Kojamo Oyj

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iso4217:EUR xbrli:shares xbrli:shares 23 Board of Directors’ Report and Financial Statements Board of Directors’ Report and Financial Statements 2023 2 Hallituksen toimintakertomus ja tilinpäätös Table of contents BOARD OF DIRECTORSʼ REPORT ................................................................ ................................................................ ................... 5 Kojamo plc in brief................................................................ ................................................................ ............................................... 5 Strategy ................................................................ ................................................................ ............................................................... 5 Summary of performance in 2023 ................................................................ ................................................................ ....................... 6 Outlook for 2024 ................................................................ ................................................................ ................................................. 6 Saving programme ................................................................ ................................................................ .............................................. 6 Effects of Russia’s war of aggression in Ukraine on Kojamo ................................................................................................ .............. 6 Key figures ................................................................ ................................................................ .......................................................... 7 Operating environment ................................................................ ................................................................ ........................................ 8 Business operations ................................................................ ................................................................ ............................................ 9 Total revenue ................................................................ ................................................................ ...................................................... 9 Result and profitability ................................................................ ................................................................ ....................................... 10 Balance sheet, cash flow and financing ................................................................................................................................ ............ 10 Real estate property and fair value ................................................................................................ ................................................... 11 Rental housing ................................................................ ................................................................ .................................................. 11 Investments, divestments and real estate development................................................................ .................................................... 13 Strategic targets and their achievement ................................................................ ................................................................ ............ 14 Shares and shareholders ................................................................ ................................................................ .................................. 14 Governance ................................................................ ................................................................ ...................................................... 17 Personnel ................................................................ ................................................................ .......................................................... 17 Statement of non-financial information ................................................................ ................................................................ .............. 18 Near-term risks and uncertainties ................................................................................................ ..................................................... 28 Internal auditing ................................................................ ................................................................ ................................................ 28 Group structure and changes therein ................................................................ ................................................................ ................ 29 Events after the financial year ................................................................ ................................................................ ........................... 29 Proposal by the Board of Directors for the distribution of profits ....................................................................................................... 29 EPRA PERFORMANCE MEASURES ................................................................................................ .............................................. 30 FINANCIAL STATEMENTS ................................ ................................................................ .............................................................. 35 Consolidated comprehensive income statement ................................................................ ............................................................... 35 Consolidated balance sheet ................................................................ ................................................................ .............................. 36 Consolidated statement of cash flows ................................................................ ................................................................ ............... 37 Consolidated statement of changes in equity ................................................................ ................................................................ .... 38 Notes to the consolidated financial statements ................................................................ ................................................................ . 39 1. Basis for presentation of the financial statements................................................................ ..................................................... 40 1.1 Basic information about the Group ................................................................ ................................................................ ..... 40 2. Result ................................................................................................ ................................................................ ....................... 41 2.1 Specification of revenue ................................................................ ................................................................ ..................... 42 2.2 Profit/loss on sales of investment properties and Other operating income and expenses .................................................. 43 2.3 Administrative expenses................................................................ ................................................................ ..................... 43 2.4 Employee benefits expenses ................................................................ ................................................................ .............. 44 2.5 Depreciation, amortisation and impairment ........................................................................................................................ 45 2.6 Research and development expenditure ................................................................ ............................................................ 45 2.7 Earnings per share ................................................................ ................................................................ ............................. 45 3. Real estate property ................................................................................................ ................................................................ . 46 Board of Directors’ Report and Financial Statements 2023 3 Hallituksen toimintakertomus ja tilinpäätös 3.1 Investment properties ................................................................ ................................................................ ......................... 46 3.2 Non-current assets held for sale ................................................................ ................................................................ ......... 51 3.3 Trading properties ................................................................................................ .............................................................. 51 3.4 Commitments and contingent liabilities related to investment properties ........................................................................... 51 4. Financing and equity ................................................................ ................................................................ ................................. 53 4.1 Equity ................................................................................................ ................................................................ ................. 53 4.2 Financial income and expenses ................................................................................................ ......................................... 55 4.3 Financial assets and liabilities by valuation category ................................................................ ......................................... 56 4.4 Interest-bearing liabilities ................................................................ ................................................................ .................... 58 4.5 Derivative instruments ................................................................ ................................................................ ........................ 60 4.6 Financial risk management ................................................................ ................................................................ ................. 61 4.7 Guarantees and commitments ................................................................................................ ........................................... 64 5. Income taxes ................................................................................................ ................................................................ ............ 65 5.1 Current tax expense ................................................................ ................................................................ ........................... 65 5.2 Deferred tax assets and liabilities ................................................................ ................................................................ ....... 66 6. Other balance sheet items ................................................................ ................................................................ ........................ 67 6.1. Lease agreements ................................................................ ................................................................ ............................. 67 6.2 Intangible assets ................................................................................................ ................................................................ 69 6.3 Property, plant and equipment ................................................................ ................................................................ ........... 70 6.4 Non-current receivables ................................................................................................ ..................................................... 71 6.5 Current trade and other receivables ................................................................ ................................................................ ... 71 6.6 Provisions and other non-current liabilities ................................................................ ......................................................... 71 6.7 Current trade payables and other payables................................................................ ........................................................ 72 7. Other notes ................................................................ ................................................................ ............................................... 72 7.1 Adjustments to cash flow from operating activities ................................................................ ............................................. 72 7.2 Related party transactions ................................................................ ................................................................ .................. 72 7.3 The Group’s subsidiaries, associated companies and joint arrangements ................................................................ ......... 75 7.4 Effects of Russia’s war of aggression in Ukraine on Kojamo................................ .............................................................. 84 7.5 Events after the financial year ................................................................................................................................ ............ 84 Key figures, the formulas used in their calculation, and reconciliation calculations in accordance with ESMA guidelines ................ 85 PARENT COMPANY’S FINANCIAL STATEMENTS ................................................................ ......................................................... 90 Parent company’s income statement, FAS ................................................................ ................................................................ ....... 90 Parent company’s balance sheet, FAS ................................................................................................ ............................................. 91 Parent company’s cash flow statement, FAS ................................................................ ................................................................ .... 92 Parent company accounting policies ................................................................ ................................................................ ................. 93 Notes to the parent company financial statements................................................................ ............................................................ 94 1. Total revenue ................................................................ ................................................................ ............................................ 94 2. Other operating income ................................................................................................ ............................................................ 94 3. Personnel costs ................................................................................................................................ ........................................ 94 4. Depreciation according to plan ................................................................................................ ................................................. 95 5. Other operating expenses ................................................................ ................................................................ ........................ 96 6. Total amount of financial income and expenses ................................................................ ....................................................... 96 7. Appropriations................................................................ ................................................................ ........................................... 96 8. Income tax ................................................................ ................................................................ ................................................ 97 9. Intangible assets ................................................................ ................................................................ ....................................... 97 Board of Directors’ Report and Financial Statements 2023 4 Hallituksen toimintakertomus ja tilinpäätös 10. Tangible assets ................................................................ ................................................................ ....................................... 98 11. Investments ................................................................ ................................................................ ............................................ 98 12. Non-current receivables ................................................................ ................................................................ .......................... 99 13. Current receivables ................................................................ ................................................................ ................................. 99 14. Financial securities ................................................................................................................................ ................................. 99 15. Comprehensive income ................................................................ ................................................................ ........................ 100 16. Non-current liabilities ................................................................................................ ............................................................ 100 17. Current liabilities ................................................................................................................................ ................................... 101 18. Derivative instruments ................................................................................................ .......................................................... 101 19. Guarantees and commitments ................................................................ ................................................................ .............. 101 20. Other liabilities ................................................................................................................................ ...................................... 102 21. Related party transactions ................................................................ ................................................................ .................... 102 SIGNATURES TO THE BOARD OF DIRECTORS’ REPORT AND FINANCIAL STATEMENTS ................................................... 