----

----

|                                                    | Page   |
|---------------------------------------------------------|--------|
|                                                    |   |
| Report of independent registered public accounting firm | 2      |
|                                                    |   |
| Condensed Financial Statements:                         |   |
|                                                    |   |
| Balance sheets                                          | 3-4    |
|                                                    |   |
| Statements of income                                    | 5      |
|                                                    |   |
| Statements of cash flows                                | 6-7    |
|                                                    |   |
| Notes to the condensed financial statements             | 8-11   |
|                                                    |   |

----

CO

----

LB

|                                                                |   |   |   |   | December 31       |    |
|---------------------------------------------------------------------|--------|--------|--------|--------|-------------------|---------|
|                                                                |   |   |   |   | 2 0 1 4           |    |   | 2 0 1 3 |   |   | 2 0 1 4 |   |
|                                                                |   |   |   |   |              |    |   | Convenience translation(note 2D) |   |
|                                                                |   | Note   |   |   | (in thousand NIS) |    |   | U.S.$'000 |   |
|                                                                |   |   |   |   |              |    |   |   |   |   |   |   |
| Current Assets                                                      |   |   |   |   |              |    |   |   |   |   |   |   |
| Cash and cash equivalents                                           |   |   |   |   |              | 95,086  |   |   |   | 120,483 |   |   |   | 24,450 |   |
| Short-term deposits and investments                                 |   |   |   |   |              | 777     |   |   |   | 11,603 |   |   |   | 200 |   |
| Other receivables                                                   |   |   |   |   |              | 1,716   |   |   |   | 9,319 |   |   |   | 441 |   |
| Assets related to discontinued operations                           |   |   |   |   |              | 33,437  |   |   |   | - |   |   |   | 8,598 |   |
|                                                                |   |   |   |   |              | 131,016 |   |   |   | 141,405 |   |   |   | 33,689 |   |
| Non-Current Assets                                                  |   |   |   |   |              |    |   |   |   |   |   |   |   |   |   |
| Deposits, loans and other long-term balances                        |   |   |   |   |              | 16,355  |   |   |   | 16,069 |   |   |   | 4,205 |   |
| Loans and investments in subsidiaries, associates and joint venture |   | 3      |   |   |              | 894,983 |   |   |   | 1,668,989 |   |   |   | 230,132 |   |
| Property, plant and equipment                                       |   |   |   |   |              |    | 1,962 |   |   |   | 5,542 |   |   |   | 504 |   |
| Deferred expenses                                                   |   |   |   |   |              |    | - |   |   |   | 94 |   |   |   | - |   |
|                                                                |   |   |   |   |              |    | 913,300 |   |   |   | 1,690,694 |   |   |   | 234,841 |   |
|                                                                |   |   |   |   |              |    |   |   |   |   |   |   |   |   |   |   |
|                                                                |   |   |   |   |              |    | 1,044,316 |   |   |   | 1,832,099 |   |   |   | 268,530 |   |

