Graphisoft Park : interim management report for the 3rd quarter of 2019.

GRAPHISOFT PARK SE

Interim Management Report - Third Quarter 2019

November 6, 2019

GRAPHISOFT PARK - ENTRANCE

VISUALIZATION

GRAPHISOFT PARK SE

BUSINESS REPORT

THIRD QUARTER 2019

Dear Shareholders,

In 2019 the Company's forecasted IFRS consolidated pro forma result is 4.8 million euros, 9% higher compared to the prior year, which is due to the full year revenue generation of buildings delivered in prior year and increasing occupancy rate. Our 2020 forecast is 5.1 million euros net profit surpassing nearly by 6% our 2019 forecast.

The most recent developments had ended in 2018, after which we had begun the equipment refurbishment in the older buildings in the central area of the Park, totaling 5,500 m2this year. Besides this we have commenced the archeological and landscaping works on the southernmost area of the Park on 4,000 m2in the second half of 2019, as well as the preparations for launching possible future projects there. The preparatory works are expected to be finished by the end of this year.

In 2019 we have renewed several lease contracts, among others one of our key tenants, Microsoft Magyarország Kft. renewed its lease contract (expiring at the end of this year) for additional 5 years as of June 28, 2019. Consequently, the weighted average lease term of existing lease contracts to expiry ("WAULT") has increased to 5 years, while the average lease term spent in the Park showing the loyalty of our tenants has increased to 12.5 years.

Property portfolio and fair value of net assets

The fair value of the Company's entire property portfolio was valued by the independent appraiser (ESTON International Zrt.) at 264 million eurosin the end of the third quarter of 2019. The fair value of the completed, delivered properties slightly increased by 0.4 million euros compared to the previous quarter, mainly due to the permanently high occupancy rate (97%) and the renewal of recently expiring lease contracts. At the same time, value of development lands decreased by 0.7 million euros compared to the previous quarter due to the facts, that the starting and end dates of the remediation on the former gas factory area are delayed further compared to the original date (see below under section "Legal proceedings"), and the risk of constantly high construction costs and lack of capacity was also taken into account by the independent appraiser.

			[thousands of EUR]
	March 31, 2019	June 30, 2019	Sept 30, 2019
Completed, delivered properties	238,990	239,720	240,150
Development lands	24,320	24,320	23,630
Estimated fair value of the entire property portfolio	263,310	264,040	263,780
Net asset value at estimated fair value	191,131	189,490	190,923
Net asset value at fair value per share (EUR)	19.0	18.8	18.9

In comparison to 2019 Q2, the slight decrease of the investment property fair value was compensated by the loan installments and the increasing cash balance, consequently the fair value of net assets is 191 million euros, which is nearly 1.5 million euros higher than at the end of the previous quarter.

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GRAPHISOFT PARK SE

BUSINESS REPORT

THIRD QUARTER 2019

Pro forma results

Our 2019 9 months quarter "pro forma" results developed as expected: we have reached a rental revenue figure of 10.6 million euros surpassing the same period of previous year by 1.5 million euros, while EBIDTA rose by 1 million euros. Due to the delivery of new buildings depreciation charge increased significantly by 900 thousand euros. The current period net profit amounts to 3.7 million euros, which equals to the net profit of prior period, but in the comparative period a one-off other revenue in amount of 400 thousand euros is also to be taken to account.

(million euros)	2018 Q1-Q3	2019 Q1-Q3
Rental revenue	9.1	10.6
Other revenue	0.4	-
Other income (net)	0.4	0.3
Operating expense	(1.0)	(1.0)
EBITDA	8.9	9.9
Depreciation	(4.3)	(5.2)
Operating profit	4.6	4.7
Net interest expense	(0.9)	(1.0)
Profit before tax	3.7	3.7
Income tax expense	(0.0)	(0.0)
Net profit	3.7	3.7

Forecast for 2019 and 2020

Our 2019 expected pro forma results is 4.8 million euros, nearly 400 thousand euros higher than in prior year; in 2020 we expect to increase the pro forma results by additional 300 thousand euros. The new building complex delivered in 2018 will generate revenue in the whole year therefore the 2019 expected rental revenue will be 14.2 million euros. In 2020 we count with rental revenue growth of additional 400 thousand euros. From 2019, due to the new completed developments and refurbishments, depreciation will be significantly higher by 1.1 million euros, while interest expense will be slightly lower due to the decreasing outstanding loans payable. Overall, the 2019 net profit is expected to surpass that of the prior year by nearly 8%, which, according to our forecast, will increase by additional 6% in 2020.

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GRAPHISOFT PARK SE

BUSINESS REPORT

THIRD QUARTER 2019

(million euros)	2018 actual	2019 forecast	2020 plan
Rental revenue	12.41	14.2	14.6
Other revenue	0.41	-	-
Other income (net)	0.55	0.4	0.3
Operating expense	(1.49)	(1.5)	(1.6)
EBITDA	11.88	13.1	13.3
Depreciation	(5.96)	(7.1)	(7.1)
Operating profit	5.92	6.0	6.2
Net interest expense	(1.42)	(1.2)	(1.1)
Profit before tax	4.50	4.8	5.1
Income tax expense	(0.05)	0.0	0.0
Net profit	4.45	4.8	5.1

These results prove that we are right in our pursuit of the "micro-silicon-valley" concept articulated some 20 years ago: targeting a well-defined market - Hungarian and international technology companies pursuing innovation - and focusing real estate developments to cater to their needs. The key to success in their fields is attracting talent. We are aiming to contribute to this with quality and environmentally conscious architecture, in a uniquely quiet setting on the green banks of the river Danube surrounded by the Park's state-of-the art renovated industrial monument buildings preserving the marvelous ambiance of the old Óbuda Gas Works.

Bojár Gábor	Kocsány János
Chairman of Board of Directors	Chief Executive Officer

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GRAPHISOFT PARK SE

BUSINESS REPORT

THIRD QUARTER 2019

Financial highlights

IFRS, consolidated, thousand EUR

Results:

	"Pro forma" results (1)	Results according to financial statements
	9 months ended	9 months ended	9 months ended	9 months ended
	Sept 30, 2018	Sept 30, 2019	Sept 30, 2018	Sept 30, 2019
Rental revenue	9,117	10,636	9,117	10,636
Other revenue	400	-	400	-
Operating expense	(989)	(1,039)	(989)	(1,039)
Other income (net)	381	326	381	326
EBITDA	8,909	9,923	8,909	9,923
Valuation gains from	-	-	3,733	3,631
investment property
Depreciation and	(4,256)	(5,224)	(165)	(141)
amortization
Operating profit	4,653	4,699	12,477	13,413
Net interest expense	(660)	(916)	(660)	(916)
Other financial cost (3)	(258)	-	(258)	-
Other financial result	6	(92)	6	(92)
Profit before tax	3,741	3,691	11,565	12,405
Income tax expense	(37)	(11)	(37)	(11)
Profit for the period	3,704	3,680	11,528	12,394
Earnings per share	0.37	0.36	1.14	1.23
(EUR) (2)

1. "Pro forma" results show profit and loss according to the cost model.
2. Treasury shares possessed by the Company and employee shares are excluded when the earnings per share value is determined (refer to Note 1.3 to the financial statements).
3. Early repayment of loan provided by Aareal Bank resulted 258 thousand eurosone-off cost in 2018.

