Untitled

ANNUAL

REPORT

EUROCASTLE INVESTMENT LIMITED

EUROCASTLE INVESTMENT LIMITED is a publicly traded closed-

ended investment company. The Company is implementing its new

investment strategy, initially focusing on opportunistic real estate in

Greece, with plans to expand across Southern Europe.

The Company is Euro denominated and is listed on Euronext Amsterdam under the symbol

“ECT”. Eurocastle is managed by an affiliate of Fortress Investment Group LLC, a leading global

investment manager. For more information regarding Eurocastle Investment Limited and to be

added to our email distribution list, please visit www.eurocastleinv.com.

2024

EUROCASTLE INVESTMENT LIMITED

SEE PAGE 16 FOR ALL END NOTES EUROCASTLE INVESTMENT LIMITED | 2024 ANNUAL REPORT 1

BUSINESS REVIEW

FINANCIAL HIGHLIGHTS AT A GLANCE

COMPANY OVERVIEW

Eurocastle Investment Limited (the “Company” or “Eurocastle”) is a publicly traded closed-ended investment company. Having previously focused

on Italian performing and non-performing loans (“NPLs”) and other real estate related assets in Italy (the “Legacy Italian Investments”), in July 2022

the Company announced the decision to refocus its investment programme on opportunistic real estate in Greece with a plan to expand across

Southern Europe, where the Manager has an extensive footprint and a long track record of investing in this asset class (the ''New Investment Strategy'').

The Company’s New Investment Strategy seeks to leverage Fortress Investment Group’s (“the Manager”) deep knowledge of the sector, which offers

significant investment opportunities in the current market cycle. To pursue this strategy, Eurocastle has now launched a Luxembourg regulated fund,

European Properties Investment Fund S.C.A., SICAV RAIF (the “Fund” or “EPIF”).

PORTFOLIO OVERVIEW

Eurocastle’s net assets comprise

i) Net Corporate Cash available to continue seeking new investments under the New Investment Strategy,

ii) an interest in EPIF which to date has acquired a boutique retail complex in an affluent part of Athens, Greece.

iii) a tax asset representing amounts paid in relation to additional tax assessed against a legacy German property subsidiary and

iv) residual interests in two legacy Italian real estate funds.

The Company’s adjusted net asset value (the “Adjusted NAV”) takes into account reserves for future costs and potential liabilities considered by the

Board in light of the realisation plan announced in November 2019 (the “Realisation Plan”). The chart below shows a breakdown of Eurocastle’s net

assets as at 31 December 2024.

€4.0m

Legacy German Tax

Asset

€3.97ps

18%

€0.1m

Legacy Italian Real

Estate Funds

€0.06ps

€5.8m

New Investment

Strategy - Gr eece

€5.76ps

26%

€12.2m

Net Corporate Cash

€12.26ps

56%

IFRS NAV

€22.05 ps / €22.1mm

less Additional Reserves

€10.71ps / €10.7mm

Adjusted NAV

€11.34 ps / €11.4 mm

YE 2024 IFRS NAV:

€22.1mm

(YE 2023: €21.7mm)

(Q3 2024: €21.4mm)

YE 2024 Adjusted NAV

of €11.4mm

YE 2023 Adjusted NAV

of €11.1mm

YE 2024 IFRS NAV per share:

€22.05ps

(YE 2023: €21.77ps)

(Q3 2024: €21.34ps)

YE 2024 Adjusted NAV

of €11.34ps

YE 2023 Adjusted NAV

of €11.12ps

Additional Reserves:

Reserves of €10.7 million of which €6.0 million relates to the legacy German tax

matter with the balance of approximately €4.7 million in place to allow for future

costs and potential liabilities while the Company establishes in parallel the New

Investment Strategy.

Legacy Italian Real Estate Funds:

Interests in

two private Italian real estate development funds which are

now in

liquidation following the sale of all underlying apartment units.

The

NAV is

represented by

net cash currently reserved in the funds.

Legacy German Tax Asset:

Amounts paid in relation to additional tax assessed against a legacy German

property subsidiary (inclusive of interest due to the Company on these amounts).

The Company won the first instance of its appeal in the German courts but the

German tax authorities are now appealing the decision. The Company expects the

matter will eventually be resolved in the Company’s favo

ur.

New Investment Strategy – Greece:

Eurocastle’s 80% share in the Fund, reflecting the value of the real estate asset

acquired to date net of Fund costs.

Net Corporate Cash:

€1

2.2 million of corporate cash after deducting current

liabilities (“Net Corporate

Cash”) of which €

2.5 million is the remaining unfunded commitment in EPIF.

SEE PAGE 16 FOR ALL END NOTES EUROCASTLE INVESTMENT LIMITED | 2024 ANNUAL REPORT 2

BUSINESS REVIEW

NEW INVESTMENT STRATEGY

Eurocastle is pursuing its New Investment Strategy by initially focusing on opportunistic real estate in Greece with a plan to expand across Southern

Europe, where the Manager has an extensive footprint and a long track record of investing in this asset class. In order to support its new investment

programme, Eurocastle has launched a Luxembourg regulated fund, European Properties Investment Fund S.C.A., SICAV RAIF. The Fund completed

its first close on August 6, 2024 for €10 million, with the Company committing €8 million alongside a €2 million commitment from its JV partner

. The

Fund is now being marketed to potential investors with a target fund size of €100 million.

Eurocastle expects to leverage the relationship of the Company’s investment manager with a local partner in Greece (the “JV Partner”) to source

investments, with a focus on opportunities arising from judicial auctions and consensual sales through which it can potentially acquire real estate

assets that are currently collateral to defaulted claims or owned by banks or investors as a consequence of a repossession process.

In addition to generating attractive risk adjusted returns on its share of any investments made by the Fund, Eurocastle will also receive a 60% share

of fees and promote generated from external investors in the Fund with the remaining 40% paid to the JV Partner. Such amounts include annual

management fees representing 1.5% of the Fund’s net asset value and promote of 20% of the Fund’s total net profit (subject to a return hurdle of 8%

per annum). The Company sees the Fund as an attractive opportunity to earn enhanced returns on the capital it invests while also building a

meaningful base for future investments

At the same time, the Board will continue to monitor the market environment for raising new capital in order to assess pursuing all elements of its

New Investment Strategy, which would require additional capital to achieve meaningful scale.

The Board considers that any potential additional costs resulting from this phased approach are adequately covered by the Company’s existing

Additional Reserves. The Board will continue to evaluate these reserves and the Company’s available capital, taking into account investment

opportunities and the performance of the new strategy.

Shareholders should however be aware that the implementation and performance of the Company’s New Investment Strategy is subject to risks,

uncertainty, and assumptions. The Manager is currently in the early stages of pursuing the New Investment Strategy and there can be no certainty

that it will have success in doing so. There is likewise no certainty that it will be able to attain sufficient scale to achieve the desired returns. In addition,

changes in economic conditions generally and the real estate market specifically, the availability of appropriate investment opportunities and the

ability to raise financing on suitable terms, may also affect the success of the New Investment Strategy.

For further details on the Company’s New Investment Strategy and the Additional Reserves, please refer to the Circular published in July 2022 and

available on the Company’s website under the Periodic Reports and Shareholder Communications section.

FY 2024 NAV Bridge

In € per share

€11.12

€11.34

€22.05

(€0.02)

(€0.03)

€0.27

€5.97

€4.74

Q4 2023

Adjusted

NAV

Legacy Italian RE Fund

Investments

Fair Value Movement

New Investment Srategy -

Greece

Other

Movement

Q4 2024

Adjusted

NAV

Legacy

German

Tax Reserve

Liquidation

Reserve

Q4 2024

IFRS

NAV

SEE PAGE 16 FOR ALL END NOTES EUROCASTLE INVESTMENT LIMITED | 2024 ANNUAL REPORT 3

BUSINESS REVIEW

Overview

During 2024, having largely concluded its Realisation Plan, the Company has focused on establishing the platform through which it can

make investments under its New Investment Strategy while also closing on the first investment made as part of this strategy.

Investment Realisations & Highlights

 New Investment Strategy – In August 2024, Eurocastle launched the Fund through which it intends to initially make investments under

the New Investment Strategy, committing to invest €8 million alongside a €2 million commitment from its JV Partner. EPIF is now being

marketed to potential investors with a target size of €100 million.

 In October 2024, the Fund made its first acquisition, being part of a boutique retail complex in an affluent part of Athens with Eurocastle

investing a total of €5.5 million into the Fund. The asset was acquired from one of the largest Greek banks out of a distressed situation.

Eurocastle’s strategy is to lease-up the last 20% of the building which is currently vacant and then seek an exit in the open market. In

parallel with executing this first investment, EPIF has been underwriting a number of additional opportunities. Eurocastle’s share in the

NAV of EPIF as at the end of 2024 is €5.8 million.

 As at 31 December 2024, the Company has €12.2 million of Net Corporate Cash to invest under the New Investment Strategy, of which

approximately €2.5 million represents Eurocastle’s remaining outstanding commitment in EPIF.

 Legacy Italian Real Estate Funds – The remaining NAV for these investments of €0.1 million, or €0.06 per share, reflects cash currently

reserved in the funds that is expected to be released once the fund manager resolves certain potential liabilities and liquidates each fund.

 Additional Reserves - As at 31 December 2024, of the total Additional Reserves of €10.7 million, €6.0 million related to the legacy German

tax matter with the balance of approximately €4.7 million in place to allow for future costs and potential liabilities while the Company

pursues in parallel the New Investment Strategy. The Board anticipates reviewing the appropriate level of reserves once it has further

clarity on the amount of commitments received by the Fund.

 Legacy German Tax Matter - As previously announced, to date the Company has paid a net amount of €3.7 million in relation to the

Legacy German tax matter against which it has raised a corresponding tax asset. The Company, in pursuing the reimbursement of this

amount through the German fiscal court won the first instance of its appeal in December 2024. Shortly after, the German tax authorities

appealed the decision through the German federal tax court and the Company is currently waiting to be notified of the date of the hearing.

The current remaining potential exposure on the matter (excluding associated costs of €0.3 million) is estimated to be €1.7 million and

relates to the years 2013 to 2015 which remain subject to ongoing tax audits. As at 31 December 2024, this amount has not been reflected

within the IFRS NAV of the Company as no formal commitments for potential liabilities exist. Notwithstanding the Company’s expectation

that the tax matter will eventually be resolved in the Company’s favour, as at 31 December 2024, the full potential liability of €6.0 million,

or €5.97 per share, is fully reserved for within the Additional Reserves.