----

T 

|                                              |   |   | December 31       |      |
|---------------------------------------------------|--------|--------|-------------------|-----------|
|                                              |   |   | 2 0 1 4           |      |   | 2 0 1 3 |   |   | 2 0 1 4 |   |
|                                              |   |   |              |      |   | Convenience translation(note 2D) |   |
|                                              | Note   |   | (in thousand NIS) |      |   | U.S.$'000 |   |
|                                              |   |   |              |      |   |   |   |
| Current Liabilities                               |   |   |              |      |   |   |   |   |   |   |
| Short-term credits                                |   |   |              | -         |   |   |   | 2,639,286 |   |   |   | - |   |
| Payables and other credit balances                |   |   |              | 29,289    |   |   |   | 196,240 |   |   |   | 7,531 |   |
|                                              |   |   |              | 29,289    |   |   |   | 2,835,526 |   |   |   | 7,531 |   |
|                                              |   |   |              |      |   |   |   |   |   |   |   |   |   |
| Non-Current Liabilities                           |   |   |              |      |   |   |   |   |   |   |   |   |   |
| Borrowings                                        |   |   |              | 755,538   |   |   |   | - |   |   |   | 194,276 |   |
| Other liabilities                                 |   |   |              | 27,434    |   |   |   | 29,213 |   |   |   | 7,054 |   |
|                                              |   |   |              | 782,972   |   |   |   | 29,213 |   |   |   | 201,330 |   |
| Commitments, Contingencies, Liens and Collaterals |   |   |              |      |   |   |   |   |   |   |   |   |   |
|                                              |   |   |              |      |   |   |   |   |   |   |   |   |   |
| Shareholders' Equity                              |   |   |              |      |   |   |   |   |   |   |   |   |   |
| Share capital and share premium                   |   |   |              | 1,055,056 |   |   |   | 927,228 |   |   |   | 255,332 |   |
| Reserves                                          |   |   |              | (755,872  | ) |   |   | (704,519 | ) |   |   | (178,401 | ) |
| Retained earnings                                 |   |   |              | (67,129   | ) |   |   | (1,086,828 | ) |   |   | (17,262 | ) |
| Treasury stock                                    |   |   |              | -         |   |   |   | (168,521 | ) |   |   | - |   |
|                                              |   |   |              |      |   |   |   |   |   |   |   |   |   |
|                                              |   |   |              | 232,055   |   |   |   | (1,032,640 | ) |   |   | 59,669 |   |
|                                              |   |   |              |      |   |   |   |   |   |   |   |   |   |
|                                              |   |   |              | 1,044,316 |   |   |   | 1,832,099 |   |   |   | 268,530 |   |

|                               |   |                                     |   |                                                                |
|------------------------------------|--------|------------------------------------------|--------|---------------------------------------------------------------------|
| Doron MosheChief Financial Officer |   | Zvi TroppChairman of the audit committee |   | Ron HadassiChairman of the board and Acting Chief Executive Officer |

----

AG

|                                                 |   |   | Year ended December 31 |      |
|------------------------------------------------------|--------|--------|------------------------|-----------|
|                                                 |   |   | 2 0 1 4                |      |   | 2 0 1 3 |   |   | 2 0 1 2 |   |   | 2 0 1 4 |   |
|                                                 |   |   |                   |      |   | Convenience translation (Note 2D) |   |
|                                                 | Note   |   | (in thousand NIS)      |      |   | U.S.$'000 |   |
|                                                 |   |   |                   |      |   |   |   |   |   |   |   |   |   |
| Revenues from providing management services          |   |   |                   | 461       |   |   |   | 1,965 |   |   |   | 30,379 |   |   |   | 119 |   |
|                                                 |   |   |                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| General and administrative expenses                  |   |   |                   | (37,315   | ) |   |   | (58,964 | ) |   |   | (50,749 | ) |   |   | (9,595 | ) |
|                                                 |   |   |                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Financial expenses, net                              |   |   |                   | (97,619   | ) |   |   | (119,187 | ) |   |   | (141,637 | ) |   |   | (25,101 | ) |
|                                                 |   |   |                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Financial gain from debt restructuring               |   |   |                   | 1,791,644 |   |   |   | - |   |   |   | - |   |   |   | 460,695 |   |
|                                                 |   |   |                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Initiation expenses                                  |   |   |                   | (168      | ) |   |   | (438 | ) |   |   | (1,114 | ) |   |   | (43 | ) |
|                                                 |   |   |                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other income (expense)                               |   |   |                   | (5,020    | ) |   |   | 2,460 |   |   |   | (34,808 | ) |   |   | (1,291 | ) |
|                                                 |   |   |                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Profit (loss) before income taxes                    |   |   |                   | 1,651,983 |   |   |   | (174,164 | ) |   |   | (197,929 | ) |   |   | 424,784 |   |
|                                                 |   |   |                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income tax expenses                                  |   |   |                   | -         |   |   |   | 6,298 |   |   |   | 3,500 |   |   |   | - |   |
|                                                 |   |   |                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                 |   |   |                   | 1,651,983 |   |   |   | (180,462 | ) |   |   | (201,429 | ) |   |   | 424,784 |   |
| Company's share in results of investee companies     |   |   |                   | (641,801  | ) |   |   | (982,900 | ) |   |   | (121,034 | ) |   |   | (165,030 | ) |
|                                                 |   |   |                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Profit (loss) from continuing operations             |   |   |                   | 1,010,182 |   |   |   | (1,163,362 | ) |   |   | (322,463 | ) |   |   | 259,754 |   |
|                                                 |   |   |                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Profit (loss) from discontinued operations, net |   |   |                   | (1,175    | ) |   |   | 7,717 |   |   |   | 6,717 |   |   |   | (302 | ) |
|                                                 |   |   |                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Profit (loss) for the year                           |   |   |                   | 1,009,007 |   |   |   | (1,155,645 | ) |   |   | (315,746 | ) |   |   | 259,452 |   |