103 Board of Directors’ Report and Financial Statements 2023 5 Hallituksen toimintakertomus ja tilinpäätös BOARD OF DIRECTORSʼ REPORT Kojamo plc in brief Kojamo plc offers rental apartments and housing services in Finnish growth centres. The company’s vision is to be the property market frontrunner and the number one choice for its customers. In accordance with our mission, we create better urban housing, using a long-term approach, focusing on the best customer experience as well as competent, energetic per- sonnel and sustainable development. The goal is to create more offering and new service solutions in rental housing in or- der to make it easier to acquire rental apartments and to live in them. Kojamo’s vision is to be the property market frontrunner and the number one choice for customers who value better urban housing. With our Lumo brand, we are transforming Finnish rental housing and making it more attractive. We are promot- ing the competitiveness and well-being of urbanising Finland by facilitating work-related mobility. We are investing heavily in digital services, the customer expe- rience and our corporate culture. Our objective is to be a strongly performing housing investment company known for its excellent customer experience. Delivering the best customer experience is a key strategic pri- ority for us. That is why we are constantly developing new housing solutions and services. Lumo is our housing brand, of- fering great rental living and housing services in growth cen- tres across Finland. Strategy Kojamo’s mission is to create better urban housing. The com- pany’s vision is to be the property market frontrunner and the number one choice for its customers. The company’s strategic focus areas are: delivering the best customer experience; strong growth; operational excellence; responsibility and sus- tainable development; the most competent personnel and a dynamic place to work; and renewal through digital solutions. Kojamo aims to invest heavily in increasing its housing supply by developing new properties, buying existing properties and converting existing properties, such as office buildings, to resi- dential use. Urbanisation and migration to growth centres pro- vides the Group with good growth opportunities in the Finnish rental housing market. Kojamo makes it easier for people to migrate in pursuit of em- ployment in urbanising Finland. Kojamo operates in the seven main urban regions of Finland, focusing on demand for rental apartments especially in the Helsinki region. Kojamo’s share of the entire rental housing market in Finland is about four per cent. Kojamo also focuses on providing an excellent customer expe- rience. It is generated by a versatile range of housing solu- tions, easy and effortless service, and user-friendly online ser- vices. The Lumo brand and its new housing services lead the way in rental living. Operating in an efficient and responsible manner and attend- ing to corporate social responsibility are integral to the way Kojamo does business. Kojamo engages in meaningful work to provide high-quality housing. The company continuously de- velops its operations to ensure its competitiveness. Kojamo has the skills and enthusiasm to discover even better construc- tion solutions, housing services, ecological innovations and ways to provide good customer experiences. The company’s energetic company culture creates a solid foundation for its work. The value of the customer experience is emphasised in Kojamo’s corporate culture. The customer experience consists of Kojamo’s code of conduct, professional skill, customer ser- vice attitude and the desire to solve the customer’s problems in one go. The foundation of the corporate culture is created by Kojamo’s energetic, forward-looking values: Happy to serve, Strive for success and Courage to change. More information on Kojamo’s strategic targets and their achievement is provided under Progress of strategy implemen- tation and targets. Board of Directors’ Report and Financial Statements 2023 6 Hallituksen toimintakertomus ja tilinpäätös Summary of performance in 2023 ● Total revenue increased by 7.0 per cent to EUR 442.2 (413.3) million. ● Net rental income increased by 6.1 per cent, totalling EUR 297.2 (280.1) million. Net rental income represented 67.2 (67.8) per cent of revenue. ● Result before taxes was EUR -112.3 (-499.8) million. The result includes EUR -295.4 (-682.0) million in net result on the valuation of investment properties at fair value and EUR 0.2 (0.2) million in profit/loss from the sale of invest- ment properties. Earnings per share was EUR -0.36 (-1.62). ● Funds From Operations (FFO) increased by 4.1 per cent and amounted to EUR 167.2 (160.7) million. ● The fair value of investment properties was EUR 8.0 (8.2) billion at the end of the financial year. ● The financial occupancy rate stood at 93.0 (92.0) per cent during the financial year. ● Gross investments totalled EUR 190.7 (501.6) million, rep- resenting 43.1 (121.4) per cent of total revenue. ● Equity per share was EUR 14.67 (15.55) and return on eq- uity was -2.4 (-9.9) per cent. Return on investment was -0.4 (-5.7) per cent. ● EPRA NRV per share (net reinstatement value) decreased by 5.5 per cent and amounted to EUR 18.45 (19.53). ● At the end of the financial year, there were 354 (1,804) Lumo apartments under construction. ● The Board of Directors’ dividend proposal is that no divi- dend be paid for 2023. Kojamo owned 40,619 (39,231) rental apartments at the end of the financial year. In 2023, Kojamo acquired 0 (985) apart- ments, completed 1,450 (1,348) apartments, sold 73 (0) apart- ments and demolished or otherwise altered 11 (1) apartments. Outlook for 2024 Kojamo estimates that in 2024, the Group’s total revenue will increase by 4–8 per cent year-on-year. In addition, Kojamo es- timates that the Group’s FFO for 2024 will amount to between EUR 154–166 million, excluding non-recurring items. The outlook is based on the management’s assessment of to- tal revenue, property maintenance costs and repairs, adminis- trative expenses, financial expenses, taxes to be paid and new development to be completed, as well as the management’s view on future developments in the operating environment. The outlook takes into account the estimated occupancy rate and rises in rents as well as the number of apartments to be completed. The outlook does not take into account the impact of potential acquisitions or disposals on total revenue and FFO. The management can influence total revenue and FFO through the company’s business operations. In contrast, the management has no influence over market trends, the regula- tory environment or the competitive landscape. Saving programme In August 2023, Kojamo launched a saving programme where the company targets total savings of approximately EUR 43 million in costs and investments during 2024, of which the share of costs is estimated to be approximately EUR 18 mil- lion. We will not make new investments for the time being, and we will reduce repairs other than those supporting renting of apartments. We started change negotiations as part of the saving programme which were concluded in October 2023. We may carry out property sales during 2024. In addition, the com- pany’s Board of Directors will propose to the Annual General Meeting in the spring of 2024 that no dividend be paid for 2023. All measures aim at maintaining the company’s profita- bility and safeguarding credit rating. The saving programme is proceeding as planned. Effects of Russia’s war of aggression in Ukraine on Kojamo The continuation of Russia's war of aggression is still reflected in the recovery of the world economy. The development of the Finnish economy was weak last year. Energy prices, which had risen sharply due to the war, fell during the year, but in general, inflation continued to be high. The rise in prices af- fected Kojamo's maintenance costs, especially in the begin- ning of the year regarding heating costs and electricity prices. Board of Directors’ Report and Financial Statements 2023 7 Hallituksen toimintakertomus ja tilinpäätös Key figures 2023 2022 Change % Total revenue, M€ 442.2 413.3 7.0 Net rental income, M€ * 297.2 280.1 6.1 Net rental income margin, % * 67.2 67.8 Profit/loss before taxes, M€ * -112.3 -499.8 77.5 EBITDA, M€ * -39.9 -441.3 91.0 EBITDA margin, % * -9.0 -106.8 Adjusted EBITDA, M€ * 255.1 240.4 6.1 Adjusted EBITDA margin, % * 57.7 58.2 Funds From Operations (FFO), M€ * 167.2 160.7 4.1 FFO margin, % * 37.8 38.9 FFO excluding non-recurring costs, M€ * 167.2 160.7 4.1 Investment properties, M€ 8,038.8 8,150.2 -1.4 Financial occupancy rate, % 93.0 92.0 Interest-bearing liabilities, M€ * 3,600.4 3,678.2 -2.1 Return on equity (ROE), % * -2.4 -9.9 Return on investment (ROI), % * -0.4 -5.7 Equity ratio, % * 44.5 45.3 Loan to Value (LTV), % * 44.6 43.7 EPRA Net Reinstatement Value (NRV), M€ 4,558.8 4,825.9 -5.5 Gross investments, M€ * 190.7 501.6 -62.0 Number of personnel, end of the period 288 304 Key figures per share, € 2023 2022 Change % FFO per share * 0.68 0.65 4.6 Earnings per share -0.36 -1.62 77.8 EPRA NRV per share 18.45 19.53 -5.5 Equity per share 14.67 15.55 -5.7 Dividend per share ¹ ⁾ - 0.39 -100.0 * In accordance with the guidelines issued by the European Securities and Markets Authority (ESMA), Kojamo provides an account of the Alterna- tive Performance Measures used by the Group in the Key figures, the formulas used in their calculation, and reconciliation calculations in accor- dance with ESMA guidelines section of its financial statements ¹ ⁾ 2023: The Board of Directors proposes to the Annual General Meeting that no dividend be paid for 2023 Board of Directors’ Report and Financial Statements 2023 8 Hallituksen toimintakertomus ja tilinpäätös Operating environment General operating environment As Kojamo operates in the residential real estate sector, the company is affected particularly by the situation in the residen- tial property market and development in Finnish growth cen- tres. The company is also affected by financial market situation and interest rates, as well as macroeconomic factors, such as economic growth, employment, disposable income, inflation, regional population growth and household sizes. Operating environment key figures % 2024E 2023E GDP growth 0.7 -0.5 Unemployment 7.5 7.2 Inflation 2.0 6.3 Source: Ministry of Finance, Economic survey 12/2023 According to the economic survey published by the Ministry of Finance in December, the outlook for the global economy is uncertain. High interest rates, weak consumer confidence as well as geopolitical tensions cast a shadow over the outlook. However, inflation has slowed down quickly, and employment has remained high in many economies. The economic outlook for the United States is quite favorable, and the growth continued strong last autumn driven by private consumption. Economic growth is expected to slow down dur- ing 2024, but the decline is believed to be short-lived. Eco- nomic growth in the euro area stalled at the end of 2023 as Germany’s growth, in particular, has been weak. The predic- tive indicators for industry and services are at a low level. With the slowing inflation, it is estimated that the US and the European central bank’s the rate hike cycle of is over, and the market expects interest rate cuts to start in the first half of 2024. The Finnish economy contracted slightly in 2023. The fall in in- terest rates and the slowdown in inflation will increase con- sumers’ purchasing power as well as investments, and the Finnish economy is expected to turn to a small growth in 2024. Employment is estimated to decrease temporarily, but to re- main at a high level. Industry operating environment Industry key figures 2024E 2023E Residential start-ups, units <19,500 <16,000 of which non-subsidised block-of-flats 5,000 3,800 Building permits granted, annual, units * n/a 20,992 Construction costs, change % ** n/a 1.1 * Rolling 12 months, November 2023, ** 2023E: building cost index, December 2023 Sources: Confederation of Finnish Construction Industries (CFCI), economic forecast September 2023; Statistics Finland, Building and dwelling production; Statistics Finland, Building cost index; Construction companies' interim reports According to the Confederation of Finnish Construction Indus- tries CFCI's economic forecast published in September, the number of residential start-ups was predicted to fall to a histori- cally low level of around 16,000 apartments in 2023 and to re- main almost as low this year as well. Based on the interim re- ports published by construction companies, the number of start-ups may be significantly lower than this. According to Nordea's housing market review published in De- cember, the strong contraction in residential construction is due to weak demand and high plot and construction prices. Nordea estimates that plot prices and construction costs should fall by about 15 per cent from the current level in order for construction to become profitable again. Despite the expec- tation of lower interest rates, it does not appear that the con- struction will start on a large scale yet in 2024. Construction may be at a standstill for a longer period of time, which re- duces the housing supply. Board of Directors’ Report and Financial Statements 2023 9 Hallituksen toimintakertomus ja tilinpäätös Effects of urbanisation Population Share of rental growth household- forecast, % dwelling units, % Area 2022–2040 2010 2022 Helsinki 22.4 47.1 50.4 Capital region ¹ ⁾ 25.9 41.9 46.6 Helsinki region ² ⁾ n/a 37.7 42.6 Jyväskylä 8.0 40.2 46.0 Kuopio 3.5 36.5 42.1 Lahti -0.2 37.3 42.0 Oulu 9.6 36.7 43.3 Tampere 17.6 42.2 51.5 Turku 18.1 43.0 51.8 Other areas n/a 23.8 26.8 ¹ ⁾ Helsinki, Espoo, Kauniainen, Vantaa ² ⁾ Capital region, Hyvinkää, Järvenpää, Kerava, Kirkkonummi, Mäntsälä, Nurmijärvi, Pornainen, Porvoo, Riihimäki, Sipoo, Tuusula, Vihti Sources: Statistics Finland, Dwellings and Housing Conditions 2022; MDI population forecast 2040 (urbanization scenario), September 2023 According to the population forecast published by MDI in Sep- tember 2023, urbanization continues strongly, and regional dif- ferences are increasing. In the future, the population will be concentrated in large city areas largely with the rest of Finland weakening. In addition to migration within the country, immi- gration that has increased in the 2020s will advance urbaniza- tion. Immigration is strong to the capital region as well other large cities. The population growth of the capital region, Tampere and Turku accelerated during the last year. According to Statistics Finland's preliminary population statistics, Helsinki, Espoo, Tampere, Vantaa and Turku were Finland's most grown mu- nicipalities in 2023. With the exception of Vantaa, the popula- tion increase of all these municipalities has been stronger than in the past few decades. The population growth was especially strong in Helsinki, where it was almost double compared to the previous year. According to Nordea's housing market review, at the same time that urbanization has intensified, construction has fallen sharply. This is expected to significantly balance the supply- demand situation in the market. Business operations Kojamo is the largest private residential real estate company in Finland measured by the fair value of investment properties. Kojamo offers rental apartments and housing services for resi- dents primarily in Finnish growth centres. At the end of the fi- nancial year, Kojamo’s property portfolio comprised 40,619 (39,231) rental apartments. The fair value of Kojamo’s invest- ment properties amounted to EUR 8.0 (8.2) billion at the end of the financial year. Investment properties include completed apartments as well as development projects and land areas. Measured at fair value on 31 December 2023, 97.5 per cent of Kojamo’s rental apartments were located in the seven largest Finnish growth centres, 86.8 per cent in the Helsinki, Tampere and Turku regions and 73.8 per cent in the Helsinki region. Kojamo’s share of the country’s entire rental housing market is about four per cent. Kojamo aims to create the best customer service experience for its customers, which is why the company has made signifi- cant investments in services. The Lumo webstore allows cus- tomers to rent a suitable apartment by paying the first month’s rent, after which they can move into their new home as soon as the next day. Kojamo’s resident cooperation model gives the residents an opportunity to influence the development of housing and Lumo services. Lumo apartments offer a range of different services, such as broadband internet connection in- cluded in the rent and a car sharing service. Total revenue Kojamo’s total revenue increased to EUR 442.2 (413.3) mil- lion. Total revenue is generated entirely by income from rental operations. Total revenue increased especially due to the rental apart- ments completed in 2022 and 2023 by around EUR 17.0 mil- lion, due to the development of rents and the financial occu- pancy rate by around EUR 6.1 million, and due to the proper- ties acquired in the summer of 2022 by around EUR 4.8 mil- lion. Board of Directors’ Report and Financial Statements 2023 10 Hallituksen toimintakertomus ja tilinpäätös Result and profitability Net rental income increased to EUR 297.2 (280.1) million, which corresponds to 67.2 (67.8) per cent of total revenue. The growth of total revenue EUR 28.9 million and the de- crease of repair costs by a EUR 0.9 million had a positive im- pact and higher property maintenance costs EUR 12.6 million had a negative impact on the net rental income. Heating costs, credit losses and property taxes, in particular, increased year- on-year. Result before taxes was EUR -112.3 (-499.8) million. Result in- cludes EUR -295.4 (-682.0) million in net result on the valua- tion of investment properties at fair value and EUR 0.2 (0.2) million in profit/loss from the sale of investment properties. The negative impact on the valuation of the investment properties at fair value was mainly attributable to yield increase by EUR - 815.5 million and positively affected by the growth in net rental income by EUR 305.9 million, changes in inflation, rents and expense growth assumptions by EUR 181.7 million and other items by EUR 32.5 million. The yield requirements and other input data are based on market observations and the best available market information. This information includes the opinion of an external independent valuer. The yield require- ments for the valuation of the investment properties were in- creased on an average by 0.43 percentage points. Result be- fore taxes and excluding net result on the valuation of the in- vestment properties at the fair value increased by EUR 0.9 mil- lion totalling EUR 183.1 (182.2) million. Financial income and expenses totalled EUR -71.3 (-57.4) mil- lion. Financial income and expenses increased EUR 13.9 mil- lion year-on-year. Gain/loss on the valuation of investments amounted to EUR 1.1 (-1.4) million and the unrealised change in the fair value of derivatives EUR -0.9 (6.8) million. A profit of EUR 8.7 million was recorded in financial income