Subsequent event to 31 December 2024

On April 23rd, 2025, EPIF successfully held its first investor close, securing €16 million of commitments from 10 investors taking the total

fund size to €26 million. Currently, a significant number of potential additional commitments are at advanced stage of due diligence, with

a further close expected in May 2025.

The commitments closed on 23 April 2025 will reduce Eurocastle's interest in the Fund from 80% to approximately 31%. As a result, the

new investors will reimburse Eurocastle an estimated total of €3.5 million of the €5.5 million it had invested to date in EPIF. This

reimbursement is to align Eurocastle's revised pro rata share of the capital called plus compensatory interest. The amount to be paid to

Eurocastle is substantially in line with the relevant share of Eurocastle's valuation of its interest in EPIF as at 31 December 2024.

SEE PAGE 16 FOR ALL END NOTES EUROCASTLE INVESTMENT LIMITED | 2024 ANNUAL REPORT 4

FINANCIAL REVIEW

INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2024

Income

Statement

Income

Statement

2024

2023

€ Thousands

Portfolio Returns

New Investment Strategy – Greece unrealised fair value movement

273

Legacy Italian NPLs & Other Loans realised gain

Legacy Italian Real Estate Funds unrealised fair value movement

(18)

(50)

Fair value movement on Investments

255

(48)

Other income

113

Interest income

827

519

(Loss) on foreign currency translation

(1)

(2)

Total income

1,194

471

Operating Expenses

Manager base and incentive fees

103

Remaining operating expenses

745

1,012

Other operating expenses

848

1,106

Total expenses

848

1,106

Profit/(Loss) for the year

346

(635)

€ per share

0.35

(0.64)

BALANCE SHEET AND ADJUSTED NAV RECONCILIATION AS AT 31 DECEMBER 2024

New Investment

Strategy -

Greece

Legacy

Italian

Investments

Corporate

Total

2024

2023

€ Thousands

Assets

Other assets

315

210

Legacy German tax asset

3,974

3,727

Investments – New Investment Strategy - Greece

5,770

Investments – Legacy Italian Real Estate Funds

Cash, cash equivalents and Treasury Investments:

Cash and cash equivalents

12,

415

12,415

13,951

Treasury Investments

4,236

Total assets

5,770

16,704

22,

538

22,206

Liabilities

Trade and other payables

389

425

Manager base and incentive fees

Total liabilities

452

466

IFRS Net Asset Value

5,770

16,252

22,086

21,740

Liquidation cash reserve

(

4,748)

(4,748)

(5,

185)

Legacy German tax cash reserve

(

2,008)

(

2,008)

(1,

728)

Legacy German tax asset reserve

(3,

974)

(3,

974)

(3,

727)

Adjusted NAV

5,770

5,522

11,356

11,

100

Adjusted NAV (€ per Share)

5.76

0.0

11.

1.12

SEE PAGE 16 FOR ALL END NOTES EUROCASTLE INVESTMENT LIMITED | 2024 ANNUAL REPORT 5

FINANCIAL REVIEW

ADDITIONAL RESERVES

The table below summarises the movement of Eurocastle's Additional Reserves, set as part of the Realisation Plan in 2019. In light of the

disposal of the majority of its investments, the Company has taken a prudent view in managing its cash and accordingly implemented various

reserves which sought to ensure that the Company could continue to meet known, potential and unknown future liabilities over the period

which it anticipated would be required for the Company to complete the realisation of its investments and then be liquidated in an orderly

fashion. The Additional Reserves are not accounted for under IFRS as no formal commitments for these future costs and potential liabilities

exist.

As at 31 December 2024, the Additional Reserves totaled €10.7 million, of which €6.0 million is specifically related to additional tax assessed

in relation to a legacy German property subsidiary, with the balance of approximately €4.7 million in place to allow for future costs and

potential liabilities while the Company pursues in parallel the New Investment Strategy. Notwithstanding the Company’s expectation that

the legacy German tax matter will eventually be resolved in the Company’s favour, as at 31 December 2024, the potential liability was fully

reserved for within the Additional Reserves.

The Board anticipates reviewing the appropriate level of reserves once it has further clarity on the amount of commitments received by the

EPIF.

Dec 2023

Additional

Reserves

€ million

Reserves

paid/ payable

in 2024

€ million

Dec 2023 Reserves

after

paid/ payable

in 2024

€ million

Q4 2024

Reserves

€ million

2024 Net

Movement on

Reserves

€ million

Legacy German Tax Reserve

(5.5)

(0.2)

(5.7)

(6.0)

0.3

Liquidation Reserve

(5.2)

0.2

(5.0)

(4.7)

(0.3)

Total

(10.7)

0.0

(10.7)

Per Share

(10.65)

(0.06)

(10.71)

Additional

Reserves as at

announcement of

Realisation Plan

€ million

Reserves

paid/ payable

since Realisation

Plan

€ million

Reserves

after paid/ payable

since Realisation

Plan

€ million

Q4 2024

Reserves

€ million

Net

Movement on

Reserves since

Realisation Plan

€ million

Legacy German Tax Reserve

(7.1)

0.2

(6.9)

(6.0)

0.9

Liquidation Reserve

(12.9)

6.6

(6.3)

(4.7)

1.6

Total

(20.0)

6.8

(13.2)

(10.7)

2.5

Per Share

(19.99)

6.76

(13.23)

(10.71)

2.52

SEE PAGE 16 FOR ALL END NOTES EUROCASTLE INVESTMENT LIMITED | 2024 ANNUAL REPORT 6

DIRECTORS’ REPORT

DISTRIBUTION

During the year ended 31 December 2024, no distributions were declared or paid (during the year ended 31 December 2023, no distributions

were declared or paid).

DIRECTORS

The Directors who have held office during the year were:

Constantine (Dean) Dakolias

Claire Whittet

Jason Sherwill

Peter Smith – resigned on 30 October 2024.

Simon J. Thornton

DIRECTORS INTERESTS

The interests of the Directors in the voting shares of Eurocastle are as follows:

SUBSTANTIAL SHAREHOLDINGS

Per the shareholder register and as at [23] April 2025, the following shareholders had an interest in 3% or more of Eurocastle's share capital:

% Holdings

Euroclear Nominees Limited

44%

Nederlands Centraal Instituut Voor Giraal Effectenverkeer BV

41%

Vidacos Nominees Limited

Eurocastle is subject to EU transparency rules as a result of its listing on an EU regulated market and, consequently, shareholders are required

to notify the relevant regulators of certain changes to the percentage of voting rights in Eurocastle held by them.

A number of individual shareholders have made a notification of exceeding the reporting thresholds per the EU transparency rules as

implemented in the Netherlands. These notifications are registered in the public register maintained by the Netherlands Authority for

Financials Markets (AFM) and can be found at the following website www.afm.nl. The shareholding above has been obtained from the share

register, which records legal title to the Company’s shares. The shareholdings listed above may therefore not reflect beneficial ownership.

AUDITORS

BDO LLP were re-appointed during the period and have expressed a willingness to continue in office.

CORPORATE GOVERNANCE

The Directors have applied the principles of the Guernsey Code of Corporate Governance which came into effect from the 1 January 2012.

As a Guernsey incorporated company which is managed and controlled in Guernsey, Eurocastle Investment Limited is subject to the

provisions of the UK City Code on Takeovers and Mergers.

As at

31-Dec-

Dean Dakolias

Claire Whittet 8

,324

Jason Sherwill 16

,965

Peter Smith (resigned on 30 October 2024)

Simon J. Thornton 15

,427

SEE PAGE 16 FOR ALL END NOTES EUROCASTLE INVESTMENT LIMITED | 2024 ANNUAL REPORT 7

DIRECTORS’ REPORT

MANAGEMENT AGREEMENT

The Independent Directors have reviewed the continued appointment of the Manager. In carrying out the review, the Independent Directors

considered the past performance of the Company and the capability and resources of the Manager to deliver satisfactory investment

performance and have concluded that the continued appointment of the Manager is in the best interest of the shareholders.

DIRECTORS’ STATEMENTS AS TO DISCLOSURE OF INFORMATION TO AUDITORS

The Directors who were members of the Board at the time of approving the Directors’ Report are listed on page 6. Having made enquiries of

fellow Directors and of Eurocastle’s auditors, each of these Directors confirms that:

 to the best of each Director’s knowledge and belief, there is no information (that is, information needed by the Company’s auditors

in connection with preparing their report) of which Eurocastle’s auditors are unaware; and

 each Director has taken all the steps a Director might reasonably be expected to have taken to be aware of relevant audit information

and to establish that Eurocastle’s auditors are aware of that information.

GOING CONCERN

Following the announcement of the Realisation Plan in 2019 and the New Investment Strategy, the Directors have assessed, and continue to

have a reasonable expectation, that the Company will be able to continue in operation and meet its liabilities as they fall due. The Directors

have reviewed the Company’s processes to control those risks to which the Company is exposed, as disclosed in note 3, as well as reviewing

the annual budget, including the Additional Reserves set aside as part of the Realisation Plan. As a result of the Realisation Plan and the New

Investment Strategy, no contractual commitments have become onerous and no commitments for further realisation costs have been made.

Therefore, no provisions have been recorded in the financial statements for the future costs of the business. In particular, neither the conflict

in Israel, the ongoing war in Ukraine nor the market uncertainty following potential US tariffs is expected to have a significant impact on the

Company's liquidity. The Directors have also reviewed forecasts that have been sensitised to reflect plausible downside scenarios. The

Directors have determined that there is no material uncertainty that casts doubt on the entity’s ability to continue as a going concern. The

Directors have also considered the above in light of the New Investment Strategy.

As a result of this, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence

for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the financial statements.

DIRECTORS’ STATEMENTS PURSUANT TO THE DISCLOSURE AND TRANSPARENCY RULES

Each of the Directors as at 31 December 2024 (whose names are listed on page 6) confirms that, to the best of each person’s knowledge and

belief:

 the financial statements, prepared in accordance with International Financial Reporting Standards, as adopted by the EU, give a true

and fair view of the assets, liabilities, financial position and loss of the Company; and

 the Report of the Directors contained in the Annual Report includes a fair review of the development and performance of the business

and the position of the Company, together with a description of the principal risks and uncertainties that they face as disclosed in

note 3 of the Annual Report.

