Kardan N.V. — Earnings Release 2014

Mar 26, 2015

PRESS RELEASE Amsterdam/Tel Aviv, March 26, 2015 Number of pages: 16

FOURTH QUARTER AND FULL YEAR 2014 RESULTS KARDAN N.V.

'We have finished the year 2014 with a very strong fourth quarter, and are consequently pleased to report our first profitable year since 2008, with a full year 2014 net profit of EUR 5.1 mn. Following a significant appreciation of the RMB versus the Euro and including our net profit, our equity as at year-end 2014 increased by 40% (y-o-y). Our total comprehensive income* was EUR 32.0 mn for equity holders, reflecting the impact of the fact that Kardan's assets are currently predominantly denominated in RMB. In comparison: for 2013 we reported a net loss of EUR 101.4 mn, which included EUR 55 mn loss with respect to our discontinued real estate operations in Central and Eastern Europe (GTC SA), and a total comprehensive loss equal to the net loss.

Our efforts to reorganize our business operations and our portfolio have paid off. Throughout the year our operating subsidiaries benefitted from a strong focus on their core activities and continuing cost awareness, generally resulting in profits from operations before financing expenses and tax in all quarters of 2014. Mainly following the successful sale of GTC SA, we were able to repay an outstanding bank loan at the end of 2013 and to repay our Debenture Holders in Q1 of 2014, thereby decreasing the 2014 financing expenses of Kardan significantly. As our Debentures are denominated in Israeli Shekel and are CPI related and both strengthened during the year 2014, we were confronted with a negative forex and CPI impact of EUR 3.8 mn, albeit lower than the negative impact of EUR 10 mn last year.

Kardan Land China experienced challenging market circumstances for the development and sale of its residential apartment projects. Nevertheless, KLC sold the A2 building of the Europark Dalian project en-bloc (comprising 201 apartments) in June and handed over the building in December, leading to a boost in revenue in the fourth quarter. The construction of the Europark shopping mall was near completion by year-end 2014 and, as a result of the great efforts which were put in attracting (anchor) tenants, at present some 63% of the mall has been pre-leased and more leases are about to be signed. The opening of the mall will take place in steps – mainly following preferences of tenants – in the coming months, with a large opening event to take place in the second half of this year. In line with Kardan's focus on generating cash in order to be able to repay its debts, it was decided to sell the remaining 50% stake in the successful retail center in Chengdu. This sale was positively concluded in Q4 2014, and resulted in a significant gain.

Tahal, our water infrastructure projects company, managed to grow its revenue on existing projects and to sign up attractive new projects in its clearly defined core market sectors, such as water related projects with an agricultural focus. At year-end 2014, Tahal had a backlog of USD 358 mn, 12% better than the year before. Moreover, Tahal contributed a profit to the bottom line of Kardan, demonstrating – among other things – the success of all of the efficiency efforts taken by management in the past periods. Tahal Assets decided to sell the shares in Kardan Water International Group ('KWIG') – its main operating company in China– in 2014, of which the first 75% was successfully concluded in the first quarter of this year (2015). This decision was based on Tahal's wish to be able to focus more on its EPC activities, the ongoing need for funding KWIG's capital intensive operations and Kardan's need for cash.

TBIF, our banking and retail lending operation, recorded an excellent result and contributed EUR 7.6 mn to our consolidated net result. Although the markets in which TBIF operates were far from easy, the measures taken by management on various levels resulted in a stronger, better and resilient organization, as evidenced by the upward trend of its results. In Q4 2014, TBIF announced the sale of one of its subsidiaries, which was recently concluded successfully.

Early 2015 we reached agreement with our Debenture Holders on postponing the upcoming (February 2015) payments for 6 months and on the main principles of a debt settlement, entailing in headline delaying payment by 24 months at certain conditions. At present we are working with the representatives and trustees of the Debenture Holders on formalizing the agreed principles in new deeds of trusts. In postponing the payment of principal we can focus fully on continuing to improve the results – and thus value – of our operating subsidiaries' states Shouky Oren, CEO of Kardan N.V.

(*) Total comprehensive income comprises predominantly the net result combined with the direct equity impact of foreign currency translation differences and changes in hedge reserves.

Highlights Q4 + FY 2014:

Kardan N.V.

• Q4 2014: EUR 16.5 mn profit (Q4 2013: EUR 5.2 mn net profit), mainly due to strong performance in the real estate segment and the banking and retail lending segment, and positive forex impact on financing expenses
• 2014: EUR 5.1 mn net profit on improved operating results of TBIF and Tahal Projects, a net gain on disposal of assets, lower financing expenses (2013: loss of EUR 101.4 mn, including EUR 55 mn loss relating to the discontinued operations of GTC SA). - Total comprehensive income of EUR 32.0 mn for equity holders predominantly following the appreciation of the RMB (2013: EUR 101.4 mn comprehensive loss)

Real Estate Asia

• Q4 2014: High number of handovers of residential apartments, sale of 50% stake in Galleria Chengdu and valuation gain Europark Dalian shopping mall lead to EUR 20.6 mn profit
• 2014: EUR 24.6 mn profit; a combination of (y-o-y) slower handover of apartments, gain on disposal of assets and a forex gain

Water Infrastructure, Projects

• Q4 2014: Improved EBIT, mitigated by (y-o-y) higher financing expenses and tax, result in EUR 0.6 mn net profit
• 2014: EUR 4.2 mn net profit; predominantly higher gross profit (y-o-y), continued cost efficiencies and lower tax expenses

Water Infrastructure, Assets

• Q4 2014: Net loss of EUR 7.3 mn, mainly due to impairment on KWIG after its announced sale; net gain of KWIG sale to be recorded in Q1 2015
• 2014: EUR 5.7 mn net loss due to lower gross profit, higher financing and tax expenses and KWIG impairment

Banking and Retail Lending

• Q4 2014: Continued revenue growth lead to EUR 2.1 mn profit
• 2014: EUR 7.6 mn profit on strong growth of better quality revenue, continued cost control, mitigated by an impairment of EUR 2.8 mn on a Ukrainian loan

The 2014 quarterly results of Kardan N.V. are presented in the table below.