as the differ- ence between the nominal value of the repurchased bonds and their purchase prices. Interest expenses increased by EUR 17.6 million year-on-year due to the higher amount of in- terest-bearing liabilities. Funds From Operations (FFO) amounted to EUR 167.2 (160.7) million. The increase in FFO was attributable to the im- provement in net rental income and the profit from the repur- chase of bonds during the financial year. Balance sheet, cash flow and financing 31 Dec 2023 31 Dec 2022 Balance sheet total, M€ 8,158.3 8,482.3 Equity, M€ 3,625.9 3,842.7 Equity per share, € 14.67 15.55 Equity ratio, % 44.5 45.3 Return on equity (ROE), % -2.4 -9.9 Return on investment (ROI), % -0.4 -5.7 Interest-bearing liabilities, M€ 3,600.4 3,678.2 Loan to Value (LTV), % 44.6 43.7 Coverage ratio 3.6 3.8 Average interest rate of loan portfolio, % * 2.4 1.9 Average loan maturity, years 2.8 3.5 Cash and cash equivalents, M€ 15.0 119.4 * Includes interest rate derivatives Kojamo’s liquidity was good during the financial year. At the end of the financial year, Kojamo’s cash and cash equivalents stood at EUR 15.0 (119.4) million and liquid financial assets at EUR 3.3 (104.0) million. EUR 39.7 (30.9) million of the EUR 250 million commercial pa- per programme was in use at the end of the financial year. Kojamo has committed credit facilities of EUR 275 million and an uncommitted credit facility of EUR 5 million that were un- used at the end of the financial year. In addition, the below mentioned EUR 425 million syndicated loan signed in October was undrawn at the end of the financial year. The following financing arrangements were made during the fi- nancial year: In April, Kojamo plc signed a new EUR 75 million credit agree- ment with Aktia Bank Plc. The credit agreement is unsecured and has a maturity of five years. The loan was used for the re- financing of a EUR 50 million credit agreement with Aktia that matured in summer 2023, as well as for the group’s general fi- nancing needs. In May, Kojamo plc signed a new EUR 425 million credit facil- ity agreement linked to its sustainability targets together with six relationship banks. The syndicated loan is secured and has a maturity of three years with two one-year extension options. The loan was used to refinance company’s existing indebted- ness as well as for the group’s general financing needs. In June, Kojamo plc repurchased with a public tender offer EUR 150 million of its bonds maturing in 2024 and 2025. The Board of Directors’ Report and Financial Statements 2023 11 Hallituksen toimintakertomus ja tilinpäätös bond maturing in 2024 was repurchased for EUR 65.5 million and the bond maturing in 2025 for EUR 84.5 million. In October, Kojamo plc signed a new EUR 425 million credit agreement linked to its sustainability targets together with five relationship banks. The loan is secured and has a maturity of three years with two one-year extension options. The loan will be used for the refinancing of company’s existing indebted- ness as well as for the group’s general financing needs. Kojamo’s unsecured financing agreements include financial covenants. They are described in more detail in note 4.6. Real estate property and fair value M€ 31 Dec 2023 31 Dec 2022 Fair value of investment properties on 1 Jan 8,150.2 8,327.5 Acquisition of investment properties 165.1 478.9 Modernisation investments 26.7 22.5 Disposals of investment properties -12.0 -1.3 Capitalised borrowing costs 4.2 4.6 Profit/loss on fair value of investment properties -295.4 -682.0 Fair value of investment properties at the end of the period 8,038.8 8,150.2 Right-of-use assets included in the fair values of investment properties M€ 31 Dec 2023 31 Dec 2022 Fair value on 1 Jan 73.8 70.6 Increases/decreases 5.2 4.3 Profit/loss on fair value of investment properties -1.3 -1.1 Fair value of investment properties at the end of the period 77.8 73.8 Kojamo owned a total of 40,619 (39,231) rental apartments at the end of the financial year. The fair value of Kojamo’s investment properties is determined quarterly on the basis of the company’s own evaluation. An ex- ternal expert gives a statement on the valuation of Kojamo’s investment properties. The latest valuation statement was is- sued on the situation as at 31 Dec 2023. The criteria for deter- mining fair value are presented in the Notes to the Financial Statements. At the end of the financial year, the plot and real estate devel- opment reserve held by the Group totalled about 211,000 (184,000) floor sq.m. The fair value of the plot and real estate development reserve (including the Metropolia properties) was EUR 178.1 (152.7) million at the end of the financial year. Rental housing Apartments 31 Dec 2023 31 Dec 2022 Number of apartments 40,619 39,231 Average rent, €/m²/month 17.81 17.55 Average rent, €/m²/month, yearly average 17.74 17.30 Board of Directors’ Report and Financial Statements 2023 12 Hallituksen toimintakertomus ja tilinpäätös Kojamo responds to the trends of urbanisation, digitalisation and communality in accordance with its strategy, providing its customers with apartments with good locations and services that make daily life easier, increase the attractiveness of hous- ing and improve the sense of community. Kojamo’s properties form a networked service platform that enables agile innova- tion implementation in cooperation with other operators. All Lumo rental apartments are also easily available for rent on our webstore. Rental housing key figures % 1–12/2023 1–12/2022 Financial occupancy rate 93.0 92.0 Tenant turnover rate, excluding internal turnover 29.5 31.1 Like-for-Like rental income growth * 1.9 0.3 Rent receivables in proportion to revenue 1.6 1.5 * Change of rental income for properties owned for two consecutive years in the past 12 months compared to the previous 12-month period. The full-year financial occupancy rate was 93.0 (92.0) per cent. At year-end, 133 (274) apartments were vacant due to renovations. Kojamo’s property portfolio by region as at 31 December 2023 Helsinki Tampere Turku Kuopio Lahti % region region region Oulu Jyväskylä region region Others Distribution by number of apartments 62.4 9.7 5.2 5.5 5.1 4.1 3.5 4.5 Distribution by fair value 73.8 8.7 4.3 2.9 3.1 2.5 2.2 2.5 Information on the property portfolio as at 31 December 2023 Number of commercial Number of premises and Financial apartments, other leased Fair value, Fair value, Fair value, occupancy Area units premises, units M€ € 1,000/unit €/m² rate, % ³ ⁾ Helsinki region 25,332 476 5,711.4 221 4,135 91.9 Tampere region 3,949 111 670.7 165 3,234 96.4 Turku region 2,122 25 334.6 156 2,935 95.8 Other 9,216 145 1,017.9 109 2,063 94.7 Total 40,619 757 7,734.5 1) 187 3,523 93.0 Other 304.3 2) Total portfolio 40,619 757 8,038.8 ¹ ⁾ The figures reflect income-generating portfolio assets, which excludes new projects under constructions, plots owned by the company and ownership of certain assets through shares ² ⁾ Fair value of ongoing projects under constructions, plots owned by the company and ownership of certain assets through shares and IFRS 16 right-of-use assets ³ ⁾ The financial occupancy rate does not include commercial premises and other leased premises Board of Directors’ Report and Financial Statements 2023 13 Hallituksen toimintakertomus ja tilinpäätös Investments, divestments and real estate development Investments M€ 31 Dec 2023 31 Dec 2022 Acquisition of investment properties * 159.9 474.5 Modernisation investments 26.7 22.5 Capitalised borrowing costs 4.2 4.6 Total 190.7 501.6 Repair expenses, M€ 29.3 30.2 * Not including leases for plots of land. Number of apartments Units 31 Dec 2023 31 Dec 2022 Apartments at the start of the financial year 39,231 36,897 Divestments -73 - Acquisitions - 985 Completed 1,450 1,348 Demolished or altered 11 1 Apartments at the end of the financial year 40,619 39,231 Started during the financial year - 477 Under construction at the end of the financial year 354 1,804 Preliminary agreements for new construction 119 230 A total of 0 (985) apartments were acquired and sold 73 (0) apartments during the financial year. Of the apartments under construction, 354 (1,671) are located in the Helsinki region and 0 (133) in other Finnish growth cen- tres. A total of 1,450 (1,348) apartments were completed dur- ing the financial year. Modernisation investments during the financial year amounted EUR 26.7 (22.5) million and repair costs totalled EUR 29.3 (30.2) million. Kojamo estimates that investments in development projects will amount to EUR 15–18 million in 2024. Binding acquisition agreements for new development M€ 31 Dec 2023 31 Dec 2022 Actual costs incurred from new construction in progress 84.8 293.6 Cost of completing new construction in progress 10.0 145.1 Total 94.9 438.7 Plots and real estate development sites owned by the company 31 Dec 2023 31 Dec 2022 M€ 1,000 fl.sq.m M€ 1,000 fl.sq.m Plots 30.9 51 35.6 59 Plots and existing residential building 74.5 93 44.4 57 Conversions 72.8 67 72.8 68 Total * 178.1 211 152.7 184 * The management’s estimate of the fair value and building rights of the plots Board of Directors’ Report and Financial Statements 2023 14 Hallituksen toimintakertomus ja tilinpäätös Binding preliminary agreements and provisions for plots and real estate development 31 Dec 2023 31 Dec 2022 M€ 1,000 fl.sq.m M€ 1,000 fl.sq.m Preliminary agreements for new construction ¹ ⁾ 24.7 48.7 Estimate of the share of plots of preliminary agreements for new development ² ⁾ 4.2 5 8.5 12 Preliminary agreements and reservations for plots ² ⁾ 34.9 45 31.0 44 ¹ ⁾ Including plots ² ⁾ The management’s estimate of the fair value and building rights of the plots Strategic targets and their achievement Strategic targets 2023 2022 2021 2020 Target Annual growth of total revenue, % 7.0 5.5 2.0 2.3 4–5 Annual investments, M€ 190.7 501.6 356.9 371.2 200–400 FFO/total revenue, % 37.8 38.9 39.1 39.5 > 36 Loan to Value (LTV), % 44.6 43.7 37.7 41.4 < 50 Equity ratio, % 44.5 45.3 49.0 45.6 > 40 Net Promoter Score (NPS) * 50 45 20 36 40 * The calculation method has changed for example including digital services in calculation. Actual for years 2021 and 2020 have not been adjusted to reflect the current calculation method. Kojamo’s objective is to be a stable dividend payer whose an- nual dividend payment will be at least 60 per cent of FFO, pro- vided that the Group’s equity ratio is 40 per cent or more and taking account of the company’s financial position. In August, Kojamo plc announced that as a part of the saving programme, the company’s Board of Directors will propose to the Annual General Meeting in the spring of 2024 that no divi- dend be paid for 2023. Shares and shareholders Issued shares and share capital Kojamo’s share capital on 31 December 2023 was EUR 58,025,136 and the number of shares at the end of the finan- cial year was 247,144,399. Kojamo has a single series of shares, and each share entitles its holder to one vote in the general meeting of shareholders of the company. There are no voting restrictions related to the shares. The shares have no nominal value. The company shares belong to the book-entry system. The trading code of the shares is KOJAMO and ISIN code FI4000312251. Information on the share and share capital 2023 2022 2021 Share capital at the end of the financial year, € 58,025,136 58,025,136 58,025,136 Number of outstanding shares at the end of the financial year 247,144,399 247,144,399 247,144,399 Weighted average number of outstanding shares 247,144,399 247,144,399 247,144,399 Weighted average number of outstanding shares, diluted 247,144,399 247,144,399 247,144,399 Board of Directors’ Report and Financial Statements 2023 15 Hallituksen toimintakertomus ja tilinpäätös Trading in the companyʼs share Kojamo’s shares are listed on the official list of Nasdaq Hel- sinki. Share price and trading 2023 2022 2021 Lowest price, € 7.41 11.62 15.64 Highest price, € 15.71 22.10 21.42 Average price, € 10.29 16.98 18.97 Closing price, € 11.90 13.80 21.24 Market value of share capital, 31 Dec, M€ 2,941.0 3,410.6 5,249.3 Share trading, million units 103.8 86.5 125.0 Share trading of total share stock, % 42.0 35.0 50.6 Share trading, M€ 1,068.6 1,471.8 2,370.9 In addition to the Nasdaq Helsinki stock exchange, Kojamo shares were traded on other marketplaces. From 1 January to 31 December 2023, approximately 215 million (approximately 185 million) Kojamo shares were traded on alternative market- places, corresponding to approximately 70 per cent (approxi- mately 70 per cent) of the total trading volume (Source: Modu- lar Finance). Own shares Kojamo did not hold any of its own shares during or at the end of the financial year. Dividend In accordance with the Board of Directors’ proposal, the An- nual General Meeting on 16 March 2023 decided that a divi- dend of EUR 0.38 per share, or EUR 96,386,315.61 in total, be paid for the financial year 2022 and that EUR 154,673,003.39 be retained in unrestricted equity. The dividend payment date was 5 April 2023. In August, Kojamo plc announced that as a part of the saving programme, the company’s Board of Directors will propose to the Annual General Meeting in the spring of 2024 that no divi- dend be paid for 2023. Shareholders At the end of the review period, the number of registered shareholders was 13,452, including nominee-registered share- holders. The proportion of nominee-registered and direct for- eign shareholders was 53.7 per cent of the company’s shares at the end of the financial year. The 10 largest shareholders owned in aggregate 55.0 per cent of Kojamo’s shares at the end of the financial year. The list of Kojamo’s shareholders is based on information pro- vided by Euroclear Finland Ltd. The Board of Directorsʼ authorisations Kojamo’s Annual General Meeting on 16 March 2023 author- ised the Board of Directors to decide on the repurchase and/or acceptance as pledge of an aggregate maximum of 24,714,439 of the company’s own shares according to the pro- posal of the Board of Directors. The proposed amount of shares corresponds to approximately 10 per cent of all the shares of the company. The authorisation will remain in force until the closing of the next Annual General Meeting, however, no longer than until 30 June 2024. The Board of Directors was also authorised to decide on the issuance of shares and the issuance of special rights entitling to shares as referred to in Chapter 10, Section 1 of the Com- panies Act according to the proposal of the Board of Directors. The number of shares to be issued on the basis of the authori- sation shall not exceed an aggregate maximum of 24,714,439 shares, which corresponds to approximately 10 per cent of all the shares of the company. The authorisation applies to both the issuance of new shares and the conveyance of own shares held by the company. The authorisation will remain in force un- til the closing of the next Annual General Meeting, however, no longer than until 30 June 2024. The Board has not used authorisations. The Annual General Meeting decided that an addition is made to the Articles of Association to allow the Board of Directors, at their discretion, to arrange a General Meeting as a virtual meeting without a meeting venue, as proposed by the Board of Directors. The change has been made to the Articles of Association in 2023. Flagging notifications Kojamo has not received any flagging notification pursuant to Chapter 9, Section 5 of the Securities Market Act in 2023. Board of Directors’ Report and Financial Statements 2023 16 Hallituksen toimintakertomus ja tilinpäätös Managers’ transactions and shareholdings Managers’ transactions at Kojamo in 2023 have been pub- lished as stock exchange releases and they are available on the Kojamo website at https://kojamo.fi/en/news-releases/. The members of the Board of Directors or corporations over which they exercise control owned a total of 57,783 (55,754) shares and share-based rights in the company or in compa- nies belonging to the same Group as the company. The mem- bers of the Management Team or corporations over which they exercise control owned a total of 163,115 (190,033) shares and share-based rights in the company or in companies be- longing to the same Group as the company. These shares rep- resent 0.09 (0.10) per cent of the company’s entire share capi- tal. Shareholdings There are a total of 13,452 shareholders in Kojamo plc, the ten largest shareholders being (share register at 31 Dec 2023): 10 largest shareholders as at 31 December 2023 No. of Shareholder shares Holding, % Heimstaden Bostad AB 49,389,283 19.98 Ilmarinen Mutual Pension Insurance Company 20,537,814 8.31 Varma Mutual Pension Insurance Company 19,362,375 7.83 The Finnish Industrial Union 16,067,182 6.50 Trade Union of Education in Finland 11,814,417 4.78 Finnish Construction Trade Union 5,708,609 2.31 Trade Union PRO 4,904,150 1.98 Elo Mutual Pension Insurance Company 3,627,000 1.47 OP-Finland Fund 2,231,091 0.90 Service Union United PAM 2,200,000 0.89 Other 111,302,478 45.04 Total 247,144,399 100.00 Breakdown of share ownership No. of No. of % of Shares owners % shares shares 1–100 7,718 57.37 301,822 0.12 101–500 3,996 29.71 1,018,156 0.41 501–1,000 901 6.70 690,441 0.28 1,001–5,000 623 4.63 1,325,829 0.54 5,001–10,000 82 0.61 586,668 0.24 10,001–50,000 68 0.51 1,681,253 0.68 50,001–100,000 12 0.09 920,969 0.37 100,001–500,000 22 0.16 5,070,997 2.05 500,001– 30 0.22 235,548,264 95.31 Total 13,452 100.00 247,144,399 100.00 Ownership structure No. of % of Shareholders shares shares Public sector 45,722,089 18.50 Financial and insurance corporations 71,781,707 29.04 Households 3,895,597 1.58 Non-financial corporations 2,076,041 0.84 Non-profit institutions 51,758,703 20.94 Other countries 71,910,262 29.10 Total 247,144,399 100.00 Nominee-registered 83,172,598 33.65 Board of Directors’ Report and Financial Statements 2023 17 Hallituksen toimintakertomus ja tilinpäätös Governance Annual General Meeting Kojamo’s Annual General Meeting (AGM) of 16 March 2023 adopted the financial statements for the financial year 2022 and discharged the members of the Board of Directors and the CEO from liability. The AGM also decided on dividend pay- ment, the number of members of the Board of Directors, the Board of Director’s remuneration and composition and the election and remuneration of the auditor and also decided amendment of the Articles of Association. The AGM approved the Remuneration Report for the members of the Board of Di- rectors, the CEO and the Deputy CEO. The AGM authorised the Board of Directors to resolve on one or more share issues or the issuance of special rights entitling to shares, as referred to in Chapter 10, Section 1 of the Companies Act. The minutes of the AGM are available at https://kojamo.fi/en/investors/cor- porate-governance/annual-general-meeting/annual-general- meeting-2023/. Board of Directors and auditors The members of Kojamo’s Board of Directors are Mikael Aro (Chairman), Mikko Mursula (Vice-Chairman), Kari Kauniskan- gas, Anne Koutonen, Andreas Segal, Catharina Stackelberg- Hammarén and Annica Ånäs. The company’s auditor is KPMG Oy Ab, with