----

MA

|                                                                        |   | Year ended December 31 |       |
|-----------------------------------------------------------------------------|--------|------------------------|------------|
|                                                                        |   | 2 0 1 4                |       |   | 2 0 1 3 |   |   | 2 0 1 2 |   |   | 2 0 1 4 |   |
|                                                                        |   |                   |       |   | Convenience translation (Note 2D) |   |
|                                                                        |   | (in thousand NIS)      |       |   | U.S.$'000 |   |
| CASH FLOWS FROM OPERATING ACTIVITIES                                        |   |                   |       |   |   |   |   |   |   |   |   |   |
|                                                                        |   |                   |       |   |   |   |   |   |   |   |   |   |
| Profit (loss) for the year from continued operations                        |   |                   | 1,010,182  |   |   |   | (1,163,362 | ) |   |   | (322,463 | ) |   |   | 259,452 |   |
| Income tax expenses (tax benefit) recognized in profit and loss             |   |                   | -          |   |   |   | 6,298 |   |   |   | 3,500 |   |   |   | - |   |
| Finance expenses recognized in profit and loss                              |   |                   | 97,619     |   |   |   | 119,187 |   |   |   | 141,637 |   |   |   | 24,311 |   |
| Financial gain from debt restructuring                                      |   |                   | (1,791,644 | ) |   |   | - |   |   |   | - |   |   |   | (460,695 | ) |
| Income tax paid in cash                                                     |   |                   | -          |   |   |   | (8,000 | ) |   |   | - |   |   |   | - |   |
| Depreciation and amortization                                               |   |                   | 3,636      |   |   |   | 3,825 |   |   |   | 10,350 |   |   |   | 935 |   |
| Share in losses of associates, net                                          |   |                   | 641,801    |   |   |   | 982,900 |   |   |   | 121,034 |   |   |   | 166,211 |   |
| Stock based compensation expenses                                           |   |                   | 3,147      |   |   |   | (11,335 | ) |   |   | 14,848 |   |   |   | 809 |   |
| Other                                                                       |   |                   | (4,209     | ) |   |   | 1,286 |   |   |   | 62 |   |   |   | (1,082 | ) |
| Receivables and other debit balances                                        |   |                   | 8,595      |   |   |   | 2,580 |   |   |   | 19,228 |   |   |   | 2,121 |   |
| Trading property                                                            |   |                   | -          |   |   |   | - |   |   |   | (12,793 | ) |   |   | - |   |
| Payables and other credit balances                                          |   |                   | (6,910     | ) |   |   | 81,511 |   |   |   | 21,025 |   |   |   | 1,405 |   |
| Net cash provided by (used in) operating activities of continued operations |   |                   | (37,783    | ) |   |   | 14,890 |   |   |   | (3,572 | ) |   |   | (6,533 | ) |
| Net cash provided by (used in) discontinued operating activities            |   |                   | -          |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Net cash provided by (used in) operating activities                         |   |                   | (37,783    | ) |   |   | 14,890 |   |   |   | (3,572 | ) |   |   | (6,533 | ) |