SEE PAGE 16 FOR ALL END NOTES EUROCASTLE INVESTMENT LIMITED | 2024 ANNUAL REPORT 8

DIRECTORS’ REPORT

STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN RESPECT OF THE FINANCIAL STATEMENTS

The Directors are responsible for preparing the financial statements in accordance with applicable Guernsey law and generally accepted

accounting principles.

Guernsey Company law requires the Directors to prepare financial statements for each financial year which give a true and fair view of the

state of affairs of the Company and of the profit or loss of the Company for that year. In preparing these financial statements, the Directors

should:

 select suitable accounting policies and then apply them consistently;

 make judgements and estimates that are reasonable and prudent;

 state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the

financial statements; and

 prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue its

business.

The Directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position

of the Company and enable them to ensure that the financial statements comply with the Companies (Guernsey) Law, 2008. They are also

responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and

other irregularities. The Directors confirm that they have complied with the above requirements in preparing the Financial Statements.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company website.

Legislation in Guernsey governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

FORWARD LOOKING STATEMENTS

This release contains statements that constitute forward-looking statements. Such forward-looking statements may relate to, among other

things, future commitments to sell real estate and achievement of disposal targets, availability of investment and divestment opportunities,

timing or certainty of completion of acquisitions and disposals, the operating performance of our investments and financing needs. Forward-

looking statements are generally identifiable by use of forward-looking terminology such as “may”, “will”, “should”, “potential”, “intend”,

“expect”, “endeavor”, “seek”, “anticipate”, “estimate”, “overestimate”, “underestimate”, “believe”, “could”, “project”, “predict”, "project",

“continue”, “plan”, “forecast” or other similar words or expressions. Forward-looking statements are based on certain assumptions, discuss

future expectations, describe future plans and strategies, contain projections of results of operations or of financial condition or state other

forward-looking information. The Company’s ability to predict results or the actual effect of future plans or strategies is limited. Although

the Company believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, its actual

results and performance may differ materially from those set forth in the forward-looking statements. These forward-looking statements are

subject to risks, uncertainties and other factors that may cause the Company’s actual results in future periods to differ materially from

forecasted results or stated expectations including the risks regarding Eurocastle’s ability to declare dividends, or achieve its targets regarding

asset disposals or asset performance.

The Directors confirm that they have complied with the above requirements in preparing the financial statements.

Registered Office

Oak House

Hirzel Street

St. Peter Port

Guernsey

GY1 2NP

On behalf of the Board

Simon J. Thornton

Director and Audit Committee Chairman

Date: 23 April 2025

EUROCASTLE INVESTMENT LIMITED | 2024 ANNUAL REPORT

INDEPENDENT AUDITOR’S REPORT

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF EUROCASTLE INVESTMENT LIMITED

OPINION ON THE FINANCIAL STATEMENTS

In our opinion, the financial statements:

x give a true and fair view of the state of the Company’s affairs as at 31 December 2024 and of its profit for the year then ended;

x have been properly prepared in accordance with International Financial Reporting Standards as adopted by the European

Union; and

x have been properly prepared in accordance with the requirements of the Companies (Guernsey) Law, 2008.

We have audited the financial statements of Eurocastle Investment Limited (the ‘Company’) for the year ended 31 December 2024 which

comprise the Income Statement, the Statement of Financial Position, the Statement of Cash Flow, the Statement of Changes in Equity and the

notes to the financial statements, including material accounting policy information. The financial reporting framework that has been applied in

their preparation is applicable law and International Financial Reporting Standards as adopted by the European Union.

BASIS FOR OPINION

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. 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. Our audit opinion is

consistent with the additional report to the audit committee.

INDEPENDENCE

We remain independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements

in the UK, including the FRC’s Ethical Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in

accordance with these requirements. The non-audit services prohibited by that standard were not provided to the Company.

CONCLUSION RELATING TO GOING CONCERN

In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the preparation of

the financial statements is appropriate. Our evaluation of the Directors’ assessment of the Company’s ability to continue to adopt the going

concern basis of accounting included:

• Evaluating the appropriateness of the forecast cash flows that support the Directors’ assessment of going concern by

considering historical performance and challenging the forecast assumptions relating to the Company’s new investment strategy;

• Assessing the sensitivity of the forecast cash flows to possible changes in the future investment strategy of the Company

and its investments;

• Challenging the appropriateness of the Directors’ assumptions and judgements made with regard to the cash forecasts.

These included those in relation to the forecast level of expenditure and the sufficiency of cash reserves required to cover both the

base case and the stress-tested scenarios in the forecast, which considered the outcome of any contingent liabilities;

• Reviewing minutes of meetings and made enquiries of the Investment Manager as to the existence of further committed

investments; and

• Reviewing the disclosures in the financial statements relating to going concern to evaluate whether the disclosure is

consistent with the circumstances.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or

collectively, may cast significant doubt on the Company’s ability to continue as a going concern for a period of at least twelve months from

when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.

EUROCASTLE INVESTMENT LIMITED | 2024 ANNUAL REPORT

INDEPENDENT AUDITOR’S REPORT

OVERVIEW

Key audit matters

2024

2023

1 Recoverability of the Legacy German tax

asset

2

3

2 Valuation of investments held at fair value

3

2

KAM 1 is no longer considered to be a key audit matter because of the fact that, during

December 2024, the Company received a court decision in its favour.

Materiality

Company financial statements as a whole

€0.65m (2023: €0.67m) based on 2.9% (2023: 3%) of Net assets (2023: Net assets).

AN OVERVIEW OF THE SCOPE OF OUR AUDIT

Our audit was scoped by obtaining an understanding of the Company and its environment, including the Company’s system of internal

control, and assessing the risks of material misstatement in the financial statements. We also addressed the risk of management override of

internal controls, including assessing whether there was evidence of bias by the Directors that may have represented a risk of material

misstatement. In particular, we considered where the Directors made subjective judgements, for example in respect of the valuation of

investments held at fair value.

EUROCASTLE INVESTMENT LIMITED | 2024 ANNUAL REPORT

INDEPENDENT AUDITOR’S REPORT

KEY AUDIT MATTERS

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of

the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified,

including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit, and directing the efforts of

the engagement team. This matter was addressed in the context of our audit of the financial statements as a whole, and in forming our opinion

thereon, and we do not provide a separate opinion on this matter.

Key audit matter

How the scope of our audit addressed the key audit matter

Valuation of

investments held at

fair value

detailed in note

10 to the financial

statements the

Company owns an

investment held at

fair value. Note 2

to the

financial

statements details

the Company’s

accounting policy

for investments held

at fair value.

The Company’s investments are measured at fair value

as at the reporting date. The fair value of the

Company’s investment in European Properties

Investment Fund S.C.A., SICAV RAIF (the “Fund”) has

been determined with reference to the Fund’s Net Asset

Value (“NAV”) as at the reporting date.

The NAV of the Fund primarily comprises of an

investment property asset that was acquired during the

year. The property is valued externally using a

Discounted Cash Flow (“DCF”) model in accordance

with RICS methodolo

gy and IFRS 13 Fair value

Measurement.

The valuation of the investment property asset is the

key driver of the Fund’s NAV, which in turn is a key

driver to the Company’s net assets and underpins the

results for the year.

The valuation of investment prop

erty involves

significant judgment and estimation, including rental

values, exit yields, discount rates and inflation rates, to

be applied by the Investment Manager and the external

valuer, increasing the inherent risk in this area.

We consider this to be

a significant risk as

small changes in each key assumption could

materially affect the carrying value of the

asset concerned and hence we consider this

to be a key audit matter.

Our audit procedures included, but were not restricted to,

the following:

We reviewed the latest audited financial statements of

the Fund to ensure the accuracy and appropriateness

of the valuation method and the use of NAV for

determinin

g the fair value of the Company's

investment.

We assessed the appropriateness of the valuation process

at the investment manager. We confirmed the

Company's 80% interest in the Fund by inspecting the

incorporation documents and vouching the payments

in bank statements.

Specifically in relation to the valuation of the investment

property asset owned by the Fund, we have performed

the following procedures:

With the help of our real estate experts, we

reviewed the independent valuer's report and

confirmed that

the valuation methodology

complied with RICS guidelines and IFRS 13,

ensuring its appropriateness for determining

the fair value of the investment property asset.

We assessed the independent external

valuation experts’ objectivity, independence,

competenc

e, capability and qualifications to

undertake the valuation.

We tested the underlying data provided to the

valuer by the Investment Manager. This data

included tenancy schedules and lease terms,

which were agreed back to appropriate

supporting documents.

-W

e challenged key judgments and

assumptions, such as rental values, exit yields,

discount rates, and inflation rates, by

benchmarking to our own expectations set

using independent industry data.

Key observations:

Based on our work, we consider that the assumptions

adopted by the Directors in the valuation of investments at

fair va

lue were reasonable and the methodology applied in

arriving at the fair value of the

property asset was

appropriate.

EUROCASTLE INVESTMENT LIMITED | 2024 ANNUAL REPORT

INDEPENDENT AUDITOR’S REPORT

OUR APPLICATION OF MATERIALITY

We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. We consider

materiality to be the magnitude by which misstatements, including omissions, could influence the economic decisions of reasonable users that

are taken on the basis of the financial statements.

In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower materiality level,

performance materiality, to determine the extent of testing needed. Importantly, misstatements below these levels will not necessarily be

evaluated as immaterial as we also take account of the nature of identified misstatements, and the particular circumstances of their occurrence,

when evaluating their effect on the financial statements as a whole.

Based on our professional judgement, we determined materiality for the financial statements as a whole and performance materiality as

follows:

Company financial statements

2024

2023

Materiality

€0.65m

€0.67m

Basis for determining materiality

2.9% of Net assets

3% of Net assets

Rationale for the benchmark applied

We consider net assets to represent the most appropriate basis for setting materiality

as it represents the interest of the users of the financial statements.

Performance materiality

€0.49m

€0.5m

Basis for determining performance materiality

75% of total materiality

The level of performance materiality applied was set after having considered a

number of factors including the expected total value of known and likely

misstatements and the level of transactions in the year.