Condensed consolidated income statement 2014 Kardan NV by Quarter (in EUR million)

	Q1/2014	Q2/2014	Q3/2014	Q4/2014*	2014
			In € millions
Total revenues Total expenses	56.3 50.9	57.7 52.7	46.8 45.1	97.1 93.8	257.9 242.5
Profit (loss) from operation before fair value adjustments, disposal of assets and financial expenses	5.4	5.0	1.7	3.3	15.4
Profit (loss) from fair value adjustments and on disposal of assets and investments	0.9	2.7	1.7	14.4	19.7
Result from operations before finance expenses and income taxes	6.3	7.7	3.4	17.7	35.1

Financing income (expenses), net	(1.9)	(13.3)	(7.4)	2.4	(20.2)
Share of profit of associates and joint ventures according to equity method	0.5	0.5	(1.5)	7.2	6.7
Profit (Loss) before income tax	4.9	(5.1)	(5.5)	27.3	21.6
Income tax (expenses)/benefit	(1.9)	(1.8)	(2.0)	(10.8)	(16.5)
Profit (Loss) from continuing operations	3.0	(6.9)	(7.5)	16.5	5.1
Profit (Loss) for the period	3.0	(6.9)	(7.5)	16.5	5.1
Attributed to share holders	3.0	(6.9)	(7.5)	16.5	5.1
Other Comprehensive income / (loss)	(2.3)	2.9	23.3	3.0	26.9
Total Comprehensive income/(loss) to equity holders (*) numbers are rounded	0.7	(4.0)	15.8	19.5	32.0

The 2014 condensed consolidated income statements split into the different segments of Kardan N.V. is shown in the table below.

Condensed Consolidated Income Statement Kardan N.V.

For the full year ended December 31, 2014 (in EUR million)

	Real Estate	Infrastructure		Banking and	Other	Total	Total	Total
	Asia	Projects	Assets	Retail lending		12M - 2014	12M - 2013	12M- 2012
			In € millions
Total revenues	52.0	135.9	34.4	35.6	-	257.9	208.0	161.8
Total expenses	56.4	125.6	26.3	28.1	6.1	242.5	203.0	186.9
Profit (loss) from operation before fair value adjustments, disposal of assets and financial expenses	(4.4)	10.3	8.1	7.5	(6.1)	15.4	5.0	(25.1)
Profit (loss) from fair value adjustments, disposal of assets and investments, equity earnings (loss)	32.9	(1.2)	(6.5)	1.3	(0.1)	26.4	8.2	9.4
Result from operations before finance expenses	28.5	9.1	1.6	8.8	(6.2)	41.8	13.2	(15.7)
Financing income (expenses), net	5.4	(1.6)	(4.1)	(0.9)	(19.0)	(20.2)	(45.6)	9.7
Profit (Loss) before income tax	33.9	7.5	(2.5)	7.9	(25.2)	21.6	(32.4)	(6.0)
Income tax (expenses)/benefit	(9.3)	(2.9)	(3.6)	(0.3)	(0.4)	(16.5)	(14.4)	(0.9)
Profit (Loss) from continuing operations	24.6	4.6	(6.1)	7.6	(25.6)	5.1	(46.8)	(6.9)
Profit (Loss) from discontinued operations	-	-	-	-	-	-	(75.2)	(131.9)
Profit (Loss) for the period	24.6	4.6	(6.1)	7.6	(25.6)	5.1	(122.0)	(138.8)
Attributable to:
Non-controlling interest	-	0.4	(0.4)	-	-	-	(20.6)	(106.0)
Net result for equity	24.6	4.2	(5.7)	7.6	(25.6)	5.1	(101.4)	(32.8)
Profit (Loss) for the period	24.6	4.6	(6.1)	7.6	(25.6)	5.1	(122.0)	(138.8)
Other comprehensive income						26.9	-	(4.8)
Total Comprehensive Income / (Loss) to Kardan						32.0	(101.4)	(37.6)

Overall summarized review 2014 results

If developments are specifically attributable to Q4 2014, these are mentioned separately.

Kardan recognized a consolidated net profit of EUR 5.1 mn, significantly better than the net loss of EUR 101.4 mn in 2013, which included the loss of EUR 55 mn of discontinued operations (i.e. the remaining stake in GTC SA that was sold in Q4 2013). Additionally, the main improvements were due to: (a) significantly better operating results (before fair value adjustments, disposal of assets and financial expenses) of the banking and retail lending segment as well as the Water Infrastructure Projects segment, (b) the gain on the sale of the 50% stake in Galleria Chengdu, mitigated by the impairment on KWIG in China, and (c) lower financing expenses following repayment of debt and including a smaller negative impact of EUR 3.8 mn (2013: EUR 10 mn negative impact) due to the strengthening of the Israeli Shekel (NIS) versus the Euro and the increase of the CPI index. Total comprehensive income was EUR 32.0 mn for equity holders, mainly the result of the significant appreciation of the RMB versus the Euro (the majority of Kardan's assets are in denominated in RMB).

The Q4 2014 net profit of EUR 16.5 mn was significantly higher than in the comparable period last year (Q4 2013: EUR 5.2 mn profit), mainly as a result of the profit from fair value adjustments and on disposal of assets (EUR 14.4 mn). In addition, KLC contributed a good operational fourth quarter, and due to the weakening of the Israeli Shekel versus the Euro CPI changes a forex gain of EUR 6.2 mn could be recognized.

Real Estate Asia contributed a profit of EUR 24.6 mn (2013: EUR 18.3 mn) to the 2014 consolidated net result of Kardan, predominantly on the back of the very strong Q4 result (EUR 20.6 mn profit). Revenue from delivery of apartments was significantly higher due to the handover of the A2 building (Europark Dalian) en-bloc in Q4 2014, albeit at lower margins. Equity earnings in Q4 2014 improved compared to the previous 2014 quarters as nearly two third of the total 2014 (joint venture) handovers took place in this quarter. During the full year 2014, however, 46% (y-o-y) fewer apartments from joint venture projects were handed over, leading to a (y-o-y) similar decrease in equity earnings. In addition, the gain on the sale of the 50% stake in Galleria Chengdu (EUR 16.8 mn, before taxes) in Q4 2014 contributed substantially.

The construction of the retail center in Dalian was nearly completed as at year-end 2014 translated into a positive revaluation. As a result of the significant strengthening of the RMB versus the Euro, net financing income included a substantial positive forex impact. The number of sold apartments in 2014 (1,254) reflects the challenging market circumstances when compared to the 2,118 apartments sold in 2013.

Water Infrastructure Projects recorded a net profit of EUR 4.2 mn in 2014 compared to EUR 2.9 mn net loss in 2013, mainly the result of 11% higher (y-o-y) revenues at higher margins, fairly stable costs and lower tax expenses (in 2013 these were impacted by the EUR 8 mn gain on the sale of a real estate property and the closing down of the Polish subsidiary).

