RomReal Limited Annual 2018 Report 9 April 2019

RomReal is a Company focused on the Romanian real estate market. Established in 2005 it owns a premium portfolio of properties in the Black Sea – Constanta region.

2018 Highlights

Net Asset Value (NAV)

Net Asset value was EUR 0.47 (NOK 4.67) per share, being 2% lower compared to the end of 2017.

The year-end 2018 valuation was concluded by Knight Frank and resulted in a 2.6% reduction of the portfolio's fair value.

Operational highlights

During the calendar year 2018, several properties have been sold totalling about EUR 2.6m. In addition, fully or parts of three properties have been conditionally agreed sold. Furthermore, during 2018 ongoing regulations processes, among others on Lakeside (no. 1 on list), Centrepoint (no. 4 on list) and Oasis (no. 3 in list) have progressed well.

In 2018, RomReal received a tax claim in excess of EUR 1.7 million. There is some communication with the Central Tax Authorities, but no conclusion yet. If the Tax Authorities do not reach a decision by 25th June 2019, the Company reserves its right to proceed in a lawsuit against the Tax Authorities in a Civil Court.

Financial Results

At the end of 2018, the Company had a cash position of EUR 3.5 million plus a total of EUR 0.89 million in unsettled receivables related to binding sales agreements, totalling at about EUR 4.4 million or about EUR 0.1 per share.

EUR '000	2018	2017
Operating Revenue	1,371	309
Operating Expenses	(989)	(1,218)
Other operating income/ (expense), net	(689)	2,273
Net financial income/(cost)	(43)	(1,419)
Pre-tax result	(351)	(55)
Result for the period	(360)	(272)

Total assets	20,019	27,503
Total liabilities	417	7,573
Total equity	19,602	19,930
Equity %	97.9%	72.5%
NAV per share (EUR)	0.47	0.48
Cash position	3,469	3,505

Property Portfolio

Total size of the Company's Property Portfolio ("Land Bank") totalled 278,290 sqm at the end of 2018. The Company owns prime location plots in the Black Sea region, County Constanta:

Plot name	Location	Size (m2)
1 Ovidiu Lakeside	Constanta North/Ovidiu	59,779
2 Badulescu plot	Constanta North/Ovidiu	50,000
3 Ovidiu (Oasis)	Constanta North/Ovidiu	24,651
4 Centrepoint	Constanta North/Ovidiu	121,672
5 Gunaydin plot	Constanta North/Ovidiu	15,000
6 Balada Market	Central Constanta	7,188
Total		278,290

*(6) Sale agreed, closing still to be completed

For further information on the Company's property portfolio, please visit www.RomReal.com

Romanian Macro development

During 2018, the Romanian economy grew by 4.1 percent compared with 2017, driven by private demand for consumption, but also by the continuing build-up of inventory. The European Commission expects country's growth to decelerate below 4% per year in 2019- 2020 as the fiscal stimulus fades away and amid broader slowdown in Europe.

Romania's consumer prices inched up by 0.16% in December versus November and the annual inflation eased to under 3.3% in the month from 3.4% in November. The prices of nonfood goods advanced by 3.8% over the 12 months ended December 2018 compared to the 3.1% y/y advance of the food prices. The fees paid by households for services increased by only 2.4% y/y.

The average inflation rate in 2018 was 4.6% y/y, up from 1.3% y/y in 2017. The exchange rate correction after steady widening of the current account deficit during 2018 is expected to exert certain inflationary pressures (the local currency hit two-year's low these days and keeps weakening at very moderate pace). The supplementary taxes enacted by the Government under emergency ordinance 114/2018 also have direct and indirect inflationary effects, possibly resulting in certain upward adjustment of the central bank's inflation outlook.

The central bank currently expects headline inflation to remain slightly under 3.5% over the next few months. The central bank's inflation target is 2.5% with a variation band of +/- 1 percentage point.

The Gross Domestic Product (GDP) in Romania expanded 0.70 percent in the fourth quarter of 2018 over the previous quarter. GDP Growth Rate in Romania averaged 0.76 percent yearly from 1995 until 2018, reaching an all time high of 6.10 percent in the first quarter of 1996 and a record low of -7.10 percent in the first quarter of 2009.

Monthly building Permits in Romania averaged 3680 from 2005 until 2019, reaching an all time high of 6291 in May of 2008 and a record low of 1429 in January of 2016.

RomReal Ethical Policy

Introduction

RomReal is only involved in minor construction or development projects, but aiming to maintain its principles with regards to Ethical Policy since its listing to the Oslo Stock Exchange. These can be found below:

Energy

From initial site surveys, through to the specification of fixtures and fittings, the Company aims to identify the most energyefficient solutions. The Company is seeking more intelligent and sustainable approaches to design, construction and materials.

Water

All of the developments consider ways in which water usage can be reduced, both during construction and occupancy. Where possible, specifying ways of increasing the efficiency of water usage within the infrastructure of our developments, delivering responsibility and cost-efficiency.

Materials

The Company is aiming to to select all construction materials carefully. The aim is to protect natural resources and reduce carbon emissions, thereby contributing to a healthy environment for the residents in all developments.

Waste

RomReal is aware of the need to reduce and manage waste across our operations and is aiming to fulfil all legal requirements. It also supports and encourages residents in their own recycling efforts.

Community

From introducing improvements to the local infrastructure to including spaces for socialising and local amenities, the aim is to contribute to sustainable communities for everyone.

Healthy Living

RomReal recognises our responsibility to support healthy lifestyles and meet the needs and aspirations of residents. RomReal seeks to maximise the natural benefits of sunlight, daylight and open space within each development.

Education

RomReal seeks to deliver sustainable development through its ethical policy and working practices. The terms of reference include requirements for economic and social progress at a local level. The Company has supported educational initiatives, both those that spread best practice in sustainable development, and those that enhance the local educational infrastructure in general.

Shareholder Overview

Please see below the list of the top 20 shareholders in RomReal as of 29 March 2019:

Ranking	Name	Holding	Percentage
1	SIX SIS AG	10,336,054	24.99%
2	GRØNSKAG, KJETIL	4,166,899	10.07%
3	SAGA EIENDOM AS	3,262,976	7.89%
4	THORKILDSEN DØDSBO, KAY TØNNES	3,071,656	7.43%
5	THORKILDSEN, WENCHE SYNNØVE	2,344,100	5.67%
6	AUSTBØ, EDVIN	2,108,500	5.10%
7	Danske Bank A/S	1,452,995	3.51%
8	ENERGI INVEST A/S	1,122,941	2.71%
9	ORAKEL AS	1,101,000	2.66%
10	SPAR KAPITAL INVESTOR AS	940,236	2.27%
11	THORKILDSEN INVEST AS	829,478	2.01%
12	PERSSON, ARILD	718,000	1.74%
13	GRØNLAND, STEINAR	712,675	1.72%
14	HOEN, ANDERS MYSSEN	689,557	1.67%
15	Skandinaviska Enskilda Banken S.A.	628,832	1.52%
16	JONAS BJERG PENSION PLAN, NTS TRUSTEES LTD	558,306	1.35%
17	SILJAN INDUSTRIER AS	481,480	1.16%
18	MAGDAHL, AKSEL	470,545	1.14%
19	CLEARSTREAM BANKING S.A.	438,583	1.06%
20	BNP Paribas Securities Services	406,856	0.98%
Total Top 20		35,841,669	86.64%

(1) This is the Top 20 Shareholder list as per 29 March 2019

(2) The total issued number of shares issued at end 2018 was 41,367,783.

(3) Thorkildsen Invest AS is a Company controlled by RomReal Kay Thorkildsen family.

(4) Chairman Kjetil Grønskag owns directly and indirectly 4,414,629 shares corresponding to 10.67%. The above list is the 20 largest shareholders according to the VPS (cumputerized shareholder register) print out; please note that shareholders might use different accounts and account names, adding to their total holding.

Board of Directors

Kjetil Grønskag - Chairman of the Board and CEO

Mr. Grønskag holds a master of General Business (siviløkonom) from Handelshøyskolen BI and is a Certified Financial Analyst (CFA) from the Norwegian School of Economics and Business Administration. Mr. Grønskag has a long experience within international banking and Real Estate. Mr Grønskag has significant Directorship experience from both listed and private companies. He is a Norwegian citizen and resides in London, UK.

Lacramioara Isarescu - Board member

Ileana Lacramioara Isarescu is a corporate professional with over 15 years of international experience in business development in real estate, finance and IT. Having worked in Vienna and New York, Ileana is currently the Governmental Programs Executive for IBM South East Europe, and resides in Bucharest, Romania. Ileana holds a MBA degree from Harvard Business School and a MSc in International Economics from the Academy of Economic Studies Bucharest.

Bendt Thorkildsen – Board Member

Mr. Thorkildsen holds a Master of Science (MSc) in International Marketing and Strategy from the Norwegian School of Economics and Business Administration. Mr. Thorkildsen has more than 20 years with varied experience with particular focus on business development/sales (IT). During the last 10 years Mr. Thorkildsen also has held various Directorship including in the real-estate industry. He is a Norwegian citizen.

Heidi Sørensen Austbø – Board member

Mrs Austbø is a State Authorised Public Accountant from Handelshøyskolen BI in Oslo. Mrs Austbø has 14 years' experience from both financial auditing and fund Management with Norwegian and global equities, working for KPMG and long equity funds at Terra Fondsforvaltning and Arctic Fund Management. Mrs Austbø also has Directorship and CEO experience from privately held companies. She is a Norwegian citizen and resides in Oslo.

Today, the Board of Directors and the Chief Executive Officer reviewed and approved the Board of Directors Report and the RomReal Ltd consolidated and annual financial statements as of 31 December 2018. To the best of our knowledge, we confirm that RomReal Ltd and RomReal Group's consolidated annual financial statements for 2018 have been prepared in accordance with IFRSs and IFRICs as adopted by the European Union (EU), IFRSs as issued by the International Accounting Standards Board (IASB).

The information presented in the financial statements gives a true and fair view of the Company's and the Group's assets, liabilities, financial position and results for the period viewed in their entirety.

DIRECTORS REPORT 2018

RomReal Directors

The Board of Directors of RomReal is responsible for the supervision and administration of the Company's affairs and for ensuring that the Company's operations are organized in a satisfactory manner.

The Directors are shown below together with their interest in the number of shares in the Company per 31 December 2018 and per 31 December 2017:

		31 December 2018	31 December 2017
Kjetil Grønskag	Appointed November 2006	4,414,629	4,288,179
Heidi Sørensen Austbø	Appointed April 2017	Nil	Nil
Bendt Thorkildsen	Appointed April 2016	6,245,234	6,245,234
Lacramioara Isarescu	Appointed April 2014	Nil	Nil
TOTAL		10,659,863	10,533,413

Operations Update

On the 19 July 2018, RomReal's final property in Bucharest the "Alexandriei plot" (13,263 sqm), was sold by its subsidiary Company WESTHOUSE GROUP for the total gross amount of EUR 1,850,000 to be paid in instalments. Installments of EUR 1,200,000 EUR is already received and a seller's credit for the rest until 2021. In total properties worth about EUR 2.6m was sold during 2018. In addition, partly or fully another three properties were conditionally agreed sold.

In order to increase the attractiveness of land plots the Group is progressing the upgrade of its land's planning permits. Below are operational highlights that took place during the year:

Lake Side (No.1 on the table) – The plot is being split in small plots suitable for house building and small blocks. Please see www.westhouseGroup.ro for further info. Building authorization for roads has been obtained during mid-August 2018. Works for implementing the roads and utilities has commenced in November 2018. Most permits are obtained, excluding the gas supplier Company which only partly has been obtained. The Company has sold a minor plot at a satisfactory price, subject to all outstanding regulation permits secured.

Badulescu plot (No. 2 on the table) – The new urbanistic plan is going to be modified according to the requests of the local authorities. The purpose of this modification is to improve the site and road logistics as well as the attractiveness of the project. It is estimated that the new urbanistic plan will be finalized in 2nd half 2019.

Oasis (No. 3 on the table) –The new Planning Permission (PUZ) was approved during Q4 2018. The Company is presently marketing the project and the two apartment block structures in the market. The Company is considering finalizing the apartment structures and sell the apartments to end users.

Industrial Park (No. 4 on the table) – As soon as the conditional sale of 1.5 hectares to an investor for a total amount of EUR 630,000 reaches a final agreement, the Company is going to implement the roads and utilities in the area and promote the rest of land to the market on broad scale basis.

Gunaydin plot (No.5 on the market) – The plot is being marketed, so far, no satisfactory bid is received.

Balada Market (No. 6 on the table) – The Urbanization Certificate regarding the sale of the plot has been received from the Constanta Municipality. The Company, together with the conditional Buyer, is following all legal steps in order to receive the sale authorization from the Municipality. The conditional closing is delayed for six months up to 1 October 2019.