REPORTING THRESHOLD

We agreed with the Audit Committee that we would report to them all individual audit differences in excess of €32,000 (2023: €33,000). We

also agreed to report differences below this threshold that, in our view, warranted reporting on qualitative grounds.

OTHER INFORMATION

The directors are responsible for the other information. The other information comprises the information included in the annual report other

than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information

and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our

responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the

financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such

material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement

in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this

other information, we are required to report that fact.

We have nothing to report in this regard.

OTHER COMPANIES (GUERNSEY) LAW 2008 REPORTING

We have nothing to report in respect of the following matters where the Companies (Guernsey) Law, 2008 requires us to report to you if, in

our opinion:

x proper accounting records have not been kept by the Company; or

x the financial statements are not in agreement with the accounting records; or

EUROCASTLE INVESTMENT LIMITED | 2024 ANNUAL REPORT

INDEPENDENT AUDITOR’S REPORT

x we have failed to obtain all the information and explanations which, to the best of our knowledge and belief, are necessary for the

purposes of our audit.

OTHER REPORTING - EUROPEAN SINGLE ELECTRONIC FORMAT (ESEF)

The Company has prepared its annual report in ESEF. The requirements for this are set out in the Delegated Regulation (EU) 2019/815 with

regard to regulatory technical standards on the specification of a single electronic reporting format (hereinafter: the RTS on ESEF).

In our opinion, the annual report prepared in XHTML-format, including the financial statements of Eurocastle Investment Limited, has been

prepared in all material respects with the RTS on ESEF.

Management is responsible for preparing the annual report including the financial statements, in accordance with the RTS on ESEF.

Our responsibility is to obtain reasonable assurance for our opinion whether the annual report complies with the RTS on ESEF.

Our procedures included:

x obtaining an understanding of the entity's financial reporting process, including the preparation of the annual financial report in

XHTML-format; and

x identifying and assessing the risks that the annual report does not comply in all material respects with the RTS on ESEF and designing

and performing further assurance procedures responsive to those risks to provide a basis for our opinion, including examining

whether the annual financial report in XHTML-format is in accordance with the RTS on ESEF.

RESPONSIBILITIES OF DIRECTORS

As explained more fully in the Statement of Directors’ responsibilities, the Directors are responsible for the preparation of the financial

statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is necessary to

enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Directors are responsible for assessing the Company’s ability to continue as a going concern,

disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend

to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,

whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance,

but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected

to influence the economic decisions of users taken on the basis of these financial statements.

Extent to which the audit was capable of detecting irregularities, including fraud.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our

responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our

procedures are capable of detecting irregularities, including fraud is detailed below:

Non-compliance with laws and regulations

Based on:

x Our understanding of the Company and the industry in which it operates;

x Discussion with the Investment Manager, Audit Committee, legal counsel and those charged with governance; and

x Obtaining an understanding of the Company’s policies and procedures regarding compliance with laws and regulations

we considered the significant laws and regulations to be the International Financial Reporting Standards as adopted by the European Union,

Companies (Guernsey) Law 2008, EU transparency rules, German Tax Laws and the Euronext Rule Book.

The Company is also subject to laws and regulations where the consequence of non-compliance could have a material effect on the amount

or disclosures in the financial statements, for example through the imposition of fines or litigations. We identified such laws and regulations

to be the Guernsey Code of Corporate Governance and The Protection of Investors (Bailiwick of Guernsey) Law, 2020.

EUROCASTLE INVESTMENT LIMITED | 2024 ANNUAL REPORT

INDEPENDENT AUDITOR’S REPORT

Our procedures in respect of the above included:

x Agreement of the financial statement disclosures to underlying supporting documentation;

x Enquiries of the Investment Manager and those charged with governance relating to the existence of any non-compliance with laws

and regulations; and

x Reviewing minutes of meeting of those charged with governance throughout the period for instances of non-compliance with laws

and regulations.

Fraud

We assessed the susceptibility of the financial statements to material misstatement, including fraud. Our risk assessment procedures included:

x Enquiry with the Investment Manager and those charged with governance regarding any known or suspected instances of fraud;

x Obtaining an understanding of the Company’s policies and procedures relating to:

o Detecting and responding to the risks of fraud; and

o Internal controls established to mitigate risks related to fraud.

x Review of minutes of meeting of those charged with governance for any known or suspected instances of fraud;

x Discussion amongst the engagement team as to how and where fraud might occur in the financial statements; and

x Considering remuneration incentive schemes and performance targets and the related financial statement areas impacted by these.

Based on our risk assessment, we considered the areas most susceptible to fraud to be the valuation of investments held at fair value and

management override of controls.

Our procedures in respect of the above included the following:

x In addressing the fraud risk on the valuation of investments held at fair value, we performed the procedures set out in the key audit

matters section above;

x In addressing the risk of management override of control, we:

o Performed a review of estimates and judgements applied by the Investment Manager in the financial statements to assess

their appropriateness and the existence of any systematic bias;

o Considered the opportunity and incentive to manipulate accounting entries and tested journals which met a defined risk

criteria by agreeing to supporting documentation;

o Reviewed for significant transactions outside the normal course of business; and

o Performed a review of unadjusted audit differences, if any, for indications of bias or deliberate misstatement.

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members who were all

deemed to have appropriate competence and capabilities and remained alert to any indications of fraud or non-compliance with laws and

regulations throughout the audit.

Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not

detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate

concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures

performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial

statements, the less likely we are to become aware of it.

A further description of our responsibilities is available on the Financial Reporting Council’s website at:

www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

EUROCASTLE INVESTMENT LIMITED | 2024 ANNUAL REPORT

INDEPENDENT AUDITOR’S REPORT

USE OF OUR REPORT

This report is made solely to the Company’s members, as a body, in accordance with Section 262 of the Companies (Guernsey) Law, 2008. Our

audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an

auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other

than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Christopher Young

For and on behalf of BDO LLP

Chartered Accountants and Recognised Auditor

London, UK

23ȱApril 2025

BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).

EUROCASTLE INVESTMENT LIMITED | 2024 ANNUAL REPORT

ENDNOTES

Per share calculations for Eurocastle throughout this document are based on the weighted average of outstanding voting shares and

therefore exclude shares held in treasury. As at 31 December 2024, a total of 1,001,555 shares were in issue all of which were voting shares,

and no shares were held in treasury. Amounts per share are therefore calculated on the following basis: Q4 2024 Net Asset Value per share

(“NAV per share”) – 1,001,555 voting shares in issue; Q4 2023 NAV per share based on 998,555 voting shares; Q3 2024 NAV per share based

on 1,001,555 voting shares.

In light of the Realisation plan, the Adjusted NAV reflects the additional reserves for future costs and potential liabilities, which have not

been accounted under IFRS NAV.

References to the fund in this document do not constitute an offer to sell or a solicitation of an offer to buy any security and may not be

relied upon in connection with the purchase or sale of any security. Any such offer would only be made by the means of formal offering

documents, which would govern in all aspects.

Since March 2022, the Company has made net payments totalling €3.7 million in relation to the legacy German tax matter.

Notwithstanding the Company’s expectation that the tax matter will be eventually resolved in Company’s favour as at 31 December 2024,

the tax asset was fully reserved for within the Additional Reserves.

Independent director.

Percentages calculated on 1.0 million voting shares in issue.

EUROCASTLE INVESTMENT LIMITED

INCOME STATEMENT

Year ended

31 December

2024

Year ended 31

December

2023

Notes €'000 €'000

Portfolio Returns

Realised fair value gain on Legacy Italian investments 4 - 2

Unrealised fair value movements on Legacy Italian investments 4 (18) (50)

Unrealised fair value movements on New Strategy Investments 4 273 -

Other income

Other income 113 2

Interest income 5 827 519

Loss on foreign currency translation (1) (2)

Total income 1,194 471

Operating expenses

Other operating expenses 6 848 1,106

Total expenses 848 1,106

Net operating profit/(loss) before taxation 346 (635)

Profit/(Loss) for the year 346 (635)

Attributable to:

Ordinary equity holders of the Company 346 (635)

Profit/(Loss) for the year 346 (635)

€€

Earnings per ordinary share

(1)

Basic and diluted 13 0.35 (0.64)

The Company had no other comprehensive income in the year ended 31 December 2024 and the year ended 31 December 2023.

All revenue is from continuing operations.

(1)

See notes to the financial statements (page 21 to 32) which form an integral part of these financial statements.

Earnings per share is based on the weighted average number of shares in the year of 1,000,211 (31 December 2023: 997,199). Refer to note 13.

EUROCASTLE INVESTMENT LIMITED | 2024 ANNUAL REPORT 17

EUROCASTLE INVESTMENT LIMITED

STATEMENT OF FINANCIAL POSITION

As at 31

December

2024

As at 31

December

2023

Notes €'000 €'000

Assets

Cash and cash equivalents

7 12,415 13,951

Other assets

8 315 210

Treasury investments held at amortised cost 9

- 4,236

Investments held at fair value 10

5,834 82

Legacy German tax asset 8

3,974 3,727

Total assets 22,538 22,206

Equity and Liabilities

Capital and reserves

1,615,158 1,615,136

Accumulated losses (1,593,072) (1,593,396)

Total shareholders' equity 22,086 21,740

Total equity 22,086 21,740

Liabilities

Trade and other payables 12 452 466

Total liabilities 452 466

Total equity and liabilities 22,538 22,206

See notes to the financial statements (page 21 to 32) which form an integral part of these financial statements.