Authorised Public Accountant Petri Kettunen as the auditor with principal responsibility. Board committees Kojamo’s Board of Directors has established two permanent committees, an Audit Committee and a Remuneration Commit- tee. Anne Koutonen (Chairman), Kari Kauniskangas, Mikko Mursula and Annica Ånäs serve in the Audit Committee. Mi- kael Aro (Chairman), Andreas Segal and Catharina Stackel- berg-Hammarén serve in the Remuneration Committee. Nomination Board A stock exchange release was issued on 13 September 2023 announcing the composition of Kojamo plc’s Nomination Board. Kojamo’s three largest shareholders nominated the fol- lowing members to the Shareholders’ Nomination Board: Christian Fladeland, CIO, Heimstaden; Jouko Pölönen, CEO, Ilmarinen Mutual Pension Insurance Company; and Risto Murto, CEO, Varma Mutual Pension Insurance Company. In addition, the Chairman of Kojamo’s Board of Directors serves as an expert member of the Nomination Board. The Shareholders’ Nomination Board is a body established by the Annual General Meeting consisting of shareholders, with the task of annually preparing and presenting proposals for the General Meeting concerning the number, composition and Chairman of the Board of Directors, remuneration of the Board of Directors and remuneration of the members of the Board Committees. The proposal of the Nomination Board to the Annual General Meeting were published as a stock exchange release on 18 December 2023. CEO Jani Nieminen, M.Sc. (Tech.), MBA was the CEO during the review period. The CEO’s deputy was CFO Erik Hjelt, Licenti- ate in Laws, eMBA. Management Team At the end of the review period, the members of the Manage- ment Team were Jani Nieminen, CEO; Erik Hjelt, CFO; Ville Raitio, Chief Investment Officer; and Janne Ojalehto, Execu- tive Vice President, Housing. The company published a stock exchange release on May 31, 2023 announcing that Katri Harra-Salonen, Chief Digital Of- ficer, has resigned and left her position at the end of August. The company published a stock exchange release on 22 Au- gust, 2023 announcing that Tiina Kuusisto will not continue working for Kojamo. Her work obligation ended on August 23, 2023. Description of corporate governance The description of Kojamo’s administration and the Corporate Governance Statement are publicly available on Kojamo’s website at https://kojamo.fi/en/investors/releases-and-publica- tions/financial-reports/. Personnel At the end of 2023, Kojamo had a total of 288 (304) employ- ees, of who 271 (270) were on permanent contracts and 17 (34) were on temporary contracts. The average number of per- sonnel during the year was 315 (316). The average length of service was 9.3 (9.3) years. Personnel turnover in 2023 was 10.9 (17.6) per cent. The company hired about 50 summer employees in 2023. The salaries and fees paid during the financial year totalled EUR 18.8 (17.8) million. Annual performance bonus and incentive sys- tem Kojamo’s employees are included in an annual performance bonus system which is based on the achievement of the com- pany’s general targets as well as personal targets. Kojamo also has a long-term share-based incentive plan for the Group’s key personnel. The reward is based on reaching the targets set for Kojamo’s key business criteria in relation to the Group’s strategic goals. Three performance periods were ongoing at the end of the review period: 2021–2023, 2022– 2024 and 2023–2025. Board of Directors’ Report and Financial Statements 2023 18 Hallituksen toimintakertomus ja tilinpäätös On 15 February 2023, Kojamo’s Board of Directors resolved on the long-term incentive plan’s performance period of 2023– 2025. The possible rewards for the performance period are based on the Group’s revenue (%), Funds From Operations (FFO) per share and apartment-specific CO2 emission reduc- tion target for years 2023–2025, and Loan to Value ratio. The rewards to be paid on the basis of the performance period cor- respond to the value of a maximum total of 178,000 shares in- cluding the proportion to be paid in cash. If the three ongoing earning periods were accrued in full, the maximum bonus would be a sum corresponding to 385,211 Kojamo shares, of which part of would be paid in Kojamo shares and part of in cash. More information on the long-term incentive plan is provided in Kojamo’s Remuneration Report for 2023. On 15 February 2023, Kojamo’s Board of Directors approved to establish a new restricted share programme for the years 2023–2025. The programme will be used in specific situations decided by the Board of Directors separately. The programme consists of individual, annually commencing maximum three- year long restricted share plans within which the participants have the opportunity to receive a fixed number of shares as a long-term incentive and retention award. 2023–2025 commitment period will last until the end of 2025 and the possible reward will be paid during the year following the expiry of the period partially in shares in the company and partially in cash. The maximum gross number of shares to be granted is 50,000 shares. Statement of non-financial information Ta xonomy reporting Since 2021, we have voluntarily reported on the EU taxonomy eligibility and, in 2022, we also included alignment in our tax- onomy reporting. For the year 2023, we have revised our tax- onomy reporting in accordance with the EPRA’s (European Public Real Estate Association) taxonomy reporting recom- mendations updated in November 2023 (EU Taxonomy Align- ment in Listed Real Estate, Nov 2023 Edition). Of the seven economic activities included in the EU taxonomy, according to EPRA's recommendations, only 7.7 Acquisition and ownership of buildings is relevant to our business when reviewing objectives related to climate change. Regarding the four environmental goals – transition to a circular economy, sustainable use and protection of water and marine resources, pollution prevention and control, protection and restoration of biodiversity and ecosystems, EPRA states that only the goals related to circular economy are relevant in the real estate sec- tor. However, EPRA does not connect the five circular eco- nomic activities defined in the taxonomy at all to the acquisition and ownership of buildings. Therefore, we have interpreted that our taxonomy reporting should only cover 7.7. Acquisition and ownership of buildings in terms of climate change mitigation and climate change ad- aptation. Accordingly, our taxonomy alignment reporting for 2023 covers the acquisition and ownership of buildings and substantial contribution to climate change mitigation. The exist- ing portfolio makes up the majority of our business operations. EPRA's recommendations divide the existing portfolio into two different categories according to the date of construction: prop- erties built before 31 December 2020 and properties built after 31 December 2020. To the properties built before 31 December 2020, the taxon- omy applies an energy efficiency criterion according to which the energy rating of the property must be A or the property must represent the best 15 per cent of national building stock in terms of primary energy demand. To determine the best 15 per cent, we have used as the threshold energy rating of 119, referring to the study commissioned by Finnish Association of Building Owners and Construction Clients (Rakli ry), titled “As- sessment of the primary energy consumption of the best 15 per cent of property stock” (in Finnish: Rakennuskannan 15 prosentin parhaimmiston primäärienergian kulutuksen määrit- tely ). For properties that were built before 31 December 2020, we have reported properties with an energy class of A or an E value of 119 or below as aligning with the taxonomy. For properties built after 31 December 2020, in accordance with EPRA's recommendations, we have used a criterion that determines the energy efficiency to be at least 10 per cent lower in terms of primary energy demand than the threshold value for nearly zero energy buildings. This sets the E value threshold to 81. For properties built after 31 December 2020, we have reported as aligning with the taxonomy properties with an E value of 81 or below, and which are 5,000 m 2 or less in size. The EU taxonomy's only “do no significant harm" criterion for the acquisition and ownership of buildings is the implementa- tion of property-specific climate risk mapping. We have carried out property-specific climate risk mapping in accordance with the taxonomy requirements for 80 per cent of the properties that meet the criteria mentioned above. Only a few individual properties were found to currently have a medium level risk re- lated to climate change. These risks were related to heat waves and floods. Even in the medium term, only less than twenty properties were found to have a medium level risk. These were mainly related to heat waves. RCP 2.6 and RCP 8.5 scenarios were used in property-specific risk mapping. We report total revenue, capital expenditures and operational costs as described above for properties that we have owned in 2023. Capital expenditures include all repair costs for proper- ties that align with the taxonomy, as well as the costs of reno- vations and energy improvements for properties for which a capital expenditure plan has been drawn up to achieve taxon- omy alignment. With reference to EPRA's recommendations, we have used the date of entry into force of the building permit to determine whether the property was built before or after 31 December 2020. We don’t produce fossil gas or nuclear en- ergy. Board of Directors’ Report and Financial Statements 2023 19 Hallituksen toimintakertomus ja tilinpäätös Taxonomy-aligned proportion of revenue Financial year 2023 Substantial contribution criteria DNSH criteria Economic activities Code Revenue Proportion of revenue Climate change mitigation Climate change adaptation Water Pollution Circular economy Biodiversity Climate change mitigation Climate change adaptation * Water Pollution Circular economy Biodiversity Minimum safeguards Proposition of taxonomy aligned revenue, year 2022 Category enabling activity Category transitional activity Y; N; Y; N; Y; N; Y; N; Y; N; M€ % N/EL N/EL N/EL N/EL N/EL Y/N Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T A. Taxonomy-eligible activities A.1 Environmentally sustanable activities (Taxonomy-aligned) Acquisition and ownership of buildings 7.7 129.1 29.2 Y N N/EL N/EL N/EL N/EL Y Y Y Y Y Y N Revenue of environmentally suistainable activities (Taxonomy-aligned) (A.1) 129.1 29.2 100% 0% 0% 0% 0% 0% Y Y Y Y Y Y N Of which Enabling 129.1 29.2 100% 0% 0% 0% 0% 0% Y Y Y Y Y Y N Of which Transitional A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) E/KEL E/KEL E/KEL E/KEL E/KEL E/KEL N/EL N/EL N/EL N/EL N/EL N/EL Acquisition and ownership of buildings 7.7 312.9 70.8 EL EL N/EL N/EL N/EL N/EL Revenue of Taxonomy- eligible but not environmentally sustainable (not Taxonomy-aligned activities) (A.2) 312.9 70.8 100% 0% 0% 0% 0% 0% A. Revenue of Taxonomy eligible activities (A.1 + A.2) 442.0 100.0 100% 0% 0% 0% 0% 0% B. Taxonomy-non eligible activities Revenue of Taxonomy-non-eligible activities 0.2 0.0 Total (A + B) 442.2 100.0 * Climate risk assessment coverage 80% EL = Eligible; N/EL = Non-eligible Board of Directors’ Report and Financial Statements 2023 20 Hallituksen toimintakertomus ja tilinpäätös Taxonomy-aligned proportion of CapEx Financial year 2023 Substantial contribution criteria DNSH criteria Economic activities Code CapEx Proportion of CapEx Climate change mitigation Climate change adaptation Water Pollution Circular economy Biodiversity Climate change mitigation Climate change adaptation * Water Pollution Circular economy Biodiversity Minimum safeguards Proposition of taxonomy aligned CapEx, year 2022 Category enabling activity Category transitional activity Y; N; Y; N; Y; N; Y; N; Y; N; M€ % N/EL N/EL N/EL N/EL N/EL Y/N Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T A. Taxonomy-eligible activities A.1 Environmentally suistanable activities (Taxonomy-aligned) Acquisition and ownership of buildings 7.7 16.3 40.9 Y N N/EL N/EL N/EL N/EL Y Y Y Y Y Y N CapEx of environmentally sustainable activities (Taxonomy-aligned) (A.1) 16.3 40.9 100% 0% 0% 0% 0% 0% Y Y Y Y Y Y N Of which Enabling 16.3 40.9 100% 0% 0% 0% 0% 0% Y Y Y Y Y Y N Of which Transitional A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) E/KEL E/KEL E/KEL E/KEL E/KEL E/KEL N/EL N/EL N/EL N/EL N/EL N/EL Acquisition and ownership of buildings 7.7 23.6 59.1 EL EL N/EL N/EL N/EL N/EL CapEx of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2) 23.6 59.1 100% 0% 0% 0% 0% 0% A. CapEx of Taxonomy eligible activities (A.1 + A.2) 40.0 100.0 100% 0% 0% 0% 0% 0% B. Taxonomy-non eligible activities Turnover of Taxonomy-non-eligible activities - 0.0 Total (A + B) 40.0 100.0 * Climate risk assessment coverage 80% EL = Eligible; N/EL = Non-eligible Board of Directors’ Report and Financial Statements 2023 21 Hallituksen toimintakertomus ja tilinpäätös Taxonomy-aligned proportion of OpEx Financial year 2023 Substantial contribution criteria DNSH criteria Economic activities Code OpEx Proportion of OpEx Climate change mitigation Climate change adaptation Water Pollution Circular economy Biodiversity Climate change mitigation Climate change adaptation * Water Pollution Circular economy Biodiversity Minimum safeguards Proposition of taxonomy aligned OpEx, year 2022 Category enabling activity Category transitional activity Y; N; Y; N; Y; N; Y; N; Y; N; M€ % N/EL N/EL N/EL N/EL N/EL Y/N Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T A. Taxonomy-eligible activities A.1 Environmentally suistanable activities (Taxonomy-aligned) Acquisition and ownership of buildings 7.7 34.2 22.9 Y N N/EL N/EL N/EL N/EL Y Y Y Y Y Y N OpEx of environmentally sustainable activities (Taxonomy-aligned) ( A.1) 34.2 22.9 100% 0% 0% 0% 0% 0% Y Y Y Y Y Y N Of which Enabling 34.2 22.9 100% 0% 0% 0% 0% 0% Y Y Y Y Y Y N Of which Transitional A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) E/KEL E/KEL E/KEL E/KEL E/KEL E/KEL N/EL N/EL N/EL N/EL N/EL N/EL Acquisition and ownership of buildings 7.7 114.2 76.5 EL EL N/EL N/EL N/EL N/EL OpEx of Taxonomy-eligible but not environmentally suistainable activities (not Taxonomy-aligned activities) (A.2) 114.2 76.5 100% 0% 0% 0% 0% 0% A. OpEx of Taxonomy eligible activities (A.1 + A.2) 148.4 99.4 100% 0% 0% 0% 0% 0% B. Taxonomy-non eligible activities Turnover of Taxonomy-non-eligible activities 1.0 0.6 Total (A + B) 149.4 100.0 * Climate risk assessment coverage 80% EL = Eligible; N/EL = Non-eligible Board of Directors’ Report and Financial Statements 2023 22 Hallituksen toimintakertomus ja tilinpäätös Sustainability programme Responsibility and sustainable development is one of the focus areas in Kojamo’s strategy. Our sustainability programme is based on materiality assessment, and it extends across our businesses. It helps us steer and develop our sustainability ef- forts systematically as a key component of our business oper- ations. Our sustainability programme sets out focus areas, long-term and short-term targets and performance indicators for our sustainability efforts. The focus areas of our sustainability programme are: ● sustainable cities ● the best customer experience ● most competent personnel and a dynamic place to work ● a responsible corporate citizen. The foundation of our sustainability programme is built on en- suring long-term profitability and growth, sustainable and re- sponsible operations and transparent sustainability communi- cations and reporting. Sustainability management Our responsibility work is guided by our strategy, values, oper- ating principles and sustainability programme. The Board of Directors is responsible for strategic policies and decisions concerning sustainability. The CEO is responsible for the im- plementation of the Board of Director’s decisions and, with the assistance of the Management Team, monitors the realisation of sustainability as part of the Group’s business operations in accordance with the Board’s decisions. At the Management Team level, the Executive Vice President, Investments & Port- folio Management, is in charge of sustainability. The Sustaina- bility Manager is responsible for Kojamo’s sustainability related matters and their development, sustainability reporting and supporting the Group’s business units as an expert on sustain- ability issues. The Sustainability Manager reports to the Exec- utive Vice President, Investments & Portfolio Management. Business directors are in charge of actions related to their re- spective areas of responsibility with regard to the implementa- tion of the sustainability programme. Sustainability targets are integral elements of the operating plans and objectives of our businesses. The Management Team acts as the sustainability steering group. Sustainable cities Key policies, principles, commitments and pro- grammes Kojamo’s strategy, Kojamo’s values, Code of Conduct, UN Sustainable Development Goals, Voluntary energy efficiency agreement of the Finnish real estate sector 2017-2025, WWF Green Office, Due diligence in investment decisions Key targets Our target is to achieve carbon-neutral energy consumption for our property portfolio by 2030 ● Performance indicator 1: Carbon footprint of the property portfolio, result 2023: 33,304 tCO 2 e ● Performance indicator 2: Carbon footprint of the property portfolio, result 2023: 0.8 tCO 2 e/apartment The property electricity used by our property portfolio is 100% carbon-neutral ● Performance indicator: Share of carbon-neutral electricity of property electricity consumption, result 2023: 100% All of our own new development projects, the planning of which began in 2021, will be implemented with an E value of ≤ 80 ● Performance indicator 1: Construction starts, using Kojamo’s own plot reserve, with an E-value of ≤ 80, result: N/A ● Performance indicator 2: Completed apartments, us- ing Kojamo’s own plot reserve, with an E-value of ≤ 80, result 2023: 100% The sustainability of our business is based on the notion that we invest in growth centres, in locations with good public transport connections and services. We aim to improve energy efficiency, reduce the carbon footprint and promote circular economy in property maintenance and in all our investments, from new construction to renovation. Our goal is to achieve carbon-neutral energy consumption in our properties by 2030. We have drafted a roadmap that lays out measures to achieve this goal. The primary means of re- ducing emissions include modernisation, renovations and en- ergy management. In addition, we make investments, for ex- ample, in geothermal systems and other renewable energy so- lutions. New construction also plays a significant role in the re- duction of the portfolio’s relative CO 2 emissions. The roadmap’s principles, targets and actions are reviewed sys- tematically as part of annual planning and budgeting. Our annual carbon dioxide emission reduction target is a mini- mum 4 per cent reduction in CO 2 emissions for the entire prop- erty portfolio until the end of 2025 (measured in terms of tCO 2 e/apartment). For 2023, CO 2 emission reduction was - 16.9 per cent. A significant action during the financial year was the demand response agreement for district heating signed with Vantaa Energy for nearly 70 properties. In connection with the agreement, we adopted a renewable district heating prod- uct for the properties in question. Our target is to improve the energy efficiency by 30 per cent in connection with renovations. In 2023, we continued to invest in the repair and modernisation of our property portfolio, with the total investments amounting to EUR 56.0 (52.7) million. We completed four renovation projects: in Helsinki, Jyväskylä, Tampere and Turku. The energy efficiency of our property portfolio was improved during the year, for example, by replac- ing ventilation fans, optimising the energy consumption of properties and making adjustments to the heating network. In 2022, we started the conversion of seven properties from dis- trict heating to geothermal heating. The first geothermal heat projects have been concluded, and the remaining projects will be completed during 2024. Plans for six new geothermal heat projects were completed in 2023. Board of Directors’ Report and Financial Statements 2023 23 Hallituksen toimintakertomus ja tilinpäätös Our goal is to reduce the total energy consumption and emis- sions of our properties. We control the heating of 77.0 per cent of our apartments with the help of smart optimisation systems. Practically all our property portfolio is heated by district heat- ing. The property electricity of our entire property portfolio is produced by using 100 per cent carbon-neutral energy sources. We promote circular economy in new construction and renova- tion. We have set a target of sorting and recycling over 70 per cent of non-hazardous waste by the end of 2023. During the year, we developed our reporting process for collecting data on the recycling rate of our construction sites. The reporting process was in place for part of the year and, based on the ini- tial data, we can conclude that achieving a 70 per cent recy- cling rate will be challenging. We will continue to develop our cooperation with our partners to achieve the target. The best customer experience Key policies, principles, commitments and pro- grammes Kojamo’s strategy, Kojamo’s values, Code of Conduct, UN Sustainable Development Goals, Through the Customer’s Eyes programme, Whistleblowing procedure, Customer satis- faction surveys Key targets By the end of 2023, 90 per cent of our households will use the My Lumo service ● Performance indicator 1: Percentage of households using My Lumo, result 2023: 81% ● Performance indicator 2: Percentage of customers using My Lumo, result 2023: 86% We will improve the waste recycling rate of our properties to 55 per cent by the end of 2023 ● Performance indicator: Waste recycling rate of the prop- erty portfolio, result 2023: 33% We will promote a strong sense of community in housing through our active Lumo teams, among other means ● Performance indicator: Number of Lumo teams and per- centage of all properties, result 2023: 429 pcs and 56% By the end of 2025, the opportunity to use a shared vehicle will be offered at all of our properties ● Performance indicator: Percentage of properties with pos- sibility to share a vehicle, result 2023: 100% We work with a long-term view to promote better and more sustainable urban living. The Lumo brand delivers the best customer experience in housing for our customers: safe, con- venient and environmentally friendly housing paired with the best housing services. Our main objectives are satisfied resi- dents and increasing our Net Promoter Score. We measure customer satisfaction with Net Promoter Score (NPS), which was 50 in 2023. The positive development of NPS has been influenced by the improvement of our service ability. We have also invested in understanding the needs of our customers. All our available apartments are available for renting at the Lumo webstore where we provide information also on sustain- ability perspectives on the pages that present our apartments. In 2023, we added a travel time search to the webstore which helps customers looking for an apartment in the Helsinki Re- gion Transport (HSL) area to find a Lumo home from where it is easy to travel to key destinations within the desired time frame using public transport. We also incorporated an AI- driven Apartment Agent function to our webstore which searches for the most suitable Lumo homes for the user with the help of a recommendation algorithm running in the back- ground. Sustainable values are incorporated into the marketplace on the My Lumo platform, where customers can purchase various additional services related to housing, such as shared vehicle service, cleaning or moving services. We have customized a carbon footprint test for our residents, and residents also have the option of purchasing a service that allows them to reduce the carbon footprint of their heating to zero. During the year, we developed the My Lumo service on the ba- sis of our residents’s feedback. The changes were based on a resident survey and usability testing carried out in the previous year, and their aim was to improve customer satisfaction and retention, as well as to reduce the number of customer service contacts. The changes made the service more user-friendly and enhanced communication between the property manager and residents. In addition, residents with a foreign background have been taken into account better than before. In the summer of 2023, we conducted our annual survey among our residents regarding the sustainability of housing. As the most important sustainability themes in housing, the residents highlighted the provision of comprehensive waste sorting opportunities, both in the apartment and at the waste collection point, indoor environmental conditions, i.e. home temperature and ventilation, as well as the safety of housing. We take electric vehicle charging needs into consideration in all of our new construction projects and continuously increase the availability of charging opportunities at our existing proper- ties based on demand. Promoting inclusion and a strong sense of community and cre- ating meeting places are important for us and the residents. Lumo teams consist of volunteers who live in the building, and who are tasked with developing and livening up the residential environment by organising events and shared activities for the residents. In 2023, such events included for example Venetian festival celebrations, Christmas parties and resident events with varying themes. There were a total of 429 active Lumo teams in 2023. The shared facilities of Lumo buildings provide opportunities for community-oriented living. Examples of shared facilities include club rooms, gyms and remote work- stations. Waste sorting and recycling as well as clean waste disposal facilities are important aspects of the comfort of residents. In 2023, we focused on improving our residents’ recycling and waste sorting awareness. Improving the effectiveness of com- munications on recycling has been identified as a key method of increasing the recycling rate. We also tested new operating practices at selected properties. Board of Directors’ Report and Financial Statements 2023 24 Hallituksen toimintakertomus ja tilinpäätös The most competent personnel and a dynamic place to work Key policies, principles, commitments and pro- grammes Kojamo’s strategy, Kojamo’s values, Code of Conduct, UN Sustainable Development Goals, A responsible employer, Re- sponsible Summer Job campaign, Personnel policy, Equality and non-discrimination plan, Collective bargaining agreements Key targets Employee Net Promoter Score ● Performance indicator: eNPS, new employees, result 2023: 82 We promote gender equality amongst our personnel. Equal and fair operating models are applied in all functions and roles ● Performance indicator: Gender distribution, result 2023 (women/men): o All employees: 60 / 40 o Supervisors: 44 / 56 o Management: 0 / 100 o Board of Directors: 43 / 57 Zero accidents ● Performance indicator: Accident frequency (LTIF), result 2023: total accident frequency: 14.7, work accidents: 9.2, commuting accidents: 5.5 Our shared values – happy to serve, strive for success and courage to change – guide our operations and are reflected in our day-to-day work. Our aim is that every Kojamo employee enjoys their work and can take pride in the results of their work. In 2023, we focused particularly on ensuring smooth and effective work for our employees working at the customer inter- face and developing their working methods with the help of our handbooks for sales and property management. We have a “Safe at work” training model for new employees, safety and rescue plans as well as an occupational healthcare action plan. These cover 100 per cent of our employees and operating locations. We also have a Customer Service Safety Plan for employees who work at the customer interface. During 2023, we organised a training related to safety at work for our customer service operations. In addition, we carried out training activities related to data protection and the use of artifi- cial intelligence, among other topics. The new ERP system de- ployment project and related process renewals have also pro- vided our employees with opportunities to develop their exper- tise and professional skills. Our most recent personnel satisfaction survey was conducted in 2022, and the overall results were very good, although the overall average score decreased slightly from the previous year and came to 4/5. The response rate was 79 per cent. The next personnel satisfaction survey will be conducted in 2024. As part of the saving programme, we conducted change nego- tiations to adapt the number of personnel. Improving the effi- ciency of various functions and potential restructuring measures were assessed broadly in the negotiations. As the result of the negotiations, 59 employees were laid off until fur- ther notice or for a fixed term, and five person’s duties ended permanently. A responsible corporate citizen Key policies, principles, commitments and pro- grammes Kojamo’s strategy, Kojamo’s values, Code of Conduct, Sup- plier Code of Conduct, UN Sustainable Development Goals, Corporate Governance Code, Whistleblowing procedure, Vastuu Group Oy’s Reliable Partner service, Data security policy, Risk management, Lumo sponsorship and grant pro- gramme Key targets A zero tolerance policy concerning the grey economy ● Performance indicator: Reports through the whistleblowing channel or internal reporting procedures, result 2023: 0 pcs Zero tolerance for data protection violations ● Performance indicator: Data protection violations or sus- pected misconducts, result 2023: 4 pcs At our construction sites, we monitor the TR figure as an indi- cator of working conditions in order to maintain a high level of occupational safety, our target TR >90 ● Performance indicator: TR indicator, result 2023: 96 Our Code of Conduct is based on Kojamo’s values. It is the foundation for our operating practices and applies to everyone at Kojamo. The Code of Conduct includes the Group’s busi- ness practices and requirements related to responsible and le- gally compliant operations, conflicts of interest, combating the grey economy, competition, responsibility for employees, brib- ery and corruption, sponsorship, environmental responsibility and the protection of assets and data. We have incorporated our Code of Conduct training into the orientation of all new em- ployees. Kojamo has a whistleblowing channel that employ- ees, partners’ employees and other stakeholders can use to confidentially report any shortcomings, either anonymously or by identifying themselves. Especially anti-grey economy models have been recognised as key focus areas in the field of construction and contracting. Our anti-grey economy operating models are effective and ex- ceed the legislative requirements in many respects. Responsi- bility in our procurement activities is guided by Kojamo’s Code of Conduct and other procurement principles and guidelines. We require compliance with laws and regulations from all our partners and subcontractors. We require our partners to be registered with the Reliable Partner service maintained by Board of Directors’ Report and Financial Statements 2023 25 Hallituksen toimintakertomus ja tilinpäätös Vastuu Group Ltd to verify that they fulfil the obligations stipu- lated by the Contractor’s Obligations Act. We ensure the sustainability of our procurement activities by maintaining a Procurement Policy and providing related train- ing to our procurement personnel. We have drawn up a sepa- rate Procurement Policy for construction contracting, IT pur- chasing and property services. In 2023, we updated our train- ing regarding the Procurement Policy. In addition to the Pro- curement Policy, our responsibility is guided by Kojamo’s Code of Conduct, which is issued to our employees and incorporated into the agreements that we conclude with our partners. We conduct supplier audits systematically. Our aim is to have no personal data breaches in our opera- tions and that we are not the subject of any justified complaints pertaining to data protection. We operate in full compliance with data protection legislation in all processing of personal data, and we process personal data with particular care. This ensures the confidentiality of the personal data of our custom- ers and other data subjects throughout the personal data lifecycle. The data protection policy covers our main principles, responsibilities and operating practices concerning data pro- tection. The data protection policy is complemented by harmo- nised data protection guidelines and function-specific practical work instructions. In 2023, we introduced a new data protec- tion training to our online learning environment. The training is intended for our entire personnel, and the participation rate for the training was 100 per cent. We also updated our data pro- tection and data security agreement templates. In 2023, we identified two personal data breaches in our oper- ations, both of which were isolated incidents caused by human error. We processed the breaches in accordance with our pro- cedures as required by the EU’s General Data Protection Reg- ulation. We did not receive any substantiated complaints from customers or other data subjects regarding the processing of personal data, nor did we receive any requests for clarification from the Data Protection Ombudsman based on a data sub- ject’s complaint. Kojamo’s most significant strategic risks and their management Kojamo’s risk management policy is based on the company’s risk management policy and treasury policy, corporate govern- ance and Code of Conduct as well as the risk assessment, which was carried out in December 2023 connection with the strategy and annual planning process. The risk assessment identifies the most significant risks and defines means to man- age them. The risk assessment is updated regularly. The com- pany’s risk management is described in more detail in the Cor- porate Governance Statement. The risk assesment takes into consideration strategic and fi- nancial risks as well as risks related to business operations, operating environment and safety. Kojamo’s most significant risks and their primary risk management methods are de- scribed below. RISK CAUSES OF THE RISK CONSEQUENCES Strategic risks Decreased availability of capital ● Lower availability of financing due to bank- ing regulations and/or the domestic or in- ternational economic situation ● Market disruptions ● Difficulty in financing investments ● Refinancing of maturing loans becomes more difficult ● Slows down investment and business growth ● Deteriorates the prerequisites for repair work Decrease in apartment values in growth centres ● Due to the weak economic situation or in- flation and rising interest rates, the vol- umes of home sales and portfolio transac- tions will decrease and the prices of apart- ments will decrease, and the demand for returns will rise ● Weakened equity ratio ● Slows down investment and business growth Renting apartments becomes more diffi- cult due to the increased supply of rental apartments ● Investments in new rental apartments ● Measures of society and cities do not sup- port the construction of the right types of apartments ● Property rents are priced above the local rental price level ● Difficulty achieving results Reform of housing and rent legislation ● Changes in general housing legislation, or in particular in rent legislation ● Significant changes in the housing allow- ance system ● Restrictions on rent and leasing ● Loss of profitability Demand for rental housing declines ● Continuing trend of urbanization ● Segregation within locations ● Popularity of owner-occupied housing will increase ● Financial performance will deteriorate ● Failure to achieve strategic growth targets Not getting enough investment projects off the ground ● Increase in the level of construction costs ● Incorrect assessment of project risks ● No quotes received; limited resources allo- cated to projects with better margins ● Increase in yield requirements ● Limited access to capital ● Failure to achieve strategic growth targets Board of Directors’ Report and Financial Statements 2023 26 Hallituksen toimintakertomus ja tilinpäätös Profile raising ● Kojamo’s and Lumo’s brands are not be- coming stronger in line with the set goal ● Brand promises not redeemed ● Target group not interested in the offering ● Failure to meet responsibility requirements ● Negative media coverage ● Loss of customers ● Loss of the intended benefits ● Image of Lumo rental apartments’ attractive- ness and price-quality ratio suffers, which would have a negative impact on Lumo’s business and the listed company’s profile National economy is not growing ● International economic situation deterio- rates further ● International financial market in difficulty ● Pandemics ● Decrease in residents’ ability to pay, which has an impact on economic performance (increase in vacancy rates) ● Investment financing becomes more difficult and prevents business growth Suitability of services ● Failure to identify customers’ needs ● Failure to define customer groups ● No demand for services ● Weakened cash flow ● Weakened financial performance ● Weakened ability to create customer reten- tion Failure to take advantage of the opportu- nities presented by digitalisation ● Failure to repatriate the benefits of digitali- sation ● Failure to commercialise services ● Failure to involve partners in the develop- ment of services ● Organisation’s capabilities/operating meth- ods do not meet the requirements of digi- talisation ● Current technology solutions do not sup- port digital development ● Difficulty achieving financial results ● Loss of customers ● Loss of the intended benefits ● Difficulties to recruit skilled staff and weak- ened employer reputation ● Loss of pioneering position ● Strategy implementation slows down Technology solutions