International Hotel Investments p l c : IHI Magyarország Zrt Financial Statements for 2022

Annual Report and financial statements prepared in accordance with

International Financial Reporting Standards

IHI Magyarország Zrt.

Year ended 31 December 2022

IHI Magyarország Zrt.	1
Annual Report and financial statements
Year ended 31 December 2022
Contents
Contents	1
Directors' report	2 - 3
Independent auditor's report	4 - 7
Statement of comprehensive income	8
Statement of financial position	9
Statement of changes in equity	10
Statement of cash flows	11
Notes to the financial statements	12-39

IHI Magyarország Zrt.

2

Annual Report and financial statements

Year ended 31 December 2022

Directors' report

The directors present their report together with the audited financial statements of IHI Magyarorszag Zrt. (the 'Company') for the year ended 31 December 2022.

Mission and Strategy

The Company's mission is to maximise shareholders' wealth by owning and operating assets at the top end of the market within which it operates.

Principal activities

The Company operates the Corinthia Hotel Budapest, a landmark five-star deluxe hotel located in the heart of Budapest drawing on an unrivalled 112-year history of excellence and tradition. The Company also owns and operates the Royal Residence and the Royal Spa.

The Company's sole shareholder is IHI p.l.c., a company domiciled in Malta.

Review of business and future outlook

The results for the year are set out in the statement of profit or loss and other comprehensive income on page 9 of the financial statements. The profit for the year of €0.23 million (2021 loss: €1.07 million) will be added to the retained earnings. Following a revaluation assessment, the 2020 impairment of €5 million was reversed in 2021 as shown in the statement of comprehensive income following improvement noted in occupancy and forecasts.

Future developments

As the Company continues to recover from the pandemic, we expect conversion ratios from Revenue to operating results before depreciation and fair value movements to continue to improve. This improvement is tempered by inflationary pressures, rising interest rates and tight labour market in consequence of the economic effects of the pandemic and the military conflict in Russia.

We continue to counter or minimise these pressures by retaining as many of the efficiencies and cost discipline gained during the pandemic.

Going concern

The Directors have reviewed the Company's and the IHI p.l.c. Group's operational and cash flow forecasts. Based on this review, after making enquiries, and in the light of the current financial position, the existing banking facilities and other funding arrangements, the Directors confirm, that they have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future.

IHI Magyarország Zrt.

3

Annual Report and financial statements

Year ended 31 December 2022

Directors' report - continued

Equity

The statement of changes in equity is set out on page 10 of the financial statements.

In 2022, no dividend has been declared to the parent IHI p.l.c.

Directors

The board of directors is made up as follows:

Frank Xerri de Caro

Joseph Pisani

Richard Cachia Caruana (Appointed: 11 October 2022)

Joseph Fenech (Demise: 3 August 2022)

The company's Articles of Association do not require any directors to retire.

Approved by the Board of Directors on 28 April 2023 and signed on its behalf by:

Frank Xerri de Caro

Chairperson

Joseph Pisani

Director

Erzsébet krt 43-49 1073 Budapest Hungary

4

Independent auditor's report

To the Shareholders of IHI Magyarország Zrt.

Report on the audit of the financial statements

Our opinion

In our opinion the financial statements give a true and fair view of the financial position of IHI Hungary Magyarorszag Zrt. (the Company) as at 31 December 2022, and of the company's financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards ('IFRSs') as adopted by the EU; and

What we have audited

IHI Hungary Magyarorszag Zrt.'s financial statements, set out on pages 8 to 39 comprise:

the statement of comprehensive income for the year ended 31 December 2022; the statement of financial position as at 31 December 2022;

the statement of changes in equity for the year then ended; the statement of cash flows for the year then ended; and

the notes to the financial statements, which include significant accounting policies and other explanatory information.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We are independent of the company in accordance with the International Code of Ethics for Professional Accountants (including International Independence Standards) issued by the International Ethics Standards Board for Accountants (IESBA Code) together with the ethical requirements of the Accountancy Profession (Code of Ethics for Warrant Holders) Directive issued in terms of the Accountancy Profession Act (Cap. 281) that are relevant to our audit of the financial statements in Malta. We have fulfilled our other ethical responsibilities in accordance with these Codes.