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GRAPHISOFT PARK SE

BUSINESS REPORT

THIRD QUARTER 2019

IFRS, consolidated, thousand EUR

Asset value:

	December 31, 2018	September 30, 2019
Fair value of properties	234,630	240,150
-from this book value (1)	227.866	233,947
Fair value of development lands	29,880	23,630
- from this book value (1)	11,767	11,782
Entire property portfolio at estimated fair value	264,510	263,780
Net asset value at estimated fair value	190,796	190,923
Number of ordinary shares outstanding (thousands)	10,083	10,083
Net asset value at fair value per share (euro) (2)	18.9	18.9

1. Investment properties and investment properties under construction are fair valued in the financial statements, while development lands andowner-occupied property are stated at cost. Development lands are presented under "Investment properties" and owner-occupied properties under "(Owner-occupied) Property, plant and equipment" in the balance sheet. As a result, instead of accounting depreciation, current period change in fair value are presented in the profit or loss.
2. Treasury shares possessed by the Company and employee shares are excluded when the earnings per share value is determined (refer to Note 1.3 to the financial statements).

Net asset value at book value and net asset value at fair value (equity) are disclosed in Note 21 to the financial statements.

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GRAPHISOFT PARK SE

BUSINESS REPORT

THIRD QUARTER 2019

Management Report

In this business report, Graphisoft Park presents the progress made toward its goals in the following areas:

• Financial results for the nine months of 2019 ("pro forma" results and results according to the financial statements),
• Utilization, occupancy,
• Development and modernization plans,
• Financing,
• Forecast for the years 2019 and 2020.

"Pro forma" results for the nine months of 2019

"Pro forma" results of 2019 Q3 changed compared to 2018 Q3 because of the following main factors:

• Rental revenue(2019: 10,636 thousand euros; 2018: 9,117 thousand euros) rose by 1,519 thousand euros, or 17% compared to the previous period due to the rental revenues derived from the new office building in the southern area handed over in 2018.
• Other revenue(2019: 0 thousand euros; 2018: 400 thousand euros) includes a one-off revenue from engineering services provided in 2018.
• Operating expense(2019: 1,039 thousand euros; 2018: 989 thousand euros) increased by 50 thousand euros, or 5% compared to prior year. Property related expenses increased in the proportion of the new developments delivered.
• Other income(2019: 326 thousand euros; 2018: 381 thousand euros) net amount was 55 thousand euros lower than the base last year, mainly due to developments and refurbishments based on tenant requests.
• Depreciation(2019: 5,224 thousand euros; 2018: 4,256 thousand euros) increased by 968 thousand euros, or 23% compared to the previous year because of the 2018 delivery of the new building complex and refurbishment works in the core area.
• EBITDA(2019: 9,923 thousand euros; 2018: 8,909 thousand euros) grew by 1,014 thousand euros, or 11%, while
  operating profit(2019: 4,699 thousand euros; 2018: 4,563 thousand euros) increased by 46 thousand euros, or 1% compared to the previous year due to the factors mentioned above.
• Net interest expense(2019: 916 thousand euros; 2018: 918 thousand euros) did not change compared to prior
  year: due to the higher balance of loans payable interest expense increased by 256 thousand euros, while the 2018 one off loan break fee in amount of 258 thousand euros did not incur in this period.
• Other financial result(2019: 92 thousand euros loss; 2018: 6 thousand euros gain) decreased by 98 thousand euros compared to prior year due to the weakening forint compared to euro.
• The balance ofincome tax expense(2019: 11 thousand euros; 2018: 37 thousand euros) is minimal as the Group
  - except for Graphisoft Park Engineering & Management Kft. - has SZIT status from January 1, 2018 and as such is not subject to corporate income tax and local business tax.
• Net profit(2019: 3,680 thousand euros; 2018: 3,704 thousand euros) decreased by 24 thousand euros in the first nine months of 2019 compared to the same period of 2018 because of the factors explained in the previous points.

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GRAPHISOFT PARK SE

BUSINESS REPORT

THIRD QUARTER 2019

2019 nine months results according to the financial statements

2019 Q3 results according to the financial statements are 8,714 thousand euros higher than the "pro forma" results due to the following two factors: unrecognized depreciation expense increased the results by 5,083 thousand euros and fair value gains increased the results by 3,631 thousand euros. Increase in fair value is due to the delivery of the development in the southern area and conclusion of new rental contracts.

In the same period of 2018 results according to the financial statements are 7,824 thousand euros higher than the "pro forma" results: unrecognized depreciation expense increased the results by 4,091 thousand euros and fair value gains increased the results by 3,733 thousand euros. In the comparative period the fair value gain was caused by the progress in the new developments and the delivery of the new SAP wing and Startup building.

Details of changes in fair values are disclosed in Note 8 (Investment property) to the financial statements.

Utilization, occupancy

Occupancy rate of Graphisoft Park's gross leasable area developed as follows (at the end of the quarter):

Period:	2018 Q1	2018 Q2	2018 Q3	2018 Q4	2019 Q1	2019 Q2	2019 Q3
Occupancy of gross leasable area (%):	98%	95%	94%	95%	96%	97%	97%
Gross leasable area (m2):	68,000	72,000	82,000	82,000	82,000	82,000	82,000

Occupancy stood at an effective 100% in the beginning of 2018. In the third quarter of 2018, due to the delivery of the development in the southern area the rentable area significantly increased in more steps. Due expansion needs of certain tenants who moved from the core area to the southern area (and leaving some empty office spaces in the core area) the occupancy rate was 94%, but due to the new lease contracts concluded in the previous quarters increased the occupancy rate to 97% starting from the end of 2019 Q2.

Overall due to the new deliveries, tenant movements and new rental contracts in 2018 and 2019 rented office space increased to 13,000 m2.

Graphisoft Park's tenant's make longer commitments than the national average. The Park's unique natural environment and its information technology focus (the "micro silicon-valley" concept) provide the space in which globally acclaimed companies have settled as tenants and expanded continuously over time. Examples for these companies are Microsoft, SAP or Servier; and the Park's naming tenant and founder, Graphisoft SE, which now operates wholly independently. Recent example of their engagement is that one of our key tenants, Microsoft Magyarország Kft. renewed its lease contract (expiring at the end of this year) for additional 5 years as of June 28, 2019. It is also important to highlight that smaller tenants are staying in the Park for more than 5 years on average and keep extending (average 1-3 years) their leases after expiration even with rental fees considered premium in the Budapest office market. The average lease term in the Park calculated with the starting date of current tenants' earliest lease agreements (in certain cases lease agreements concluded with the predecessor of Graphisoft Park Group) is 12.5 years, and in case of existing lease contracts the weighted average lease term to expiry is 5.0 years.

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GRAPHISOFT PARK SE

BUSINESS REPORT

THIRD QUARTER 2019

Development and modernization plans

By the completion of the new developments from September 2018, Graphisoft Park has 82,000 m2gross leasable areaas well as underground parking foraround 2,000 carsavailable for its tenants.

Other parts of the southern development area offer room for another 20,000 m2potential development, while the monument and northern development areas provide room for another 42,000 m2gross leasable area. In the second half of 2019 we have commenced the archeological and landscaping works on the southernmost area of the Park on 4,000 m2, as well as the preparations for launching possible future projects there. The preparatory works are expected to be finished by the end of this year. In the northern area no further preparatory work or development is allowed until NKM Földgázszolgáltató Zrt. completes its mandated rehabilitation duties in the area (see details below in the "Main risk factors associated with the areas" and in "Legal proceedings" sections).

In 2017 we have started the systematic modernization and refurbishing of the buildings of the nearly 20 years old office park. In the past 2 years costs related the refurbishment of nearly 13,000 m2office space amounted to around 4 million euros and cca. 6 million euros have been invested by the tenants to implement their individual needs. From 2019 the technological refurbishment of certain buildings in the core area is planned, at a cost of additional 1 million euro per year. This year we have started the refurbishment of several smaller office and service buildings on 5,500 m2, which amounted to 696 thousand euro in the nine months of 2019.