Water Infrastructure Assets contributed a net loss of EUR 5.7 mn compared to EUR 3.1 mn net profit in 2013. The main reason for the loss is the impairment of EUR 6.9 mn (before tax) on KWIG following the announcement in January 2015 of its sale, of which the first phase (75%) was completed beginning of March 2015. As the growth in 2014 revenue derived mainly from construction activities at KWIG (the main subsidiary of Tahal Assets), and these activities generally have a lower margin, the gross profit decreased by 7%. Although Tahal Assets kept its costs under control and equity earnings improved (y-o-y), this could not off-set the impairment of KWIG in the results of Q4 2014.

The Banking and Retail Lending segment reported a significant contribution in 2014 of EUR 7.6 mn profit, a marked improvement on the loss of EUR 18.8 mn in 2013 (which included impairments totaling EUR 12 mn). With 37% higher revenues (y-o-y) in 2014 - due to better quality loan portfolios, less interest expenses on deposits and including EUR 2.8 mn impairment on a loan - and stable costs of banking, combined with lower financing and tax expenses, TBIF has proven the success of its reorganizations, risk approach and business model. AVIS Ukraine, reported under equity earnings, managed to record a slight positive result in 2014, despite the continued unstable situation in the country.

Included in "Other" are the expenses and finance costs of Kardan and GTC RE, contributing a loss of EUR 25.6 mn in 2014 compared to a loss of EUR 101.1 mn in 2013, which included the loss from discontinued operations (GTC SA). Financing expenses decreased significantly following repayment of the majority of a loan and of debenture instalments. Moreover, in Q4 2014, the Israeli Shekel ('NIS') weakened against the Euro leading to a positive foreign exchange result of EUR 6.2 mn. For the full year 2014, the forex and CPI effect amounted to a negative impact of EUR 3.8 mn, lower than the EUR 10 mn negative forex impact in 2013.

The 2012 net consolidated result of Kardan amounted to a loss of EUR 33 mn, mainly due to substantial impairment of assets particularly in the real estate sector in Central and Eastern Europe.

Equity

Kardan N.V. (company only, in € million)	December 31, 2014	December 31, 2013
Total Assets	459.0	486.3
Total Equity	92.4	66.1
Equity/Total assets (%)	20%	14%

The shareholder's equity of Kardan N.V. increased from EUR 66.1 mn as of December 31, 2013 to EUR 92.4 mn as of December 31, 2014 on a combination of the profit of EUR 5.1 mn for the year and a substantial positive foreign exchange and other comprehensive income movement resulting from the strengthening of the RMB versus the Euro, mitigated by a change in the non-controlling interest transaction reserve. For further details, reference is made to the Statement of changes in Equity in the 2014 consolidated Financial Statements.

Covenants

As at December 31, 2014, the Company and its subsidiaries were not in breach of any covenants. We refer to note 27 of the 2014 consolidated Financial Statements.

Highlights per segment:

The result from operations before finance expenses of each segment is presented in note 28 of the condensed 2014 consolidated financial statements called "Segment result". In this press release, additional segment information is provided for information purposes.

REAL ESTATE

Kardan is active in development and management of Real Estate through the segment Real Estate Asia, which comprises its 100% subsidiary Kardan Land China ('KLC') operating in China.

Real Estate Asia

General developments China and Kardan Land China

During 2014, the Chinese government was faced with the effects of a complicated and volatile international environment, a domestic speculative property market as well as increasing credit growth. Consequently, various support measures were taken - such as granting tax breaks to small businesses, some monetary easing measures and stimulating investments in social housing and railways - in order to maintain domestic development, reform and stability and to support its aim to shift China's economic growth model from investment-led to consumption-led growth.

GDP growth in China held steady at 7.3% (y-o-y) in the fourth quarter of 2014 (Q3 GDP was also up by 7.3% annually), a combination of better retail sales and industrial production, mitigated by a slow-down in fixed asset investment, particularly in the development of residential buildings. The stimulus measures which were introduced during the year began to show some positive results, such as an uptick in home sales in December 2014, the first year on year advance in 12 months.

Over the full year 2014, however, the Chinese economy grew at its slowest pace since 2010 (by 7.4% y-o-y, just off the targeted 7.5%), albeit that this growth appears to be slowly becoming better balanced. Consumption drove 51 % of the 2014 growth, whereas this was still 48% in 2013, and trade also contributed better to the overall 2014 growth than in the previous year, whilst investment in fixed assets decelerated. The internal consumption was underpinned by a (nominal) growth in national per capita disposable income (up 10.1% y-o-y in 2014), an increase in retail sales on domestic markets (up by 11.9% y-o-y in 2014) and a low inflation rate of on average 2% during 2014 (in December prices went up by 1.5% y-o-y).

The fundamentals of the Chinese real estate market remained strong: a large population, continued urbanization, growing income and upgrading of living standards. KLC based its strategy on these growth characteristics and

accordingly developed both residential apartments in various joint venture projects, a successful shopping mall in Chengdu and currently it is developing a large mixed-use project in Dalian.

Due to the strong growth fundamentals, the retail market is increasingly becoming exposed to over- supply of basic shopping malls. With the Europark project, KLC therefore specifically focuses on consumers and individuals with high quality requirements offering a complete shopping and entertainment area combined with apartments situated around a green park and connected to the city's new subway line.

The cities in which KLC initiated its real estate developments were carefully selected on specific parameters, such as a higher than country average growth of the disposable income of its residents.

The Chinese residential real estate market continues to face challenges, as buyers of apartments are hesitant to buy and await possible new eased mortgage measures. KLC follows these developments closely and – as far as possible - paces the development of its residential apartment from joint venture projects in order not to build up too large an inventory. As at December 31, 2014, the percentage of completed but unsold apartments in the inventory increased to 9% (compared to 6% as at December 31, 2013). With respect to the residential apartment buildings in the Europark Dalian project, KLC also looks into possibilities of selling the service apartment buildings en-bloc (i.e. the total building), evidenced by the sale of the A2 building in June 2014 which involved 201 SOHO apartments that were handed over in the fourth quarter of 2014. Moreover, KLC has also adjusted its offering (in terms of lay out as well as price) and increased its marketing efforts. Despite these actions, however, fewer sale contracts for apartments were signed in 2014 than in 2013.