The financial statements were approved by the Board of Directors on [23 April ] 2025 and signed on its behalf by:

Simon J. Thornton

Director and Audit Committee Chairman

Issued capital, no par value, unlimited number of shares authorised

EUROCASTLE INVESTMENT LIMITED | 2024 ANNUAL REPORT 18

EUROCASTLE INVESTMENT LIMITED

STATEMENT OF CASH FLOW

Year

ended 31

December

2024

Year

ended 31

December

2023

Notes €'000 €'000

Cash flows from operating activities

Profit/(Loss) for the year before taxation 346 (635)

Adjustments for:

Realised fair value gain on Legacy Italian investments 4 - (2)

Unrealised fair value movements on Legacy Italian investments 4 18 50

Unrealised fair value movements on New Strategy Investments 4 (273) -

Interest income 5 (827) (519)

Loss on foreign currency translation 12

Other operating income and expenses non-cash (14) -

Total adjustments to profit/(loss) for the year

(1,095) (469)

(Increase) in other assets 8 (205) (1)

(Decrease) in trade and other payables (36) (288)

Movements in working capital (241) (289)

Deposit for New Investment Strategy - Greece 10 (149) (100)

New Investments Strategy - Greece - Capital Call from European Properties Investment Fund, SCA, RAIF ("EPIF") 10 (5,454) -

New Investments Strategy - Greece - return of advances settled prior to the incorporation of EPIF 10 224 -

Cash distribution from Legacy Italian investments 10 - 497

Interest received 590 682

Cash movements from operating activities (4,789) 1,079

Cash (used in) operations (5,779) (314)

Taxation paid - Legacy German Tax 19 - (174)

Taxation refund - Legacy German Tax 19 - 1,092

Net cash flows (used in)/generated from operating activities (5,779) 604

Cash flows from investing activities

Disposal/(Acquisition) of Treasury Investments held at amortised cost 9 4,241 (4,401)

Net cash flows generated from/(used in) investing activities 4,241 (4,401)

Cash flows from financing activities

Repurchase of share capital including costs -25

Return of distributions paid 22

Net increase in cash flows from financing activities 227

Net (decrease) in cash and cash equivalents (1,536) (3,770)

Cash and cash equivalents, beginning of the year 7 13,951 17,721

Total cash and cash equivalents, end of the year 7 12,415 13,951

See notes to the financial statements (page 21 to 32) which form an integral part of these financial statements.

EUROCASTLE INVESTMENT LIMITED | 2024 ANNUAL REPORT 19

EUROCASTLE INVESTMENT LIMITED

STATEMENT OF CHANGES IN EQUITY

capital

Accumulated

losses

Total

equity

€'000 €'000 €'000

As at 1 January 2023 1,615,091 (1,592,741) 22,350

(Loss) for the year

- (635) (635)

Shares issued to Directors (note 14) 20 (20) -

Share Tender

25 - 25

1,615,136 (1,593,396) 21,740

Profit for the year

- 346 346

Contributions by and distributions to owners:

Shares issued to Directors (note 14)

22 (22) -

1,615,158 (1,593,072) 22,086

Total comprehensive profit for the year

As at 31 December 2024

Total comprehensive (loss) for the year

Contributions by and distributions to owners:

As at 31 December 2023

EUROCASTLE INVESTMENT LIMITED | 2024 ANNUAL REPORT 20

EUROCASTLE INVESTMENT LIMITED

NOTES TO THE FINANCIAL STATEMENTS

1. BACKGROUND

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Interest income

Interest income is recognised in the income statement as it accrues, taking into account the effective yield of the asset or an applicable floating rate. Interest

income includes the amortisation of any discount or premium or other differences between the initial carrying amount of an interest bearing instrument and

its amount at maturity calculated on an effective interest rate basis.

Eurocastle Investment Limited (“Eurocastle”, the "Company") was incorporated in Guernsey, Channel Islands on 8 August 2003 and commenced its

operations on 21 October 2003. Eurocastle is a Euro denominated Guernsey closed-end investment company listed on Euronext Amsterdam (formerly listed

on the London Stock Exchange) regulated by the Nederlands Authority for Financial Markets (“AFM”), which is also now its home state regulator as a

result of Brexit. Eurocastle is subject to EU transparency rules as a result of its listing on an EU regulated market and, consequently, shareholders are

required to notify Eurocastle and the AFM when their holding of the issued share capital and/or of the voting rights in Eurocastle reaches, exceeds or falls

below certain thresholds, whereby the lowest threshold is 3%.

Basis of preparation

Eurocastle is externally managed by its investment manager, FIG LLC (the “Manager”). The Manager is indirectly owned by affiliates of Mubadala

Investment Company PJSC (“Mubadala”) and by certain members of FIG LLC management and employees. The Manager continues to operate as an

independent investment manager under the Fortress brand, with full autonomy over investment processes and decision making, personnel and operations.

Eurocastle has entered into a management agreement (the “Management Agreement”) under which the Manager advises the Company on various aspects of

its business and manages its day-to-day operations, subject to the supervision of the Company’s Board of Directors. For its services, the Manager receives

an annual management fee and incentive compensation (as well as reimbursement for expenses, including expenses of certain employees providing asset

management and finance services), as described in note 16. The Company has no ownership interest in the Manager.

Until December 2019, the activities of the Company included investing indirectly in Italian performing and non-performing loans (''PLs'' / ''NPLs''),

distressed loan assets and other credit receivables, Italian loan servicing platforms, real estate related assets and other related businesses in Italy. On 18

November 2019 the Board of Directors (“Board”) announced a plan to realise the majority of the Company’s assets in order to accelerate the return of value

to the Company’s shareholders (the “Realisation Plan”). On 8 July 2022, the Company announced the relaunch of its investment activity and will initially

focus on opportunistic real estate in Greece with a plan to expand across Southern Europe, where the Manager has an extensive footprint and a long track

record investing in this asset class (the ''New Investment Strategy''). The Company’s New Investment Strategy seeks to leverage the Manager’s deep

knowledge of the sector, which offers significant investment opportunities in the current market cycle.

Significant estimates and judgements

In preparing these financial statements, management has made judgements, estimates and assumptions that affect the application of the accounting policies

and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions

are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively.

The area involving significant judgements is:

- valuation of investment in the Fund - refer to note 10

Following the classification of the Company as an investment entity under IFRS 10 in July 2017, the Company does not consolidate the entities it controls

and therefore fair values all of its investments (whether through subsidiaries or joint ventures). These separate financial statements of the Company are its

only financial statements.

Following the announcement of the Realisation Plan in 2019, the Directors have assessed, and continue to have a reasonable expectation, that the Company

will be able to continue in operation and meet its liabilities as they fall due. The Directors have reviewed the Company’s processes to control those risks to

which the Company is exposed, as disclosed in note 3, as well as reviewing the annual budget, including the additional reserves set aside as part of the

Realisation Plan. As a result of the Realisation Plan, no contractual commitments have become onerous and no commitments for further realisation costs

have been made. Therefore, no provisions have been recorded in the financial statements for the future costs of the business. The Directors have determine

that there is no material uncertainty that casts doubt on the entity’s ability to continue as a going concern. The Directors have also considered the above in

light of the New Investment Strategy. As a result of this, the Directors have a reasonable expectation that the Company has adequate resources to continue

in operational existence for the foreseeable future. For this reason they continue to adopt the going concern basis in preparing the financial statements.

These financial statements have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union on a

going concern basis and under the historical cost basis of accounting, except for investments at fair value through profit and loss, which are measuredat

fair value. These financial statements are also prepared in accordance with Guernsey Company Law.

The functional currency of the Company is the Euro (EUR). This determination is based on the primary economic environment in which the entity

operates, where the majority of transactions, including revenues and expenses, are denominated in EUR. Consequently, all financial information presented

in these financial statements is expressed in Euro.

EUROCASTLE INVESTMENT LIMITED | 2024 ANNUAL REPORT 21

EUROCASTLE INVESTMENT LIMITED

NOTES TO THE FINANCIAL STATEMENTS

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Taxation

Tax asset

Cash and cash equivalents

Capital and reserves

Financial Instruments

Recognition

Classification

Financial Assets

Recognition, derecognition and measurement

Fair value measurement

The Company has invested in a Luxembourg regulated real estate investment fund, EPIF. The Fund is unquoted and, to date, has invested in one Greek real

estate asset. The fair value of Eurocastle’s holding in this investment is based on the Company’s share of the total net asset value of EPIF. The fair value of

the underlying investment in EPIF is calculated using methodology which is consistent with the International Private Equity and Venture Capital Valuation

Guidelines (“IPEV”). For further details please refer to note 10.

Tax assets are recognised when amounts have been paid in relation to a disputed matter where there is uncertainty over the tax treatment and the Company

deems it probable that the ultimate tax authority (i.e. the relevant jurisdictional tax court) will determine that the tax is not due. The accounting policy

adopted by the Company relating to the tax balance is to account for the transaction at amounts that do not reflect time value of money considering that

there is no clear guidance on long term receivable tax assets under IAS 12.

Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Companyhas

transferred substantiall

all the risks and rewards of ownershi

Financial assets held under a business model whose objective is to collect contractual cash flows representing solely payments of principal and interest are

measured at amortised cost, and tested for impairment.

Financial assets held at fair value through profit or loss are investments that are initially recognised at fair value with any subsequent movements in fair

value recognised in the income statement. Subsequent to initial recognition, all financial assets at fair value through profit and loss are measured at fair

value. Gains and losses arising from changes in the fair value of the "financial assets at fair value through profit or loss" category are presented in the

statement of comprehensive income within the net changes in fair value of financial assets at fair value through profit or loss in the period in which they

arise.

A financial asset or liability is recognised on the date the Company becomes party to contractual provisions of the instrument.

All financial assets and liabilities are initially recognised on the trade date, i.e. the date that the Company becomes a party to the contractual provisions of

the instrument. This includes regular way trades: purchases or sales of financial assets that require delivery of assets within the time frame generally

established by regulation or convention in the market place.

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity via the reserves as a deduction

from the issue proceeds.

Where the Company purchases and cancels its own equity shares (see note 14), the consideration paid, including any directly attributable incrementalcosts

is deducted from equity attributable to the Company’s equity holders.

The Company falls under the Collective Investment Schemes exemption for Guernsey tax purposes and is charged €1,934 per annum (2023: €1,400). The

Company is granted this exemption status on an annual basis and therefore the Company is treated as not being resident in Guernsey for tax purposes and is

not liable for Guernsey tax on non-Guernsey source income (which for these purposes includes Guernsey bank deposit interest).

Cash and cash equivalents comprise cash at bank, cash on deposit and in hand with an original maturity of three months or less.

EUROCASTLE INVESTMENT LIMITED | 2024 ANNUAL REPORT 22

EUROCASTLE INVESTMENT LIMITED

NOTES TO THE FINANCIAL STATEMENTS

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Segment Reporting

New standards, interpretations and amendments effective from 1 January 2024

3. FINANCIAL RISK MANAGEMENT

Alternative Investment Fund Managers Directive ("AIFMD") Leverage

Capital Risk Management

•

Credit Risk

In order to meet the Company’s capital management objectives, the Manager and the Board monitor and review the broad structure of the Company’s capital

on an ongoing basis. This review includes:

Credit risk is the risk of the financial loss to the Company if a counterparty to a financial instrument fails to meet its contractual obligations and arises

principally from the Company's cash and cash equivalents. As at 31 December 2024, the Company's cash and cash equivalents amounted to €12.4 million (31

December 2023: €13.9 million).