Key characteristic of the Graphisoft Park domestic "Silicon Valley" concept is the sustained synergy between teams of startup entrepreneurs, global IT and Technology focused companies and Higher Educational Institutions as leading edge "knowledge-factories". Another sign of our strengthening education focus is that after IBS and AIT, also Real School has chosen Graphisoft Park as location in Budapest from this year. Real School offers primary education in English language for international students, focusing on environmentally conscious sustainability. Partnering relationships based on tight collaboration between Technology Firms, Startups and Educational Institutions have been shaped among these three main pillars of Graphisoft Park, resulting in mutual support and strengthening and stimulating cooperation. The enhanced physical proximity and meaningful collaboration act as an attractive force and is recognized as a convenient source by all the three sectors. Management of the Park is consciously supporting the balanced presence of all three pillars and application of the full potential offered by their collaboration. In order to strengthen the focus on education we are open to accommodate educational institutions that act as knowledge centers and knowledge factories and fit the Park's concept.

Creative work, research and educational activities are further supported by the Park's Management by sustainably ensuring inspiring environment. Our goals are the increase of comfort levels, thus the levels of productivity for all Park tenant's creative and productive staff, the development of tools for promoting communities, hosting of relevant events and programs for further improvement of creative work conditions for all our tenants. We also aim at

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GRAPHISOFT PARK SE

BUSINESS REPORT

THIRD QUARTER 2019

developing conditions allowing for various leisure, recreational and sporting activities within the Park. We do all these consciously in order to develop and sustain high levels of employee satisfaction and engagement, thus enhancing our tenant's competitively on the market. Management is committed to have the Park feel as a comfortable, pleasant second home for all resident employees, more than just a work place.

Financing

We have executed a loan agreement with Erste Bank Hungary Zrt. in December 2015 with 10 years maturity to finance the development in the core area. In accordance with the loan agreement Erste Bank made a 4 billion HUF (12.2 million EUR) credit facility and another 3 million EUR credit facility available to Graphisoft Park within the National Bank of Hungary's Funding for Growth Scheme. In order to hedge exchange rate risk associated with the forint-based loan, we have executed a cash flow hedge (CCIRS) agreement in June 2016 covering the entire loan amount and cash flows from the beginning of the loan repayment period until the expiration of the loan contract, by which we have converted the forint-based capital and the fixed interest payment obligations onto euro base.

We have executed a loan agreement with UniCredit Bank Hungary Zrt. in November 2016 with 10 years maturity to finance the ongoing development in the southern area. In accordance with the loan agreement UniCredit Bank made a 24 million EUR credit facility available to Graphisoft Park within the National Bank of Hungary's Funding for Growth Scheme. The credit facility has fixed interest rate.

On November 30, 2017 we concluded a new euro-based, 10 years to maturity loan facility which is worth 40 million EUR with Erste Bank Hungary Zrt., for the refinancing of the previous loan facility before its maturity, concluded with Aareal Bank AG. The remaining smaller part of the loan is used to finance the refurbishment of the older buildings of Graphisoft Park. The new loan facility is complemented by an interest rate swap agreement (IRS) for its entire term; as a result the interest rate is fixed for the full term of the loan.

At the end of the period the outstanding loan liability amounted to 73.8 million euro, which is about 28% of the property fair value. After concluding the hedge agreement, all of the Company's outstanding loan liabilities have been switched to fixed interest rates for the 10 year loan term, which further strengthen the Park's stable operation.

Forecast for the years 2019 and 2020

Our forecasted "pro forma" profit for 2019 is 4.8 million euros, which is about 400 thousand euros higher than in prior year, while our 2020 forecast is 5.1 million euros profit surpassing nearly by 6% our 2019 forecast.

(million euros)	2018 actual	2019 forecast	2020 plan
Rental revenue	12.41	14.2	14.6
Other revenue	0.41	-	-
Other income (net)	0.55	0.4	0.3
Operating expense	(1.49)	(1.5)	(1.6)
EBITDA	11.88	13.1	13.3
Depreciation	(5.96)	(7.1)	(7.1)
Operating profit	5.92	6.0	6.2
Net interest expense	(1.42)	(1.2)	(1.1)
Profit before tax	4.50	4.8	5.1
Income tax expense	(0.05)	0.0	0.0
Net profit	4.45	4.8	5.1

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GRAPHISOFT PARK SE

BUSINESS REPORT

THIRD QUARTER 2019

• In 2019rental revenueis expected to rise by 1.8 million euros, or by 14% compared to 2018 as the last year delivery of South Park office building will have full year revenue effect in 2019. In 2020 we count with additional rental revenue growth of 400 thousand euros. This is partly due to the automatic indexation, partly due to the full year revenue effect of new rental contracts concluded in 2019; and due to the fact, that during the renewal of expiring rental contracts rental fees agreed earlier could converge toward the significant rental fee increase in the Budapest office market.
• In 2018 amongother revenuewe realized a one-off engineering work (408 thousand euro); we do not count with the repetition of this work in the upcoming years.
• We count with no significant change ofoperational costsin 2019 or in 2020.
• Due to all of the above in 2019EBIDTAis expected to rise by 1.2 million euros or 9% compared to 2018, achieving an EBIDTA amount of 13.1 million euros, while in 2020 the amount will be 13.3 million euros.
• From 2019, as a result of new developments and refurbishments in progress we expect significant increase indepreciation(which will not affect the consolidated accounts according to the SZIT rules): in 2019 and in 2020 it will increase by 1.1 million euros or by 19% compared to 2018.
• In 2018 net interest expense was increased due to theone-off fee relating to the refinancing of the loan. The net interest expenseof the outstanding loan liabilities will be about 1.2 million euros in 2019 and 1.1 million euros in 2020.
• As a result,net profitin 2019 is forecasted to be 4.8 million euros surpassing the 2018 profit by almost 8%, in 2020 it is forecasted to be 5.1 million euros.

Main risk factors associated with the areas

• Due to the prior gasification activity the northern development area is still contaminated. The rehabilitation of this area is the duty of the polluter Capital City Gas Works (currently NKM Földgázszolgáltató Zrt.). According to the resolution of Pest County Government Office, the starting and end dates of the remediation on the former gas factory area are delayed further compared to the original date (see below under section "Legal proceedings").
• Potential flood risk due to the location on the Danube waterfront, which is to be reckoned with for the increasing water level fluctuation, despite the old Gasworks rampart protecting the area even during the historical high floods in 2013.

Legal proceedings

In the resolution received on October 3, 2018, the competent government body, the Pest County Government Office notified us about the prolongation of the completion deadline of the rehabilitation in the northern development area. We have filed suit for the review of the resolution in administrative court. The first hearing took place on April 16, 2019, the second one on June 18, 2019, while the third one on September 19, 2019 without the court entering any decision that times. The the last hearing will take place on November 12, 2019, where judgement is also expected to be entered.

***

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GRAPHISOFT PARK SE

BUSINESS REPORT

THIRD QUARTER 2019

Forecasts published here are based on the valid lease contracts in effect at the time of writing this report. We will not try to predict the number or value of new lease contracts on one hand, as we will not account for the scenario of current tenants not prolonging their leases after expiration on the other, only if they have given notice by the closing date of our business report.

It is our intention to maintain the price structure designed to match the high value services provided by Graphisoft Park in order to be able to preserve the level of service provided in the long run. Since we do not intend to compete with the sometimes extremely low prices in the Budapest office market, we cannot rule out the possibility of some tenants leaving in the future.