Key features of the real estate market

The real estate market runs on a slightly different clock than the macro cycle given the time required to actually develop projects, so 2018 was a solid year despite the slightly worse macro picture compared to 2017. According to Colliers, for retail, 2018-2019 seems be one of the best seasons in the post-crisis period. The office segment is likely to start feeling the pinch of the tighter labor market. Meanwhile, for the industrial market, there is reasonable space to grow as retail companies improve country-wide coverage and over the medium term.

Office market: Around 185,000 sqm in new modern office spaces are expected to be added in Bucharest in 2018, taking the total stock to 2.4 million sqm. Demand has been solid for office land plots during 2018: (i) AFI Europe bought a 43,000 sq. m land plot situated in the proximity of AFI Park and AFI Cotroceni, for EUR 23m, with a view to

develop a commercial mix in the following years; (ii) Globalworth acquired for EUR 16m two adjoint land plots in order to develop two office buildings in the north of Bucharest; (iii) Globalworth bought a land plot of 30 ha for EUR 7.4m in Timisoara. Another notable transaction was the acquisition of the development land Festival Mall in Sibiu, by NEPI

Retail Market: The development of the retail segment from the past years encouraged the growth of the demand. Retailers interest remained high and vacancy rates low. In Bucharest in particular, several shopping Centre players would like to enter the market, given the low vacancy in the prime commercial units. The most active developers in the retail market remain NEPI Rockcastle, Mitiska Reim and Prime Kapital. Given the volume of new deliveries due in the next two years, we expect to see many new market entrants.

Industrial Market: Deliveries in 2018 are estimated to reach 750,000 sqm compared to some 500,000 sqm in 2017. Rental levels for prime industrial and logistics space remained stable in the first half of 2018, both in Bucharest and in the other regions across the country. In Bucharest, prime rents for modern warehouses are approx. €4.0– 4.2/ sq. m/month.

Land Market: Both Bucharest and the secondary cities major land supply is coming from the former factories' platforms, located in semi-central areas. In Bucharest, the few remaining prime land plots, located in central/high end residential areas, are also sought-after by the residential constructors/developers. Given the large quantity of big residential projects announced or under construction, the small developers focus on central land plots with small boutique projects, with good transportation network. One essential aspect in selling a land plot is the Building Permit or PUZ. Investors are more interested into land plots with development documents issued, than to lose 2 years for approvals and miss the trend.

Residential Market: The fourth quarter of 2018 witnessed a slight increase terms of residential prices growth of 1.5%, resulting in a total increase of circa 6.4% compared to the same period of 2017. Equally, in Bucharest apartment prices went up 1.2% on average during the last quarter of 2018. Prices in Constanta have reached in December 2018 EUR 1,117 /sqm, a 2% increase during 2018. Nonetheless, the prices are still 30% less than they were at their peak in June 2008.

The following graphs indicate the apartment prices trend in Romania and Constanta in March 2019:

According to the largest online broker in Romania imobiliare.ro, apartment prices in Romania have seen an increase of 3.0% to EUR 1,233 per m2 compared with the same period last year. Since the bottom in Dec. 2014, the average price has increased 38.4%.

Apartment prices in Constanta have seen a mild increase of 1.4% to EUR 1,126 per m2 during Feb 2019, compared with the same period last year. Since the bottom in Dec. 2013, the average price has increased 34.2%

Accounts and financial position

RomReal has prepared the financial statements as of 31 December 2018, on the basis of going concern. While the industry has faced significant challenges in Romania, RomReal actively seeks to improve liquidity, capitalize on its strong assets base, and take advantage of the future developments of the country's economy.

Operating revenues

RomReal had consolidated operating revenues of EUR 1,4 million in 2018 compared to EUR 0.3 million in 2017. The main revenue streams were rental income from the Balada Market and sales of plots.

Operating expenses

Total consolidated operating expenses were EUR 1 million in 2018 compared to EUR 1.2 million in 2017. RomReal (parent Company) operating losses were EUR 0.3 million in 2018 compared to gain of EUR 0.2 million in 2017.

Profit/Loss

Consolidated profit/loss after tax in 2018 was a loss of EUR 0.4 million compared to a loss after tax of EUR 0.3 million in 2017. RomReal (parent Company) loss after tax was EUR 0.3 million in 2018 compared to a gain of EUR 0.6 million in 2017.

The end of year 2018 independent land bank portfolio valuation has shown an average reduction of 2.6% on a like for like basis compared to the end of year 2017 valuation representing a decrease in value of EUR 0.3 million.

Dividends

The Directors are not proposing any dividends for the period.

Balance sheet

RomReal had on a consolidated basis a total balance sheet of EUR 20 million at 31 December 2018. RomReal (parent Company) had a total balance sheet of EUR 19.7 million. Total consolidated equity at 31 December 2018 amounted to EUR 19.6 million (parent Company EUR 19.6 million) compared with EUR 19.9 million in 2017 (parent Company EUR 19.9 million). The Company has total current liabilities of EUR 0.3 million at 31 December 2018 (parent Company EUR 0.01 million).

Net cash flow from consolidated operations was negative EUR 1.8 million at December 31 2018 compared to negative EUR 2.8 million in 2017 (parent Company negative EUR 0.2 million compared to negative EUR 0.4 million in 2017). Consolidated current assets were EUR 7.4 million at 31 December 2018 compared to EUR 6.5 million at 31 December 2017 (parent Company EUR 1.8 million in 2018 compared to EUR 1.9 million in 2017).

Financial risk

Extraordinary tax claim: during the latest routine tax audit performed at the level of RomReal Romanian subsidiary Westhouse Group, covering the period 1 January 2011 – 31 December 2016, the tax authorities reassessed the loans granted by RomReal Ltd to Westhouse Group as contribution to share capital instead of inter-Company loans. In this respect, the Company received the tax audit report and the corresponding tax assessment decision, whereby the tax authorities imposed an extraordinary tax-bill on the Company, in excess of EUR 1.7m (including penalties), as profit tax for the period covered by the tax audit.

On 18th July 2018 the Company managed to obtain the suspension of the Tax Authority Decision, until a binding Court decision regarding the contestation is obtained. On 18th July 2018, the Constanta Court of Appeal ordered that no attachments to the bank accounts and/or lands belonging to Westhouse Group should take place. There is some communication with the central tax authorities, but no conclusion yet. If the Tax Authorities do not reach a decision by 25th June 2019, the Company reserves its right to proceed in a lawsuit against the Tax Authorities in a Civil Court. In the meantime, no penalties are expected.

Organization

RomReal Ltd operates in Romania through its fully owned subsidiary S.C. Westhouse Group SRL (WHG). WHG holds an office in Constanta, Romania, and a small team of five employees, head by Westhouse Group Administrator Adrian Cristea. The employees mainly deal with managing the assets, accounting compliance and reporting, and sales/ marketing.

Working Conditions, Equal Opportunities, Health and Environmental issues

RomReal works continuously on facilitating employee development, good health, enthusiasm and commitment among its employees. The Company also encourages employees to use public transport on travelling to reduce pollution. Women and men in comparable jobs receiving the same pay.

Corporate Governance

RomReal Ltd (RomReal) is with its modest resources trying to focus on practicing good corporate governance, which will strengthen confidence in the Group and thereby contribute to the best possible long-term value creation to the benefit of the shareholders, the employees and other stakeholders. The purpose of its principles for corporate governance is to regulate the division of roles between shareholders, the Board and the Executive Management more comprehensively than is required by legislation.

The Norwegian code of practice for corporate governance (the code) has been issued by the Norwegian Corporate Governance Board (NCGB). It builds on the principle of "comply or explain", whereby companies must either comply with the code or explain why they may have chosen an alternative approach. It also requires the Company's report on its corporate governance to address all 15 sections of the code. The Oslo Stock Exchange stipulates that listed companies must provide an overall presentation of their corporate governance principles in accordance with the applicable code, and that this must be included in their annual report. RomReal's principles for corporate governance are based on the recommendation of 17 October 2018, which can be found at www.nues.no.

1. Implementation and reporting on corporate governance

Confidence in its Management and business are crucial for RomReal's present and future competitiveness. The Group practices open Management, and thereby builds trust both in-house and externally.

The Board of RomReal is responsible for implementing sound corporate governance principles in the Group according to Bermuda Corporate Governance standards. RomReal's corporate governance does not deviate from the requirements of the code in a significant way which requires more detailed explanation. Relations between owners and the Group will be characterized by respect for the owners, good and timely information, and equal treatment of shareholders.

2. Business

RomReal owns a portfolio of prime location plots in the Black Sea region, more specifically Constanta and Ovidiu. The plots are well suited for residential and commercial developments. RomReal is involved in several construction or development projects for the time being. The ethical guidelines observed by RomReal reflect its values base; please see separate Ethical Policy Section.

The objective of the Company for 2019 is to:

Focus on land value enhancing activities in order to improve the shareholder value.
Key action points are increased & more professional sales & marketing efforts
Some infra-structure investments and, if necessary, engage more resources into regulation processes.
The Company is fully financed without any external debt, and when/if certain additional disposals are realized, a potential re-distribution of cash to the shareholders will become a priority.
Conclude the several on-going court cases in a satisfactory manner.

3. Equity and dividends

RomReal aims to maintain a solid equity and good liquidity appropriate to its objectives, strategy, and risk profile.

Dividend

The Company is fully financed without any external debt, and when/if certain additional disposals are realized, a potential re-distribution of cash to the shareholders will become a priority.

Under Bermuda law, a Company's Board of Directors may declare and pay dividends from time to time unless there are reasonable grounds for believing that the Company is, or would after the payment be, unable to pay its liabilities as they become due or that the realizable value of its assets would thereby be less than the aggregate of its liabilities and issued share capital and share premium accounts. Under the Company's Bye-Laws, each share is entitled to dividends if, as and when dividends are declared by the Board, subjects to any preferred divided right of the holders of any preference shares. There are no restrictions on the Company's ability to transfer funds (other than funds denominated in Bermuda dollars) in and out of Bermuda or to pay dividends to Norwegian residents who are holders of the Company's Shares.

4. Equal treatment of shareholders and transactions with close associates

Share Issues

Only the General Meeting considers Board mandates to increase the share capital for each purpose after assessing the requirements set by the Board.

Different Classes of Shares

RomReal has a single share class, and each share carries one vote. Shareholders will be treated equally unless qualified grounds exist for an alternative approach.

Efforts will be made to conduct possible transactions by the Company in its own shares through the stock exchange or in others ways at prevailing stock exchange prices.

Transactions with close associates

RomReal's routines specify that, in general, no transactions should be conducted between the Group and its shareholders, Directors, senior executives or their close associates. Should any of these have an interest in a transaction involving the Group, the Board must be informed and take up the matter for consideration if necessary. Unless the transaction is insignificant, the Board will secure third-party assessments of the transaction and otherwise assure itself that no form of unfair treatment of shareholders, elected officers, employees or others is involved. The related parties, including shareholders and close associates, are reported to the stock exchange via www.newspoint.no. During 2018, there were three insider transactions.

5. Shares and negotiability

RomReal's articles of association place no restrictions on transferability, and its shares are freely negotiable. RomReal received a listing on the Oslo Stock Exchange's Oslo Axess list on 11 June 2007.

6. General Meetings

RomReal facilitates the participation of as many shareholders as possible at the General Meeting and ensures that it functions as much as possible as an effective meeting place for the shareholders and the Board so that the owners can exercise their rights. Notice of the Meeting and supporting documents are prepared no later than 21 days before the Meeting is to take place and posted on the Company's website. The documents are sent to all shareholders with a known address in the Norwegian Central Securities Depository (VPS) in good time before the General Meeting takes place. This is facilitated by RomReal's register keeper DNB, which ensures that documents, including proxies and notifications, are carried by email and/or regular post to all shareholders. The notifications and proxies clearly specify the deadline for returning the proxies which provide the shareholders between 2 to 3 weeks to return their vote depending on their accessibility more i.e. email or post.

The Meeting takes place in our registered office in Bermuda, and it is accessible to all Board members and shareholders. Shareholders unable to attend in person will be given an opportunity to vote by proxy. The Company provides information on the procedure for:

(a) Appointing a proxy
(b) appoint a person who can act as proxy for the shareholder

The Board will propose to vote for each individual Board Member as of Ordinary General Meeting scheduled in April 2020.

Representatives of the Board always attend the Annual General Meeting, together with representatives of the Executive Management, and normally a representative from EY auditors either in person or via conference calling.