----

|                                                                               |   | Year ended December 31 |    |
|------------------------------------------------------------------------------------|--------|------------------------|---------|
|                                                                               |   | 2 0 1 4                |    |   | 2 0 1 3 |   |   | 2 0 1 2 |   |   | 2 0 1 4 |   |
|                                                                               |   |                   |    |   | Convenience translation (Note 2D) |   |
|                                                                               |   | (in thousand NIS)      |    |   | U.S.$'000 |   |
| CASH FLOWS FROM INVESTING ACTIVITIES                                               |   |                   |    |   |   |   |   |   |   |   |   |   |
| Purchase of property plant and equipment, investment property and other assets     |   |                   | (22     | ) |   |   | (984 | ) |   |   | (1,751 | ) |   |   | (6 | ) |
| Proceeds from realization of investments in subsidiaries and associates            |   |                   | 6,954   |   |   |   | 169,698 |   |   |   | - |   |   |   | 1,789 |   |
| Investments and loans to subsidiaries and associates                               |   |                   | 27,598  |   |   |   | (59,242 | ) |   |   | 198,272 |   |   |   | 7,096 |   |
| Proceed from realization of (investment in) long-term deposits and long-term loans |   |                   | (711    | ) |   |   | 100 |   |   |   | 9,461 |   |   |   | (183 | ) |
| Interest received in cash                                                          |   |                   | 3,098   |   |   |   | 2,697 |   |   |   | 5,945 |   |   |   | 797 |   |
| Short-term deposits and marketable securities, net                                 |   |                   | 5,678   |   |   |   | 34,081 |   |   |   | 74,236 |   |   |   | 1,460 |   |
| Net cash provided by continued investing activities                                |   |                   | 42,595  |   |   |   | 146,350 |   |   |   | 286,163 |   |   |   | 10,953 |   |
| Net cash provided by discontinued investing activities                             |   |                   | -       |   |   |   | - |   |   |   | 36,529 |   |   |   | - |   |
| Net cash provided by investing activities                                          |   |                   | 42,595  |   |   |   | 146,350 |   |   |   | 322,692 |   |   |   | 10,953 |   |
|                                                                               |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES                                               |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest paid in cash                                                              |   |                   | (33,075 | ) |   |   | (20,911 | ) |   |   | (177,217 | ) |   |   | (11,686 | ) |
| Repayment of long-term borrowings                                                  |   |                   | -       |   |   |   | - |   |   |   | (329,220 | ) |   |   | - |   |
| Repayment of short-term credit                                                     |   |                   | -       |   |   |   | (54,840 | ) |   |   | (133 | ) |   |   | - |   |
| Net cash used in financing activities                                              |   |                   | (33,075 | ) |   |   | (75,751 | ) |   |   | (506,570 | ) |   |   | (11,686 | ) |
|                                                                               |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Increase (decrease) in cash and cash equivalents                                   |   |                   | (28,263 | ) |   |   | 85,489 |   |   |   | (187,450 | ) |   |   | (7,266 | ) |
| Cash and cash equivalents at the beginning of the year                             |   |                   | 120,483 |   |   |   | 30,637 |   |   |   | 217,642 |   |   |   | 30,980 |   |
| Net effect on cash due to currency exchange rate changes                           |   |                   | 2,866   |   |   |   | 4,357 |   |   |   | 445 |   |   |   | 736 |   |
|                                                                               |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash and cash equivalents at the end of the year                                   |   |                   | 95,086  |   |   |   | 120,483 |   |   |   | 30,637 |   |   |   | 24,450 |   |