Other factors significantly affecting results are changes in the EUR/HUF exchange rate, the inflation rate and the regulatory environment with special regards to the tax regulations. In this forecast we calculate with an exchange rate of 330 HUF/EUR till the end of 2019, euro inflation rate of 1.5% and unchanged legal and taxation environment.

Forward-lookingstatements- The forward-looking statements contained in this Interim Management Report involve inherent risks and uncertainties, may be determined by additional factors, other than the ones mentioned above, therefore the actual results may differ materially from those contained in any forecast.

Statement of responsibility- We declare that the attached Quarterly Report which have been prepared in accordance with the International Financial Reporting Standards and to the best of our knowledge, give a true and fair view of the assets, liabilities, financial position and profit or loss of Graphisoft Park SE and its subsidiaries included in the consolidation, and the Business Report gives a fair view of the position, development and performance of Graphisoft Park SE and its subsidiaries included in the consolidation, together with a description of the principal risks and uncertainties of its business.

Budapest, November 6, 2019

Bojár Gábor	Kocsány János
Chairman of Board of Directors	Chief Executive Officer

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GRAPHISOFT PARK SE

QUARTERLY REPORT

for the quarter ended September 30, 2019

in accordance with International Financial Reporting Standards (IFRS)

(consolidated, unaudited)

Budapest, November 6, 2019

Kocsány János	Bodócsy Ágnes
Chief Executive Officer	Chief Financial Officer

GRAPHISOFT PARK SE

QUARTERLY REPORT

SEPTEMBER 30, 2019

CONTENTS:
	Page(s)
Consolidated Balance Sheet	3
Consolidated Statement of Income	4
Consolidated Statement of Comprehensive Income	5
Consolidated Statement of Changes in Shareholders' Equity	6
Consolidated Statement of Cash Flows	7
Notes to the Quarterly Report	8-24

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GRAPHISOFT PARK SE

CONSOLIDATED BALANCE SHEET

SEPTEMBER 30, 2019

(all amounts in thousands of euros unless otherwise indicated)

		Notes	December 31, 2018	September 30, 2019
Cash and cash equivalents	3	5,874	5,070
Trade receivables	4	1,450	1,437
Current tax receivable	5	217	155
Other current assets	6	2,504	2,451
Current assets		10,045	9,113
Investment property	8	239,633	245,729
(Owner occupied) Property, Plant and Equipment	7	2,074	1,741
Intangible assets		5	3
Non-current assets		241,712	247,473
TOTAL ASSETS
	251,757	256,586
Short-term loans	11	3,561	3,623
Trade payables	9	1,250	626
Current tax liability	5	136	210
Other short-term liabilities	10	5,124	5,048
Current liabilities		10,071	9,507
Long-term loans	11	69,111	65,988
Other long-term liabilities	12	5,030	7,018
Non-current liabilities		74,141	73,006
TOTAL LIABILITIES		84,212	82,513
Share capital	1.3	250	250
Retained earnings		170,999	179,455
Treasury shares	20	(974)	(974)
Cash flow hedge reserve	11	(308)	(2,370)
Revaluation reserve of properties		531	681
Accumulated translation difference		(2,953)	(2,969)
Shareholders' equity		167,545	174,073
TOTAL LIABILITIES & EQUITY		251,757	256,586

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GRAPHISOFT PARK SE

CONSOLIDATED STATEMENT OF INCOME

SEPTEMBER 30, 2019

(all amounts in thousands of euros unless otherwise indicated)

	Notes	3 months ended	9 months ended
		Sept 30, 2018	Sept 30, 2019	Sept 30, 2018	Sept 30, 2019
Property rental revenue		3,435	3,584	9,117	10,636
Other revenue		-	-	400	-
Revenue	13	3,435	3,584	9,517	10,636
Property related expense	14	(30)	(28)	(53)	(78)
Employee related expense	14	(103)	(146)	(510)	(606)
Other operating expense	14	(126)	(106)	(426)	(355)
Depreciation and amortization	7, 14	(73)	(48)	(165)	(141)
Operating expense		(332)	(328)	(1,154)	(1,180)
Valuation gains from investment	8	971	(413)	3,733	3,631
property
Other income	15	295	107	381	326
OPERATING PROFIT
	4,369	2,950	12,477	13,413
Interest expense	16	(297)	(313)	(660)	(916)
Other financial cost	16	-	-	(258)	-
Exchange rate difference	17	(88)	(59)	6	(92)
Financial result		(385)	(372)	(912)	(1,008)
PROFIT BEFORE TAX		3,984	2,578	11,565	12,405
Income tax expense	18	4	(4)	(37)	(11)
PROFIT FOR THE PERIOD		3,988	2,574	11,528	12,394
Attributable to equity holders of the parent		3,988	2,574	11,528	12,394
Basic earnings per share (EUR)	19	0.40	0.26	1.14	1.23
Diluted earnings per share (EUR)	19	0.40	0.26	1.14	1.23

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GRAPHISOFT PARK SE

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

SEPTEMBER 30, 2019

(all amounts in thousands of euros unless otherwise indicated)

	Notes	3 months ended	9 months ended
	Sept 30, 2018	Sept 30, 2019	Sept 30, 2018	Sept 30, 2019
Profit for the period	3,988	2,574	11,528	12,394
Cash-flow hedge valuation reserve*	17	(353)	(695)	(2,060)
Revaluation reserve of properties**	-	-	-	150
Translation difference**	15	(19)	(28)	(16)
Other comprehensive income	32	(372)	(723)	(1,926)
COMPREHENSIVE INCOME
4,020	2,202	10,805	10,468
Attributable to equity holders of the
4,020	2,202	10,805	10,468
parent

• Will be reclassified to profit or loss in subsequent periods.
• Will not be reclassified to profit or loss in subsequent periods.

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GRAPHISOFT PARK SE

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

SEPTEMBER 30, 2019

(all amounts in thousands of euros unless otherwise indicated)

		Share		Retained		*Treasury		**Cash flow		***Revaluation		Accum. translation		Total
		capital		earnings		shares		hedge reserve		reserve of properties		difference		equity
December 31, 2017
250		158,909		(974)		665		531		(2,934)		156,447
Profit for the period	-	11,715	-	(187)	-	-	11,528
Translation difference	-	-	-	-	-	(28)	(28)
Revaluation reserve	-	(184)	-	(695)	-	-	(882)
Dividend	-	(2,993)	-	-	-	-	(2,993)
September 30, 2018
250	167,444	(974)	(217)	531	(2,962)	164,072
December 31, 2018
250		170,999		(974)		(308)		531		(2,953)		167,545
Profit for the period	-	12,396	-	(2)	-	-	12,394
Translation difference	-	-	-	-	-	(16)	(16)
Revaluation reserve	-	(2)	-	(2,060)	-	-	(2,062)
Revaluation difference of	-	-	-	-	150	-	150
properties
Dividend	-	(3,938)	-	-	-	-	(3,938)
September 30, 2019		250		179,445		(974)		(2,370)		681		(2,969)		174,073

• Treasury share details are disclosed in Note 20.
• Cash flow hedge transaction details are disclosed in Note 11 (Loans).
• Revaluation surplus on leasing a part ofowner-occupied property, i.e. transfers from investment property to owner occupied property.