The Board determines the agenda for the General Meeting. The main items on the agenda comply with the requirements of the Public Limited Companies Act as well as the parent Company's articles of association. As recommended by the code, each General Meeting appoints a person to act as its independent Chair. Minutes of general meetings are published on www.RomReal.com and on the Oslo Stock Exchange website at www.newsweb.no.

For 2019, the Annual General Meeting of the Company will take place on the 17th April at 13:00 (local time), at the Company's registered office in Bermuda.

7. Nomination Committee

RomReal has chosen not to comply with the directive 7 for appointing a Nomination Committee. This is due to the current size, resources and activity of the Company, the Company considers that the cost of running a separate nomination committee should be avoided.

8. Board of Directors: composition and independence

RomReal's Board of Directors consisted at 31 December 2018 of four Directors:

Kjetil Grønskag

Bendt Thorkildsen

Lacramioara Isarescu

Heidi Sørensen Austbø

The Directors have long and varied experience in real estate, banking and finance which ensures that the Board can function effectively as a collegiate body. An overview of the Directors expertise, role and attendance can be found on the Company's website, www.RomReal.com.

The composition of the Board ensures that it serves the common interest and that it can operate as independently as possible of special interests. Chairman Kjetil Gronskag holds an executive position as Chief Executive of RomReal following Board approval on the 26 May 2016.

The Chairman of the Board, as well as the Vice Chairman, Secretary, and assistant Secretary are elected by the Board of Directors during the first meeting of the newly elected Board. The term office for members of the Board is one year.

To be proposed as of Ordinary General Meeting in April 2020, the General Meeting should elect the Chairman of the Board as the Company's highest governing body.

9. The work of the Board of Directors

The Board of Directors is the Company's highest body, and answerable only to the General Meeting. It has overall responsibility for planning and execution of the Group's strategy and activities, including its organization, remuneration policy and risk Management.

The Board also has overall responsibility for control and supervision. It produces an annual plan for its work with objectives, strategy and implementation. This is supported by a 2-3-year forecast plan or budget, which is updated on a quarterly basis during Board meetings. During Board meetings decisions are taken and tasks are delegated to the Executive Management. The Board discusses all matters relating to the Group's activities which are of significant importance or of a special character.

The duties and responsibilities of the Board are dictated by applicable legislation, the parent Company's articles of association, and mandates and instructions adopted by the general meeting. The Board will exercise supervision to ensure that the Group meets its business goals and manages risk in a wise and satisfactory manner. The Board is responsible for appointing the chief executive.

The Chairman is responsible for ensuring that the work of the Board is conducted in an efficient and proper manner and in compliance with applicable legislation. During 2018 nine (9) Board meetings were conducted. In addition to the Chairman, the Board has two independent chairs to lead the discussion on issues where the chair has a conflict of interest or is unable to attend. The Board carries out an annual assessment of its work

The Board of Directors ensures that members of the board of Directors and executive personnel make the Company aware of any material interests that they may have in items to be considered by the board of Directors, prior to each Annual General Meeting.

The Board does not hold any Independent Committees due to the small size and limited activity of the Company. Four out of five Board members are independent therefore their direct judgement and decision-making during Board meetings, ensures that the Board is aligned to shareholders' value in decisions related to audit and remuneration of the executive personnel.

10. Risk Management and internal control

The Board and Executive Management of RomReal place great emphasis on establishing and maintaining routines for risk Management and internal control. An annual review of the most important risks affecting the business is conducted by the Board.

Economic conditions and Emerging markets risk

The financial market climate and especially the price of property/plots and general rental levels in Romania represents risk, as it will affect the Group's limited rental income. There is risk associated with the general development of lease levels of commercial property for various segments and the locations where the Group owns properties. This especially applies to the market conditions at the expiration of lease contracts on the Group's properties. The Company aims to reduce this type of fluctuations, by holding tenants' deposits and/or bank guarantees. If fluctuations occur, it will have a negative impact on the Group's earnings and financial position.

Financial reporting

Quarterly operational and accounting reports are prepared for Board approval using International Financial Reporting Standards.

Counterparty risk

RomReal conducts an annual review of both clients and suppliers to identify counterparty risk. New clients are also subject to a thorough assessment to identify any risk they may present.

Financial risk

Foreign Exchange risk

The Company's main reporting currency is the EUR, which is used to facilitate loans to its subsidiaries. At the subsidiary level in Romania, the operational currency is RON. Due to its operational exposure in Romania, the financial reporting currency used to value the Company's assets is the RON. Due to the difference between reporting and operational currency the Company is exposed to foreign exchange risk. To manage this, the Company holds most of its deposits in EUR. The average exchange rate during 2018 was 1.00 EUR to 4.65 RON.

Tax risk

Changes in laws and rules regarding tax and duties may involve new and changed parameters for investors and the Company. This may involve a reduction in the profitability of investing in property and the profit after tax for the Company. Tax implications of transactions and dispositions conducted by the Company are to a certain extent based on judgment of applicable tax laws and regulations. Even if the Company is of the opinion that it has assessed tax law in good faith, it could not be ruled out that the authorities are of a different opinion. A change in regulation status in parts or all of the Land Bank may also normally change the applicable tax.

The Company is required to calculate its current income tax at a flat rate of 16%. Starting 2013, the companies in the Group with turnover below a EUR 65,000 threshold are subject to a 3% tax calculated on total revenue. This is the case for 7 of the Group companies while 3 of them are subject to 16% on taxable profits. In order to simplify and optimize the Romanian sub-holding structure, a number of merger processes of the Romanian subsidiaries is under way.

The new fiscal code implemented 01 Jan 2016 has applied a land tax increase of 500% on idle plots that lack cleaning. The Board has allocated a budget for the Management to maintain all of the Company's idle plots in a clean condition.

Director's Liability risk

The Company holds a Directors and Officers liability insurance policy with the reputable insurance Company, Chartis.

11. Remuneration of the Board of Directors

The General Meeting determines Directors' fees. The remuneration is not linked to the Company's performance in any way.

During 2018, the Directors received the following remuneration:

Lacramioara Isarescu	EUR 6,000
Heidi Sørensen Austbø	EUR 6,000

During 2018, Chairman Kjetil Grønskag and Director Bendt Thorkildsen abstained from receiving any remuneration as a Board Member during the year. There are no outstanding share options. The Company does not grant share options to board members.

North Bridge Group is a Company associated with Chairman Kjetil Grønskag, which holds a service contract for Management and a service contract for Investor Relations with RomReal fully disclosed to all Board members and where the remuneration has been approved by the Board members not related to North Bridge. This service agreement is to be proposed not extended to Board of Directors, when it terminates in late May this year. It is set to be proposed replaced by direct remuneration.

12. Remuneration of the Executive Management

The Board determines the chief executive's terms of employment. The main principle applied by RomReal for determining the pay of the Chief executive and other senior executives is that these persons will be offered competitive terms. In addition, RomReal will offer terms which encourage value creation for the Group and its shareholders, and which strengthen the loyalty of senior employees to the business.

The Executive Management of RomReal comprises three executives with good knowledge within their job functions and with senior Management experience from across the industry. The Executive Management of RomReal currently includes the following persons with the yearly outlined remuneration:

Name	Position	Yearly fees	Benefits/Bonuses
Kjetil Gronskag	CEO RomReal	€35,500	0.7% on asset sales
Adrian Cristea	Board member of Rom subsidiaries and legal advisor	€36,000	2% on asset sales *
Claudia Oprisan	Chief Accountant	€23,000	N/A

* The incentive lawyer fee is applied on the net proceeds received by RomReal or any of its subsidiaries net of any transactions fees and vat to be added (net proceeds in Euro). These net proceeds have to be approved by the CEO of RomReal's subsidiaries Board of Directors and paid by RomReal's subsidiaries.

13. Information and communication

RomReal takes the view that objective, detailed and frequent information to the market is essential for a correct valuation of its share, and accordingly pursues a continuous dialogue with analysts and investors.

Information about important events in RomReal as well as its periodic reporting of results is published in accordance with the guidelines to which the Group became subject through its listing on Oslo Axess. RomReal seeks continuously to publish all relevant

information to the market in a timely, efficient and non-discriminatory manner. The Company constantly improves its Investor Relation material by upgrading its reporting format, content, and website.

All stock exchange announcements are made available on www.RomReal.com and the Oslo Stock Exchange website, www.newsweb.no. The Group will provide the same information to all shareholders at the same time. To the extent that analysts or shareholders ask for further details, RomReal and the Board will ensure that only information which has already been made public is provided.

The Group holds quarterly and interim presentations. These provide an overview of operational and financial developments in the previous quarter as well as an overview of market prospects and the outlook for the business. Interim reports, and presentation materials are made available on the Group's website.

The Board determines the Group's financial calendar, which specifies the dates for publication of interim reports, the annual general meeting and the payment of dividends. This calendar is published by the end of December via the Oslo Stock Exchange's information system and on the RomReal website.

2019 Financial Calendar includes the following dates:

Q4 2018 Reporting and Investor Presentation	22	FEB	2019

2019 Annual General Meeting	17	APR	2019
Q1 2019 Reporting and Investor Presentation	24	MAY	2019
Q2 2019 Reporting and Investor Presentation	30	AUG	2019
Q3 2019 Reporting and Investor Presentation	22	NOV	2019

14. Takeovers

In the event of a bid for the parent Company's shares, the Board and the Executive Management will try to ensure that everyone gets access to sufficient information to be able to reach a decision on the offer. Unless otherwise instructed by the general meeting, the Board will not try to deploy defensive mechanisms to prevent the implementation of the bid.

The Board will provide shareholders with its view of the offer and, providing they have reached a decision on this, Directors are duty-bound to inform shareholders whether they personally intend to accept the bid. Should the Board find that it is unable to recommend whether the shareholders should accept the bid, it will explain the reasons why such a recommendation cannot be given. An explanation must be provided if the

Board's decision is not unanimous. The Board will consider whether an assessment should be obtained from an independent expert.

15. Auditors and advisors

RomReal is audited by Ernst & Young AS. Ernst & Young AS, registration number 976 389 387, has been the Company's auditor since its incorporation in 2005. The registered business address of Ernst & Young AS is Thormøhlens gate 53 D, NO-5008 Bergen, Norway, and Ernst & Young AS is a member of the Norwegian Institute of Public Accountants (Nw. "Den Norske Revisorforeningen"). The Group will not use the auditor as a consultant unless this has been approved in advance by the Board or its Chair. A plan for their work is submitted annually by the external auditor to the Board, and this plan will specify planned services other than auditing.

The auditor attends Board meetings which deal with the annual accounts and is also present during the AGM. During these meetings, the auditor will review possible changes to the Company's auditing principles, assessments of significant accounting estimates and all cases where disagreement has arisen between the auditor and the Executive Management.

At least once a year, the auditor will conduct a review of the Company's internal control system and possible weaknesses. The auditor will also propose improvements. In addition, the Board and the auditor will hold at least one meeting a year without the chief executive or other executive personnel being present. A briefing on the audit work and an assessment of the Group's internal control will be provided by the auditor to the general meeting.

The Board of Director's Reports the auditor remuneration to the general meeting, including details of the fee paid for audit work and any fees paid for other specific assignments.

Prospects

RomReal, according to the strategy, is focusing on land value enhancing activities in order to improve the shareholder value and exit. This includes, among others, increased sales & marketing efforts, and if deemed required some infra-structure investments, and more resources into regulation processes. The ongoing tax dispute adds uncertainty and reduces the financial flexibility.

The Company has signed three conditional sales agreements and is involved in several potential sales processes. One of the three conditional sales agreements is related to the Company's most important project, Lake Side.

Bermuda, 09.04.2019 The Board of Directors of RomReal

.......................................... ..........................................

Kjetil Grønskag (Chairman & CEO) Bendt Thorkildsen (Director)

........................................... ...........................................