Residential projects Kardan Land China
Units sold in the period
	2014	2013	Q4/14	Q4/13
Joint Venture projects*
Olympic Garden	550	818	133	230
Suzy	162	540	21	62
Palm Garden	75	134	38	24
City Dream	256	562	73	175
	1,043	2,054	265	491
100% owned
Dalian	211	64	2	25
Total	1,254	2,118	267	516

* presented 100% number, KLC holds approx. 50%

During 2014, KLC still owned 50% of Galleria Chengdu, the shopping mall which KLC developed, opened in 2010 and of which it sold 50% in 2011. In line with the asset disposal program of Kardan, to generate funds to repay its debt, KLC's remaining 50% stake was sold to its co-shareholder in December 2014. KLC will, however, continue to manage the mall.

The construction of the Europark shopping mall in Dalian was completed early 2015, and a large number of tenants have finished their fit-out activities. The opening of the mall is planned to take place gradually to be concluded in the second half of 2015; some tenants are expected to open in Q2 2015 at the same time as the opening of the subway station adjacent to the Europark Dalian project, whilst other tenants have a preference to open simultaneously with their new seasonal offering after summer. Just after reporting date, KLC announced that it had signed a lease agreement with Beijing Hualian Group ('BHG') for an upscale supermarket of over 6,000 sqm in Europark Dalian's shopping mall. As a result, the current (pre lease) occupancy of the mall is approximately 63%, and more leases are about to be signed. The mix of tenants reflects Europark Dalian's target to lead the way in providing malls in which family entertainment is a key element.

Results Real Estate Asia

		For the year ended December 31		For the three months ended December 31
	2014	2013	2014	2013
		In € millions
Delivery of units Management fee and other revenues	46.9 5.1	24.0 5.0	37.7 1.7	24.0 1.4
Total revenues	52.0	29.0	39.4	25.4
Cost of Sales	47.5	21.9	38.1	20.3
Gross profit	4.5	7.1	1.3	5.1
SG&A expenses	8.9	8.3	3.1	2.6
Adjustment to fair value (impairment) of investment property	8.9	8.8	4.4	3.6
Gain on disposal of assets and other income	16.8	0.1	16.8	0.1
Equity earnings (losses)	7.2	14.5	7.2	7.8
Result from operations before finance expenses	28.5	22.2	26.6	14.0
Financing income (expenses), net	5.4	(0.1)	2.0	0.2
Income tax (expenses) / benefit	(9.3)	(3.8)	(8.0)	(3.2)
Net profit (loss)	24.6	18.3	20.6	11.0
Attributable to: Equity holders (Kardan N.V.)	24.6	18.3	20.6	11.0

Additional information Kardan Land China	2014 (31.12)		2013 (31.12)
Balance sheet (in € millions)
Share of investment in JVs	60.7		105.8
Investment Property Under Construction	181.1		118.1
Inventory	98.1		96.9
Cash & short term investments	66.6		26.2
Total Assets	470.3		364.7
Loans and Borrowings	120.7		60.9
Advance payments from buyers	0.2		5.7
Total Equity	305.6		269.5
Operational Information Residential	FY 2014	FY 2013	Q4/14	Q4/13
Revenue Residential - JV (in € million)	50.0	79.2	28.1	38.0
Gross profit residential - JV (in € million)	14.6	24.3	8.1	10.8
Apartments sold in period (a)	1,254	2,118	267	516
Apartments delivered in period (Dalian, 100%)	250	120	204	120
Apartments delivered in period (Joint Venture, 50%)	1,480	2,727	949	1,381
Total apartments sold, not yet delivered	2,832(b)	3,308	2,832	3,308
Operational Information Retail (in € million)
Revenue Retail (50% rental Chengdu, 100% service fees)	8.0	7.4	2.4	2.0
Gross profit Retail	5.1	4.8	1.6	1.4

(a) All residential apartments, incl. Dalian (100%).

(b) Includes approximately EUR 26 mn gross profit (Kardan Land China share)

Result analysis 2014

The Real Estate Asia segment, fully comprising Kardan Land China, contributed EUR 24.6 mn to the consolidated 2014 net result, which was significantly more than the EUR 18.3 mn contribution in 2013, mainly on its strong results in the fourth quarter.

The results of KLC's joint venture residential activities and the results of the 50% stake in Galleria Chengdu are reported as "Equity in net earnings of joint ventures". "Management fee and other revenues" consequently predominantly relates to the 100% asset management activities of Chengdu, and "delivery of units" relates to the revenue resulting from the handover of apartments of the Europark Dalian project (100%).

It is noted that the results of Real Estate Asia are impacted by an appreciation of the RMB by 11.4% (y-o-y) as at December 31, 2014.

KLC recognized significantly higher (y-o-y) revenue from the delivery of units in 2014 than in 2013, predominantly following the en-bloc delivery of 201 apartments after the sale of the A2 building of the Europark Dalian project in Q2 of 2014. In comparison: the first 120 apartments of the Europark Dalian project were handed over in last quarter of 2013. The revenue relating to the asset management activities for Galleria Chengdu remained stable in 2014 compared to 2013. It is noted that although Galleria Chengdu has been sold in Q4 2014, KLC will continue to manage the mall.

The gross margin on delivery of apartments was significantly lower (6%) in 2014 than in 2013 (18%). This was the effect of the en-bloc sale and hand-over of the A2 building, which predominantly represents the reported revenue and relating cost of sales, whereas in 2013 apartments were handed over to individual buyers. The gross margin on management fees and other revenues (i.e. of the asset management activities with respect to Galleria Chengdu) decreased slightly to 53% from 55% in 2013.

Total sales & marketing, and general & administrative expenses (SG&A) grew by 7% (y-o-y), mainly on higher administrative expenses mainly following some one-off costs (e.g. consultants) (which were recognized in Q4 2014), and on the back of higher selling and distribution expenses linked to the progress of the Europark Dalian project.

As the construction of the Europark Dalian shopping mall progressed according to plan, and more contracts were signed with tenants (current pre-lease is 63%, and more leases are about to be signed) a fair value adjustment of EUR 8.9 mn was recognized in 2014 (of which EUR 4.4 mn in Q4), which was similar to in 2013. The gain on disposal of assets reflects the sale of the remaining 50% stake in Galleria Chengdu, which includes a substantial foreign exchange contribution of the strong RMB. In 2013, no assets were sold.