----

AG

| NOTE 1 - | GENERAL |
|----------|---------|

|   | A. | Elbit Imaging Ltd. ("the Company") was incorporated in Israel. The Company's registered office is at 5 Kinneret Street Bney-Brak, Israel. The Company's shares are registered for trade on the Tel Aviv Stock Exchange and in the United States on the NASDAQ Global Select Market. |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | B. | The Group engages, directly and through its investee companies, in Israel and abroad, mainly in the following areas: |
|--------|----|----------------------------------------------------------------------------------------------------------------------|

|   | · | Commercial centers - initiation, construction, and sale of commercial centers and other mixed-use property projects, predominantly in the retail sector, located in Central and Eastern Europe and in India. In certain circumstances and depending on market conditions, the Group operates and manages commercial centers prior to their sale. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Hotels - hotels operation and management, primarily in major European cities. |
|--------|--------|-------------------------------------------------------------------------------|

|   | · | Medical industries and devices - (a) research and development, production and marketing of magnetic resonance imaging guided focused ultrasound treatment equipment, and (b) development of stem cell population expansion technologies and stem cell therapy products for transplantation and regenerative medicine. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Residential projects - initiation, construction and sale of residential units or plots designated for residential located primarily in India. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------|

|   |   | Fashion apparel - distribution and marketing of fashion apparel and accessories in Israel. On October 27, 2014 Elbit Fashion signed a sale agreement with Fox-Wisel Ltd. with regard to the sale of the operation and business of "Mango" retail stores in Israel (See note 23 of the annual consolidated financial statements). The transaction was closed on January, 5 2015.  Accordingly this operation is classified in these financial statements as discontinued operations. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | During 2012, the Company finalized a transaction to sale all its investments in commercial centers in the US (see note 23 of the annual consolidated financial statements) and lost control over its holding in a subsidiary that operates in the medical industry (see note 23 of the annual consolidated financial statements). Accordingly, these operations are presented in these financial statements as discontinued operations. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| NOTE 1 - | GENERAL (CONT.) |
|----------|-----------------|

|   | C. | Financial position: |
|--------|----|---------------------|

|   | D. | Definitions: |
|--------|----|--------------|

| The Company     |  - | Elbit Imaging                                                                                                                                                                                                                                                                                                                                                                                                     |
|-----------------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Elscint         |  - | A formerly 100% subsidiary of the Company, merged with the Company in 2010.                                                                                                                                                                                                                                                                                                                                       |
| Group           |  - | The Company and its Investees                                                                                                                                                                                                                                                                                                                                                                                     |
| Investees       |  - | Subsidiaries, joint ventures and associates                                                                                                                                                                                                                                                                                                                                                                       |
| PC              |  - | Plaza Centers N.V. (“PC”) Group, a material subsidiary operating mainly in the field of commercial centers and is traded in the Main Board of the London Stock Exchange, the Warsaw Stock Exchange and Tel Aviv Stock Exchange. As of December 31, 2014 the Company holds 44.9% in Plaza Centers. For Plaza Centers Plan of Arrangement see note 3B of the annual consolidated financial statements.  |
| Elbit Medical   |  - | Elbit Medical Technologies Ltd., a public Israeli company traded on the Tel Aviv Stock Exchange. As for December 31, 2014, the Company holds 82.71% of Elbit Medical on a fully diluted basis.                                                                                                                                                                                                                    |
| Related parties |  - | As defined in International Accounting Standard ("IAS") no. 24. For details see note 21 of the annual consolidated financial statements                                                                                                                                                                                                                                                                                |

----

| NOTE 2 - | SIGNIFICANT ACCOUNTING POLICIES |
|----------|---------------------------------|

|   | A. | Statement of compliance: |
|--------|----|--------------------------|

|   | B. | Basis for preparation: |
|--------|----|------------------------|

|   | C. | Presentation of the income statements: |
|--------|----|----------------------------------------|

|   | D. | Convenience translation: |
|--------|----|--------------------------|

----

| NOTE 3 - | LOANS AND INVESTMENTS IN SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE |
|----------|---------------------------------------------------------------------|

|   | A. | As part of the EPI transaction (as described in note 9B of the annual consolidated financial statements) PC has provided the Company with an advance on account of the Kochi project which as of  December 31, 2014 amounted to Euro 4.5 million.in order to secure the advance granted by PC the Company provided PC with a guarantee, which shall be exercised in the event the Company fails to transfer all its rights in the Kochi Island to EPI (or alternatively to transfer 50% of the said rights to PC). The guarantee expired in August 2013. The Company and PC are negotiating in order to reach an amicable solution to this matter. |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----