Heidi Sørensen Austbø (Director) Lacramioara Isarescu (Director)

FINANCIAL STATEMENTS AS OF 31 DECEMBER 2018

Income Statement

Figures in EUR		Consolidated			Parent company
	Notes	2018	2017	2018	2017

Rent revenue	12	174,813	195,875	-	-
Sales of investment property		9,217,932	11,507,307
Cost of sales- investment property	4, 11	(8,022,051)	(11,394,033)	-	-
Profit / (loss) on sales of
investment property		1,195,881	113,275	-	-
Total income		1,370,694	309,150	-	-

Payroll and related expenses	13	(178,525)	(183,507)	(15,000)	(18,500)
Depreciation and amortisation expense	3	(18,288)	(9,564)	-	-
Other operating (losses)/gains	15	33,902	13,454	(67,900)	430,773
Inventory (write off )/ reversal	5	(200,271)	176,638
General and administrative
expenses	14	(626,349)	(1,215,074)	(234,173)	(239,228)
Operating expenses		(989,531)	(1,218,063)	(317,074)	173,045

Profit/(loss) before other operating
items		381,163	(908,913)	(317,074)	173,045

Net gain/(loss) from revaluation of	4, 11	(689,037)	2,273,649	-	-
investment properties
Profit/(loss) from operations		(307,874)	1,364,736	(317,074)	173,045

Interest income	16	17,774	22,230	2	401,862
Interest expense	16	(12,455)	(117,082)	(12,455)	(13,869)
Foreign exchange, net	16	(48,233)	(1,324,458)	-	-
Profit/(loss) before taxes		(350,789)	(54,574)	(329,527)	561,037

Tax expense	17	(9,676)	(217,360)	-	-

Result of the period		(360,465)	(271,934)	(329,527)	561,037
Attributable to:
-Equity holders of the parent		(360,465)	(271,934)	(329,527)	561,037

Basic earnings/(losses) per share
from continuing operations	23	(0.01)	(0.01)	(0.01)	0.01
Basic earnings/(losses) per share
from continuing - diluted	23	(0.01)	(0.01)	0.01	0.01

Statement Of Comprehensive Income

Figures in EUR	Consolidated		Parent company
	2018	2017	2018	2017

Profit / (loss) for the year	(360,465)	(271,934)	(329,527)	561,037

Other comprehensive income to be
reclassified to profit or loss in
subsequent periods
Exchange differences on translation of
foreign operations	33,292	832,971	-	-

Other comprehensive income for
the year, net of tax	33,292	832,971	-	-

Total comprehensive income for the
year, net of tax	(326,126)	561,037	(329,527)	561,037
Attributable to equity holders of the
parent:	(326,126)	561,037	(329,527)	561,037

Statement of Financial Position

Figures in EUR	Consolidated Parent company
ASSETS		Notes December 31,	December 31,	December 31,	December 31,
Noncurrent assets		2018	2017	2018	2017
Property, plant & equipment	3	85,009	90,053	-	-
Investment properties	4	10,222,177	13,626,714	-	-
Deferred tax asset	17	121,126	121,235	-	-
Investments in subsidiaries	1	-	-	17,864,283	18,108,465
Total non current assets		10,428,311	13,838,001	17,864,283	18,108,465
Current assets
Inventories	5	2,504,218	2,689,652	-	-
Trade receivables and other receivables	6	1,417,710	367,366	43,393	57,884
Cash and cash equivalents	9	3,469,377	3,505,384	1,755,186	1,812,397
Total current assets		7,391,305	6,562,403	1,798,579	1,870,282

Assets held for sale	11	2,200,000	7,102,737	-	-
Total assets		20,019,616	27,503,142	19,662,862	19,978,747
Figures in EUR
LIABILITIES AND EQUITY		Notes December 31,	December 31,	December 31,	December 31,
		2018	2017	2018	2017
Equity
Issued share capital	7	103,419	103,419	103,419	103,419
Contributed surplus	7	87,117,249	87,117,249	87,117,249	87,117,249
Retained earnings	8	(69,810,278)	(69,449,812)	(67,620,262)	(67,290,736)
Other Reserves		160,221	424,808	-	-
Translation reserve		2,032,148	1,734,269	-	-
Total equity		19,602,810	19,929,933	19,600,406	19,929,933
Non current liabilities
Deferred tax liability	17	99,563	1,091,839	-	-
Total non current liabilities		99,563	1,091,839	-	-
Current liabilities
Trade and other payables	10	124,057	117,494	62,457	48,816
Income tax payable	17	401	895	-	-
Deferred income	18	192,782	6,363,353	-	-
Total current liabilities		317,240	6,481,742	62,457	48,816
Total liabilities and equity		20,019,616	27,503,142	19,662,862	19,978,747

Signed on behalf of the Board of Directors

.......................................... ..........................................

Kjetil Grønskag (Chairman) Bendt Thorkildsen (Director)

........................................... ........................................... Heidi Sørensen Austbø (Director) Lacramioara Isarescu (Director)

Date: 09 April 2019

Consolidated Statement Of Changes in Equity

Figures in EUR	Attributable to equity holders of the parent
	Share Capital (Note 7)	Contributed Surplus (Note 7)	Retained Earnings (Note 8)	Translation Reserve	Other Reserves	Total
Balance as of 01 January 2017	103,419	87,117,249	(69,177,879)	901,298	424,808	19,368,895
Profit / (loss) for the period Other comprehensive income	- -	- -	(271,934) -	- 832,971	- -	(271,934) 832,971
Total comprehensive income and expense for the year	-	-	(271,934)	832,971	-	561,037
Balance as of 31 December 2017	103,419	87,117,249	(69,449,812)	1,734,269	424,808	19,929,933
Profit / (loss) for the period Other comprehensive income	- -	- -	(360,465) -	- 297,879	- (264,587)	(360,465) 33,292
Total comprehensive income and expense for the year	-	-	(360,465)	297,879	(264,587)	(326,126)
Balance as of 31 December 2018	103,419	87,117,249	(69,810,278)	2,032,148	160,221	19,602,807

Parent Company's Statement Of Changes in Equity

Figures in EUR
	Share Capital (Note 7)	Contributed Surplus (Note 7)	Retained Earnings (Note 8)	Total

Balance as of 01 January 2017	103,419	87,117,249	(67,851,773)	19,368,895
Profit for the period Other comprehensive income	- -	- -	561,037 -	561,037 -
Total comprehensive income and expense for the year	-	-	561,037	561,037
Balance as of 31 December 2017	103,419	87,117,249	(67,290,736)	19,929,932
Profit for the period Other comprehensive income	- -	- -	(329,527) -	(329,527) -
Total comprehensive income and expense for the year	-	-	(329,527)	(329,527)
Balance as of 31 December 2018	103,419	87,117,249	(67,620,262)	19,600,406

Statement Of Cash Flows

Figures in EUR		Consolidated			Parent company
	Notes	2018	2017	2018	2017
CASH FLOW FROM OPERATING ACTIVITIES:
Net profit/(loss) Adjustments for:		(360,465)	(271,934)	(329,527)	561,037
- Income tax expense/(profit) -Net (gain)/loss from revaluation of	17	9,676	217,360	-	-
investment properties	4,11	689,037	(2,273,649)	-	-
-Expenses/(gain) on disposal of investment property	4,11	(1,195,881)	(126,729)	-	-
- Depreciation and amortization	3	18,288	9,564	-	-
- Interest Income	16	(17,734)	(22,230)	-	-
- Interest expense	16	12,455	117,082	12,455	13,869
-Unrealised foreign exchange (gain) /		48,233	1,324,458	-	-
loss	16
-Other operating expenses	15	-	-	67,900	(835,649)
Decrease/(increase) in trade and other receivables		(102,329)	(170,634)	14,492	(35,998)
(Decrease)/increase in current payables		87,720	(237,876)	(6,610)	(111,414)
Decrease/(increase) in inventories		(157)	(153,869)	-	-
Cash generated from operations		(816,196)	(1,588,457)	(241,291)	(408,155)
Income tax paid		(1,002,358)	(1,194,234)	-	-
Net cash flow from operating activities		(1,818,554)	(2,782,691)	(241,291)	(408,155)
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchases of property plant and equipment		-	(82,095)
Sales of investment property		2,075,924	17,802,078	-	-
Capital expenditure on investment property		(311,467)	(93,107)	-	-
Inter-company loans (granted) / received, net		-	-	194,340	2,500,000
Net cash flow used in investing activities		1,763,456	17,626,876	194,340	2,500,000
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from borrowings		-	100,000	-	100,000
Payment of issue costs		-	-	-	-
Repayment of borrowings		-	(12,100,000)	-	(500,000)
Interest paid	16	(12,455)	(77,320)	(10,260)	(7,667)
Interest received		17,774	1,048	-	-
Net cash from financing activities		5,319	(12,076,272)	(10,260)	(407,667)
Other non-cash expenses/(revenues)		13,773	30,326	-	-
Net change in cash and cash equivalents		(36,007)	2,798,329	(57,211)	1,684,178
Cash and cash equivalents, beginning of period		3.505,384	707,145	1,812,397	128,219
Cash and cash equivalents, end of
period		3,469,377	3,505,384	1,755,186	1,812,397

Notes To The Financial Statements

Note 1 ORGANIZATION AND OPERATIONS

The consolidated financial statements of RomReal Limited and its subsidiaries (collectively the "Group" or the "Company") for the year ended 31 December 2018 were authorised for issue in accordance with a resolution of the directors on the 9 April 2019. Note 4 INVESTMENTS PROPERTIES

These financial statements cover RomReal Ltd. and its subsidiaries. RomReal Ltd. is incorporated in Bermuda whereas the subsidiaries Westhouse Group SRL, Concorde Group SRL, Investate SRL, Rofrench Connection SRL, Westhouse Invest SRL, Terra del Sol SRL are incorporated in Romania. RomReal Ltd and its subsidiaries (the Group) are principally engaged in property investments and development in Romania. During 2018, a process to simplify the organization's structure was undertaken as follows: Westhouse One SRL and West Feriae SRL merged into Westhouse Group SRL, Hars SRL merged into Westhouse Invest SRL and Magic Sail SRL merged into Rofrench SRL. The table below lists all subsidiaries as of reporting date. Note 4 INVESTMENTS PROPERTIES

Also, for reference, single financial statements of the parent company, RomReal Ltd. have been prepared. As a general rule, all comments refer to the consolidated financial statements of the Group, unless specifically mentioned otherwise.

Both consolidated financial statements and those of the parent have been prepared on a going concern basis.

Entity	Country of business	Owner's share	Number of shares
Westhouse Group SRL	Romania	100%	19,392,043
Concorde Group SRL	Romania	100%	222,020
Rofrench Connection SRL	Romania	100%	100
Investate SRL	Romania	100%	351,300
Westhouse Invest SRL	Romania	100%	68,000
Terra del Sol SRL	Romania	100%	15,020

The registered office address of RomReal Ltd is located at Burnaby Building, 16 Burnaby street, Hamilton HM11, Bermuda.

Note 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis for preparation

The consolidated financial statements of the RomReal Group and those of the parent company have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), adopted by the EU. All IFRS standards adopted have effective date 1 January 2018 or earlier. The consolidated financial statements and those of the parent company are presented in euros. Note 4 INVESTMENTS PROPERTIES Note 4 INVESTMENTS PROPERTIES

The financial statements have been prepared on the basis of historical cost except for Investment Properties which is presented at fair value and Assets Held for sale which are measured at the lower of carrying amount before the reclassification and the fair value less cost to sell.

2.2 Consolidation

The consolidated financial statements comprise the financial statements of RomReal Ltd. and its subsidiaries as of 31 December 2018 and 31 December 2017; the Group was established in the autumn 2005. Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases.

The financial statements of the subsidiaries are prepared for the same reporting year as the parent company, using consistent accounting policies. All intra-group balances, transactions, income and expenses and profits and losses resulting from intragroup transactions are eliminated in full.

A subsidiary is a company which the Company controls. The control is typically evidenced if an only if the Company has:

Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee)
Exposure, or rights, to variable returns from its involvement with the investee, and
The ability to use its power over the investee to affect its returns

2.3 Significant accounting judgements, estimates and assumptions

The preparation of the Group's financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the reporting date. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods.

Judgements

In the process of applying the Group's accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognised in the consolidated financial statements.

Classification of property

The Group determines whether a property is classified as investment property, assets held for sale or inventory:

-Investment property comprises land and buildings which are not occupied substantially for use by, or in the operations of, the Group, nor for sale in the ordinary course of business, but are held primarily to earn rental income and capital appreciation.

-Assets held for sale comprises property which is available for immediate sale and for which the sale is highly probable and expected to be substantially completed within a year from the date of classification.

-Inventory comprises property that is held for sale in the ordinary course of business. Principally, this is residential property that the Group develops and intends to sell before or on completion of construction.

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Group based its assumptions and estimates on parameters available when the consolidated financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Group. Such changes are reflected in the assumptions when they occur.

Estimate of fair value of investment properties

Fair values are determined based on an annual evaluation performed by an accredited external, independent valuer that is certified by the Romanian Institute of Valuers. Valuation has been made such, in accordance with the International Valuation Standards, to reflect market value of the properties, namely "The amount for which an asset could be exchanged or a liability settled, between knowledgeable, willing parties, in an arm's length transaction". No account has been taken of any additional prospective purchaser with a special interest. No allowance has been made with regard to any expenses of realization, or for any taxation arising in case of disposal. The determined fair value of the investment properties is most sensitive to the degree to which comparable transactions are available, including the degree of judgement and adjustments necessary to make such market transactions comparable to the investment property being valued. The determination of the fair value of investment property may also require the use of estimates such as future cash flows from assets and discount rates applicable to those assets. In addition, development risks (such as construction and letting risks) are also taken into consideration when determining the fair value of investment properties under construction. These estimates are based on local market conditions existing at reporting date.