'Equity earnings', comprising the results of the retail center in Chengdu and of the residential apartments from joint venture projects, was significantly lower than in 2013. The results of Galleria Chengdu were the main contribution in the equity earnings 2014. The mall recognized good revenue growth (y-o-y) against stable costs and therefore a higher gross margin. In addition, a valuation gain was recognized at the time of the sale of the mall. In Q4 2014, nearly two third (i.e. 949) of the total 2014 number of hand-overs of apartments from joint venture projects (1,480) were delivered. As the total number of deliveries of residential apartments from joint venture projects was 46% lower in 2014 than in 2013, the relating revenue decreased by a similar percentage (y-o-y). Despite an impairment of EUR 0.8 mn on inventory of parking spaces in the joint venture projects, the gross margin in 2014 was 28% (2013: 30%).

The net financing income, which includes the net exchange rate differences, was impacted predominantly by the strengthening of the RMB versus the Euro during 2014 (y-o-y) which added EUR 4.2 mn in 2014, whereas in 2013 a negative forex impact of EUR 1.4 mn was recognized.

The increase of EUR 5.5 million in tax expenses is attributable to the tax on the gain on the sale of the 50% stake in Galleria Chengdu.

Additional Information

Investment property under construction, which relates fully to the Europark Dalian retail center, increased by 53% (from December 31, 2013) as the result of the construction progress and the consequential positive valuation as well as a substantial positive forex effect due to the strengthening of the RMB versus the Euro .

"Loans and borrowings", which predominantly relates to the use of a construction loan for Europark Dalian, nearly doubled as at year end 2014 compared to year end 2013. The increase is the result of the additional construction loan of RMB 400 mn (at that time approximately EUR 48 mn), that was taken on in February 2014 and was fully drawn down by the end of 2014, and of the forex effect of the RMB.

Following the delivery of the A2 building apartments in Q4 of 2014 and taking into account the slow sale of 'individual' apartments of the Dalian project, "Advance Payments from Buyers" decreased significantly at year end 2014 compared to year end 2013.

The increase of equity in 2014 by 13% (y-o-y) is attributable to a combination of the profit in the period combined with the forex effect of the RMB, off-set by the impact of pay-out of a vested employee stock option plan.

WATER INFRASTRUCTURE

Tahal Group International B.V. ('TGI'), Kardan's water infrastructure company, focuses on executing water related projects worldwide through Tahal Projects and focused on developing water assets (e.g. wastewater, water treatment and water supply plants) through Tahal Assets. Tahal Projects is active in Africa, Central and Eastern Europe, Latin America and in other regions and countries, such as Israel, whilst Tahal Assets was mainly active in China, through its subsidiary KWIG, and also in Turkey. The sale of the shares of KWIG was announced and 75% of the transaction was concluded in Q1 2015.

General developments water infrastructure markets and Tahal

Water supply crises and food security are generally considered as global risks with a significant impact if they were to manifest over the next coming years, as economic growth and social well-being depend on a safe and secure water and food supply. Although the water quantity on Earth has been stable for many years , the quality of water has deteriorated considerably, mainly due to population growth and urbanization. Moreover, as the (economic strength of the) middle class is growing, particularly in emerging markets, the demand for more and better food as well as an improved infrastructure is also increasing. Taking into account that approximately 70% of all the worldwide available water is used for agricultural purposes, and therefore inextricable linked to food supply, this leads to the necessity to not only facilitate better and more access to (potable) water, but also to force the world to find new ways to generate higher growth while using much less water. It requires collaboration between governments to provide sound policies and regulation and financial institutions to provide funding. As water is a local resource, it is therefore not surprising that solutions to water scarcity are generally likely to be (searched for) local(ly). Engineering expertise and reputation are, however, crucial in the water solutions market, which means that barriers to entry are high. Tahal recognizes that besides delivering high quality engineering solutions and project management, it is of great importance to offer assistance in arranging appropriate funding for projects. This is therefore included in Tahal's tender offers.

At present, Tahal Projects is conducting a number of larger projects in Africa - with an integrated agricultural and regional development focus – as well as other water related projects in various countries.

During 2014, the majority of the existing projects progressed according to plan. Tahal managed to sign up a significant number of new projects in its focal market sectors during 2014, with a combined total value of approximately USD 229 million (as the majority of the projects is US dollar denominated the backlog is reported in USD). Consequently at the end of 2014 the backlog of Tahal Projects amounted to USD 358 mn (year-end 2013: USD 320 mn) as the result of newly signed agreements and the effect of the progress of execution (and thus revenues) of projects. Tenders for new projects usually have long lead times, as so many parties are involved.

Results Water Infrastructure Projects*

	For the year ended December 31			For the three months ended December 31
	2014	2013	2014	2013
		In € millions
Contract revenues	135.9	122.0	37.7	35.6
Contract cost	113.4	105.2	31.6	30.9
Gross profit	22.5	16.8	6.1	4.7
SG&A expenses	12.2	11.9	3.3	2.9
Equity earnings / (losses)	(1.0)	(0.1)	(0.2)	(0.1)
Gain on disposal of assets and other income	(0.2)	(0.9)	(0.5)	(0.3)
Result from operations before financing expenses	9.1	3.9	2.1	1.4

Financing income (expenses), net	(1.6)	(2.4)	(0.5)	-
Income tax (expenses) / benefits	(2.9)	(4.1)	(0.9)	(0.4)
Profit (loss) from continuing operations	4.6	(2.6)	0.7	1.0
Net profit (loss)	4.6	(2.6)	0.7	1.0
Attributable to: Non-controlling interest holders	0.4	0.3	0.1	0.1
Equity holders (Kardan N.V.)	4.2	(2.9)	0.6	0.9

(*) General and Administrative expenses of Tahal Group International have been allocated to Water Infrastructure Projects

Additional Information Projects	2014 (31.12)	2013 (31.12)
Balance sheet (in EUR million)
Cash & short term investments	12.9	7.0
Total Assets	140.3	140.9
Net debt (excl. shareholder loans)*	(12.6)	(5.5)
Equity**	37.4	40.8
Equity** / Assets	26.7%	28.9%
Other (in USD million)
Backlog	358	320

* Bank loans net of cash and cash equivalents

** Group equity including shareholder loan

Result analysis 2014

Tahal Projects contributed EUR 4.2 mn net profit in 2014, compared to a net loss of EUR 2.9 in 2013, mainly on higher revenues at higher margins and lower tax expenses.