6

GRAPHISOFT PARK SE

CONSOLIDATED STATEMENT OF CASH FLOWS

SEPTEMBER 30, 2019

(all amounts in thousands of euros unless otherwise indicated)

	3 months ended		9 months ended
	Sept 30, 2018	Sept 30, 2019	Sept 30, 2018	Sept 30, 2019
OPERATING ACTIVITIES
Income before tax	3,984	2,578	11,565	12,405
Fair value change of investment properties	(971)	413	(3,733)	(3,631)
Depreciation and amortization	73	48	165	141
Revaluation difference of properties	-	-	-	(150)
(Gain) / loss on sale of tangible assets	(1)	-	1	1
Interest expense	297	313	660	916
Break cost of loan	-	-	258	-
Unrealized foreign exchange loss / (gain)	321	(3)	(591)	(30)
Changes in working capital:
Decrease / (increase) in receivables and	2,823	(471)	7,033	144
other current assets
(Decrease) / increase in liabilities	(875)	181	(87)	136
Corporate income tax paid	-	(27)	(28)	(27)
Net cash from operating activities	5,651	3,032	15,243	9,905
INVESTING ACTIVITES
Purchase of investment property	(3,689)	(784)	(19,208)	(2,353)
Purchase of other tangible assets and	(143)	(156)	(302)	(195)
intangibles
Sale of tangible assets	15	-	34	2
Net cash used in investing activities	(3,817)	(940)	(19,476)	(2,546)
FINANCING ACTIVITIES
Proceeds from receipt of loans	-	-	46,089	-
Loan repayments	(1,243)	(1,094)	(34,912)	(3,257)
Interest paid	(300)	(328)	(685)	(929)
Break fee of loan	-	-	(258)	-
Dividend paid	-	-	(2,993)	(3,938)
Net cash from financing activities	(1,543)	(1,422)	7,241	(8,124)
Increase in cash and cash equivalents	291	670	3,008	(765)
Cash and cash equivalents at beginning of	6,878	4,432	4,239	5,874
period
Exchange rate gain / (loss) on cash and cash	57	(32)	(21)	(39)
equivalents
Cash and cash equivalents at end of period	7,226	5,070	7,226	5,070

7

GRAPHISOFT PARK SE

NOTES TO THE QUARTERLY REPORT

FOR THE QUARTER ENDED SEPTEMBER 30, 2019

(all amounts in thousands of euros unless otherwise indicated)

1. General information

1.1. Business activities

Graphisoft Park SE was established through a demerger from Graphisoft SE on August 21, 2006. The purpose of the restructuring was to spin off a new company, dedicated to real estate development and management. Graphisoft Park operates as a holding currently having five 100% owned subsidiaries.

The real estate development is performed by the owners of the properties, namely Graphisoft Park Kft., Graphisoft Park South I. Kft. and Graphisoft Park South II. Development Kft. Graphisoft Park Services Kft. is responsible for property operation tasks. On December 14, 2017 Graphisoft Park SE established Graphisoft Park Engineering & Management Kft., which entity is responsible for the Group's certain property management, engineering and administration activities from January 1, 2018.

Graphisoft Park SE and subsidiaries are incorporated under the laws of Hungary. Court registration number of Graphisoft Park SE is CG 01-20-000002. Registered address of the Group is H-1031 Budapest, Záhony utca 7., Hungary. Headcount was 23 on September 30, 2019.

1.2. Properties

The total area of Graphisoft Park is nearly 18 hectares. Over the past 20 years, 82,000 m2gross leasable area have been developed and occupied by tenants. In the southern development area 14,000 m2gross leasable was handed over in 2018. The remaining area provides the opportunity to develop an additional 62,000 m2of gross leasable area.

The real estate is categorized as follows:

Area	Property
Core area	Modern office park spreading over 8,5 hectares of land, comprising 59,000 m2
	completed gross leasable area.
Monument area	2,4 hectares of land comprising 13,500 m2of total gross leasable area of the
	monument buildings, out of which 6,000 m2has been renovated and handed
	over; as such additional 7,500 m2can be developed.
Southern and Northern	6,8 hectares of development land, on which a 3,000 m2floor area dormitory has
development areas	been constructed, further 14,000 m2gross leasable area was handed over during
	2018 and additional 54,500 m2rentable area together with underground parking
	and auxiliary facilities can be developed.

8

GRAPHISOFT PARK SE

NOTES TO THE QUARTERLY REPORT

FOR THE QUARTER ENDED SEPTEMBER 30, 2019

(all amounts in thousands of euros unless otherwise indicated)

1.3. Stock information

Graphisoft Park SE's share capital consists of 10,631,674 class "A" publicly traded, marketable, registered ordinary shares of 0.02 euro face value, each representing equal and identical rights, and 1,876,167 class "B" employee shares of 0.02 euro face value.

Ordinary shares of the Company are publicly traded at Budapest Stock Exchange, currently in Premium category, from August 28, 2006. The share ownership structure is the following according to the Company's shareholder records:

		December 31, 2018		September 30, 2019
Shareholder	Shares	Share	Voting right	Shares	Share	Voting right
	(pcs)	(%)	(%)	(pcs)	(%)	(%)
ORDINARY SHARES:	10,631,674	100.00	88.97	10,631,674	100.00	88.97
Directors and management	2,715,082	25.54	23.96	2,715,082	25.54	23.96
Bojár Gábor - Chairman of the BoD	2,485,125	23.37	21.93	2,485,125	23.37	21.93
Dr. Kálmán János - Member of the BoD	13,500	0.13	0.12	13,500	0.13	0.12
Szigeti András - Member of the BoD	126,000	1.19	1.11	126,000	1.19	1.11
Kocsány János - Member of the BoD,	90,457	0.85	0.80	90,457	0.85	0.80
CEO
Shareholders over 5% share	3,298,195	31.02	29.10	3,315,537	31.19	29.25
HOLD Alapkezelő Zrt.	1,504,628	14.15	13.28	1,504,628	14.15	13.28
AEGON Magyarország Befektetési	1,093,567	10.29	9.65	1,110,909	10.45	9.80
Alapkezelő Zrt.
B.N.B.A. Holding Zrt.	700,000	6.58	6.18	700,000	6.58	6.18
Other shareholders	4,069,321	38.28	35.91	4,051,979	38.11	35.75
Treasury shares*	549,076	5.16	-	549,076	5.16	-
EMPLOYEE SHARES**:	1,876,167	-	11.03	1,876,167	-	11.03
Kocsány János - Member of the BoD,	1,250,778	-	11.03	1,250,778	-	11.03
CEO
Employee treasury shares*	625,389	-	-	625,389	-	-
SHARES TOTAL:
12,507,841	100.00	100.00	12,507,841	100.00	100.00

• Treasury shares possessed by the Company do not pay dividend and bear no voting rights. For details refer to Note 20.
• Class "B" employee shares are not marketable, connected to employment, may be withdrawn by the Board of Directors at any time, have no voting rights in decisions that require qualified majority and bear reduced rights to dividend at the proportion of one third of their face value. In the financial statements of the Company these payments are accounted as employee related expense instead of dividend. The Articles of Association and the Management Share Ownership Plan govern all other matters related to the employee shares.

9

GRAPHISOFT PARK SE

NOTES TO THE QUARTERLY REPORT

FOR THE QUARTER ENDED SEPTEMBER 30, 2019

(all amounts in thousands of euros unless otherwise indicated)

1.4. Governance

The governing body of Graphisoft Park SE, Board of Directors (single-tier system) is composed of the following:

Name	Position	From	Until
Bojár Gábor	Chairman	August 21, 2006	May 31, 2022
Dr. Kálmán János	Member	August 21, 2006	May 31, 2022
Kocsány János	Member	April 28, 2011	May 31, 2022
Dr. Martin-Hajdu György	Member	July 21, 2014	May 31, 2022
Szigeti András	Member	July 21, 2014	May 31, 2022
Hornung Péter	Member	April 20, 2017	May 31, 2022

The Audit Committee comprises of 3 independent members of the Board: Dr. Kálmán János (chairman), Dr. Martin- Hajdu György and Hornung Péter. The Chief Executive Officer of Graphisoft Park SE is Kocsány János.