The management believes that the valuation assumptions used reflect the best estimate of the investment properties' fair value at the date of the balance sheet. The key assumptions used to determine the fair value of the investment properties are further explained in Note 4.

Estimation of net realisable value for inventory

Inventory is stated at the lower of cost and net realisable value (NRV). NRV for completed inventory property is assessed with reference to market conditions and prices existing at the reporting date. NRV in respect of inventory property under construction is assessed with reference to market prices at the reporting date for similar completed property, less estimated costs to complete construction and less the estimated costs to make the sale.

NRV is determined by the Group based on an annual evaluation performed by an accredited external, independent valuer. However, given the limited liquidity of the market, there is a significant degree of uncertainty in estimating the NRV.

Recognition of the deferred tax asset

When determining the deferred tax liabilities and deferred tax assets, the Group considers, at the balance sheet date, the manner in which it expects to recover or settle the carrying amount of its assets and liabilities. A deferred tax asset is recognised for the carry forward of unused tax losses and unused tax credits to the extent that it is probable that future taxable profit will be available against which the unused tax losses and unused tax credits can be utilised. Where the group considered that it is not probable enough future taxable profits will be

available within the legal time framework of seven years to utilise the tax losses against, the group has not recognised such deferred tax assets.

Capitalised costs

Costs are capitalised when future cash generation is expected. Such costs include the construction costs of the inventories. See note 2.9.

2.4 Property, plant and equipment

Plant and equipment is stated at cost net of accumulated depreciation and/or accumulated impairment losses, if any. Such cost includes the cost of replacing part of such plant and equipment when that cost is incurred if the recognition criteria are met. Depreciation is calculated on a straight-line basis over the useful life of the assets. The carrying values of plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may be impaired.

Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets as follows:

IT equipment	Motor vehicles	Other fixtures and fittings
2-4 years	4 years	3-9 years

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement in the year the asset is derecognised.

The asset's residual values, useful lives and methods of depreciation are reviewed, and adjusted if appropriate, at each financial year end.

2.5 Investment properties

Property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied by the companies in the consolidated Group, is classified as investment property. Investment property comprises freehold land and freehold buildings.

Investment properties are measured initially at cost, including transaction costs.

Subsequent to initial recognition, investment properties are stated at fair value which reflects market conditions at the reporting date. Gains or losses arising from changes in the fair values are included in the income statement in the year in which they arise. Please see 2.3 above for details about fair values estimations.

Investment properties are derecognised when they have been disposed of or permanently withdrawn from use and no future economic benefit is expected from their disposal. The difference between the net disposal proceeds and the carrying amount of the asset is recognised in the income statement in the period of derecognition.

Subsequent expenditure is charged to the asset's carrying amount only when it is probable that future economic benefit associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.

Transfers are made to or from investment property only when there is a change in use. For a transfer from investment property to owner-occupied property, the deemed cost for subsequent accounting is the fair value at the date of change in use. If owner-occupied property becomes an investment property, the Group accounts for such property in accordance with the policy stated under property, plant and equipment up to the date of change in use. Property being constructed for sale in the ordinary course of business, rather than to be held for rental or capital appreciation, is held as inventory property and is measured at the lower of cost and net realisable value (NRV).

If an item of property, plant and equipment becomes an investment property because its use has changed, any differences resulting between the carrying value and the fair value of this item at the date of transfer is recognised in equity as a revaluation of property, plant and equipment under IAS 16. However, if it is a fair value gain, such is recognised in the income statement.

2.6 Cash and cash equivalents

Cash includes cash in hand and at bank. Cash equivalents are short-term liquid investments that can be converted into cash within three months and to a known amount, and which contain insignificant risk elements.

For the purpose of the consolidated cash flow statement, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts.

2.7 Financial assets

Financial assets are classified, at initial recognition, as financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, available-for-sale financial assets, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.

Available for Sale (AFS) financial investments include equity investments and debt securities. Debt

securities in this category are those that are intended to be held for an indefinite period of time and that may be sold in response to needs for liquidity or in response to changes in the market conditions. Interest earned whilst holding AFS financial investments is reported as interest income using the effective interest rate method. The Group evaluates whether the ability and intention to sell its AFS financial assets in the near term is still appropriate.

2.8 Inventories

Property acquired or being constructed for sale in the ordinary course of business, rather than to be held for rental or capital appreciation, is held as inventory and is measured at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business less cost to complete development and selling expenses. The cost of inventory recognised in profit or loss on disposal is determined with reference to the specific costs incurred on the property sold and an allocation of any non-specific costs based on the relative size of the property sold.

2.9 Trade and other receivables

Trade and other receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial measurement, such financial assets are subsequently measured using the effective interest rate method, less an allowance for any uncollectible amounts. This is calculated by taking into account any discount or premium on acquisition and fee or costs that are an integral part of the effective interest rate. Allowance is made when there is objective evidence that the Group will not be able to collect the debts. Bad debts are written off when identified.

2.10 Non-current assets held for sale

Non-current assets are classified as held for sale if their carrying amount will be recovered through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset is available for sale in its immediate condition. The sale should be expected within one year from the date of classification as held for sale.

Immediately before classification as held for sale, the assets are remeasured in accordance with the Group's accounting policies. Thereafter, the assets are recognised at the lower of their carrying amount and fair value less cost to sell. Assets classified as held for sale are not depreciated. Impairment losses on initial classification as held for sale and subsequent gains or losses on remeasurement are included in the income statement. Gains are not recognised in excess of any cumulative impairment loss. In case conditions for classification of noncurrent assets are no longer met, classification as held for sale ceases. Non-current assets that ceases

to be classified as held for sale are remeasured at the lower of their carrying amount before classification as held for sale, adjusted for any depreciation, amortisation or revaluations that would have been recognised had the asset or disposal group not been classified as held for sale, and its recoverable amount at the date of the subsequent decision to sell.

2.11 Provisions

Provisions are recognised when, and only when, the company has a valid liability (legal or constructive) as a result of past events and it can be proven probable (more likely than not) that an outflow of resources embodying economic benefits will be required to settle the obligation, and that the size of the amount can be measured reliably. Provisions are reviewed on each balance sheet date and their level reflects the best estimate of the liability.

2.12 Equity

Transaction costs relating to equity transactions are recognised directly in equity.

2.13 Operating lease contracts – the Group as a lessor

The Group has entered into commercial property leases on its investment property portfolio. The Group has determined, based on an evaluation of the terms and conditions of the arrangements (such as the lease term not constituting a major part of the economic life of the commercial property and the present value of the minimum lease payments not amounting to substantially all of the fair value of the commercial property), that it retains all the significant risks and rewards of ownership of these properties and accounts for the contracts as operating leases.

2.14 Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received, excluding discounts, rebates, and sales taxes or duty. The Group assesses its revenue arrangements against specific criteria in order to determine if it is acting as principal or agent. The Group has concluded that it is acting as a principal in all of its revenue arrangements

Revenue includes rental income, service charges and management charges from properties, and income from property trading.

Rental income: Rental income is recognised over the life of the rental period. Rental income related to rent yielding assets of the Group in respect of properties let to third parties.

Other income: Other income is recognised as it is earned.

Income from sales of investment property plots: Deposits cashed by the Group for the sale of plots are not recognised as revenue until the Group has transferred to the buyer the significant risks and rewards of ownership of the plots.

2.15 Foreign currency translation

The consolidated financial statements are presented in euros, which is the parent company's functional and presentation currency. Each entity in the group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency.

Transactions in foreign currencies are initially recorded by the Group entities at their respective functional currency rates prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency spot rate of exchange ruling at the reporting date. All differences are taken to the income statement. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. On disposal of a foreign operation, the component of other comprehensive income relating to that particular foreign operation is recognised in the income statement.

The functional currency of the Romanian operations is the Romanian New Leu. As at the reporting date, the assets and liabilities of these subsidiaries are translated into the presentation currency of RomReal Ltd. Group (the euro) at the rate of exchange ruling at the balance sheet date and, their income statements are translated at the average exchange rates for each month unless there have been significant fluctuations in the exchange rate over the applicable period, in which case the exchange rate at each transaction date is applied.

The exchange differences arising on the translation are recognised in other comprehensive income.

	December 31,	December 31,
	2018	2017
Closing	4.6639	4.6597

2.16 Taxes

RomReal Ltd. is incorporated in the Islands of Bermuda so is not subject to any income, withholding or capital gains taxes under current Bermuda law. The subsidiaries are registered in Romania and are subject to Romanian taxation rules.

Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the reporting date. Current income tax relating to items recognised directly in equity is recognised in equity and not in profit or loss. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

Deferred income tax is provided using the liability method on temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date. Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax credits and unused tax losses. Deferred income tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carryforward of unused tax credits and unused tax losses can be utilised.

The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised. Unrecognised deferred income tax assets are reassessed at each balance sheet date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

2.17 Loans and Borrowings

Borrowing costs generally are expensed as incurred. Borrowing costs are capitalized if they are directly attributable to the acquisition, construction or production of a qualifying asset. Capitalization of borrowing costs commences when the activities to prepare the asset are in progress and expenditures and borrowing costs are being incurred. Borrowing costs are capitalized until the assets are substantially ready for their intended use.

Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.

Loan is accounted for at fair value, at the time of disbursement, reduced for any transaction costs. After initial recognition, interest bearing loans and

borrowings are subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in the income statement when the liabilities are derecognised as well as through the effective interest rate method amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fee or costs that are an integral part of the effective interest rate. The effective interest rate amortisation is included in finance cost in the income statement.

2.18 Operating segments

For management purposes, the group is organised into a single business unit and consequently has only one operating segment which the management monitors in terms of performance assessment.

2.19 Changes in accounting policies and disclosures

The accounting policies adopted are consistent with those of the previous financial year. The Group applied, for the first time, the amendment below which is effective for annual periods beginning on or after 1 January 2017. The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.

Amendments to IAS 7 Statement of Cash Flows: Disclosure Initiative: the amendments require entities to provide disclosure of changes in their liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes (such as foreign exchange gains or losses). The Group no longer has any financial liabilities hence no disclosure is applicable.

IFRS 9 Financial Instruments

In July 2014, the IASB issued the final version of IFRS 9 that replaces IAS 39 Financial Instruments: Recognition and Measurement and all previous versions of IFRS 9. IFRS 9 is effective for annual periods beginning on or after 1 January 2018, with early application permitted. Except for hedge accounting, retrospective application is required, but the provision of comparative information is not compulsory. For hedge accounting, the requirements are generally applied prospectively, with some limited exceptions. The Group has adopted the new standard and will not restate comparative information. Overall, the Group did not have an impact on its statement of financial position and equity

(a) Classification and measurement

The Group did not witness an impact on its balance sheet or equity on applying the classification and measurement requirements of IFRS 9 and it expects to continue measuring at fair value or amortized cost respectively all financial assets. Loans as well as trade receivables are held to collect contractual cash flows and are expected to give rise to cash flows representing solely payments of principal and interest. The Group analysed the contractual cash flow characteristics of those instruments and concluded that they meet the criteria for amortised cost measurement under IFRS 9. Therefore, reclassification for these instruments is not required. (b) Impairment

IFRS 9 requires the Group to record expected credit losses on all of its loans and trade receivables, either ona 12-month or lifetime basis. The Group applies the simplified approach and records lifetime expected losses on all receivables. The Group has determined that, due to the short-term nature of its receivables, there will be no impact in the loss allowance

(c) Hedge accounting

The Group does not hold any hedging contracts, therefore, applying the hedging requirements of IFRS 9 will not an impact on Group's financial statements.

IFRS 15 Revenue from Contracts with Customers

IFRS 15 was issued in May 2014 and establishes a new five-step model that will apply to revenue arising from contracts with customers. Under IFRS 15 revenue is recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer.

The principles in IFRS 15 provide a more structured approach to measuring and recognising revenue.

The new revenue standard is applicable to all entities and will supersede all current revenue recognition requirements under IFRS. Either a full or modified retrospective application is required for annual periods beginning on or after 1 January 2018. The Group has assessed the impact of IFRS 15 and no material impact was determined: sometimes the Group receives long-term advances from its customers for the sales of plots. They are presented as part of Deferred revenue. Under IFRS 15, the Group must determine whether there is a significant financing component in its contracts. However, the Group decided to use the practical expedient provided in IFRS 15, and will not adjust the promised amount of the consideration for the effects of a significant financing components in the contracts, where the Group expects, at contract inception, that the period between the Group transfer of a promised good to a customer and when the customer pays for that good will be one year or less. Therefore, for short-term advances, the Group will not account for a financing component even if it is significant.