Revenue grew by 11% y-o-y in 2014 on the back of accelerated progress in existing projects, particularly in Africa and Central and Eastern Europe. Revenue of new projects generally starts to be recognized according to the relevant agreed upon milestones, which is usually after the first invoice has been sent or the first agreed upon phase of the project has been completed. During 2014 a number of new contracts were signed, of which an agricultural project in Central and Eastern Europe and the project in Yakutsk, Russia, (announced in December 2014) were the larger ones.

As a result of Tahal's project mix which included more projects (than in 2013) in the agricultural sector which generally involve lower contract costs, and as some of the existing projects progressed better than schedule, a higher gross margin could be recorded in 2014 (16.6%) than in 2013 (13.8%). Continued focus on cost efficiency in the operations mitigated by a slight increase in administrative costs at Tahal Group International has resulted in a 2.5% increase of SG&A expenses in 2014 compared to last year, although as a percentage of revenue these expenses are trending down.

Following a lower outstanding debt and a more favorable mix of interest payable in 2014 than in 2013, the net financing expenses came in lower (y-o-y). The tax expenses in 2014 were lower than in 2013 when these were impacted by the one -off gain that was realized on the sale of real estate asset in Israel combined with the impact of the bankruptcy of Tahal's subsidiary in Poland.

Results Water Infrastructure Assets*

		For the year ended December 31		For the three months ended December 31
	2014	2013	2014	2013
		In € millions
Contract revenues	34.4	31.0	10.3	9.6
Contract cost	20.5	16.1	6.4	5.5
Gross profit	13.9	14.9	3.9	4.1

SG&A expenses Equity earnings / (losses) Gain / (loss) on disposal of assets and other income	5.8 0.4 (6.9)	6.4 (0.2) 0.2	1.6 0.3 (6.9)	1.8 - 0.1
Result from operations before financing expenses	1.6	8.5	(4.3)	2.4
Financing income (expenses) net	(4.1)	(3.5)	(1.1)	(1.2)
Income tax (expenses) / benefit	(3.6)	(2.8)	(2.0)	(0.9)
Net profit (loss)	(6.1)	2.2	(7.4)	0.3
Attributable to: Non-controlling interest holders Equity holders (Kardan N.V.)	(0.4) (5.7)	(0.9) 3.1	(0.1) (7.3)	(0.2) 0.5

(*) Finance expenses of Tahal Group International have been allocated to Tahal Assets

Additional Information Assets	2014 (31.12)	2013 (31.12)
Balance sheet (in EUR million)
Cash & short term investments	1.1	7.3
Total Assets	180.6	166.6
Net Debt (excl shareholder loans)*	62.2	62.4
Equity**	86.4	84.5
Equity**/ Assets	47.8%	50.7%

* Bank loans net of cash and cash equivalents

**Group equity including shareholder loan

Result analysis 2014

The results of Tahal Assets are predominantly impacted by KWIG in China.

The 2014 net result of Tahal Assets contributable to Kardan was a loss of EUR 5.7 mn, compared to a EUR 3.1 mn profit contribution in 2013, mainly resulting from the impairment and tax of KWIG amounting to EUR 8.3 mn due to its sale. As the sale is expected to result in a net gain of approximately EUR 5 mn, including the release of positive foreign exchange reserves, and as the first phase (75%) of the sale was completed, this implies an estimated gain of EUR 13 mn to be recognized in Q1 2015. The second and final phase of this sale is planned to be completed in Q2 2015.

Reported total revenue comprises the operational revenue from rendering of water services and the effect of construction activities. KWIG reported a decrease in revenue from rendering of services of 6% (y-o-y) in the 2014 period compared to the same period last year, predominantly due to lower output from one plant and a delay in output from another plant. During 2014, KWIG initiated construction activities (expansion) on one particular project - whereas hardly any construction activities took place during 2013 – which was the main contributor to the 11% (y-o-y) increase of the total revenue of Tahal Assets for the reported period.

The construction activities in China, which predominantly took place in the second and fourth quarter of 2014, were the main reason for the decrease in the overall gross margin of Tahal Assets to 40.2% from 48.4% in 2013, as construction activities generally have lower margins. The sales & marketing, general and administration expenses (SG&A) were kept under control (9% lower y-o-y in 2014 than in 2013). Taking into account the equity earnings which turned slightly positive (from a slight loss in 2013), the 2014 results from running operations remained fairly stable.

Financing expenses were EUR 0.6 mn higher in 2014 than in 2013 which included a positive impact of the valuation of a warrant.

Additional information

The equity of Tahal Assets as at December 31, 2014 (compared to December 31, 2013) showed a net increase of EUR 1.9 mn mainly due to the loss for the year, partly off-set by a net increase in the foreign currency translation reserve.

BANKING AND RETAIL LENDING

Kardan is active in the financial services sector through its 100% holding in Kardan Financial Services (KFS) which operates through its wholly owned subsidiary TBIF (banking and retail lending) in Bulgaria and Romania. In addition, KFS is active in Ukraine with leasing activities through its 66% holding in Avis Ukraine. The results of Avis Ukraine and two other small entities are presented according to the equity method.

General developments Bulgaria and Romania and TBIF

The pace of economic recovery remained subdued in most of the European Union's ('EU') countries during 2014. Besides unfinished macroeconomic adjustments and sluggish implementation of reforms, uncertainty about the geopolitical situation, among others, weighed down on economic growth. However, most macroeconomists are cautiously optimistic with respect to 2015, albeit that diversity is likely to persist since idiosyncratic features shape the growth performance. Substantial risks to the recovery remain, but a number of developments bode well: the lagged effect of a weakening Euro, easing fiscal austerity in some countries, ECB's quantitative easing program, a more stable banking sector and currently lower oil prices.

The Bulgarian economy, although influenced by political instability and unrest in the banking sector, still managed to grow by 1.4% in 2014 mainly on the back of domestic consumption and public investment using available EU funds. Household's real disposable income grew and purchasing power improved underpinned by deflation, caused by a combination of worldwide decreased energy prices and lower food prices following a good harvest in Bulgaria. It is noted though, that Bulgaria is still one of the poorest countries of the EU and that it is experiencing a decline in the working-age population, due to aging and emigration, which is slowing down private consumption. Early 2014, consumer confidence appeared to improve, evidenced by households carefully taking on loans and depositing savings. In H2 2014 however, the turmoil around the elections and the closing of a large bank in Bulgaria (KTB Bank) led to a sharp deterioration of confidence, especially in the domestic banking system. The stability of the financial system was, however, not materially impacted. In addition, the statutory guarantee on deposits was applied to KTB clients in December 2014, which helped to restore consumer confidence, evidenced by a country wide growth of retail deposits by 16% (y-o-y) in 2014. The banking sector in Bulgaria ended the year 2014 with a 27% higher profit than in 2013.