As at 31 December 2023, the issuer of the Bond, the Italian Government, was rated long term BBB by Fitch; Baa3 by Moody's; and BBB by DBRS (31

December 2022: BBB by Fitch; Baa3 by Moody's; and BBB by DBRS.

The AIFMD prescribes two methods of measuring and expressing leverage and requires disclosure of the maximum amount of leverage the Company might

be subject to. The definition of leverage is wider than that of gearing and includes those assets on balance sheet that are subject to market based valuation

changes. For the purposes of AIFMD reporting, leverage is the ratio between the fair value of the assets under management and the net asset value of the

Company. The ratio is required to be calculated on a gross basis and a commitment basis, under the European Commission’s Delegated Regulation

(commonly known as the Level 2 Regulation). The gross basis does not take into account any netting or hedging, whereas the commitment basis takes into

account both netting and hedging. As at 31 December 2024, the leverage (as defined by this measure) under the gross and commitment basis was 45.83%

and 102.05% respectively (31 December 2023: 37.97% and 102.14%).

The Company operates in one geographical segment, being Europe. The Board of Directors assesses its business through two primary segments; the New

Investment Strategy and Legacy Italian Investments. The Company's New Investment Strategy, which is expected to grow after having successfully

establishing its investment platform (European Properties Investment Fund S.C.A., SICAV RAIF, "EIPIF"), currently comprises a retail complex in Greece

acquired in October 2024. The Company's Legacy Italian Investments are made up of Legacy Italian Real Estate Funds that are currently in liquidation.

New standards issued by not yet effective

The following standard is effective for the annual reporting periods beginning 1 January 2027:

• IFRS 18 “Presentation and Disclosure in Financial Statements”.

The Company is assessing the impact of IFRS 18, issued by the IASB in April 2024, which replaces IAS 1 and introduces major amendments to IFRS

Standards, including IAS 8. While IFRS 18 does not affect recognition or measurement, it will significantly impact presentation and disclosure, including,

but not limited to profit or loss categorisation, aggregation/disaggregation, labelling, and management-defined performance measures.

There are no standards that are not yet effective that would be expected to have a material impact on the Group in the current or future reporting periods and

on the foreseeable future transactions

Working capital requirements and follow-on investment capital for Legacy Italian Investments along with investments under the Company's New

Investment Strategy;

Risk Management

From 1 January 2024 IAS 1 has been amended to clarifying the criteria's for the classification of current and non current liabilities. The Company has

performed a review of its existing classification of liabilities and concluded that there was no material impact from adopting the amended standard.

The Company’s objectives when managing capital are to safeguard the Company’s ability to meet its obligations as they fall due and to achieve positive

returns in all market environments. In order to maintain or adjust the capital structure, the Company may raise or return capital from or to shareholders

through the issue and repurchase of voting shares and/or capital distributions. At 31 December 2024, the Company had net equity of €22.1 million (31

December 2023: €21.7 million) and no direct leverage (31 December 2023: no direct leverage).

This section provides details of the Company's exposure to risk and describes the methods used by the Company to control risk. The most important types of

financial risk to which the Company is exposed is credit risk and market risk.

The Company’s capital is represented by ordinary shares with no par value and which carry one vote each. The shares are entitled to dividends when

declared. The Company has no additional restrictions or specific capital requirements on the issuance and re-purchase of ordinary shares. The movements of

capital are shown in the statement of changes in equity.

The possible timing and extent of returning capital to shareholders through distributions and share repurchases;

The potential raising of new capital in order to pursue opportunities arising from the New Investment Strategy.

The level of Additional Reserves that were originally set aside as part of the Realisation Plan to ensure that the Company could continue to meet known

potential and unknown future liabilities (not accounted for under IFRS), taking into account investment opportunities and the performance of the New

Investment Strategy;

EUROCASTLE INVESTMENT LIMITED | 2024 ANNUAL REPORT 23

EUROCASTLE INVESTMENT LIMITED

NOTES TO THE FINANCIAL STATEMENTS

3. FINANCIAL RISK MANAGEMENT (CONTINUED)

Banking arrangements

Market Risk

Interest rate risk

Foreign Currency Risk

The Company’s objectives when managing capital are to safeguard the Company’s ability to meet its financial obligations as they fall due in order to support

the business and to maximise shareholder value. The Company expects that its cash in hand will satisfy its liquidity needs over the next twelve months.

The Board have assessed future costs and potential liabilities in conjunction with the Realisation Plan and the New Investment Strategy and have a

reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due.

The Compan

is expose

to interest rates on

anking deposits hel

in the ordinar

course o

usiness. I

addition, during 2023 fo

treasur

and cash

management purposes, the Company acquired an Italian Inflation-linked Government Bond with a nominal value of €4.25 million (the “Bond”). The Bond

bears a fixed interest rate of 0.4% of its nominal value plus a variable return determined by applying the percentage change in the Italian consumer price

index. The Bond was sold in February 2024. The Company's interest rate risk is not considered to be significant. Management monitors its interest risk take

on a continuous basis.

The majority of the Company's assets and liabilities are denominated in Euros. The Company's foreign currency risk is not considered to be significant.

Liquidity Risk

Macro-economic and political risks

Market risk encompasses the following macro-economic and political risks:

The implementation and performance of the Company’s New Investment Strategy is subject to risks and uncertainty related to the wider geopolitical

environment globally and more specifically in Southern Europe. The Manager is currently in the early stages of pursuing the New Investment Strategy and

there can be no certainty that it will have success in doing so. There is likewise no certainty that it will be able to attain sufficient scale to achieve the desired

returns. In addition, changes in economic conditions generally and the real estate market specifically, the availability of appropriate investment opportunities

and the ability to raise financing on suitable terms, may also affect the success of the New Investment Strategy as well as the value of any of the Company’s

investments made under the strategy. The current instability in the wider geopolitical environment, the war in Ukraine, the potential fallout from the United

States tariff increases and risk of a global trade war, the ongoing energy and cost of living crisis and increase in interest rates, may affect the value of the

Company’s existing assets but may also potentially provide additional opportunities that it is opportunistically targeting under its New Investment Strategy.

The Company aims to manage this risk within acceptable parameters while optimising the return and does so by regular monitoring of the underlying

performance and realisation strategy for all investments.

The Company’s banking arrangements are with major financial institutions with investment grade credit ratings with which the Company and its affiliates

may also have other financial relationships. While it is not anticipated that any of these counterparties will fail to meet their obligations, there is no certainty

in current market conditions that this will be the case. As at 31 December 2024, the Company has placed €11.4 million of its corporate cash in a 35 day

notice account and €1.0 million in a cash management account with a financial institution rated long term: A+ by Fitch; A1 by Moody's; and A+ by S&P (31

December 2023: €13.1 million of its corporate cash in a 35 day notice account and €0.6 million in a cash management account- rated long term: A by Fitch;

A1 by Moody's; and A by S&P, in addition €0.2 million was held with a separate financial institution rated long term A+ stable by Finch; A1 Stable by

Moody's; and A positive by S&P).

The Company monitors on a regular basis the credit worthiness of the various financial institutions to mitigate credit risk exposure with respect to its

banking arrangements.

EUROCASTLE INVESTMENT LIMITED | 2024 ANNUAL REPORT 24

EUROCASTLE INVESTMENT LIMITED

NOTES TO THE FINANCIAL STATEMENTS

PORTFOLIO RETURNS

Realised fair

value

movements

Unrealised

fair value

movements

Total fair

value

movements

Realised

fair value

movements

Unrealised

fair value

movements

Total fair

value

movements

€'000 €'000 €'000 €'000 €'000 €'000

New Investment Strategy (note 10) - 273 273

Portfolio returns on New Investment Strategy - 273 273 - - -

Legacy Italian NPLs & Other Loans (note 10) - - - 2 - 2

Legacy Italian Real Estate Funds (note 10) - (18) (18) - (50) (50)

Portfolio returns on Legacy Italian investments - (18) (18) 2 (50) (48)

Total portfolio returns - 255 255 2 (50) (48)

5. INTEREST INCOME

Year ended 31

December

2024

Year ended

31 December

2023

€'000 €'000

Bank interest on cash deposit 587 443

Interest on Legacy German Tax Asset - refer to note 8 247 -

Bond interest and accretion - refer to note 9 (7) 76

Total interest income 827 519

6. OTHER OPERATING EXPENSES

Year ended 31

December

2024

Year ended

31 December

2023

€'000 €'000

Professional fees 192 404

Manager base and incentive fees (related party, note 16) 103 94

Manager recharge (related party, note 16) 140 160

General and administrative expenses 413 448

Total other operating expenses 848 1,106

7. CASH AND CASH EQUIVALENTS

Year ended 31

December

2024

Year ended

31 December

2023

€'000 €'000

Cash at bank 1,045 772

Cash on deposit 11,370 13,179

Total cash and cash equivalents 12,415 13,951

Movements on investments are summarised below:

Year ended 31 December 2024 Year ended 31 December 2023

As a result of the Company having won the first instance of its appeal in relation to the legacy German tax matter, and while the tax authorities challengethe

decision, the Company has accrued for interest due on the tax amount paid should it finally prevail in the case. The balance above represents the interest due as

at 31 December 2024. Interest accrues at a rate of 6% per annum on the balance of additional tax assessed and paid but excluding any amount representing late

payment interest. Of the €3.7 million of tax paid to date, €2.5 million represents the additional tax assessed upon which the interest of 6% per annum accrues.

EUROCASTLE INVESTMENT LIMITED | 2024 ANNUAL REPORT 25

EUROCASTLE INVESTMENT LIMITED

NOTES TO THE FINANCIAL STATEMENTS

8. OTHER ASSETS

As at 31 December

2024

As at 31 December

2023

€'000 €'000

Deposit for New Investment Strategy - Greece - refer to note (i) below

- 100

Prepaid expenses and other receivables 315

110

Legacy German tax asset 3,974 3,727

Total other assets and Le

German tax asset 4,289 3,937

9. TREASURY INVESTMENTS HELD AT AMORTISED COST

As at 31 December

2024

As at 31 December

2023

€'000 €'000

Acquisition cost - 4,192

Accretion -44

Total Treasur

Investments held at amortised cost - 4,236

(i) Following the acquisition in October 2024 of the Greek real estate asset under the Company’s New Investment Strategy, advances settled in 2023

against the transaction were reclassified under Investments (refer to note 10).