fail to support busi- ness ● Wrong technology solutions ● Failures in quality assurances of the new deployments ● Cyber security related deviations ● Cause challenges to run the business oper- ations ● Technology incidents cause damage to rep- utation ● Errors and delays in financial reporting ● Incorrect business decisions are taken due to incorrect information in the financial sys- tem Financial risks Decreased availability of capital ● Lower availability of financing due to bank- ing regulations and/or the domestic or in- ternational economic situation or the capital debt market ● Market failures, access to equity, changes in environmental conditions in the financial market ● Lack of equity ● The refinancing risk is mitigated by diversify- ing the financing sources and instruments in the loan portfolio, spreading the maturity of loans and maintaining a strong balance sheet structure Rising market interest rates ● Significant changes in floating market inter- est rates, interest margins and spreads ● Changes can be caused by the market or the acceleration of inflation ● The interest rate risk associated with the loan portfolio is managed by dividing loans between fixed and floating rate loans, by dif- ferent interest rate renewal periods and by the use of interest rate derivatives ● In accordance with Kojamo Group’s treasury policy, the target hedging ratio is 50–100% Loss of investment grade credit rating ● Deterioration of the market situation ● Deterioration of key performance indica- tors, in particular coverage ratio, LTV and liquidity ● Proactive measures to maintain key perfor- mance indicators ● A savings program refraining from invest- ments and dividend payment, sale of prop- erties, front-loaded financing and capital raising Other risks Data security threats (cyber threats) - Confidential or secret information leaks to third parties or to the public by various means (privacy breach) - Deviations (privacy breaches) from the General Data Protection Regulation in the processing of personal data ● Confidential or sensitive documents are stored in the wrong place or in violation of the right of access, contrary to instructions ● Customer data is processed in violation of the principles of the GDPR ● Customer’s rights guaranteed by GDPR are not respected ● The processing of personal data is not planned, its risks are not assessed or there is no accountability ● Processing activities are not described ac- cording to the process before the signing of contracts ● Guidelines for data protection and security matters and monitoring that the guidelines are followed ● Data life cycle and risk management ● Organising processes/projects and keeping responsibilities up-to-date ● Access control ● Concentration of most confidential customer information in industry aplication ● Increasing automation ● Ensuring that Kojamo’s guidelines are up-to- date and that the personnel have sufficient knowledge of the relevance of the matter by providing them with new personnel orienta- tion and other training Board of Directors’ Report and Financial Statements 2023 27 Hallituksen toimintakertomus ja tilinpäätös ● Inadequate controls and supervision and failure to comply with data protection and data security guidelines ● Deficiencies in technical or administrative data security ● Phishing ● Cyber attacks ● Systematic data protection audits ● Adequate controls and ensuring their func- tionality ● Cyber insurance ● Crisis communications plan review and training, also the simplicity of guidelines and ensuring that they are up-to-date The information systems that are the most critical for the Group’s operations are not available, there is lack of integrity in the available data or the systems function incorrectly ● Malware ● Denial-of-service attacks ● Intentional misconduct ● Failure to comply with data security guide- lines ● Software coding error ● Incompatibility of different software and middleware ● Disturbances in telecommunications con- nections or in cloud-based business sup- port systems ● Guidelines for data security matters and monitoring that the guidelines are followed ● Ensuring sufficient technical competence and expertise ● Auditing the operating models of key IT part- ner companies and ensuring the compe- tence and sufficiency of own resources in software deployment and testing ● Ensure the timeliness of reporting and con- troller operations in identifying possible devi- ations ● Maintaining and refining of business conti- nuity plans as well as regular training ● Training ● Keeping IT services up-to-date and planning updates, as well as quality assurances in connection with service changes Violation of data protection legislation or practices ● Data protection principles are not fully com- plied with ● Data subjects’ rights are realised inade- quately ● Insufficient data protection expertise ● Data protection documentation is inade- quate or outdated and accountability is not realised ● The data subject is inadequately informed of the processing of personal data ● Personal data breaches occur ● There are shortcomings in data security and personal data is jeopardised ● There are shortcomings in the data protec- tion or data security of the partner acting as the processor of personal data ● Assigning an owner to each processing ac- tivity ● Preparing and updating processing activity descriptions, impact assessments, balance tests and TIA assessments ● Regular evaluation and updating of the in- formation targeted at the data subject ● Regular evaluation and updating of data protection processes ● Ensuring the meeting of data protection and data security requirements as part of devel- opment projects and partner selection ● Regular data protection and data security training for the personnel as well as work in- structions ● Appropriate access control ● Identifying, reporting and addressing data protection shortcomings Change management, the personnel do not commit to the short-term and long- term goals set or to operational reforms and their development ● The goals of the operations have not been defined or described or they are unclear or unmeasurable and do not allow for ade- quate monitoring and control of the opera- tions ● The goals are not prioritised clearly enough ● The goals are not managed top-down in the organisation ● The achievement of the goals is not suffi- ciently communicated or reported on ● Supervisory work ● Systematic change management according to the change plan ● Defining, communicating and actively moni- toring clear goals derived from the strategy ● Ensuring communications about the strat- egy and interactivity with development dis- cussions ● Appropriate setting, prioritisation and regular monitoring of goals Physical risks caused by climate change: Extreme weather phenomena cause damage to properties, apartments and yard and parking areas ● Decrease in the value of properties in risk areas ● Loss of rental income in high-risk areas ● Increase in maintenance costs of proper- ties ● Increase in the repair costs of properties ● Failure of temperature control in apart- ments and increasing turnover of residents ● Missing the opportunity to achieve pioneer- ship, competitive advantage and a market position as a responsible operator through progressive and proactive operations ● Assessing flood-prone areas as part of the due diligence process ● As part of the investment decision proposal for new projects, the risk of the site being lo- cated in a flood risk area is assessed and the necessary measures to be taken are de- termined ● Taking extreme weather phenomena into account in maintenance control ● Insurance policies in case of damage caused by extreme weather phenomena ● Leanheat control to adjust the indoor tem- peratures of apartments ● Sustainability programme ● Climate risk assessment for selected prop- erties Risks caused by climate change related to the transition to a low-carbon society (technological risks, market risks) ● Increasing investment costs in the transi- tion to energy-efficient and low-carbon con- struction in both new construction and ren- ovation due to stricter regulations ● Active monitoring of the development of EU and national legislation ● Promoting the sustainability programme and carbon-neutral energy consumption roadmap Board of Directors’ Report and Financial Statements 2023 28 Hallituksen toimintakertomus ja tilinpäätös ● Increasing demand for low-carbon and en- ergy-efficient apartments ● The dependence on district heating compa- nies’ low-carbon energy production is em- phasised; the significance of the price de- velopment of district heating is emphasised ● Emissions trading expands to the real es- tate and construction sectors, posing a cost risk ● Consideration of stricter requirements in the design of new construction as early as pos- sible Near-term risks and uncertainties Kojamo estimates that the most significant near-term risks and uncertainties are caused by the uncertain situation in property and financial markets, interest rate development as well as by geopolitical tensions. Geopolitical tensions including Russia’s war of aggression in Ukraine and the conflict in the Middle East continue to cause economic uncertainty and may affect inflation and interest rates. The uncertainty can have impacts on the housing and property markets, including apartment prices, rents and yield requirements as well as on the operations of the construction companies. In addition, the acts of war may have an impact on the availability and prices of building materials. If inflation does not decrease as predicted, the decrease in interest rates may be postponed. The increased costs could affect Kojamo’s re- sult and cash flow as well as the fair value of apartments. The development of the Finnish economy may affect the hous- ing and financial markets in exceptional ways. These factors may have an impact on Kojamo’s profit and cash flow as well as the fair value of apartments. A general downturn may lead to unemployment and reduce household purchasing power, which may affect the ability of residents to pay rent and, sub- sequently, the company’s rental income. The weakening of the property and financial markets as well as the changes in market interest rates may lower the credit rating, make it more difficult to get financing and increase the price of financing significantly as well as weaken Kojamo’s fi- nancial key figures. These factors may affect Kojamo's profit and cash flow, as well as the fair value of the apartments. Urbanisation is expected to continue in the longer term. The supply of rental apartments may increase locally in the main areas in which Kojamo operates, and the changes in supply and demand could have an impact on Kojamo’s tenant turno- ver or the financial occupancy rate and, thereby, rental in- come. Cyber attacks and various other data security threats have in- creased. These data security breaches could impact Kojamo’s business operations and the reliability of information systems. Kojamo's most significant risks are described in more detail in the report on non-financial information. Internal auditing The internal audit is responsible for the independent evaluation and assurance function required of a listed company, which systematically examines and verifies the efficiency of risk man- agement, control, management and governance. The Audit Committee of Kojamo’s Board of Directors has confirmed the operating instructions for the internal audit function. Kojamo’s internal auditing has been outsourced to the audit firm PricewaterhouseCoopers Oy. Kojamo has designated the CFO and Group Controller to be in charge of coordinating the practical activities. Internal auditing operates under the author- ity of the CEO and the Audit Committee and reports its obser- vations and recommendations to the Audit Committee, the CEO, the Management Team and the auditor. The auditing function covers all companies and functions in the Kojamo Group. The auditing operations are based on risk analyses and con- versations with the Group management related to risk man- agement and control. Regular meetings with the auditor are set up in order to guarantee sufficient audit coverage and to avoid overlapping operations. Internal auditing annually draws up an auditing plan that is ap- proved by the CEO and the Audit Committee. The auditing plan is modified based on risks, if necessary. In 2023, the main focus areas of internal auditing operations were related to unit audits, information security, sustainability and management of occupancy rate and customer satisfaction. Board of Directors’ Report and Financial Statements 2023 29 Hallituksen toimintakertomus ja tilinpäätös Group structure and changes therein At the end of the financial year, the legal Group comprised 377 (380) subsidiaries and 44 (42) associates companies. Subsidiaries wholly owned by Kojamo plc are Lumo Kodit Oy, Lumo Vuokratalot Oy, Lumohousing 2 Oy, Lumohousing 11 Oy, Lumohousing 12 Oy, Lumo Asumisen Palvelut Oy, VVO Hoivakiinteistöt Oy, Kojamo Holding Oy, Kotinyt Oy and Kojamo Palvelut Oy. In addition, Kojamo plc has a 50 per cent holding in SV-Asunnot Oy. Lumohousing 10 Oy merged with Lumo Kodit Oy on 1 May 2023. Group structure 31 Dec 2023 Associated M€ Subsidiaries companies Kojamo plc 10 1) 2 Parent companies of sub-groups Lumo Kodit Oy 355 34 Lumo Vuokratalot Oy 10 3 2) Lumo Asumisen Palvelut Oy 1 6 Kojamo Palvelut Oy 1 Total 377 44 ¹ ⁾ Includes the parent companies of the sub-groups and other subsidiaries listed ² ⁾ 1 of the associated company is subsidiary at Kojamo Group level Events after the financial year In January 2024, Kojamo plc announced as a stock exchange release that Kojamo plc issued EUR 200 million unsecured green notes as a private placement. The new notes were is- sued under the company’s EMTN programme as an increase to the company’s notes maturing on 28 May 2029. The pro- ceeds of the issue will be used for the refinancing of projects in accordance with the company’s Green Finance Framework. Proposal by the Board of Directors for the distribution of profits The parent company Kojamo plc’s distributable unrestricted equity on 31 Dec 2023 was EUR 155,723,844.51, of which the profit for the financial year amounted to EUR 1,043,478.44. No significant changes have taken place in the company’s finan- cial position since the end of the financial year. In August, Kojamo plc announced that as a part of the saving programme, the company’s Board of Directors will propose to the Annual General Meeting in the spring of 2024 that no divi- dend be paid for 2023. Board of Directors’ Report and Financial Statements 2023 30 Hallituksen toimintakertomus ja tilinpäätös EPRA PERFORMANCE MEASURES EPRA (European Public Real Estate Association) is an advo- cacy organisation for publicly listed European property invest- ment companies. Kojamo is a member of EPRA. As part of its activities, the organisation promotes financial reporting in the industry and the adoption of best practices to ensure the qual- ity of information provided to investors and improve compara- bility between companies. Kojamo follows EPRA recommen- dations in its reporting practices. This section covers EPRA performance measures and their calculation. More information on EPRA and EPRA recommendations is available on the EPRA website at www.epra.com. EPRA performance measures 2023 2022 EPRA Earnings, M€ 159.9 158.2 EPRA Earnings per share (EPS), € 0.65 0.64 EPRA Net Reinstatement Value (NRV), M€ 4,558.8 4,825.9 EPRA NRV per share, € 18.45 19.53 EPRA Net Tangible Assets (NTA), M€ 4,558.2 4,825.2 EPRA NTA per share, € 18.44 19.52 EPRA Net Disposal Value (NDV), M€ 3,757.3 4,060.8 EPRA NDV per share, € 15.20 16.43 EPRA Loan to Value (LTV), % 44.6 43.2 EPRA Net Initial Yield (NIY), % 4.0 3.7 EPRA 'topped-up' NIY, % 4.0 3.7 EPRA Vacancy Rate, % 7.1 8.0 EPRA Cost Ratio (including direct vacancy costs), % 12.7 12.5 EPRA Cost Ratio (excluding direct vacancy costs), % 9.2 8.6 EPRA Earnings M€ 2023 2022 Earnings per IFRS income statement -89.0 -399.8 (i) Change in value of investment properties, development properties held for investment and other interests 295.4 682.0 (ii) Profits or losses on disposal of investment properties, development properties held for investment and other interest -0.4 -0.2 (iii) Profits or losses on sales of trading properties including impairment charges in respect of trading properties - 0.0 (iv) Tax on profits or losses on disposals -0.2 0.2 (vi) Changes in fair value of financial instruments 0.9 -6.8 (vi) Early close-out costs/gains of financial instruments and debt -7.0 - (viii) Deferred tax in respect of EPRA adjustments -39.8 -117.2 EPRA Earnings 159.9 158.2 Average number of shares, million 247.1 247.1 EPRA Earnings per share (EPS), € 0.65 0.64 Board of Directors’ Report and Financial Statements 2023 31 Hallituksen toimintakertomus ja tilinpäätös EPRA Net Asset Values 2023 2022 M€ NRV NTA NDV NRV NTA NDV IFRS Equity attributable to shareholders 3,625.9 3,625.9 3,625.9 3,842.7 3,842.7 3,842.7 Diluted NAV 3,625.9 3,625.9 3,625.9 3,842.7 3,842.7 3,842.7 Diluted NAV at Fair Value 3,625.9 3,625.9 3,625.9 3,842.7 3,842.7 3,842.7 Exclude: (v) Deferred tax in relation to fair value gains 825.4 825.4 872.8 872.8 (vi) Fair value of financial instruments -13.1 -13.1 -52.6 -52.6 (viii.b) Intangibles as per the IFRS balance sheet -0.6 -0.7 Include: (ix) Fair value of fixed interest rate debt * 131.4 218.1 (xi) Real estate transfer tax 120.6 120.6 163.0 163.0 Net Asset Value 4,558.8 4,558.2 3,757.3 4,825.9 4,825.2 4,060.8 Number of shares, million 247.1 247.1 247.1 247.1 247.1 247.1 NAV per share 18.45 18.44 15.2 19.53 19.52 16.43 * Balance sheet at amortised cost and the fair value of interest-bearing loans and borrowings Board of Directors’ Report and Financial Statements 2023 32 Hallituksen toimintakertomus ja tilinpäätös EPRA LTV (Loan to Value) 2023 Share of Share of Non- Group as Joint Material controlling M€ reported Ventures Associates Interest Combined Include: Borrowings from Financial institutions 1,483.3 - - - 1,483.3 Commercial paper 39.7 - - - 39.7 Bond Loans 1,993.2 - - - 1,993.2 Net Payables 56.8 - - - 56.8 Owner-occupied property (debt) 5.6 - - - 5.6 Exclude: Cash and cash equivalents -15.0 - - - -15.0 Net Debt (A) 3,563.7 - - - 3,563.7 Include: Owner-occupied property 27.2 - - - 27.2 Investment properties at fair value 7,781.2 - - - 7,781.2 Properties under development 179.8 - - - 179.8 Intangibles 0.6 - - - 0.6 Financial assets 4.1 - - - 4.1 Total Property Value 7,992.9 - - - 7,992.9 EPRA Loan to Value (LTV), % 44.6 - - - 44.6 2022 Share of Share of Non- Group as Joint Material controlling M€ reported Ventures Associates Interest Combined Include: Borrowings from Financial institutions 1,226.4 - - - 1,226.4 Commercial paper 30.9 - - - 30.9 Bond Loans 2,338.9 - - - 2,338.9 Net Payables 65.7 - - - 65.7 Owner-occupied property (debt) 7.5 - - - 7.5 Exclude: Cash and cash equivalents -119.4 - - - -119.4 Net Debt (A) 3,550.0 - - - 3,550.0 Include: Owner-occupied property 27.6 - - - 27.6 Investment properties at fair value 7,681.2 - - - 7,681.2 Properties under development 