TBI Bank Bulgaria managed to benefit from the liquidity in the system and saw deposits increase by 4% (y-o-y) as individuals transferred their deposits from KTB Bank to other banks. Against the general market trend (-1%), deposit balances from small and medium-sized enterprises ('SMEs') at TBI grew by 5%(y-o-y), both in volume as in clients as the result of the bank's focus on long term account relationships. The net loan portfolio increased by 10% (y-o-y), particularly on the back of the retail portfolio development.

Romania's GDP growth in 2014 arrived at 2.9% - slightly lower than in 2013 which benefitted from a bumper harvest - on strengthening private consumption and continuing robust export mitigated by investments. Following a stellar Q3 2014 GDP growth of 1.9% (q-o-q), the fourth quarter (0.5% q-o-q) was impacted by a weakening of export. Consumer demand is expected to remain strong as labor market conditions improve, wages continue to increase and the inflation rate is anticipated to stay low and interest rates to decline. During 2014, confidence indicators in Romania moved back to pre-crisis levels, resulting in individuals and corporates slowing down their deleveraging .Supported by easing credit conditions and favorable tax policy changes, local currency lending picked up again.

The net loan portfolio of TBIF's activities in Romania grew (by 16%, y-o-y), particularly on the back of a strong increase in the SME segment. In 2014, the first full year in which TBI could raise deposits in Romania after having obtained permission to perform banking activities, the growth in deposit taking was significant: retail deposits increased by 78% and SMEs deposited nearly three and a half times more funds than in 2013, demonstrating the successful strategy of TBI Bank's Romanian branch.

Avis Ukraine focuses on operational leasing services mainly to international corporations. The political situation of Ukraine continues to be unstable and TBIF is monitoring the situation closely both with respect to its Avis Ukraine operations as with respect to its intention to sell its stake in this company.

Results Banking & Retail Lending

		For the year	For the three months
		ended December 31	ended December 31
	2014	2013	2014 In € millions	2013
Banking and retail lending activities	33.3	24.4	8.8	6.4
Other revenues	2.3	1.6	0.7	0.2
Total revenues	35.6	26.0	9.5	6.6
Costs of banking and lending activities	25.6	25.2	7.0	4.4
Other expenses, net	2.6	1.1	0.7	0.9
Gross profit	7.4	(0.3)	1.8	1.3
SG&A expenses	-	1.1	(0.3)	0.1
Equity earnings (losses)	0.2	(2.7)	(0.1)	0.4
Gain on disposal of assets and other income	1.2	(8.4)	0.4	(5.0)
Impairment losses on goodwill	-	(3.9)	-	(0.5)
Result from operations before financing expenses	8.8	(16.4)	2.4	(3.9)
Financing income (expenses), net	(0.9)	(1.9)	(0.4)	(0.1)
Income tax (expenses) / benefits	(0.3)	(0.5)	0.1	(0.7)
Net Profit (loss)	7.6	(18.8)	2.1	(4.7)
Attributable to:
Equity holders (Kardan N.V.)	7.6	(18.8)	2.1	(4.7)

Additional Information KFS Banking & Retail Lending	2014 (31.12)	2013 (31.12)
Balance sheet (in € millions)
Net loan portfolio	152.1	137.2
Cash & short term investments	71.0	67.3
Total Assets	304.4	268.8
Deposits	189.5	149.7
Total Equity	37.8	29.2
Portfolio quality
Provisions / non-performing loans	66%	77%

Result analysis 2014

Despite the unstable political and banking sector situation in Bulgaria during 2014, TBIF contributed a significant profit of EUR 7.6 mn to the 2014 consolidated result of Kardan, whereas this was still a loss of EUR 18.8 mn last year (including impairments totaling EUR 12 mn).

Revenues increased by 37% y-o-y in 2014 as loan portfolios grew in volume and in quality. As a result of the better quality of the portfolio, lower provisions were deducted from revenues, albeit that in Q3 2014 a loan to VAB Bank was impaired by EUR 2.8 mn following the deterioration of the situation of VAB bank in Ukraine. Moreover, less interest expenses were recognized as, particularly in the first half of 2014, a decline in deposits was recorded in Bulgaria following the banking crisis in the country. In Q4 2014, however, clients of the KTB Bank transferred their deposits to other banks, leading to a large influx of cash although at lower interest rates given the competition. As TBIF kept its costs of banking – which also includes the wages of the staff in the operations - under control, the gross profit improved significantly from a loss in 2013 to EUR 7.4 mn in 2014. It is noted, however, that the Q4 2014 costs of banking showed an increase due to marketing expenses related to the holiday season.

AVIS Ukraine reported a small profit of EUR 0.1 mn in very difficult market and economic circumstances, reported under equity earnings. In 2014 receivables were collected (recognized under 'gain on disposal of assets and other income'), compared to a substantial loss in 2013 relating to impairments on intangible assets. Financing expenses decreased (y-o-y) mainly as a result of foreign exchange differences.

"Other" (Expenses)

	For the year ended December 31		For the three months
	2014	2013	2014	ended December 31 2013
	In € millions
General and administration expenses	6.1	5.8	2.2	1.9
Equity earnings (losses)	(0.1)	0.8	0.2	0.3
Financing income (expenses), net	(19.0)	(37.7)	2.5	(4.5)
Income tax expenses (benefit)	(0.4)	(3.2)	-	0.1
Profit (loss) from continuing operations	(25.6)	(45.9)	0.5	(6.0)
Net Profit (loss) from discontinued operations	-	(75.2)	-	3.5
Net profit (loss)	(25.6)	(121.1)	0.5	(2.5)
Attributable to:
Non-controlling interest holders Equity holders (Kardan NV)	- (25.6)	(20.0) (101.1)	- 0.5	- (2.5)

General

Results under "Profit (loss) from continuing operations" relate to the holding and finance expenses of Kardan N.V. and its direct subsidiary GTC Real Estate Holding BV (GTC RE).