All prepaid expenses and other receivables are expected to mature in less than one year.

The Legacy German tax asset, including interest accruing amounting to €0.25 million on the tax paid by the Company, is expected to be resolved in more

than one year (refer to notes 5 and 19).

On 14 February 2023, for treasury and cash management purposes, the Company invested €4.4 million of its corporate cash in an Italian Inflation-linked

Government Bond in order to i) diversify the credit risk in which its cash is held and ii) improve the yield it is earning on such cash in light of the rising

interest rate and inflationary environment.

Eurocastle acquired the Bond at a price of 98.64% of its nominal value of €4.25 million plus interest and inflation compensation accrued up to the date of

acquisition. The Bond pays interest every six months at an annual rate of 0.4% of its nominal value plus a variable return determined by applying the

percentage change in the Italian consumer price index since the previous interest payment date to the Bond’s nominal value and current coupon due.

On 15 February 2024, the Company sold the Bond at a price of 99.81% of its nominal value receiving €4.2 million of proceeds.

EUROCASTLE INVESTMENT LIMITED | 2024 ANNUAL REPORT 26

EUROCASTLE INVESTMENT LIMITED

NOTES TO THE FINANCIAL STATEMENTS

10. INVESTMENTS HELD AT FAIR VALUE

As at 31 December

2024

As at 31 December

2023

€'000 €'000

New Investment Strategy - Greece (Investment in EPIF) 5,770 -

Legacy Italian Real Estate Funds 64 82

Total investments 5,834 82

As of 31 December 2024, the movements in the New Investments Strategy - Greece and Legacy Italian portfolio were as follows:

New Investment

Strate

- Greece

(Investment in EPIF)

Italian Real

Estate Funds Total Investments

Fair value accounted Fair value accounted

€'000 €'000 €'000

Balance as at 1 January 2024 - 82 82

Transfers 267 - 267

Additions - Capital call paid to EPIF 5,454 - 5,454

Additions - Return of advances made prior to EPIF's incorporation (224) - (224)

Unrealised fair value movement - refer to note 4 273 (18) 255

Balance as at 31 December 2024 5,770 64 5,834

As at 31 December 2023, the movements in the Legacy Italian investments portfolio were as follows:

Italian NPLs

& Other Loans

Italian Real

Estate Funds Total Investments

Fair value accounted Fair value accounted

€'000 €'000 €'000

Balance as at 1 Januar

2023 - 629 629

Distributions received (2) (497) (499)

Realised fair value gain - refer to note 4 2 - 2

Unrealised fair value movement - (50) (50)

Balance as at 31 December 2023 - 82 82

Refer to the portfolio summary on page 28 for further details on investments .

The Company indirectly holds the following investments:

EUROCASTLE INVESTMENT LIMITED | 2024 ANNUAL REPORT 27

EUROCASTLE INVESTMENT LIMITED

NOTES TO THE FINANCIAL STATEMENTS

10. INVESTMENTS HELD AT FAIR VALUE (CONTINUED)

Portfolio summary:

During the year, the Company's investments were categorised as follows:

New Investment Strategy - Greece (Investment in EPIF)

Legacy Italian Real Estate Funds

Real Estate Fund Investment II:

Real Estate Fund Investment V:

Real Estate Fund Investment V is managed by Torre, an affiliate of the Manager

Fair value hierarchy

The following table shows an analysis of the fair value assets on the balance sheet by level of hierarchy:

As at 31 December 2024:

Level 1 Level 2 Level 3

Total fair value

€'000 €'000 €'000 €'000

New Investment Strategy - Greece (Investment in EPIF) - - 5,770 5,770

Legacy Italian Real Estate Funds - - 64 64

Total - - 5,834 5,834

As at 31 December 2023:

Level 1 Level 2 Level 3

Total fair value

€'000 €'000 €'000 €'000

Legacy Italian Real Estate Funds - - 82 82

Total - - 82 82

Explanation of the fair value hierarchy:

- Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.

- Level 2: Use of a model with inputs (other than quoted prices included in Level 1) that are directly and indirectly observable market data.

- Level 3: Use of a model with inputs that are not based on observable market data.

Transfers between levels

There were no transfers between levels for the year ended 31 December 2024 (31 December 2023: no transfers).

The Company has the following Legacy Italian Real Estate Fund investments:

The Company's investment is held through a joint venture (ownership percentage: 49.7%) investment in Torre Real Estate Fund III Value Added – Sub fund

A ("RE Torre Fund"). Real Estate Fund Investment II is managed by Torre, an affiliate of the Manager.

In April 2017, building on Real Estate Fund Investment II, the Company closed on the purchase of an office to residential conversion development site in

Rome (“Real Estate Fund Investment V”) through a joint venture interest (ownership percentage: 49.6%) in Torre Real Estate Fund III Value Added – Sub

fund B. As at 31 December 2024, the project has been fully completed with all units sold and the fund is in the process of liquidating.

On 14 June 2024 the Company incorporated a Luxembourg regulated fund, European Properties Investment Fund S.C.A., SICAV RAIF (the “Fund”), to

make opportunistic real estate investments across Southern Europe. The Fund completed its first close on August 6, 2024 for €10 million, with the Company

committing €8 million alongside a €2 million commitment from its JV partner. The Fund is now being marketed to potential investors with a target fund size

of €100 million. The Fund made its first acquisition, being part of a boutique retail complex in an affluent part of Athens, in October 2024, with Eurocastle

investing a total of €5.5 million into the Fund. The asset was acquired from one of the largest Greek banks out of a distressed situation.

EUROCASTLE INVESTMENT LIMITED | 2024 ANNUAL REPORT 28

EUROCASTLE INVESTMENT LIMITED

NOTES TO THE FINANCIAL STATEMENTS

10. INVESTMENTS HELD AT FAIR VALUE (CONTINUED)

Fair value methodology and sensitivity analysis

Valuation techniques and processes

New Investment Strategy - Greece (Investment in EPIF)

For the year ended 31 December 2024 Discount rate New Investment Strategy -

Greece (Investment in

EPIF)

Fair value 9.36% 5,770

Increase in discount rate by 50bps 9.86% 5,570

Value sensitivity (200)

For the year ended 31 December 2024 Exit Yield New Investment Strategy -

Greece (Investment in

EPIF)

Fair value 6.68% 5,770

Increase in exit yield by 50bps 7.18% 5,545

Value sensitivity (225)

11. CONTRACTUAL MATURITIES

Contractual maturities

Fair values of financial assets and financial liabilities

12. TRADE AND OTHER PAYABLES

As at 31 December

2024

As at 31 December

2023

€'000 €'000

Due to Manager (related party, refer note 16) 95 103

Accrued expenses and other payables 357 363

Total trade and other payables 452 466

All the trade and other payables are recognised at amortised cost and are expected to mature in less than one year.

The tables below present the sensitivity of the valuation to changes in the most significant assumptions, specifically the discount rate and the exit yield applied:

The fair value of the Company's investment in EPIF is sensitive to the movement in the fair value of the underlying real estate asset owned by the Fund, as it is

the most judgemental area.

Also refer to note 10 for additional informtion.

As at 31 December 2024, the Company had no contractual maturities on financial liabilities, outside of trade and other payables which are all due within one

year.

The Company's financial assets consist of investments, other debtors and cash and cash equivalents. The Company's financial liabilities consist of trade and

other payables. The financial assets and liabilities are measured at either fair value and amortised cost. The amortised cost of these balances approximate their

fair value.

Investments in the New Investment Strategy and Legacy Italian real estate funds have been funded through equity. The investment in the New Investment

Strategy is expected to be realised in more than one year.

In accordance with IAS 40, Investment Property, the real estate asset has been independently valued at fair value by Pi-Thita Real Estate Consulting I.K.E, an

accredited external valuer with a recognised relevant professional qualification and with recent experience in the locations and categories of the investment

properties being valued. The valuation basis conforms to the RICS Valuation Professional Standards (the "Red Book"). The basis of the valuation is fair value

under IFRS 13 which is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market

participants at the measurement date. The investment valuation is based on the difference between expected cash inflows and outflows, appropriately

discounted.

On a quarterly basis, the Company presents the valuations to the Board. This includes a discussion of the major assumptions used in the valuations, which

focuses on significant investments and significant changes in the fair value of investments. If considered appropriate, the Board will approve the valuations.

Also refer to note 11 for further details.

EUROCASTLE INVESTMENT LIMITED | 2024 ANNUAL REPORT 29

EUROCASTLE INVESTMENT LIMITED

NOTES TO THE FINANCIAL STATEMENTS

13. EARNINGS PER SHARE

As at 31

December

2024

As at 31

December

2023

Weighted average number of ordinary shares 1,000,211 997,199

Weighted average number of ordinary shares - dilutive 1,000,211 997,199

14. SHARE CAPITAL AND RESERVES

Number of

Votin

As at 1 January 2023 995,555

Shares issued to the Directors as part of their in-place compensation arrangements for €nil consideration - 15 June 2023 3,000

As at 31 December 2023 998,555

Shares issued to the Directors as part of their in-place compensation arrangements for €nil consideration - 13 June 2024 3,000

As at 31 December 2024 1,001,555

As at 31 December 2024, the Company held no shares in treasury (31 December 2023: nil)

Accumulated loss

The reserve represents the cumulative gains and losses and transactions with shareholders (e.g. dividends) not recognised elsewhere.

Basic earnings per share is calculated by dividing net profit after taxation by the weighted average number of ordinary shares outstanding during the year.

There are currently no instruments that would give rise to a dilutive effect on the Company's shares.

The following is a reconciliation of the weighted average number of ordinary shares outstanding on a diluted basis:

The movement in issued share capital is shown as follows:

As at 31 December 2024, there were 1,001,555 shares (31 December 2023: 998,555) issued of which no shares (31 December 2023: no shares) were held

in treasury. All shares are fully paid up.