395.2 - - - 395.2 Intangibles 0.7 - - - 0.7 Financial assets 104.7 - - - 104.7 Total Property Value 8,209.3 - - - 8,209.3 EPRA Loan to Value (LTV), % 43.2 - - - 43.2 Board of Directors’ Report and Financial Statements 2023 33 Hallituksen toimintakertomus ja tilinpäätös EPRA Net Initial Yield (NIY) and EPRA "topped-up" NIY M€ 2023 2022 Investment property 8,038.8 8,150.2 Trading property - 0.1 Developments -179.8 -395.2 Completed property portfolio 7,859.0 7,755.1 Allowance for estimated purchasers’ costs 117.9 155.1 Gross up completed property portfolio valuation B 7,976.9 7,910.2 Annualised cash passing rental income 464.2 438.9 Property outgoings -146.7 -148.9 Annualised net rents A 317.5 290.0 Notional rent expiration of rent free periods or other lease incentives - - Topped-up net annualised rent C 317.5 290.0 EPRA Net Initial Yield (NIY), % A/B 4.0 3.7 EPRA 'topped-up' NIY, % C/B 4.0 3.7 EPRA Vacancy Rate M€ 2023 2022 Estimated rental value of vacant space * A 31.3 33.7 Estimated rental value of the whole portfolio * B 444.4 419.8 EPRA Vacancy Rate, % A/B 7.1 8.0 * Including rental value of apartments. EPRA Cost Ratios (Operating expenses relative to gross rental income) M€ 2023 2022 Include: (i) Administrative expense line per IFRS income statement 45.6 43.1 (i) Maintenance expense line per IFRS income statement 115.7 103.1 (i) Repair expense line per IFRS income statement 29.3 30.2 (ii) Net service charge costs/fees -15.8 -13.8 (iii) Management fees less actual/estimated profit element -0.2 -0.2 (iv) Other operating income/recharges intended to cover overhead expenses less any related profits -0.3 -0.3 Exclude: (vii) Ground rent costs -0.1 0.0 (viii) Service charge costs recovered through rents but not separately invoiced -137.5 -128.3 EPRA Costs (including direct vacancy costs) A 36.7 33.8 (ix) Direct vacancy costs -10.2 -10.7 EPRA Costs (excluding direct vacancy costs) B 26.5 23.1 (x) Gross Rental Income less ground rent costs - per IFRS 425.7 398.5 (xi) Service fee and service charge costs components of Gross Rental Income -137.5 -128.3 Gross Rental Income C 288.1 270.3 EPRA Cost Ratio (including direct vacancy costs), % A/C 12.7 12.5 EPRA Cost Ratio (excluding direct vacancy costs), % B/C 9.2 8.6 Board of Directors’ Report and Financial Statements 2023 34 Hallituksen toimintakertomus ja tilinpäätös EPRA Property-related CapEx 2023 2022 Joint Joint Group Ventures Group Ventures (exl. Joint (proportionate Total (exl. Joint (proportionate Total M€ Ventures) share) Group Ventures) share) Group Acquisitions - - - 197.5 - 197.5 Development 159.9 - 159.9 277.1 - 277.1 Investment properties No incremental lettable space 26.7 - 26.7 22.5 - 22.5 Capitalised interest 4.2 - 4.2 4.6 - 4.6 Total CapEx 190.7 - 190.7 501.6 - 501.6 Conversion from accrual to cash basis 10.5 - 10.5 3.3 - 3.3 Total CapEx on cash basis 201.3 - 201.3 504.9 - 504.9 EPRA Like-for-Like Like-for-Like properties consist of investment properties held for two consecutive years. 2023 2022 Change M€ M€ M€ % Rental income 391.7 384.5 7.2 1.9 Net rental income 259.4 259.2 0.2 0.1 Like-for-Like investment properties 6,438.9 6,670.2 2022 2021 Change M€ M€ M€ % Rental income 372.3 371.3 1.0 0.3 Net rental income 249.0 248.1 0.9 0.4 Like-for-Like investment properties 6,320.6 6,969.7 Board of Directors’ Report and Financial Statements 2023 35 Hallituksen toimintakertomus ja tilinpäätös FINANCIAL STATEMENTS This translation is a non-official version of the Financial Statements. Consolidated comprehensive income statement M€ Note 1–12/2023 1–12/2022 Total revenue 2.1 442.2 413.3 Maintenance expenses -115.7 -103.1 Repair expenses -29.3 -30.2 Net rental income 297.2 280.1 Administrative expenses 2.3 -45.6 -43.1 Other operating income 2.2 4.0 3.8 Other operating expenses 2.2 -0.3 -0.3 Profit/loss on sales of investment properties 2.2 0.2 0.2 Profit/loss on sales of trading properties - 0.0 Profit/loss on fair value of investment properties 3.1 -295.4 -682.0 Depreciation, amortisation and impairment 2.5 -1.3 -1.2 Operating profit/loss -41.1 -442.5 Financial income 13.5 9.6 Financial expenses -84.8 -67.0 Total amount of financial income and expenses 4.2 -71.3 -57.4 Share of result from associated companies 0.1 0.1 Profit/loss before taxes -112.3 -499.8 Current tax expense 5.1 -16.5 -17.3 Change in deferred taxes 5.2 39.8 117.2 Profit/loss for the period -89.0 -399.8 Profit/loss for the financial period attributable to shareholders of the parent company -89.0 -399.8 Other comprehensive income Items that may be reclassified subsequently to profit or loss Cash flow hedges 4.2 -39.8 92.4 Deferred taxes 5.2 8.0 -18.5 Items that may be reclassified subsequently to profit or loss -31.8 74.0 Total comprehensive income for the period -120.8 -325.8 Total comprehensive income attributable to shareholders of the parent company -120.8 -325.8 Earnings per share based on profit/loss attributable to shareholders of the parent company 2.7 Basic, € -0.36 -1.62 Diluted, € -0.36 -1.62 Average number of shares, million 2.7 247.1 247.1 Board of Directors’ Report and Financial Statements 2023 36 Hallituksen toimintakertomus ja tilinpäätös Consolidated balance sheet M€ Note 31 Dec 2023 31 Dec 2022 Assets Non-current assets Intangible assets 6.2 0.6 0.7 Investment properties 3.1, 6.1 8,038.8 8,150.2 Property, plant and equipment 6.1, 6.3 28.0 28.4 Investments in associated companies 7.3 2.0 1.5 Financial assets 4.3 0.8 0.7 Non-current receivables 6.4 6.5 6.7 Derivatives 4.5 29.8 53.8 Deferred tax assets 5.2 4.9 1.5 Total non-current assets 8,111.4 8,243.4 Current assets Trading property 3.3 - 0.1 Derivatives 4.5 0.6 0.2 Current tax assets 11.1 4.0 Trade and other receivables 6.5 17.0 11.1 Financial assets 4.3 3.3 104.0 Cash and cash equivalents 15.0 119.4 Current assets total 46.9 238.9 Total assets 8,158.3 8,482.3 Shareholders' equity and liabilities Equity attributable to shareholders of the parent company Share capital 58.0 58.0 Share issue premium 35.8 35.8 Fair value reserve 11.2 43.0 Invested non-restricted equity reserve 164.4 164.4 Retained earnings 3,356.4 3,541.4 Equity attributable to shareholders of the parent company 3,625.9 3,842.7 Total equity 4.1 3,625.9 3,842.7 Liabilities Non-current liabilities Loans and borrowings 4.4, 6.1 3,007.2 3,330.5 Deferred tax liabilities 5.2 829.3 873.7 Derivatives 4.5 17.3 1.4 Provisions 6.6 0.1 0.3 Other non-current liabilities 6.6 4.9 5.0 Total non-current liabilities 3,858.9 4,210.9 Current liabilities Loans and borrowings 4.4, 6.1 593.2 347.7 Derivatives 4.5 - 0.0 Current tax liabilities 4.9 2.5 Trade and other payables 6.7 75.4 78.5 Current liabilities total 673.5 428.7 Total liabilities 4,532.4 4,639.6 Total equity and liabilities 8,158.3 8,482.3 Board of Directors’ Report and Financial Statements 2023 37 Hallituksen toimintakertomus ja tilinpäätös Consolidated statement of cash flows M€ Note 1–12/2023 1–12/2022 Cash flow from operating activities Profit/loss for the period -89.0 -399.8 Adjustments 7.1 345.0 639.4 Change in net working capital Change in trade and other receivables -0.5 -1.6 Change in trading properties - 0.0 Change in trade and other payables -0.6 -2.2 Interest paid -79.4 -58.4 Interest received 2.3 1.1 Other financial items -3.4 -0.4 Taxes paid -21.2 -19.0 Net cash flow from operating activities 153.3 159.0 Cash flow from investing activities Acquisition of investment properties 3.1 -201.3 -504.9 Acquisition of associated companies -0.6 -0.1 Acquisition of property, plant and equipment and intangible assets -0.3 -0.3 Proceeds from sale of investment properties 5.1 1.1 Proceeds from sale of associated companies 0.3 - Purchases of financial assets -55.0 -140.9 Proceeds from sale of financial assets 157.1 164.4 Non-current loans, granted 0.0 -0.1 Repayments of non-current loan receivables 0.2 0.2 Interest and dividends received on investments 0.9 0.4 Net cash flow from investing activities -93.6 -480.2 Cash flow from financing activities 4.4 Non-current loans and borrowings, raised 500.0 450.0 Non-current loans and borrowings, repayments -574.5 -91.6 Current loans and borrowings, raised 135.8 205.8 Current loans and borrowings, repayments -127.2 -225.2 Repayments of lease liabilities -1.8 -1.6 Dividends paid -96.4 -93.9 Net cash flow from financing activities -164.1 243.5 Change in cash and cash equivalents -104.4 -77.6 Cash and cash equivalents at the beginning of the period 119.4 197.0 Cash and cash equivalents at the end of the period 4.3 15.0 119.4 Board of Directors’ Report and Financial Statements 2023 38 Hallituksen toimintakertomus ja tilinpäätös Consolidated statement of changes in equity M€ Note Share Capital Share issue premium Fair value reserve Invested non - restricted equity reserve Retained earnings Equity attributable to shareholders of the parent company Total Eguity Equity at 1 Jan 2023 58.0 35.8 43.0 164.4 3,541.4 3,842.7 3,842.7 Comprehensive income Cash flow hedging -31.8 -31.8 -31.8 Profit for the period -89.0 -89.0 -89.0 Total comprehensive income for the period -31.8 -89.0 -120.8 -120.8 Transactions with shareholders Share-based incentive scheme 0.4 0.4 0.4 Dividend payment -96.4 -96.4 -96.4 Total transactions with shareholders -96.0 -96.0 -96.0 Total change in equity -31.8 -185.0 -216.8 -216.8 Equity at 31 Dec 2023 4.1 58.0 35.8 11.2 164.4 3,356.4 3,625.9 3,625.9 M€ Note Share Capital Share issue premium Fair value reserve Invested non - restricted equity reserve Retained earnings Equity attributable to shareholders of the parent company Total Equity Equity at 1 Jan 2022 58.0 35.8 -31.0 164.4 4,036.0 4,263.3 4,263.3 Comprehensive income Cash flow hedging 74.0 74.0 74.0 Profit for the period -399.8 -399.8 -399.8 Total comprehensive income for the period 74.0 -399.8 -325.8 -325.8 Transactions with shareholders Share-based incentive scheme -0.9 -0.9 -0.9 Dividend payment -93.9 -93.9 -93.9 Total transactions with shareholders -94.8 -94.8 -94.8 Total change in equity 74.0 -494.6 -420.6 -420.6 Equity at 31 Dec 2022 4.1 58.0 35.8 43.0 164.4 3,541.4 3,842.7 3,842.7 Board of Directors’ Report and Financial Statements 2023 39 Hallituksen toimintakertomus ja tilinpäätös Notes to the consolidated financial statements The notes to the consolidated financial statements have been grouped according to their nature. The notes contain the rele- vant financial information, the accounting policies and the key estimates and judgment-based decisions. The following table presents the notes to Kojamo’s financial statements and the related accounting policies. The table also indicates the IFRS standards on which the accounting policies are primarily based. Accounting policy Note Number IFRS Income, other operating income and expenses, other receivables Revenue from contracts with customers, other opera- ting income and expenses, other receivables 2.1, 6.4, 6.5 IFRS 15, IFRS 9, IFRS 16 Employee benefits and share-based payments Employee benefits expenses 2.3, 7.2 IAS 19, IFRS 2 Earnings per share Earnings per share 2.6 IAS 33 Investment property Investment property 2.2, 3.1, 3.3, 3.4 IAS 40, IFRS 13 Non-current assets held for sale Non-current assets held for sale 3.2 IAS 40, IFRS 5 Equity and dividends Equity 4.1 IAS 32 Interest income and expenses Financial income and expenses 4.2 IFRS 7, IFRS 9, IAS 32 Financial assets and liabilities Financial assets and liabilities by valuation category 4.3, 4.4, 4.6 IFRS 9, IFRS 7, IFRS 13, IAS 32 Derivative instruments and hedge accounting Derivatives 4.5 IFRS 9, IFRS 7, IFRS 13, IAS 32 Current tax expense and deferred taxes Taxes 5 IAS 12 Leases Leases 2.4, 6.1 IFRS 16 Intangible assets Intangible assets 2.4, 6.2 IAS 36, IAS 38 Tangible assets Property, plant and equipment 2.4, 6.3 IAS 16, IAS 36 Provisions Provisions and other non-current liabilities 6.6 IAS 37 Responsibilities and commitments Commitments and contingent liabilities related to in- vestment properties 3.4, 4.7 IAS 37 Subsidiary consolidation principles, joint arrangements and associated companies The Group’s subsidiaries, joint arrangements and as- sociated companies 7.3 IFRS 10, IFRS 11, IFRS 12, IAS 28 Related party information Related party transactions 7.2 IAS 24 Accounting policies The accounting policies are described under each note in sec- tions 1–7. Board of Directors’ Report and Financial Statements 2023 40 Hallituksen toimintakertomus ja tilinpäätös 1. Basis for presentation of the financial statements 1.1 Basic information about the Group Name of reporting entity or other means of identification Kojamo plc Domicile of entity Helsinki Legal form of entity plc Country of incorporation Finland Address of entity's registered office Mannerheimintie 168, 00300 Helsinki Principal place of business Finland Description of nature of entity's operations and principal Kojamo plc is Finland’s largest market-based, private housing investment company that offers rental apartments and housing services in Finnish growth centres Name of parent entity Kojamo plc A copy of the consolidated financial statements is available at www.kojamo.fi/en or the parent company’s head office. Trading in Kojamo’s shares commenced on the pre-list of Nasdaq Helsinki on 15 June 2018 and on the official list of Nasdaq Helsinki on 19 June 2018. The Group’s five bonds are listed on the official list of the Irish Stock Exchange. The Group has chosen Finland as its home state for the disclosure of peri- odic information pursuant to Chapter 7, Section 3 of the Finn- ish Securities Market Act. At its meeting on 15 February 2024, Kojamo plc’s Board of Di- rectors approved these financial statements for publication. According to the Finnish Limited Liability Companies Act, the shareholders may approve or reject the financial statements in a General Meeting held after the publication of the financial statements. Moreover, the General Meeting may make a deci- sion on altering the financial statements. Basis of preparation These consolidated financial statements are prepared in ac- cordance with International Financial Reporting Standards (IFRSs). All IFRSs and IASs as well as SIC and IFRIC inter- pretations in force on 31 December 2022 and endorsed by the EU have been applied in preparing the financial statements. The International Financial Reporting Standards refer to the standards and associated interpretations in the Finnish Ac- counting Act and in regulations issued under it that are en- dorsed by the EU in accordance with the procedure laid down in Regulation (EC) No. 1606/2002. Kojamo has not early adopted any standards or interpretations. The notes to the consolidated financial statements are also in accordance with the requirements of the Finnish accounting and corporate leg- islation supplementing the IFRS rules. The figures in the consolidated financial statements are in euro, presented mainly as million euro. All the figures pre- sented are rounded. Consequently, the sum of individual fig- ures may deviate from the aggregate amount presented. The key figures have been calculated using exact values. The consolidated financial statements are presented for the calendar year, which is also the reporting period for the parent company and the Group. All statements made in these finan- cial statements regarding the Group or its business are based on the views of the management, and the sections addressing the general macroeconomic or industry situation are based on third-party information. If there are differences between differ- ent language versions of the financial statements, the Finnish version is the official one. Investment properties, derivative instruments and financial as- sets measured at fair value through profit or loss are measured at fair value after initial recognition. In other respects, the con- solidated financial statements are prepared on the basis of original acquisition cost, unless otherwise stated in the ac- counting policies. Changes in IFRS standards and accounting poli- cies New standards and interpretations applied during the financial year 2023 The new standards and interpretations applied in the financial years 2023 did not have a significant impact on the consoli- dated financial result, financial position, or the presentation of the financial statements of the Group. In 2023, Kojamo imple- mented a change in the IAS 12 standard related to deferred tax arising from a single transaction, which is detailed in note 5.2. Other standards and model rules that came into effect in 2023, such as IFRS 17 Insurance Contracts and Council Di- rective (EU) 2022/2523, ensuring a global minimum level of taxation for multinational enterprise groups and large-scale do- mestic groups in the Union, do not apply to Kojamo. New and revised standards to be applied in subse- quent financial years IASB has issued new and amended standards and interpreta- tions, the application of which is mandatory in financial years beginning on or after 1 January 2023. Kojamo has not applied these standards and interpretations in preparing these consoli- dated financial statements. Kojamo will adopt them as of the effective date or, if the date is other than the first day of the fi- nancial year, from the beginning of the subsequent financial year. The adoption of the amended standards and interpretations in question is not expected to have any material effects on Kojamo’s financial statements. Board of Directors’ Report and Financial Statements 2023 41 Hallituksen toimintakertomus ja tilinpäätös Translation of foreign currency items Transactions in foreign currency are recorded in EUR at the exchange rate on the transaction date. On the last date of the reporting period, monetary receivables and liabilities denomi- nated in foreign currencies are translated into EUR at the ex- change rate of the last date of the reporting period. Gains and losses arising from transactions denominated in foreign cur- rency and from translating monetary items are recognised in profit or loss, and they are included in financial income and ex- penses. Consolidated financial statements are presented in EUR, which is the functional and presentation currency of Kojamo’s parent company. Kojamo has very few transactions denominated in foreign cur- rencies. Kojamo has no units abroad. Accounting policies that require management’s judgment and key sources of estimation uncertainty Management’s judgment related to the application of the accounting policies The preparation of financial statements in accordance with the IFRS requires Kojamo’s management to make judgment- based decisions on the application of the accounting policies, as well as estimates and assumptions that affect the amounts of reported assets, liabilities, income and expenses and the presented notes. Management’s judgment-based decisions affect the choice of accounting policies and their application. This particularly ap- plies to cases for which the current IFRSs include alternative recognition, measurement or presentation methods. Kojamo’s management must make judgment-based decisions when applying the following accounting policies: Classification of properties: see note 3.1, Fair value of invest- ment properties by valuation method Deferred taxes: recognition principle (investment properties), exemption concerning initial recognition and the recognition of deferred tax assets: see note 5.2. Key sources of estimation uncertainty The estimates and related assumptions are based on Kojamo’s historical experience and other factors, such as ex- pectations concerning future events. These are considered to represent the management’s best understanding at the time of evaluation and believed to be reasonable considering the cir- cumstances. The actual results may differ from the estimates and assumptions used in the financial statements. Estimates and related assumptions are regularly evaluated. Changes in accounting estimates are recorded for the period for which the estimate is being checked, if the change in the estimate con- cerns only that period. If the change in the estimate concerns both the period in question and later periods, the change in the estimate is recorded both for the period in question and the fu- ture periods. The most significant section of the financial statements in which the management has exercised the aforementioned judgment, as well as the assumptions about the future and other key uncertainty factors in estimates at the end of the re- porting period which create a significant risk of change in the carrying amounts of Kojamo’s assets and liabilities within the next financial year, are related to the measurement of the fair value of investment properties (see note 3.1, Accounting poli- cies ). 