Financing expenses in 2014 were less than in 2013, following repayment of bank debts and of debenture instalments, less negative impacted from CPI and foreign exchange differences relating to the debentures (as the Israeli Shekel (NIS) strengthened versus the Euro) in the amount of a EUR 3.8 mn (Q4 2014: profit of EUR 6.2 mn) compared to the negative impact of EUR 10 million in 2013 (Q4 2013: profit of EUR 1.4 mn). Currently, the Company's equity is mostly exposed to the Chinese RMB on its assets side and to NIS on its liabilities side. Changes in the NIS exchange rate mostly impact the income statement while changes in RMB mostly impact the equity directly. The income tax expense relates to deferred and current tax on hedge instruments.

OUTLOOK 2015

Kardan N.V.

In the interest of all of Kardan's stakeholders, management of Kardan continues to work with its business segments to improve their results and consequently their value. In addition, management focuses on generating cash through its continuing operations to meet the Group's obligations to its debt holders and banks. As a result of the sale of KWIG (China) in the first quarter of 2015, we expect to recognize the gain on this disposal of assets in our Q1 2015 results. On the basis of the current currency movements, the Company estimates the Q1 2015 results to be negatively impacted in its income statement by the strengthening of the NIS as the Debentures are denominated in NIS. As the RMB has appreciated versus the Euro, however, the Company estimates to recognize a positive movement in its equity as part of the other comprehensive income, as the majority of its assets are denominated in RMB.

Management is committed to succeed both in strengthening its financial position and in organically growing Kardan's existing businesses. A cash flow forecast for the coming two years can be found in the Directors' Report on page 14, as well as the Assumptions and Notes to the Cash Flow forecast.

This report also contains information regarding market developments which are based on external party research which was published in the following reports.

Macro-economic reports National Bureau of Statistics, China International Monetary Fund, World Economic Outlook: Cross Currents (January 2015) European Commission; Economic Forecast Spring 2014: Growth becoming broader- based (May 2014) Worldbank; Global Economic Prospects, Disappointments, Divergences and Expectations (January 2015) KBC; Economic Outlook

Real Estate: CBRE; The key to investing in the China Retail market Q4 2014 Jones Lang LaSalle: An overview of 30 retail locations in China (2014) Jones Lang LaSalle: Retail Cities in Asia Pacific (2014) National Bureau of Statistics, China McKinsey; All you need to know about business in China (April 2014)

Water Infrastructure KPMG: Future State 2030, 2013 Pacific Institute: The CEO Water mandate, corporate water disclosure guidelines, 2014 China Water Risk; China Water Risk's 5 trends for 2014 (February 2014)

Financial Services Bulgarian National Bank, Economic Review Summaries Ministry of Finance Bulgaria, Bulgarian Economy, monthly report (June 2014) KBC; Economic Outlook Central Europe (July 2014) Oesterreichische National bank; Focus on European Economic Integration Q2 2014, Outlook for selected CESEE Countries

Kardan N.V. is not responsible for the nature or correctness of data presented in this section regarding market developments or macro-economic projections.

Analyst & Investor Call

An analyst and investor call will be held on Thursday, March 26, at 09.30 CET. To take part in the call, please use the following dial-in number:

Dial in number NL: +31(0)20 716 8256	Conference ID: 6356286
Dial in number UK: +44(0)20 3140 8286	Conference ID: 6356286

The Investor Relations presentation will be published on the corporate site, www.kardan.nl, approximately one hour after publication of this release.

Please confirm your attendance to eventmanagement@citigateff.nl.

DISCLAIMER

This press release contains forward-looking statements and information, for example concerning the financial condition, results of operations, businesses and potential exposure to market risks of Kardan N.V. and its group companies (jointly "Kardan Group"). All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements (including "forward looking statements" as defined in the Israeli Securities Law). Forward-looking statements are statements of future expectations that are based on management's current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. These forward-looking statements are identified by the use of terms and phrases such as ''anticipate'', ''believe'', ''could'', ''estimate'', ''expect'', ''intend'', ''may'', ''plan'', ''objectives'', ''outlook'', ''probably'', ''project'', ''will'', ''seek'', ''target'', ''risks'', ''goals'', ''should'' and similar terms and phrases. A variety of factors, many of which are beyond Kardan Group's control, affect our operations, performance, business strategy and results and could cause the actual results, performance or

achievements of Kardan Group to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements. For Kardan Group, particular uncertainties arise, amongst others but not limited to and not in any order of importance, (i) from dependence on external financing with the risk that insufficient access to capital threatens its capacity to grow, execute its business model, and generate future financial returns (ii) from concentration of its business in Central Eastern Europe and China as a result of which Kardan Group is strongly exposed to these particular markets (iii) from risks related to the financial markets as a result of Kardan N.V.'s listings on NYSE Euronext Amsterdam and the Tel Aviv Stock Exchange and (iv) from it being a decentralized organization with a large number of separate entities spread over different geographic areas in emerging markets, so that Kardan Group is exposed to the risk of fraudulent activities or illegal acts perpetrated by managers, employees, customers, suppliers or third parties which expose the organization to fines, sanctions and loss of customers, profits and reputation etc. and may adversely impact Kardan Group's ability to achieve its objectives and (v) from any of the risk factors specified in Kardan N.V.'s Annual Report and in the related "Periodic Report" (published by Kardan N.V. in Israel) published in April, and which is also available at the Kardan website. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in the relevant forward-looking statement as expected, anticipated, intended, planned, believed, sought, estimated or projected. Kardan N.V. does not intend or assume any obligation to update or revise these forward-looking statements in light of developments which differ from those anticipated.

About Kardan

Kardan identifies and develops assets in promising emerging markets, mainly in Asia (predominantly China), Africa and selected CEE and CIS countries.

Its activities are mainly focused on three sectors that benefit from the rising middle class: Real Estate, Water Infrastructure and Banking & Retail Lending. Company headquarters are in the Netherlands. Kardan aims at holding controlling interests in its investments and is actively involved in the definition and implementation of their strategy through its local business platforms. Total assets as of December 31, 2014 amounted to EUR 1 billion; revenues totalled EUR 258 mn in 2014. Kardan is listed on NYSE Euronext Amsterdam and the Tel Aviv Stock Exchange.

The Director's Report including the financial reports, drawn up in accordance with the Dutch and Israeli regulations, are presented in a separate document and form an integral part of this release.

For further information please contact: Caroline Vogelzang Director Investor Relations +31 (0)20 305 0010 Vogelzang@kardan.nl www.kardan.nl

"This press release contains regulated information (gereglementeerde informatie) as defined in the Dutch Act on Financial Supervision (Wet op het financieel toezicht)"