2. Accounting policies

The accounting policies adopted are consistent with those of the previous financial year (see Notes to the Consolidated Financial Statements of 2018), with the following differences:

Seasonality of business

The Company's business activities are not seasonal; revenues and expenses generally accrue at a constant rate during the course of the financial year. Certain one-off transactions may affect the results from one quarter to the next.

Exchange rates used

Exchange rates used are as follows:

	3 months ended	9 months ended
	Sept 30, 2018	Sept 30, 2019	Sept 30, 2018	Sept 30, 2019
EUR/HUF opening:	328.60	323.54	310.14	321.51
EUR/HUF closing:	323.78	334.65	323.78	334.65
EUR/HUF average:	324.15	328.14	317.54	323.16

10

GRAPHISOFT PARK SE

NOTES TO THE QUARTERLY REPORT

FOR THE QUARTER ENDED SEPTEMBER 30, 2019

(all amounts in thousands of euros unless otherwise indicated)

3. Cash and cash equivalents

		December 31, 2018			September 30, 2019
Cash in hand	2	3
Cash at banks	5,872	5,067
Cash and bank	5,874	5,070
4.	Trade receivables
		December 31, 2018			September 30, 2019
Trade receivables	1,450	1,437
Provision for doubtful debts	-	-
Trade receivables	1,450	1,437

Trade receivables are on 8-30 day payment terms.

5. Current tax receivables and liabilities

	December 31, 2018		September 30, 2019
Current tax receivables	217	155
Current tax liabilities	(136)	(210)
Current tax receivables / (liabilities), net	81	(55)

11

GRAPHISOFT PARK SE

NOTES TO THE QUARTERLY REPORT

FOR THE QUARTER ENDED SEPTEMBER 30, 2019

(all amounts in thousands of euros unless otherwise indicated)

6.	Other current assets
		December 31, 2018		September 30, 2019
Accrued income	123	21
Prepaid expense	133	235
Bank security accounts	2,109	1,980
Construction fund manager accounts	83	17
Other receivables	56	198
Other current assets
2,504	2,451

7. (Owner occupied) Property, Plant and Equipment

		(Owner occupied)			Plant and Equipment			(Owner occupied)
		Property						Property,
								Plant and Equipment
Net value:
December 31, 2017	1,586	312	1,898
Gross value:
December 31, 2017	1,635	755	2,390
Addition	131	305	436
Sale	-	(66)	(66)
Translation difference	-		(17)		(17)
December 31, 2018	1,766	977	2,743
Depreciation:
December 31, 2017	49	443	492
Addition	91	99	190
Sale	-	(8)	(8)
Translation difference	-		(5)		(5)
December 31, 2018	140	529	669
Net value:
December 31, 2018	1,626		448		2,074

12

GRAPHISOFT PARK SE

NOTES TO THE QUARTERLY REPORT

FOR THE QUARTER ENDED SEPTEMBER 30, 2019

(all amounts in thousands of euros unless otherwise indicated)

Gross value:
December 31, 2018	1,766	977	2,743
Addition	1	194	195
Sale	-	(4)	(4)
Reclassification to investment	(397)	-	(397)
properties
Translation difference	-		(26)		(26)
September 30, 2019	1,370	1,141	2,511
Depreciation:
December 31, 2018	140	530	670
Addition	61	80	141
Sale	-	(1)	(1)
Reclassification to investment	(32)	-	(32)
properties
Translation difference	-		(8)		(8)
September 30, 2019	169	601	770
Net value:
September 30, 2019		1,201		540		1,741

8. Investment property

Development	Investment property
Land	under construction

Completed	Investment
investment property	property

Book value:
December 31, 2017	11,767		23,900		180,571		216,238
Addition	-	12,779	5,758	18,537
Reclassification	-	(39,260)	39,260	-
Change in fair value	-	2,581	2,277	4,858
December 31, 2018	11,767	-	227,866	239,633
Addition	15	-	1,934	1,949
Reclassification from property,	-	-	516	516
plant and equipment
Change in fair value	-	-	3,631	3,631
September 30, 2019	11,782		-		233,947		245,729

13

GRAPHISOFT PARK SE

NOTES TO THE QUARTERLY REPORT

FOR THE QUARTER ENDED SEPTEMBER 30, 2019

(all amounts in thousands of euros unless otherwise indicated)

In the nine months of 2019 additions in construction in progress of 1,949 thousand EUR comprise the following:

• refurbishment of buildings in progress in the core area (696 thousand EUR),
• new developments handed over in 2018 in the southern development area (520 thousand EUR) and
• other developments in progress (733 thousand EUR).

The independent valuation was prepared by ESTON International Zrt. with the Income approach applied for all periods presented. Properties with occupancy permits were valued based on the Discounted Cash Flow method, while properties under construction were valued based on the Residual Value method. Present value of cash flows from rental fees was calculated with a market-based discount factor reflecting the expected return from investors and creditors (cost of capital).

According to IAS 40 development lands are presented on cost.

The key assumptions applied by the independent appraiser for the periods presented were the followings:

			December 31, 2018	September 30, 2019
Rental area	•office, laboratory and related	73,000 m2	73,000 m2
	service areas
	•	education area	6,000 m2	6,000 m2
	•	Dormitory	3,000 m2/ 85 persons	3,000 m2/ 85 persons
Development lands	•rentable area which can be	62,000 m2	62,000 m2
	developed
Long term occupancy			95%	95%
Growth factor			1%	1%
Average discount factor			6.02%	5.96%

9.	Trade payables
		December 31, 2018		September 30, 2019
Trade payables - domestic	1,250	626
Trade payables	1,250	626

14

GRAPHISOFT PARK SE

NOTES TO THE QUARTERLY REPORT

FOR THE QUARTER ENDED SEPTEMBER 30, 2019

(all amounts in thousands of euros unless otherwise indicated)

10. Other short-term liabilities

	December 31, 2018		September 30, 2019
Amounts due to employees	64	51
Deposits from tenants	551	602
Fair value difference of loans*	752	714
Other payables and accruals	3,757	3,681
Other short-term liabilities
5,124	5,048

• Fair value difference of loans with preferential interest rate due within one year. Details are disclosed in Note 11 (Loans).

11. Loans

11.1. Loan details

	December 31, 2018		September 30, 2019
Short-term	3,561	3,623
Long-term	69,111	65,988
Loans
72,672	69,611
Loans provided by Erste Bank Hungary Zrt.:
Loan number 1. (Erste)
	December 31, 2018		September 30, 2019
Short-term	702	705
Long-term	12,263	11,342
Loan 1 / Erste Bank Hungary Zrt.
12,965	12,047

15

GRAPHISOFT PARK SE

NOTES TO THE QUARTERLY REPORT

FOR THE QUARTER ENDED SEPTEMBER 30, 2019

(all amounts in thousands of euros unless otherwise indicated)

The Company executed a loan agreement with Erste Bank Hungary Zrt. on December 28, 2015 with 10 years maturity to finance the ongoing development in the core area. In accordance with the loan agreement and its modification on December 29, 2016 Erste Bank makes a 4 billion HUF (12 million EUR) credit facility available to Graphisoft Park within Pillar I of the second phase of the National Bank of Hungary's Funding for Growth Scheme and another 3 million EUR credit facility within Pillar II of the third phase of the Funding for Growth Scheme. Main collaterals provided for the bank are: mortgage on real estate, revenue assignment and bank account pledge.