EUROCASTLE INVESTMENT LIMITED | 2024 ANNUAL REPORT 30

EUROCASTLE INVESTMENT LIMITED

NOTES TO THE FINANCIAL STATEMENTS

15. DIVIDENDS PAID AND DECLARED

16. MANAGEMENT AGREEMENT AND RELATED PARTY TRANSACTIONS

The Manager is deemed to be the key employee for reporting purposes. As at 31 December 2024, management fees and expense reimbursements of €0.1

million (31 December 2023: €0.1 million) were due to the Manager - refer to note 12. During the year ended 31 December 2024, management fees of €0.10

million (31 December 2023: €0.09 million), €nil of incentive fees (31 December 2023: €nil), and expense reimbursements of €0.14 million (31 December

2023: €0.16 million) were charged to the income statement - also refer to note 6.

Total annual remuneration for the Eurocastle directors as at 31 December 2024 was €0.1 million (31 December 2023: €0.1 million), payable quarterly in

equal instalments. Dean Dakolias and Peter Smith do not receive any remuneration from the Company. Peter Smith resigned as a Company director on 30

October 2024.

The Manager, its principals and certain employees of the Manager hold a total of 560,693 shares in the Company, of which 433,462 are beneficially owned

by a senior executive of the Manager with primary responsibility for the Company.

As a result of the Realisation Plan, the Company's distribution policy, including the regular quarterly dividend, did not apply with effect from Q3 2019.

The Company entered into the Management Agreement with the Manager in August 2003. Pursuant to the Management Agreement, the Manager, under

the supervision of the Board of Directors, will formulate investment strategies, arrange for the acquisition of assets, arrange for financing, monitor the

performance of the Company’s assets and provide certain advisory, administrative and managerial services in connection with the operations of the

Company. Since 1 January 2015 the management fee paid to the Manager is equal to (i) 1.5% of the Company’s Adjusted NAV reported quarterly,

excluding net corporate cash, and (ii) 0.75% on net corporate cash attributable to certain reserves.

The Management Agreement provides that the Company will reimburse the Manager for various expenses incurred by the Manager or its officers,

employees and agents on the Company’s behalf, including the cost of legal, accounting, tax, auditing, finance, administrative, asset management, property

management and other similar services rendered for the Company by providers retained by the Manager or, if provided by the Manager’s or its affiliates’

employees, in amounts which are no greater than those that would be payable to external professionals or consultants engaged to perform such services

pursuant to agreements negotiated on an arms-length basis. Such expenses have been included in the income statement.

When it was signed in 2003 the Management Agreement provided for an initial term of ten years with automatic three year extensions, subject to certain

termination rights. The Management Agreement may be terminated by the Company by payment of a termination fee, as defined in the Management

Agreement, equal to the amount of management fees earned by the Manager during the 12 consecutive calendar months immediately preceding the

termination, upon the vote of a majority of the holders of the outstanding ordinary shares. In addition, unless an arrangement is made between the Company

and the Manager, incentive compensation (as outlined above) will continue to be payable to the Manager post-termination.

The Manager is also entitled to an incentive fee, which was crystallised in respect of the Company’s existing investments at the time of implementationof

the Realisation Plan in 2019, resulting in a saving to the Company of € 2.4 million. The Manager is entitled to earn back a portion of this saving if excess

amounts are released from certain reserves put in place by the Board to fund future costs and potential liabilities. As at 31 December 2024, the amount due

to the Manager relating to incentive fees was €nil (31 December 2023: € nil).

In connection with the New Investment Strategy, certain terms of the Management Agreement are expected to be amended to reflect the anticipated return

profile of the New Investment Strategy.

During the year ended 31 December 2024, no distributions were declared or paid (during the year ended 31 December 2023, no distributions were declared

or paid).

EUROCASTLE INVESTMENT LIMITED | 2024 ANNUAL REPORT 31

EUROCASTLE INVESTMENT LIMITED

NOTES TO THE FINANCIAL STATEMENTS

17. INVESTMENT IN SUBSIDIARIES

Luxembourg:

Luxgate S.à r.l

Luxira S.à r.l (80%)

Luxway S.à r.l (60%) (incorporated on 5 January 2024)

European Properties Investment Fund S.C.A., SICAV RAIF (80%) (incorporated on 14 June 2024)

United States of America:

Fortress Italian Real Estate Opportunities Series Fund LLC - Series 2

Greece:

18. SUBSEQUENT EVENT

19. CONTINGENT LIABILITIES

20. COMMITMENTS

The Company has investments in the following subsidiaries (unless otherwise stated the Company has a 100% interest in the entity):

Castlegate S.A. (80%)

As at 31 December 2024, the unconsolidated subsidiaries do not have any significant restrictions (e.g. resulting from borrowing arrangements, regulatory requirements or

contractual arrangements) on the ability to transfer funds to the Company in the form of cash dividends or to repay loans or advances made to the unconsolidated subsidiary by the

Company.

In August 2024 the Company entered into a subscription agreement with EPIF committing a total amount of €8 million. In October 2024, primarily to fund the first acquisition

made by EPIF, €5.5 million of capital was called from Eurocastle (being its 80% share of the total amount called by EPIF). As at 31 December 2024, the Company's total

outstanding commitment to EPIF was €2.5 million.

The Company is exposed to a potential tax risk of up to an estimated €6.0 million associated with the disposal of a legacy property subsidiary in prior years. In February 2022, the

Company received revised tax assessments related to this risk covering the period 2008 - 2012 determining an initial liability of €4.6 million with an additional €0.2 million of

outstanding interest assessed in March 2023. In July 2023, the Company received revised tax assessments for the periods 2008 and 2009 which resulted in a total reimbursement of

€1.1 million of the €4.8 million of additional tax paid by Eurocastle in 2022 and 2023. In respect of the same legacy property subsidiary, the years 2013 - 2015 remain subject to

ongoing tax audits, the timings of which are uncertain. The Company estimates that the remaining financial impact (excluding associated costs of €0.3 million) for all these audits,

including interest, is approximately €1.7 million. The Company is currently appealing the additional tax assessed through the German tax system, and on 4 December 2024, won

the first instance of this appeal in the German courts. On 23 December 2024, the German tax authorities notified their intention to appeal against the judgment. The Company, in

light of the recent judgment and having taken independent advice, remains confident that the matter will eventually be resolved in its favour. In the meantime, €2.5 million of the

€3.7 million of additional tax paid by the Company, being the additional tax assessed before late payment interest, is accruing interest at 6% per annum, which would be paid to the

Company should it finally prevail in the case.

On April 23rd, 2025, EPIF successfully held its first investor close, securing €16 million of commitments from 10 investors taking the total fund size to €26 million. Currently, a

significant number of potential additional commitments are at advanced stage of due diligence, with a further close expected in May 2025.

The Company has been advised that, based on average court timings for the German federal court systems, this matter can be expected to be resolved in approximately two years,

but notes that it can take considerably longer and, in rare cases, up to ten years in total. Notwithstanding the Company’s expectation that the tax matter will eventually be resolved

in the Company’s favour, as at 31 December 2024, the potential liability is fully reserved for within the Additional Reserves (see page 5).

The commitments closed on 23 April 2025 will reduce Eurocastle's interest in the Fund from 80% to approximately 31%. As a result, the new investors will reimburse Eurocastle

an estimated total of €3.5 million of the €5.5 million it had invested to date in EPIF. This reimbursement is to align Eurocastle's revised pro rata share of the capital called plus

compensatory interest. The amount to be paid to Eurocastle is substantially in line with the relevant share of Eurocastle's valuation of its interest in EPIF as at 31 December 2024.

EUROCASTLE INVESTMENT LIMITED | 2024 ANNUAL REPORT 32

BOARD OF DIRECTORS

Jason Sherwill

Dr. Simon J. Thornton

Claire Whittet

Constantine (Dean)

Dakolias

INVESTMENT MANAGER

FIG LLC

(an affiliate of Fortress Investment Group LLC)

1345 Avenue of the Americas

46 Floor

New York, NY 10105

Tel: (212) 798-6100

www.fortress.com

REGISTRAR AND TRANSFER AGENT

JTC Trustees (Guernsey) Limited

P.O. Box 156, Ground Floor,

Dorey Court, Admiral Park, St

Peter Port, GY12HT

REGISTERED OFFICE OF THE COMPANY

Oak House

Hirzel Street

St. Peter Port

Guernsey GY1 2NP

ADMINISTRATOR & SECRETARY

OF THE COMPANY

Oak Fund Services

(Guernsey) Limited

P.O. Box 282

Oak House

Hirzel Street

St. Peter Port

Guernsey GY1 3RH

STOCK

LISTING

Euronext Amsterdam, ECT. NA

INDEPENDENT

AUDITORS

BDO

LLP

55 Baker Street

London W1U 7EU

LEGAL

COUNSEL

English & Dutch Legal Advisers

Linklaters LLP

One Silk Street

London EC2Y 8HQ

Guernsey Legal Advisers

Carey Olsen

P.O. Box 98

Carey House

Les Banques

St. Peter Port

Guernsey GY1 4BZ

INVESTOR RELATIONS CONTACT

Eurocastle Investment Limited

c/o Fortress Investment

Group

1345 Avenue of the Americas, 46 Floor

New York, NY 10105

Tel: (212) 823-5563

Email: investorrelations@eurocastle.com

www.eurocastleinv.com

FORWARD-LOOKING STATEMENTS

This report contains statements that constitute forward-looking statements. Such forward-looking statements relate to, among other things, future

commitments to sell real estate and achievement of disposal targets, availability of investment and divestment opportunities, timing or certainty of

completion of acquisitions and disposals, the operating performance of the investments and financing needs. Forward-looking statements are generally

identifiable by use of forward-looking terminology such as “may”, “will”, “should”, “potential”, “intend”, “expect”, “endeavour”, “seek”,

expressions.

Forward-looking statements are based on certain assumptions, discuss future expectations, describe future plans and strategies, contain projections

of results of operations or of financial condition or state other forward-looking information. The Company’s ability to predict results or the actual effect

of future plans or strategies is limited. Although we believe that the expectations reflected in such forward-looking statements are based on reasonable

assumptions, our actual results and performance may differ materially from those set forth in the forward- looking statements. These forward-looking

statements are subject to risks, uncertainties and other factors that may cause the Company’s actual results in future periods to differ materially from

forecasted results or stated expectations, including the risks regarding Eurocastle’s ability to achieve its targets regarding asset disposals or asset

performance.

CORPORATE INFORMATION

Eurocastle Investment Limited