Group

A. Results breakdown by project

Projects completed during the six months ended on 30 June 2023

A. Results breakdown by project

Projects completed in previous years with their impact on current year results

B. Units sold during the period

B. Units sold during the period

C. Agreements significant for the business activity of the Group

Selected financial data

Selected financial data

Overview of results

Overview of results

Revenue from sales of residential units

Cost of sales of residential units

Gross margin

Selling and marketing expenses

Administrative expenses

Net finance income/(expenses)

Overview of selected details from the Interim Condensed Consolidated Statement of Financial Position

Inventory and residential landbank

Investment properties

Advances received

Loans, bonds and borrowings

Financial liability measured at FVPL

Overview of selected details from the Interim Condensed Consolidated Statement of Financial Position

Financial liability measured at FVPL

Liability to shareholder measured at amortized costs

Overview of cash flow results

Cash flow from/(used in) operating activities

Overview of cash flow results

Cash flow from/(used in) operating activities

Cash flow from investing activities

Cash flows from financial activities

Outlook for the remaining period of 2023

A. Completed projects

Outlook for the remaining period of 2023

B. Current projects under construction and/or on sale

C. Projects for which construction work is planned to commence during the remaining period of 2023

Outlook for the remaining period of 2023

D. Value of the preliminary sales agreements signed with clients for which revenue has not been recognized in the Consolidated Statement of Comprehensive Income

Additional information about the Company

Additional information to the report

Major shareholders and disclosure obligations of controlling shareholder

Changes in the Management and Supervisory Board during the six months ended 30 June 2023 and until the date of publication of this report

Changes in ownership of shares and rights to shares by Management and Supervisory Board members during the six months ended 30 June 2023 and until the date of publication of this report

Additional information to the report

Changes in the Company's group structure

Seasonality

Influence of results disclosed in the report on fulfillment of result forecasts

Related parties transactions

Additional information to the report

Related parties transactions

Option program

Quarterly reporting by the Company

Additional information to the report

Quarterly reporting by the Company

Material court cases

Guarantees / Securities provided by the Company or its subsidiaries

Employees

Responsibility statement

Interim Condensed Consolidated Financial Statements for the six months ended 30 June 2023 Interim Condensed Consolidated Statement of Financial Position

Interim Condensed Consolidated Statement of Comprehensive Income

Interim Condensed Consolidated Statement of Changes in Equity

Interim Condensed Consolidated Statement of Cash Flows

Notes to the Interim Condensed Consolidated Financial Statements

Note 1 – General and principal activities

Note 2 – Basis of preparation of Interim Condensed Consolidated Financial Statements

Interim Condensed Consolidated Financial Statements for the six months ended 30 June 2023

Notes to the Interim Condensed Consolidated Financial Statements

Note 2 – Basis of preparation of Interim Condensed Consolidated Financial Statements

Note 3 – Summary of significant accounting policies

New standards and interpretations not yet adopted

Note 4 – The use of estimates and judgments