As of September 30, 2019 the outstanding capital of the forint based facility amounts to 3.6 billion HUF (10,675 thousand EUR); and the euro based facility amounts to 2,659 million EUR. The fair value of the loans (calculated using market interest rates) is 12,047 thousand EUR (see details under point 11.2 below).

In order to manage exchange rate risks associated with the forint-based loan, we have executed a cash flow hedge (CCIRS) transaction agreement on June 24, 2016 covering the entire loan amount and cash flows from the beginning of the loan repayment period until the expiration of the loan contract (from end of 2017 until end of 2025), by which we have converted the forint-based capital and interest payment obligations onto euro base.

As of September 30, 2019 fair value of the cash flow hedge transaction is presented among long-term financial liabilities in amount of 488 thousand EUR; unrealized difference related to the transaction are presented within the equity (Cash flow hedge reserve) in amount of 292 thousand EUR. (As of December 31, 2018, fair value of the cash flow hedge transaction is presented among long-term financial assets in amount of 195 thousand EUR; unrealized difference in 2018 related to the transaction are presented within the equity in amount of 229 thousand EUR.)

Loan number 2. (Erste)

	December 31, 2018		September 30, 2019
Short-term	1,746	1,785
Long-term	37,078	35,729
Loan 2 / Erste Bank Hungary Zrt.	38,824	37,514

On November 30, 2017, based on the decision of the Board of Directors, the Company concluded a new euro-based, 10 years to maturity loan facility with Erste Bank Hungary Zrt., for the refinancing of the previous loan facility before its maturity, concluded with Aareal Bank AG in 2007. The new loan facility is complemented by an interest rate swap agreement (IRS) for its entire term from the second half of 2018, thus the interest rate is fixed for the entire term from that time - unlike the facility redeemed with partly variable interest rates. On September 30, 2019 fair value of the IRS is 2,999 thousand EUR, which is presented among the long term financial liabilities.

The new facility is worth 40 million EUR, whose bulk is to be used for the repayment of the entire debt to Aareal Bank AG, while the remaining smaller part will be used to finance the refurbishment of the older buildings of Graphisoft Park. The 40,000 thousand EUR facility was drawn down and loans provided by Aareal Bank were refinanced. Main collaterals provided for the bank are: mortgage on real estate, revenue assignment and bank account pledge.

16

GRAPHISOFT PARK SE

NOTES TO THE QUARTERLY REPORT

FOR THE QUARTER ENDED SEPTEMBER 30, 2019

(all amounts in thousands of euros unless otherwise indicated)

Loan provided by UniCredit Bank Hungary Zrt.:

	December 31, 2018		September 30, 2019
Short-term	1,113	1,133
Long-term	19,770	18,917
Loans / UniCredit Bank Hungary Zrt.	20,883	20,050

The Company executed a 24 million EUR loan facility agreement with UniCredit Bank Hungary Zrt. on December 18, 2016 with 10 years maturity to finance the ongoing development in the southern area. Main collaterals provided for the bank are: mortgage on real estate, revenue assignment and bank account pledge.

As of September 30, 2019 the outstanding capital amounts to 22,800 thousand EUR, whose fair value was 20,050 thousand EUR (calculated using market interest rates) (see details under point 11.2 below).

11.2. Analyses Fair value of the loans:

	December 31, 2018		September 30, 2019
Erste Bank Hungary Zrt. Loan nr. 1.*	12,965	12,047
Erste Bank Hungary Zrt. Loan nr. 2.	38,824	37,514
UniCredit Bank Hungary Zrt. *	20,883	20,050
Loans at fair value*	72,672	69,611

* Calculated at a 2.5% market-based interest rate for the loans with preferential interest rate.

Loans with preferential interest rate:

As part of its monetary policy instruments, National Bank of Hungary (NBH) launched its Funding for Growth Scheme (FGS) in 2013, Under FGS, the central bank provides refinancing loans at a preferential fixed interest rate of 0% with a maximum maturity of 10 years to credit institutions which the credit institutions lend further to small and medium sized enterprises with a capped interest margin. The following table shows loan liability for the loans borrowed by the Group within FGS broken down by amortized initial fair value (market rate loan liability) and amortized initial fair value difference (interest rate grant) elements as of September 30, 2019:

17

GRAPHISOFT PARK SE

NOTES TO THE QUARTERLY REPORT

FOR THE QUARTER ENDED SEPTEMBER 30, 2019

(all amounts in thousands of euros unless otherwise indicated)

	Actual		**Fair value		*Fair value
	loan liability		difference
Erste Bank Hungary Zrt.	13,334	1,287	12,047
UniCredit Bank Hungary Zrt.	22,800	2,750	20,050
Loans (FGS)
36,134	4,037	32,097

• Calculated at a 2.5%market-based fixed interest rate effective at the time of concluding the loan contract.
• Fair value difference of loans with preferential interest rate (government grant received through the Funding for Growth Scheme compensating expenses) are shown at othershort-term liabilities (Note 10) and other long-term liabilities (Note 12) and amortized to the profit and loss statement based on the effective interest rate method.

12.	Other long-term liabilities
		December 31, 2018		September 30, 2019
Fair value difference of loans*	3,894	3,323
Warranty retention	157	208
Fair value of derivative instruments **	979	3,487
Other long-term liabilities
5,030	7,018

• Fair value differences of loans with preferential interest rate due over one year. Details are disclosed in Note 11 (Loans).
• Fair value of IRSs relating to Erste Bank loans nr. 1. and 2. as of September 30, 2019. The valuation was prepared by Erste Bank.

18

GRAPHISOFT PARK SE

NOTES TO THE QUARTERLY REPORT

FOR THE QUARTER ENDED SEPTEMBER 30, 2019

(all amounts in thousands of euros unless otherwise indicated)

13.	Revenue
		3 months ended			9 months ended
		Sept 30, 2018	Sept 30, 2019		Sept 30, 2018	Sept 30, 2019
Property rental revenue*	3,435	3,584	9,117	10,636
Other revenue**	-	-	400	-
Revenue	3,435	3,584	9,517	10,636

*Property rental revenue consists solely of rental fees coming from the lease of real estate of Graphisoft Park. **Other revenue contains a one-off revenue from engineering service provided in the second quarter of 2018.

14.	Operating expense
		3 months ended			9 months ended
		Sept 30, 2018	Sept 30, 2019		Sept 30, 2018	Sept 30, 2019
Property related expense	30	28	53	78
Employee related expense	103	146	510	606
Other operating expense	126	102	426	355
Depreciation and amortization	73	48	165	141
Operating expense
332	324	1,154	1,180

Other operating expense consists of the following items:

	3 months ended			9 months ended
	Sept 30, 2018	Sept 30, 2019		Sept 30, 2018	Sept 30, 2019
Office and telecommunication	2	3	10	8
Legal and administration	73	64	273	212
Other	51	39	143	135
Other operating expense	126	106	426	355

19

GRAPHISOFT PARK SE

NOTES TO THE QUARTERLY REPORT

FOR THE QUARTER ENDED SEPTEMBER 30, 2019

(all amounts in thousands of euros unless otherwise indicated)

15.	Other income (expense)
		3 months ended		9 months ended
		Sept 30, 2018	Sept 30, 2019		Sept 30, 2018	Sept 30, 2019
Income from recharged construction expenses	253	79	2,617	197
Recharged construction expenses	(98)	(76)	(2,439)	(177)
Income from recharged operation expenses	1,170	1,173	3,236	3,920
Recharged operation expenses	(991)	(1,066)	(3,002)	(3,594)
Others		(39)	(3)	(31)	(20)
Other income	295	107	381	326

16. Interest and other financing cost

	3 months ended		9 months ended
	Sept 30, 2018	Sept 30, 2019		Sept 30, 2018	Sept 30, 2019
Interest expense on loans	(295)	(312)	(656)	(913)
Break cost of loan	-	-	(258)	-
Other interest expense	(2)	(1)	(4)	(3)
Interest and other financing cost	(297)	(313)	(918)	(916)

17.	Other financial result
		3 months ended		9 months ended
		Sept 30, 2018	Sept 30, 2019		Sept 30, 2018	Sept 30, 2019
Exchange rate gain / (loss) realized	39	(27)	(701)	(77)
Exchange rate (loss) / gain not realized	(127)	(17)	707	(12)
Ineffective portion of hedge*	-	(15)	-	(2)
Other financial result
(88)	(59)	6	(92)

*Ineffective portion of the IRS agreement relating to the loan Nr. 2. provided by Erste Bank Hungary Zrt.