Amendments to IAS 40: Transfers of Investment Property

The amendments clarify when an entity should transfer property, including property under construction or development into, or out of investment property. The amendments state that a change in use occurs when the property meets, or ceases to meet, the definition of investment property and there is evidence of the change in use. A mere change in management's intentions for the use of a

property does not provide evidence of a change in use. Entities should apply the amendments prospectively to changes in use that occur on or after the beginning of the annual reporting period in which the entity first applies the amendments. An entity should reassess the classification of property held at that date and, if applicable, reclassify property to reflect the conditions that exist at that date. Retrospective application in accordance with IAS 8 is only permitted if it is possible without the use of hindsight. The amendments are effective for annual periods beginning on or after 1 January 2018. The Group's current practice is in line with the clarifications issued and the Group did not witness any effect on its consolidated financial statements.

2.20 Standards issued but not yet effective

The standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Group's financial statements are disclosed below. The Group intends to adopt these standards, if applicable, when they become effective.

IFRS 16 Leases

IFRS 16 was issued in January 2016 and it replaces IAS 17, IFRIC 4, SIC-15 and SIC-27.

IFRS 16 sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for all leases under a single on-balance sheet model similar to the accounting for finance leases under IAS 17. Lessor accounting under IFRS 16 is substantially unchanged from today's accounting under IAS 17. Lessors will continue to classify all leases using the same classification principle as in IAS 17 and distinguish between two types of leases: operating and finance leases. IFRS 16 also requires lessees and lessors to make more extensive disclosures than under IAS 17. IFRS 16 is effective for annual periods beginning on or after 1 January 2019. Considering the Group mainly acts as a lessor and the limited amounts and number of leases, the Group estimates the effects of adopting IFRS 16 will be immaterial to its balance sheet (current lease cost is circa EUR 6,800 p.a.).

IFRIC Interpretation 23 Uncertainty over Income Tax Treatment

The Interpretation addresses the accounting for income taxes when tax treatments involve uncertainty that affects the application of IAS 12 and does not apply to taxes or levies outside the scope of IAS 12, nor does it specifically include requirements relating to interest and penalties associated with uncertain tax treatments.

The Interpretation specifically addresses the following:

• Whether an entity considers uncertain tax treatments separately

• The assumptions an entity makes about the examination of tax treatments by taxation authorities

Figures in EUR -

• How an entity determines taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates

• How an entity considers changes in facts and circumstances

An entity must determine whether to consider each uncertain tax treatment separately or together with

Note 3 PROPERTY, PLANT AND EQUIPMENT

one or more other uncertain tax treatments. The approach that better predicts the resolution of the uncertainty should be followed. The interpretation is effective for annual reporting periods beginning on or after 1 January 2019, but certain transition reliefs are available. The Group will apply the interpretation from its effective date.

Consolidated
Note 4	IT equipment	Other fixtures INVESTMENTS PROPERTIES and fittings	Motor vehicles	Total
Gross book value as at
December 31, 2017	52,755	262,671	87,156	402,582
Note 4 Additions in period	-	INVESTMENTS PROPERTIES -	-	-
Disposals in period	-	-	(30,085)	(30,085)
Translation difference	(48)	(234)	159	(123)
Gross book value as at
December 31, 2018	52,708	262,437	57,230	372,375
Accumulated Depreciation as at
December 31, 2017	(51,325)	(220,792)	(40,412)	(312,529)
Charge for the period	(1,122)	(7,036)	(10,130)	(18,288)
Disposals in the period	-	-	29,072	29,072
Translation difference	48	14,335	3	14,386
Accumulated Depreciation as at December 31, 2018	(52,399)	(213,499)	(21,467)	(287,366)
Net book Value as at December 31, 2017	1,430	41,879	46,744	90,053
Net book Value as at December 31, 2018	309	48,398	35,763	85,009
Depreciation method Depreciation period	Linear	Linear	Linear
(Years)	2-4	3-9	4

There were no impairment charges in 2018 and 2017.

Note 4 INVESTMENTS PROPERTIES

Figures in EUR - Consolidated
	2018	2017
Note 4 INVESTMENTS PROPERTIES
Opening balance as at January 1	13,626,714	16,685,822
Note 4 INVESTMENTS PROPERTIES Additions in period	312,467	200,717
Sales	(923,506)	(3,173,777)
Transfers to Assets Held for Sale (note 11)	(2,200,000)	(436,000)
Fair value adjustment during the period	(675,402)	728,717
Translation differences	81,904	(378,765)

Carrying amount as at December 31	10,222,177	13,626,714

Investment properties consist of land and buildings at various locations in Romania. The fair value of investment property as at 31 December 2018 is based on a valuation by an independent valuer who holds a recognised and relevant professional qualification in Romania and who has recent experience in the location and categories of the investment property being valued. Additionally, for those properties where pre-sale agreements were in place, the sale value included in the respective sale agreements has been used for the purposes of the valuation.

Valuation has been made such, in accordance with the International Valuation Standards, to reflect market value of the properties, namely "The amount for which an asset could be exchanged or a liability settled, between knowledgeable, willing parties, in an arm's length transaction". No account has been taken of any additional prospective purchaser with a special interest. No allowance has been made with regard to any expenses of realization, or for any taxation arising in case of disposal.

With regard to the valuation methodology, two approaches were used: (i) the direct market comparison approach and (ii) the residual approach. Both approaches were utilised, and the degree to which either, or both, are relevant depended upon the nature of the specific land plot and the availability of information. When data is available, the market comparison approach is the most direct and systematic approach as it recognizes that property prices are determined by the market. Valuation by comparison is essentially objective since it is based on an analysis of the price achieved or offered for sites with broadly similar development characteristics with the land being valued. The residual approach estimates the land value considering the value of the proposed project upon completion and the deduction of the development costs, including the developer's profit. This method requires the input of a large amount of data and involves a large number of assumptions. Even small changes in any of the inputs can cumulatively lead to a large change in the land value. Thus, the application of this method requires a high level of expertise, being mainly used as an alternative approach when there are no or limited comparables to apply the direct market comparison approach. In line with the market practice, the valuation of assets is determined and quoted in EUR. While the basis for preparation of accounting records is RON the EUR/RON exchange rate movements result into currency differences which are reflected as an adjustment to the carrying value of the investment property.

Taking into account the characteristics of the Group's properties, as well as the features of the local market, the market comparison approach was considered in these circumstances as the most suitable in estimating the market value of the properties. However, there are limitations to this approach as there was a limited number of transactions in 2018 and 2017. For each property three comparables were selected and the following elements of comparison were considered: price, real property rights transferred, financing terms, conditions of sale, expenditures made immediately after the purchase, location, area, visibility and frontage, utilities, access, public transportation, existing buildings, existing potential building permitting and best use. Land price varies depending on the size of the plot. In case of development sites, the larger the plot, the lower the price per square meter. In terms of size, based on market evidence, land plots were grouped in several intervals, as follows: smaller than 1,000 sq m, between 1,000 and 5,000 sq m, between 5,000 and 10,000 sq m, between 10,000 and 50,000 sq m and larger than 50,000 sq m. If comparison was made with sites that are in different size intervals, a 5% adjustment was applied.

The properties have been inspected along with the surrounding neighbourhood and location from which comparable data was drawn where possible. The limited liquidity of the market has resulted in comparables being mainly based on the most recent asking prices. In such cases, several adjustments ranging on average between 10- 30% were applied to the asking prices to adjust for reduced liquidity, difference in size, accessibility, permitting, etc.

Within the fair value hierarchy, based on the lowest level input that is significant to the fair value measurement the above described valuation of investment properties is categorised as Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable. In arriving at their estimates of market values the valuators used their market knowledge and professional judgement and did not rely solely on historical transactional comparables. In these circumstances, there was a greater degree of uncertainty than which exists in a more active market in estimating the market values of investment property. Furthermore, given the rapid change on the market, significant alterations of value can be encountered within short periods of time. Unforeseen macroeconomic or political crises can have a sudden and dramatic effect on

markets. This could manifest itself by either panic buying or selling, or simply disinclination to trade until it is clear how prices in the market will be affected in the longer term. There have been no transfers between Levels in the hierarchy as compared to the previous reporting period.

Disposals to investment properties during 2018 relate to the sale of several plots from the land bank portfolio as follows: 15,000 sqm in Carrefour plot, Hospital plot, a plot of land in the town of Ovidiu, the remaining plot of Mamaia North, all with a total carrying value of EUR 8,022,051. The total selling price was higher than the carrying amount resulting in a profit of EUR 1,195,881.

Note 5 INVENTORIES

Figures in EUR - Consolidated

Note 6 INVENTORIES	2018	2017
Note 6 INVENTORIES Opening balance	2,689,652	2,535,783
Additions	16,812	40,712
Sales	-	(13,215)
Note 4 INVESTMENTS PROPERTIES Change in provisions	(200,270)	176,628
F/X reserve	(1,976)	(50,255)
Note 4 INVESTMENTS PROPERTIES Balance as at December 31	2,504,218	2,689,652

Inventories consist of the development projects of the Group. These are carried at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business less estimated costs of completion and the estimated costs to make the sale. At year-end 2018, inventories relate mainly to the Oasis project (EUR 2.5 million). The cost for the Oasis project is EUR 5.5 million. The net realisable value test in 2018 resulted in an additional provision.

Within the fair value hierarchy, based on the lowest level input that is significant to the fair value measurement the above described estimate of net realisable value is categorised as Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable. In arriving at their estimates of market values the valuators used their market knowledge and professional judgement. The net realisable value was assessed with reference to market prices at the reporting date for similar completed property, less estimated costs to complete construction and less the estimated costs to make the sale. There have been no transfers between Levels in the hierarchy as compared to the previous reporting period.

Note 6 TRADE RECEIVABLES AND OTHER RECEIVABLES
Figures in EUR	Consolidated		Parent company
Note 6 INVENTORIES	2018	2017	2018	2017

Note 6 Trade receivables INVENTORIES	1,049,865	73,255	-	-
VAT receivable	260,520	174,337	-	-
Other prepayments	28,701	42,564	43,393	57,884
Note 4 INVESTMENTS PROPERTIES Other short-term receivables	78,417	77,033
Total	1,417,503	367,366	43,393	57,884
Note 4 INVESTMENTS PROPERTIES

Trade receivables include mainly receivables related to the sales of plots for which an instalments payment schedule has been agreed by the Group and other receivables resulting in the ordinary course of business in respect of the lease agreements for some of the rent yielding investment properties and the rest in sundry debtors. As of 31 December, the analysis of trade receivables that are past due is set out below:

	Total	Neither past due nor impaired	<30 days	30-60 days	Past due but not impaired 60-90 days 90-120 days		>120 days
2018	1,417,503	1,373,707	1,656	42,140	-	-	-
2017	367,366	319,085	4,447	43,404	-	-	-

Note 7		SHARE CAPITAL AND PAID-IN CAPITAL
Figures in EUR		Number of shares	Share capital	Contributed Surplus	Paid in share capital
Note 6	INVENTORIES
Total share capital
Note 6 January 1, 2017	INVENTORIES	41,367,783	103,419	87,117,249	87,220,668
New issues in the period		-	-	-	-
	Reduction in par value of shares	-	-	-	-
	Total share capital December 31,
Note 4 2017		INVESTMENTS PROPERTIES 41,367,783	103,419	87,117,249	87,220,668
New issues in the period		-	-	-	-
Note 4	Reduction in par value of shares	- INVESTMENTS PROPERTIES	-	-	-
Total share capital
December 31, 2018		41,367,783	103,419	87,117,249	87,220,668

There were no changes to the share capital or the number of shares during 2018 and 2017.

Shareholders rights

There are no restrictions on voting rights or the transferability of shares in RomReal Ltd. The below summarised the largest shareholder with shareholdings in excess of 1% as of 29 March 2019

Ranking	Name	Holding	Percentage
1	SIX SIS AG	10,336,054	24.99%
2	GRØNSKAG, KJETIL	4,166,899	10.07%
3	SAGA EIENDOM AS	3,262,976	7.89%
4	THORKILDSEN DØDSBO, KAY TØNNES	3,071,656	7.43%
5	THORKILDSEN, WENCHE SYNNØVE	2,344,100	5.67%
6	AUSTBØ, EDVIN	2,108,500	5.10%
7	Danske Bank A/S	1,452,995	3.51%
8	ENERGI INVEST A/S	1,122,941	2.71%
9	ORAKEL AS	1,101,000	2.66%
10	SPAR KAPITAL INVESTOR AS	940,236	2.27%
11	THORKILDSEN INVEST AS	829,478	2.01%
12	PERSSON, ARILD	718,000	1.74%
13	GRØNLAND, STEINAR	712,675	1.72%
14	HOEN, ANDERS MYSSEN	689,557	1.67%
15	Skandinaviska Enskilda Banken S.A.	628,832	1.52%
16	JONAS BJERG PENSION PLAN, NTS TRUSTEES LTD	558,306	1.35%

1.06% 0.98%


1.14%
1.16%

(1) This is the Top 20 Shareholder list as per 29 March 2019.

(2) The total issued number of shares issued at 29 March 2019 was 41,367,783.

(3) Thorkildsen Invest AS is a Company controlled by RomReal Kay Thorkildsen family.

(4) Chairman Kjetil Grønskag owns directly and indirectly 4,414,629 shares corresponding to 111%.

(5) The above list is the 20 largest shareholders according to the VPS print out; please note that shareholders might use different accounts and account names, adding to their total holding.

Note 8 RETAINED EARNINGS

Movements in retained earnings for the Group can be analysed as follows:

Note 6 INVENTORIES Figures in EUR Note 6 INVENTORIES	Consolidated	Parent Company
Retained earnings as of December 31, 2017 Net profit in the period	(69,449,812) (360,465)	(67,290,736) (329,527)
Note 4 INVESTMENTS PROPERTIES Retained earnings as of December 31, 2018	(69,810,278)	(67,620,262)

No dividends will be distributed by the Group in respect of 2018. Note 4 INVESTMENTS PROPERTIES

Note 9 CASH AND CASH EQUIVALENTS

Cash and cash equivalents amount to EUR 3,469,377 at 31 December 2018 (EUR 3,505,384 at 31 December 2017). Note 6 INVENTORIES

At parent company level, cash and cash equivalents amount to EUR 1,755,186 at 31 December 2018 (EUR 1,812,397 at 31 December 2017). There are no restrictions on the cash balances. Note 6 INVENTORIES

Note 10 TRADE AND OTHER PAYABLES

Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method. Note 6 INVENTORIES Note 4 INVESTMENTS PROPERTIES Note 4 INVESTMENTS PROPERTIES

Figures in EUR	Consolidated		Parent Company
Note 6 INVENTORIES	2018	2017	2018	2017
Trade payables	75,944	59,475	20,251	-
Employee taxes	2,940	8,353	-	-
Other payables Note 4 INVESTMENTS PROPERTIES	45,173	49,666	42,206	48,816

Trade payables	124,057	117,494	62,457	48,816
Note 4 INVESTMENTS PROPERTIES

At 31 December 2018, the balance of EUR 124,057 Other payables for the group as well as the balance of Other payables of EUR 62,457 for the parent company, include EUR 24,600 accrued expenses related to the 2018 audit fees.

Note 11 ASSETS HELD FOR SALE

Figures in EUR - Consolidated

Note 6 INVENTORIES	2018	2017

Opening balance as at January 1 Note 6 INVENTORIES	7,102,737	13,565,878
Sales	(7,098,545)	(8,220,256)
Transfers from investment Properties (note 4)	2,200,000	436,000
Fair value adjustment during the period	(13,635)	1,534,833
Translation differences Note 4 INVESTMENTS PROPERTIES	9,433	(213,718)
Carrying amount as at December 31 Note 4 INVESTMENTS PROPERTIES	2,200,000	7,102,737

The Group considers the completion of the transactions highly probable while the assets are available for immediate sale in its present condition.

Note 12 OPERATING INCOME

Figures in EUR - Consolidated

Note 6 INVENTORIES		2018	2017
Rent revenue		174,813	195,875
Note 6 INVENTORIES Sales of investment property	4	9,217,932	11,507,307
Cost of sales- investment property	4	(8,022,051)	(11,394,033)

Note 4 INVESTMENTS PROPERTIES Total operating income		1,370,694	309,150

Balada market is the main rent generating property. Total rent generated during the year amounted to EUR 174,813(2017: EUR 195,875). Future minimum rentals receivable under non-cancellable operating leases as at 31 December are, as follows: Note 4 INVESTMENTS PROPERTIES

Figures in EUR - Consolidated

	2018	2017
Within 1 year	174,813	195,875
After 1 year	-	-

Total operating income	174,813	195,875

The Sales of investment property during 2018 relate to the sale of several plots of land the Group owned: part of the Mamaia North plot in Constanta, Hospital plot in Bucharest and some smaller plots in north Constanta.

Note 13 PAYROLL EXPENSES AND NUMBER OF EMPLOYEES

The key management (which includes the executive officer of the Group and its directors) received remuneration in amount of EUR 18,500 (2017: EUR 18,500). Mr Kjetil Grønskag's remuneration as CEO of the Group has been assimilated to the Management Support Agreement (see note 20). Note 6 INVENTORIES Note 6 INVENTORIES

The Directors are shown below together with their interest in the shares of the Company per 31 December 20178 and per 31 December 2017:

Note 4	INVESTMENTS PROPERTIES
		31 December 2018	31 December 2017
Kjetil Grønskag	Appointed November 2006	4,414,629	4,288,179
Note 4 Heidi Sørensen Austbø	INVESTMENTS PROPERTIES Appointed April 2017	Nil	Nil
Bendt Thorkildsen	Appointed April 2016	6,245,234	6,245,234
Lacramioara Isarescu	Appointed April 2014	Nil	Nil
Adrian Cristea	CEO - Appointed October 2015	Nil	Nil
TOTAL		10,659,863	10,533,413

The average number of employees in Westhouse Group during 2018 was 5. Payroll expenses related to these employees amounted to EUR 178,525 during 2018 (2017: 165,007). All compensations offered by the Group are short term benefits. The Group does not offer a pension plan or other long-term employee benefits to its employees as of December 31, nor are there any post-employment benefits.

Note 14 GENERAL AND ADMINISTRATIVE EXPENSES

Note 6 INVENTORIES

Figures in EUR	Consolidated		Parent company
	2018	2017	2018	2017

Management fee	(102,050)	(99,500)	(102,050)	(99,500)
Legal expenses	(82,392)	(386,044)	-	-
Rent expenses	(6,806)	(8,105)	-	-
Travel expenses	(3,605)	(4,133)	(3,280)	(3,596)
Professional services	(74,896)	(84,970)	(87,020)	(84,970)
Land and other taxes	(91,074)	(64,198)	-	-
Other expenses	(265,526)	(568,124)	(41,826)	(41,865)
Total	(626,349)	(1,215,074)	(234,176)	(239,228)

Legal expenses during 2018 include one off fees related to the legal services in connection with the sales of plots entered into during 2018. For the parent company, Professional Services include EUR 33,954 accrued expenses related to the 2018 audit fees.

Note 15 OTHER OPERATING (LOSS) / GAINS

For RomReal (the parent company) "Other operating (loss)/gains" of EUR 67,900 million gain in 2018 (2017: EUR 0.51 million gain) relates mainly to change in the fair value of the investment in subsidiaries). Note 6 INVENTORIES

The fair value of investment property as at 31 December 2007 is based on a valuation by an independent valuer. Note 16 FINANCIAL INCOME AND EXPENSE

Note 6 INVENTORIES Figures in EUR	Consolidated		Parent company
Note 6 INVENTORIES	2018	2017	2018	2017
Interest income from subsidiaries Note 4 INVESTMENTS PROPERTIES	-	-	2	401,862
Note 6 INVENTORIES Interest income from banks	17,744	22,230	-	-
Note 4 Total financial income INVESTMENTS PROPERTIES	17,744	22,230	2	401,862
Interest expense and other bank fees	(12,455)	(117,082)	(12,455)	(13,869)
Note 4 INVESTMENTS PROPERTIES Foreign exchange gain	1,504,807	2,735,172
Foreign exchange loss Note 4 INVESTMENTS PROPERTIES	(1,553,040)	(4,059,630)	-	-
Total Financial expense	(60,688)	(1,441,540)	(12,453)	(13,869)

During 2018 the RON has fluctuated against the EUR but at year end was only 0.09% weaker against the EUR. All intercompany loans taken by the Romanian subsidiaries from RomReal Ltd were revalued at the closing rate.

The interest expense in 2017 relates to the interest costs in respect of the Alpha Bank loan and the shareholder loan (please see note 21).

Note 17 TAXATION

RomReal Ltd. is registered in Bermuda and is consequently not subject to taxation. The subsidiaries are subject to taxation in Romania. The applicable tax rate in Romania is 16 %. The applicable tax rate is the same whether any profits are paid out as dividends or retained in the company. There have not been any changes to the applicable tax rates in 2018. Note 6 INVENTORIES Note 6 INVENTORIES

Current income tax expense for 2018 was EUR 1,002,813 (2017: 1,195,130) and it is mainly in respect of the capital gains made on the sale of the part of the Mamaia North plot as well as the taxable profits resulting from Note 4 INVESTMENTS PROPERTIES

the renting of the Balada market and Investate. The major components of the income tax expense for the periods ended December 31, 2018 and December 31, 2017 are:

Figures in EUR - Consolidated

	2018	2017

Current income tax charge	1,002,813	1,195,130
Deferred income tax movement
in the period	(993,137)	(977,771)
Income tax expense/(income)
in the consolidated income statement	9,676	217,360

The table below shows the composition of the deferred tax assets and deferred tax liability in the balance sheet:

Figures in EUR - Consolidated
	2018	2017
Losses carried forward resulting in deferred tax asset	121,126	121,235
Fair value adjustments of Investment property resulting in	99,563	1,091,468
deferred tax liability

The reduction in the deferred tax liability during the year is related to the conversion into actual sales of the conditional sales entered into by the Group for its Mamaia North plot.

The following table shows the composition of the deferred tax asset per each company:

	2018	2017
Westhouse SRL	121,126	121,235
TOTAL	121,126	121,235

The deferred tax asset relates to the following:

	2018	2017
Carried forward fiscal losses	121,126	121,235
TOTAL	121,126	121,235

The following table shows the composition of the deferred tax liability per each company:

	2018	2017
Concorde SRL	89,601	102,007
Terra del Sol SRL	-	977,311
Investate SRL	9,962	12,150
TOTAL	99,563	1,091,468

The deferred tax liability relates to the following:

	2018	2017
Revaluation of investment properties to fair value	99,563	1,091,468
TOTAL	99,563	1,091,468

The Group measures the deferred tax liabilities and deferred tax assets in order to reflect the tax consequences that would follow from the manner in which the entity expects, at the balance sheet date, to recover or settle the carrying amount of its assets and liabilities. Consequently, where the group had transactions which are not expected to carry a deferred tax liability or the deferred tax asset, the group has not recognised such deferred tax. The Group used its judgement to determine whether there will be enough taxable income in the foreseeable future to offset the deferred tax asset against. Where there was not enough conclusive evidence to support that, such deferred tax asset was not recognised/written off.

The following shows a numerical reconciliation between the tax expense and the accounting profit.

	2018	2017
Accounting taxable profits/(loss)	(315,529)	113,036
Tax at applicable rate of 16%	50,485	(18,086)
Tax effect of (expenses)/income that are not (deductible)/taxable in determining taxable profit	(60,160)	(199,274)
Tax (expense)/income	(9,676)	(217,360)

The Company has not recognised deferred tax asset in respect of the carried forward tax losses for which there was not enough evidence to support future taxable income to offset them against. The Group can carry forward the tax losses for a period of 7 years on a rolling basis.

Note 18 DEFERRED INCOME

Deferred income at the end of 2018 included mainly the payments related to improvements of down payment in respect of the sale agreement regarding the Balada Market plot. Note 6 INVENTORIES

Note 19 TRANSACTIONS WITH RELATED PARTIES Note 6 INVENTORIES

Transactions with subsidiary

RomReal Ltd. has granted its subsidiary Westhouse Group SRL loans amounting to a total of EUR 49,886,366, interest to 31 December 2018 included. Intergroup loans are for a term of 11 months. The loans are interest free. The loan has been provisioned in the stand-alone financial statements of the parent. The loans shall be repaid out of based on availability of cash flows resulting from the monetization of the land bank assets. Note 6 INVENTORIES Note 6 INVENTORIES Note 4 INVESTMENTS PROPERTIES Note 4 INVESTMENTS PROPERTIES

Transactions with other related parties Note 4 INVESTMENTS PROPERTIES

On 30 March 2007, the group entered into an amended Management Support Agreement with North Bridge Group Ltd ("North Bridge Group"). North Bridge Group is controlled by the four shareholders of North Bridge, which include Mr. Kjetil Grønskag. Pursuant to the Management Support Agreement, North Bridge Group is retained as an advisor to the group, and will be responsible for making available resources to support the group in continuing to develop its real estate portfolio, including North Bridge Group's principals and recommending to the group specialists, including secondees where appropriate. For these services North Bridge Group received an annual fee of EUR 64,000 during the year ended 31 December 2018 (2017: EUR 64,000). In addition, North Bridge Group is entitled to reimbursement of travelling and other reasonable out of pocket expenses incurred by it with the prior agreement of the group's Board of Directors. The terms of the Management Support Agreement were renewed on 10 October 2010 and the level of fees was revised to EUR 64,000 per annum, effective January 2012. The group may engage the manager or its associates to provide other services outside the scope of this agreement. Such services will be subject to a separate mandate agreement. Note 4 INVESTMENTS PROPERTIES

The Group's Investors Relation responsible during 2018, Mr. Harris Palaondas, was seconded to the group from North Bridge Group pursuant to a secondment letter dated 01 November 2008. Following the above, the group's board approved a fee payable to North Bridge of EUR 16,000 per year plus reasonable out-of-pocket expenses for

travelling. During the period North Bridge charged EUR 16,000 (2017: EUR 16,000). The outstanding balance due to North Bridge at 31 December 2018 was nil (2017: EUR 0).