20

GRAPHISOFT PARK SE

NOTES TO THE QUARTERLY REPORT

FOR THE QUARTER ENDED SEPTEMBER 30, 2019

(all amounts in thousands of euros unless otherwise indicated)

18.	Income taxes
		3 months ended		9 months ended
		Sept 30, 2018	Sept 30, 2019		Sept 30, 2018	Sept 30, 2019
Current income tax	4	(4)	(37)	(11)
Income tax benefit / (expense)
4	(4)	(37)	(11)

Based on the business activity, Graphisoft Park Engineering & Management Kft - established in 2017 - does not operate under the "SZIT" regulation and therefore is subject to corporate income tax, local business tax and deferred income tax, if applicable. Applicable tax rates are as follow: corporate income tax at 9% and local business at tax 2% both in 2018 and 2019.

19. Earnings per share

Basic and diluted earnings per share amounts are calculated as follows:

	3 months ended		9 months ended
	Sept 30, 2018	Sept 30, 2019		Sept 30, 2018	Sept 30, 2019
Net profit attributable to equity holders	3,988	2,574		11,528	12,394
Weighted average number of ordinary shares	10,082,598	10,082,598		10,082,598	10,082,598
Basic earnings per share (EUR)	0.40	0.26		1.14	1.23
Weighted average number of ordinary shares	10,082,598	10,082,598	10,082,598	10,082,598
Diluted earnings per share (EUR)	0.40	0.26	1.14	1.23

Treasury shares possessed by the Company and employee shares are excluded when the earnings per share value is determined as described in Note 1.3 to the financial statements.

Share ownership details are disclosed in Note 1.3.

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GRAPHISOFT PARK SE

NOTES TO THE QUARTERLY REPORT

FOR THE QUARTER ENDED SEPTEMBER 30, 2019

(all amounts in thousands of euros unless otherwise indicated)

20.	Treasury shares
Graphisoft Park SE treasury share details are as follows:
		December 31, 2018	September 30, 2019
Number of ordinary shares	549,076	549,076
Number of employee shares	625,389	625,389
Face value per share (EUR)	0.02	0.02
Total face value (EUR)	23,489	23,489
Total value of treasury shares (at historical cost)	974	974

21. Net asset value

Book value and fair value of assets and liabilities as of September 30, 2019:

	Note	Book value		Fair value		Difference
		Sept 30,		Sept 30,
		2019	2019
Investment property and other tangible assets*	7,8	247,470	264,320	16,850
Intangible assets		3	3	-
Current and deferred tax assets, net	5	(55)		(55)		-
Non-financial instruments		247,418	264,268	16,850
Cash and cash equivalents	3	5,070	5,070	-
Trade receivables	4	1,437	1,437	-
Other current assets	6	2,451	2,451	-
Trade payables	9	(626)	(626)	-
Other short-term liabilities	10	(5,048)	(5,048)	-
Loans	11	(69,611)	(69,611)	-
Other long-term liabilities	12	(7,018)		(7,018)		-
Financial instruments		(73,345)	(73,345)	-
Net asset value
	174,073	190,923	16,850

• Based on the valuation of the independent appraiser the fair value of the entire property portfolio is 263,780 thousand euros as of September 30, 2019.

22

GRAPHISOFT PARK SE

NOTES TO THE QUARTERLY REPORT

FOR THE QUARTER ENDED SEPTEMBER 30, 2019

(all amounts in thousands of euros unless otherwise indicated)

Book value and fair value of assets and liabilities as of December 31, 2018:

	Note	Book value		Fair value		Difference
		Dec 31, 2018		Dec 31, 2018
Investment property and other tangible assets*	7,8	241,707	264,958	23,521
Intangible assets		5	5	-
Current and deferred tax assets, net	5	81		81		-
Non-financial instruments		241,793	265,044	23,521
Cash and cash equivalents	3	5,874	5,874	-
Trade receivables	4	1,450	1,450	-
Other current assets	6	2,504	2,504	-
Trade payables	9	(1,250)	(1,250)	-
Other short-term liabilities	10	(5,124)	(5,124)	-
Loans	11	(72,672)	(72,672)	-
Other long-term liabilities	12	(5,030)		(5,030)		-
Financial instruments		(74,248)	(74,248)	-
Net asset value		167,545	190,796	23,521

• Based on the valuation of the independent appraiser the fair value of the entire property portfolio is 264,510 thousand euros as of December 31, 2018.

23

GRAPHISOFT PARK SE

NOTES TO THE QUARTERLY REPORT

FOR THE QUARTER ENDED SEPTEMBER 30, 2019

(all amounts in thousands of euros unless otherwise indicated)

22. Legal proceedings

Due to the prior gasification activity the northern development area is still contaminated. The rehabilitation of this area is the duty of the polluter Capital City Gas Works (currently NKM Földgázszolgáltató Zrt.). In the resolution received on October 3, 2018, the competent government body, the Pest County Government Office notified us about the prolongation of the completion deadline of the rehabilitation in the northern development area. We have filed suit for the review of the resolution in administrative court. The first hearing took place on April 16, 2019, the second one on June 18, 2019, the third one on September 19, 2019 without the court entering any decision that times. The court postponed the last hearing to November 12, 2019. Judgement is expected to be entered this hearing.

23. Approval of financial statements, dividend

Following the recommendation of the Board of Directors, the Annual General Meeting on April 29, 2019 approved the 2018 consolidated financial statements of the Company prepared in accordance with International Financial Reporting Standards (IFRS) showing a balance sheet total of 251,757 thousand EUR and a profit for the year of 15,083 thousand EUR. Together with the approval of the consolidated financial statements for issue, the Annual General Meeting approved dividend distribution of 126 HUF per ordinary share, 1,270,407 thousand HUF in total (3,938 thousand EUR on the exchange rate of April 29, 2019), and 42 HUF per employee share, 52,533 thousand HUF in total (163 thousand EUR on the exchange rate of April 29, 2019). The starting date for dividend payments was May 15, 2019. The Company paid out the dividends to the shareholders identified by shareholder's registration as of May 8, 2019.

24. Declaration

Statement of responsibility- We declare that the Quarterly Report which has been prepared in accordance with International Financial Reporting Standards and to the best of our knowledge, gives a true and fair view of the assets, liabilities, financial position and profit or loss of Graphisoft Park SE and its subsidiaries included in the consolidation, and the Business Report gives a fair view of the position, development and performance of Graphisoft Park SE and its subsidiaries included in the consolidation, together with a description of the principal risks and uncertainties of its business.

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