The Group's Chairman Kjetil Gronskag, holds an executive position as Chief Executive of RomReal following Board approval on the 26 May 2016 for which he is entitled to a yearly fee of EUR 35,500 and a 0.7% commission on the realised sales of assets.

All transactions with related parties have been conducted following the principle of arm's length.

Note 20 FINANCIAL RISK

The Group's principal financial liabilities comprise trade and other payables.

Note 4 INVESTMENTS PROPERTIES

Fair value Note 6 INVENTORIES

The fair value of the financial assets and liabilities are the amounts at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Cash and short-term deposits, trade receivables, trade payables, and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments. The fair value of borrowings is estimated by discounting future cash flows using rates currently available for debt or similar terms and remaining maturities. The fair value approximates their carrying values gross of unamortised transaction costs. Note 6 INVENTORIES Note 4 INVESTMENTS PROPERTIES

The fair value of the Group's financial assets and liabilities is equal to the carrying amount.

Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Group is exposed to credit risk from its operating activities, from its financial investments and from its deposits with banks.

The carrying amounts of the Group's cash and cash equivalents, other current assets and receivables represented the maximum exposure to credit risk in relation to financial assets. Cash is placed with reputable banks.

As of 31 December 2018, no trade and other receivables were impaired (see note 6).

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. At 31 December 2018, the Group's had no exposure bearing the risk of changes in market interest rates

Liquidity risk

The Group's objective is to maintain a balance between continuity of funding and flexibility through the use of bank deposits and loans. The objective of the Group is to ensure that sufficient cash is maintained to cover the operating costs until the market recovers. Equally, the Group is actively looking to divest some of smaller plots in order to strengthen its cash position. The table below summarises the maturity profile of the Group's financial liabilities based on contractual undiscounted payments.

Year ended 31 December 2018	On demand	Less than 3 months	3 to 12 months	1 to 5 years	> 5 years	Total
Interest bearing loans	-	-	-	-	-	-
Shareholder loan	-	-	-	-	-	-
Other payables	-	124,057	-	-	-	124,057
Deferred income	-	192,782	-	-	-	192,782
Tax payable	-	401	-	-	-	401
Total	-	317,240	-	-	-	317,240

Year ended 31 December 2017	On demand	Less than 3 months	3 to 12 months	1 to 5 years	> 5 years	Total
Interest bearing loans	-	-	-	-	-	-
Shareholder loan	-	-	-	-	-	-
Other payables	-	119,899	-	-	-	119,899
Deferred income*	-	-	6,363,353	-	-	6,363,353
Tax payable	-	895	-	-	-	-
Total	-	120,794	6,363,353	-	-	6,484,147

*The Deferred income will not result in any payment. The amounts will be reversed and recognised as revenue once the sale for which such advance payments have been made will be finalised.

The changes in liabilities arising from financial assets are as follows:

Year ended 31 December 2018	1 January	Cash inflows	Cash outflows	31 December
Interest bearing loans	-	-	-	-
Shareholder loan	-	-	-	-
Total	-	-	-	-

Year ended 31 December 2017	1 January	Cash inflows	Cash outflows	31 December
Interest bearing loans	11,600,000		(11,600,000)	-
Shareholder loan	400,000	100,000	(500,000)	-
Total	12,000,000	100,000	(12,100,000)	-

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Group is subject to foreign exchange risk as the Romanian subsidiaries have business activities denominated in RON, which is different from the currency of the parent company and the one in which loans are denominated, EUR. All investment properties are owned by the Romanian subsidiaries and thus denominated in RON. However, it is the market practice that investment properties are valued with reference to EUR denominated values, thus minimising the foreign exchange risk of the Group. From an operational point of view, the Group's policy is to mitigate these effects by retaining as much cash in EUR as possible and also by denominating receivables in EUR. The Group's interest-bearing loans are also denominated in EUR. The Group perceives the risk as moderate on a Group-wide basis and has not entered into any foreign exchange forward contracts to hedge against foreign currency fluctuation. A 10% depreciation of the RON against EUR, with all other variables held constant, would result in a EUR 2 million negative impact in the profit before tax and a EUR 0.2 million decrease in equity. The impact on the Group's profit before tax is due to changes in the fair value of monetary assets and liabilities of the subsidiaries before they get translated into the functional currency of the Group. The impact on the Group's equity is due to the translation reserves.

Capital management

The primary objective of the Group's capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximise shareholder value. The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions.

The Group monitors capital primarily using a loan to value ratio, which is calculated as the amount of outstanding debt divided by the valuation of the investment property portfolio. The Group's policy is to keep a low average loan to value ratio of the Group and in any event not higher than 70%. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Group complies with its target loan to value ratio and no changes were made in the objectives, policies or processes during the years ended 31 December 2018 and 31 December 2017. In 2017, the Group repaid entirely the asset finance facility from Alpha Bank Romania.

Note 21 CONTINGENT LIABILITIES

As reported in mid-2018, during the latest routine tax audit performed at the level of RomReal Romanian subsidiary Westhouse Group, covering the period 1 January 2011 – 31 December 2016, the tax authorities reassessed the loans granted by RomReal Ltd. to Westhouse Group as contribution to share capital instead of inter-Company loans. In this respect, the Company received the tax audit report ("Tax Report") and the corresponding tax assessment decision ("Tax Decision"), whereby the tax authorities imposed an extraordinary tax-bill on the Company, in excess of EUR 1.7m (including penalties), as profit tax for the period covered by the tax audit. The Company, with support from external advisors is pursuing all legal means for challenging the effects of such reassessment, in order to cancel the additional tax liabilities. On 18th July 2018 the Company obtained the suspension of the Tax Decision, until a binding Court decision regarding the contestation is obtained. The Constanta Court of Appeal ordered that no liens to the bank accounts and/or assets belonging to Westhouse Group should take place in the meantime. As of December 31, 2018, the Company assesses the possible obligation as contingent and has therefore not booked any provision in this respect. Note 6 INVENTORIES Note 6 INVENTORIES Note 4 INVESTMENTS PROPERTIES Note 4 INVESTMENTS PROPERTIES

Note 22 GUARANTEE OBLIGATIONS

The Group has not issued any guarantees on behalf of external parties.

Note 23 EARNINGS PER SHARE

Note 6 INVENTORIES

Consolidated		Parent Company
2018	2017	2018	2017
(360,465)	(271,934)	(329,527)	561,037
41,367,782	41,367,782	41,367,782	41,367,782
41,367,782	41,367,782	41,367,782	41,367,782
(0.01)	(0.01)	(0.01)	0.01
(0.01) INVESTMENTS PROPERTIES	(0.01)	(0.01)	0.01
	INVESTMENTS PROPERTIES INVESTMENTS PROPERTIES

Note 4 INVESTMENTS PROPERTIES Note 24 SUBSEQUENT EVENTS

Note 4 INVESTMENTS PROPERTIES

Note 6 INVENTORIES

There were no subsequent events requiring disclosure or adjustment of the reported accounts.

pursuant to Section 5-5 of the Securities Trading Act

We hereby confirm that the annual accounts for the Group and the Company for 2017 to the best of our knowledge have been prepared in accordance with applicable accounting standards and give a true and fair view of the assets, liabilities, financial position and profit t or loss of the Group and the Company taken as a whole.

The Directors' report gives a true and fair view of the development and performance of the business and the position of the Group and the Company, as well as a description of the principal risks and uncertainties facing the Group.

Bermuda, 09.04.2019 The Board of Directors of RomReal Ltd

.......................................... .......................................... Kjetil Grønskag (Chairman) Bendt Thorkildsen

........................................... ........................................... Heidi Sorensen (Director) Lacramioara Isarescu (Director)

Company Addresses

Westhouse Group srl	Westhouse Group SRL, 54 Cuza-Voda Street, ap. 3, ground floor, Constanta, Romania, 900682
RomReal Ltd	Burnaby Building, 16 Burnaby Street, Hamilton, HM11, Bermuda
Auditors	Ernst & Young SRL, Premium Plaza Building, 3rd Floor, 63-69 Dr. Iacob Felix Street, Sector 1, 011033, Bucharest, Romania
Auditors	Ernst & Young AS, Thormøhlens gate 53 D, PO Box 6163, Postterminalen, Bergen, N5892, Norway
Legal Advisors	Wakefield Quin Limited, Victoria Place, 31 Victoria Street, Hamilton, HM10, Bermuda
Bank in Norway	Nordea Bank Norge ASA, Olav Tryggvasons gt. 39/4, 7005 Trondheim, Norway
Bank in Romania	Alpha Bank Constanta, 175 Mamaia Boulevard, 900540, Constanta, Romania
IR Harris Palaondas	+40 731123037 [email protected]

For further information on RomReal, including presentation material relating to this interim report and financial information, please visit www.RomReal.com

DISCLAIMER

The information included in this Report contains certain forward-looking statements that address activities, events or developments that RomReal Limited ("the Company") expects, projects, believes or anticipates will or may occur in the future. These statements are based on various assumptions made by the Company, which are beyond its control and are subject to certain additional risks and uncertainties. The Company is subject to a large number of risk factors including but not limited to economic and market conditions in the geographic areas and markets in which RomReal is or will be operating, counterparty risk, interest rates, access to financing, fluctuations in currency exchange rates, and changes in governmental regulations. As a result of these and other risk factors, actual events and our actual results may differ materially from those indicated in or implied by such forward-looking statements. The reservation is also made that inaccuracies or mistakes may occur in the information given above about current status of the Company or its business. Any reliance on the information above is at the risk of the reader, and RomReal disclaims any and all liability in this respect.

AI Terminal

RomReal Ltd.

8160_10-k_2019-04-10_0ce502de-1b49-4496-84bf-80c09708a127.pdf

RomReal Limited Annual 2018 Report 9 April 2019

2018 Highlights

Net Asset Value (NAV)

Operational highlights

Financial Results

Property Portfolio

Romanian Macro development

RomReal Ethical Policy

Introduction

Energy

Water

Materials

Waste

Community

Healthy Living

Education

Shareholder Overview

Board of Directors

Kjetil Grønskag - Chairman of the Board and CEO

Lacramioara Isarescu - Board member

Bendt Thorkildsen – Board Member

DIRECTORS REPORT 2018

RomReal Directors

Operations Update

Key features of the real estate market

Accounts and financial position

Operating revenues

Operating expenses

Profit/Loss

Dividends

Balance sheet

Financial risk

Organization

Working Conditions, Equal Opportunities, Health and Environmental issues

Corporate Governance

1. Implementation and reporting on corporate governance

2. Business

3. Equity and dividends

Dividend

4. Equal treatment of shareholders and transactions with close associates

Share Issues

Different Classes of Shares

Transactions with close associates

5. Shares and negotiability

6. General Meetings

7. Nomination Committee

8. Board of Directors: composition and independence

Heidi Sørensen Austbø

9. The work of the Board of Directors

10. Risk Management and internal control

Economic conditions and Emerging markets risk

Financial reporting

Counterparty risk

Financial risk

Foreign Exchange risk

Tax risk

Director's Liability risk

11. Remuneration of the Board of Directors

12. Remuneration of the Executive Management

13. Information and communication

2019 Financial Calendar includes the following dates:

14. Takeovers

15. Auditors and advisors

Prospects

Bermuda, 09.04.2019 The Board of Directors of RomReal

FINANCIAL STATEMENTS AS OF 31 DECEMBER 2018

Income Statement

Statement Of Comprehensive Income

Statement of Financial Position

Signed on behalf of the Board of Directors

Consolidated Statement Of Changes in Equity

Parent Company's Statement Of Changes in Equity

Statement Of Cash Flows

Notes To The Financial Statements

Note 1 ORGANIZATION AND OPERATIONS

Note 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis for preparation