2. Result Accounting policies Total revenue Kojamo’s revenue consists of rental income and charges for utilities. The revenue has been adjusted with indirect taxes and sales adjustment items. Kojamo’s revenue consists mainly of rental income from in- vestment properties. Most of the tenancy agreements are non- fixed-term leases and they have a one-month notice period. Relating to the rental agreements, Kojamo collects utility charges, mainly water and sauna fees. Net rental income Net rental income is calculated by deducting property mainte- nance and repair costs from total revenue. These expenses comprise maintenance and annual repair costs arising from the regular and continuous maintenance of the properties and are recognised immediately in the comprehensive income statement. Operating profit IAS 1 Presentation of Financial Statements does not define the concept of operating profit. At Kojamo, operating profit is de- fined as the net amount after adding other operating income to net rental income, then deducting administrative expenses and other operating expenses, amortisation, depreciation and im- pairment, and then adding/deducting gains/losses from the dis- posal of investment properties, from assessment at fair value, and from the disposal of trading properties. All the other com- prehensive income statement items except those mentioned above are presented below operating profit. Board of Directors’ Report and Financial Statements 2023 42 Hallituksen toimintakertomus ja tilinpäätös 2.1 Specification of revenue M€ 1–12/2023 1–12/2022 Revenue from contracts with customers 441.7 412.5 Other income from revenue 0.5 0.8 Total revenue 442.2 413.3 Specification of revenue from contracts with customers M€ 1–12/2023 1–12/2022 Rental income 425.7 398.5 Water fees 15.0 13.2 Sauna fees 0.8 0.6 Other income from service sales 0.2 0.2 Total 441.7 412.5 Revenue consists primarily of rental income based on tenancy agreements. In the Group’s business, the scope of IFRS 15 Revenue from Contracts with Customers -standard includes maintenance and service revenue, which include use-based charges collected from tenants. Board of Directors’ Report and Financial Statements 2023 43 Hallituksen toimintakertomus ja tilinpäätös 2.2 Profit/loss on sales of investment properties and Other operating income and expenses Profit/loss on sales of investment properties M€ 1–12/2023 1–12/2022 Profit on sales of investment properties 0.4 0.2 Losses on sales of investment properties -0.2 - Total 0.2 0.2 Kojamo sold 73 (0) rental apartments. Other operating income M€ 1–12/2023 1–12/2022 Income from construction contracting 0.0 0.1 Income from the sales of fixed assets 0.2 - Income from debt collection 3.2 2.8 Other 0.5 0.9 Total 4.0 3.8 Other operating expenses M€ 1–12/2023 1–12/2022 Cost on construction contracting -0.3 -0.3 Total -0.3 -0.3 Auditor’s fees M€ 1–12/2023 1–12/2022 KPMG Oy Ab Audit -0.4 -0.3 Tax consultancy 0.0 -0.1 Advisory services -0.1 -0.2 Total -0.5 -0.5 Accounting policies Other operating income includes income not related to the ac- tual business. It includes items such as sales profit from intan- gible assets and property, plant and equipment, as well as in- come from debt collection activities. Other operating expenses consist of expenses not related to the actual business. These items include costs related among other things to construction contracting. An existing property owned by Kojamo is considered as sold once the substantial risks and rewards associated with owner- ship have been transferred from Kojamo to the buyer. This usually takes place when control over shares is transferred. In- come from property sales is presented in the comprehensive income statement under Profit/loss on sales of investment properties. 2.3 Administrative expenses M€ 1–12/2023 1–12/2022 Personnel costs -22.8 -21.5 Administrative rents and maintenance charges -2.5 -2.1 Other administrative expenses -20.4 -19.5 Total -45.6 -43.1 Board of Directors’ Report and Financial Statements 2023 44 Hallituksen toimintakertomus ja tilinpäätös 2.4 Employee benefits expenses M€ 1–12/2023 1–12/2022 Salaries and wages -18.6 -17.0 Share-based incentive plan -0.3 -0.8 Funded pension plans -0.2 -0.2 Defined contribution pension plans -3.1 -2.9 Other social security costs -0.6 -0.6 Total -22.8 -21.5 31 Dec 2023 31 Dec 2022 Number of personnel, average for the financial year 315 316 Information on the remuneration of key management person- nel is provided in note 7.2 Related party transactions. Accounting policies Kojamo’s employee benefits include the following: ● short-term employee benefits ● post-employment benefits (pension plans) ● termination benefits (benefits provided in exchange for the termination of employment) ● other long-term employee benefits and share-based payments. Short-term employee benefits Wages, salaries, fringe benefits, annual leave and bonuses are included in short-term employee benefits and are recog- nised in the period in which the work is performed. Kojamo’s employees are included in an annual performance bonus sys- tem which is based on the achievement of the company’s gen- eral targets as well as personal targets. Post-employment benefits (pension plans) Post-employment benefits are payable to employees after the completion of employment. At Kojamo, these benefits are re- lated to pensions. Pension coverage at Kojamo is arranged through external pension insurance companies. Pension schemes are classified as defined contribution and defined benefit plans. A defined contribution plan is a pension plan under which Kojamo pays fixed contributions into a sepa- rate entity. Kojamo has no legal or constructive obligations to pay further contributions if the payee does not hold sufficient assets to pay out all pension benefits. Pension plans that are not defined contribution plans are defined benefit plans. Pay- ments made into defined contribution schemes are recognised through profit and loss in the periods that they concern. Termination benefits (benefits provided in ex- change for the termination of employment) Termination benefits are not based on work performance but the termination of employment. These benefits consist of sev- erance payments. Termination benefits result either from Kojamo’s decision to terminate the employment or the em- ployee’s decision to accept the benefits offered by Kojamo in exchange for the termination of employment. Other long-term employee benefits Kojamo has a remuneration scheme that covers the entire per- sonnel, entitling them to benefits after a specific number of years of service. The discounted present value of the obliga- tion resulting from the arrangement is recognised as a liability in the balance sheet on the last day of the reporting period. Share-based payments Kojamo has a long-term share-based incentive plan for the Group’s key employees. The reward is based on reaching the targets set for Kojamo’s key business criteria in relation to the Group’s strategic goals. The reward is recognised in Kojamo’s result for each earnings period, and an increase corresponding to the expensed amount is recognised in equity. More infor- mation on the arrangements is provided in note 7.2 Related party transactions. Board of Directors’ Report and Financial Statements 2023 45 Hallituksen toimintakertomus ja tilinpäätös 2.5 Depreciation, amortisation and impairment Amortisation and depreciation by asset group M€ 1–12/2023 1–12/2022 Intangible assets -0.2 -0.2 Property, plant and equipment -0.6 -0.6 Right-of-use assets -0.5 -0.4 Total -1.3 -1.2 No impairment was recognised on intangible assets, property, plant and equipment and right-of-use assets in the financial years 2022 and 2023. 2.6 Research and development expenditure Research and development expenditure recognised as ex- penses totalled EUR 2.8 (1.2) million in 2023. Development activities focus on the development of product concepts, im- provement of digital services and renewal of information sys- tems. Kojamo’s capitalised development expenses amount to EUR 0.5 (0.6) million. Accounting policies Development expenses Kojamo capitalises development expenses as intangible as- sets when it can be shown that a development project will gen- erate a probable future economic benefit and the costs attribut- able to the development stage can be reliably measured. Other development costs are recognised as expenses when they are incurred. 2.7 Earnings per share 1–12/2023 1–12/2022 Profit/loss for the period attributable to shareholders of the parent company, M€ -89.0 -399.8 Weighted average number of shares during the period (million) 247.1 247.1 Earnings per share Basic, € -0.36 -1.62 Diluted, € -0.36 -1.62 The company has no diluting instruments. Accounting policies Basic earnings per share is calculated by dividing the profit for the financial year attributable to equity holders of the parent company by the weighted average number of shares outstand- ing during the financial year. Board of Directors’ Report and Financial Statements 2023 46 Hallituksen toimintakertomus ja tilinpäätös 3. Real estate property Kojamo classifies its property portfolio into investment proper- ties, trading properties and investment properties held for sale. Kojamo’s property portfolio consists practically entirely of in- vestment properties. 3.1 Investment properties Fair value of investment properties M€ 31 Dec 2023 31 Dec 2022 Fair value of investment properties on 1 Jan 8,150.2 8,327.5 Acquisition of investment properties 165.1 478.9 Modernisation investments 26.7 22.5 Disposals of investment properties -12.0 -1.3 Capitalised borrowing costs 4.2 4.6 Transfer from property, plant and equipment - 0.0 Profit/loss on fair value of investment properties -295.4 -682.0 Fair value of investment properties at the end of the period 8,038.8 8,150.2 Profit/loss on fair value of investment properties M€ 1–12/2023 1–12/2022 Changes in yield requirement -815.5 -670.9 Change in net rentall income 305.9 -119.7 Changes in inflation, rents and expense growth assumptions 181.7 2.1 Other 32.5 106.6 Profit/loss on fair value of investment properties -295.4 -682.0 During the year, the number of transactions observed from the market is limited and the comparability of the transactions is weak. In addition, the transaction prices partly indicate that the sales have been highly motivated. The price indications of buy- ers appearing in the market are very opportunistic and there- fore do not represent genuine price formation. When deciding on the yield requirements used in the valuation in an environment where transaction data is limited, the com- pany's management has taken into account the views of an external expert, the deals completed in the market, discus- sions with various market participants, interest rates and inter- est rate views, as well as the company's own information about the market and its real estate portfolio. The yield requirements have also been evaluated in relation to other valuation param- eters and the 10-year calculation period. Most relevant other valuation parameters are inflation assumption, rent increase assumption and expense increase assumption, which the com- pany's management has estimated based on the current mar- ket views. Right-of-use assets included in the fair values of investment properties (plots of land) M€ 31 Dec 2023 31 Dec 2022 Fair value on 1 Jan 73.8 70.6 Increases/decreases 5.2 4.3 Profit/loss on fair value of investment properties -1.3 -1.1 Fair value of investment properties at the end of the period 77.8 73.8 Modernisation investments are often significant and they are primarily related to repairs and renovations of plumbing, fa- cades, roofs, windows and balconies. The expected average technical useful lives of the plumbing systems, facades, roofs and balconies of residential properties are taken into consider- ation in the planning of modernisation investments. Capitalised borrowing costs totalled EUR 4.2 (4.6) million. The interest rate applied to capitalised borrowing costs was 2.5 (1.8) per cent. Kojamo acquired a total of 0 (985) rental apartments. Board of Directors’ Report and Financial Statements 2023 47 Hallituksen toimintakertomus ja tilinpäätös Fair value of investment properties by valuation method M€ 31 Dec 2023 31 Dec 2022 Yield value 7,656.3 7,535.3 Acquisition cost 304.7 541.0 Right-of-use assets (plots of land) 77.8 73.8 Total 8,038.8 8,150.2 Number of apartments 31 Dec 2023 31 Dec 2022 Yield value 39,390 37,551 Acquisition cost * 1,229 1,680 Total 40,619 39,231 * Includes 4 apartments as part of development projects Kojamo has used the following average parameters when ap- plying the yield-based valuation method: Average valuation parametres 31 Dec 2023 Capital Other regions Group region of Finland total Unobservable inputs: Yield requirement cash flow, weighted, % * 4.11 5.00 4.40 Exit capitalisation rate, weighted, % * 4.26 5.15 4.55 Cash flow discount rate, weighted, % * 6.11 7.00 6.40 Inflation assumption, % 2.0 2.0 2.0 Market rents, weighted by square metres, €/m²/month 20.55 16.13 18.54 Property maintenance expenses, repairs and modernisation investments €/m²/month 6.67 6.41 6.56 10-year average financial occupancy rate, % 97.5 96.6 97.2 Rent increase assumption, % 2.7 2.4 2.6 Expense increase assumption, % 2.5 2.5 2.5 * Yield requirement for net rental income 31 Dec 2022 Capital Other regions Group region of Finland total Unobservable inputs: Yield requirement cash flow, weighted, % * 3.56 4.92 3.97 Exit capitalisation rate, weighted, % * 3.71 5.07 4.12 Cash flow discount rate, weighted, % * 5.36 6.72 5.77 Inflation assumption, % 1.8 1.8 1.8 Market rents, weighted by square metres, €/m²/month 20.08 15.53 17.97 Property maintenance expenses, repairs and modernisation investments €/m²/month 6.77 6.52 6.65 10-year average financial occupancy rate, % 97.5 96.6 97.2 Rent increase assumption, % 2.3 2.0 2.2 Expense increase assumption, % 2.3 2.3 2.3 * Yield requirement for net rental income Climate-related matters have not had a significant impact on the fair value measurement of investment properties so far. Board of Directors’ Report and Financial Statements 2023 48 Hallituksen toimintakertomus ja tilinpäätös Sensitivity analysis for measuring the fair value of investment properties Properties measured at yield value 31 Dec 2023 Change % (relative) -10% -5% 0% 5% 10% Change, M€ Yield requirement 860.3 407.3 -368.2 -702.7 Market rents -944.8 -472.4 472.4 944.8 Maintenance costs 310.0 155.0 -155.0 -310.0 Change % (absolute) -2% -1% 0% 1% 2% Change, M€ Financial occupancy rate -194.4 -97.2 97.2 194.4 Properties measured at yield value 31 Dec 2022 Change % (relative) -10% -5% 0% 5% 10% Change, M€ Yield requirement 840.1 397.8 -359.6 -686.3 Market rents -961.0 -480.5 480.5 961.0 Maintenance costs 329.7 164.8 -164.8 -329.7 Change % (absolute) -2% -1% 0% 1% 2% Change, M€ Financial occupancy rate -197.7 -98.8 98.8 197.7 Kojamo has acquisition agreements related to new develop- ment and renovations, presented in note 3.4. Accounting policies Fair value measurement of investment property Kojamo’s fair value of investment properties is based on IFRS 13 Fair Value Measurement -standard and IAS 40 Investment Property -standard. The valuation is carried out on quarterly basis and are reviewed by external independent valuation ex- pert. The results of the assessment are reported to the Man- agement Group, Audit Committee and Board of Directors. The measurement process, market conditions and other factors af- fecting the assessment of the fair value of properties are re- viewed quarterly with the CEO and CFO in accordance with Kojamo’s reporting schedule. Each quarter, an external inde- pendent expert issues a statement on the valuation methods applied in the valuation of rental apartments and business premises owned by Kojamo as well as on the quality and relia- bility of the valuation. A statement on the situation as at 31 De- cember 2023 is available on Kojamo’s website. According to IFRS 13 Fair value Measurement -standard is the price that would be received to sell an asset or paid to transfer liability in an orderly transaction between market participants at the measurement date. However, determining the fair values of investment properties requires significant management esti- mates and assumptions especially when the level of transac- tion activity is significantly decreased. Estimates and assump- tions are especially related to the yield requirements, occu- pancy rate and market rent levels. Kojamo strives to use as much relevant observable input data as possible and as little non-observable input data as possible. The yield requirements are analysed quarterly in connection with the valuation. The yield requirements and other input data used are based on market observations and the best infor- mation available under current conditions. The information in- cludes the opinion of an external independent expert as well as Kojamo's own information. Fair value is the price that would be received from the sale of an asset or paid for the transfer of a liability between market parties in a normal transaction on the valuation date. Kojamo uses valuation techniques that are appropriate under those circumstances, and for which sufficient data is available to measure fair value. Board of Directors’ Report and Financial Statements 2023 49 Hallituksen toimintakertomus ja tilinpäätös Investment properties Investment property refers to an asset (land, building or part of a building) that Kojamo retains to earn rental income or capital appreciation, or both. An investment property can be owned di- rectly or through an entity. Properties used for administrative purposes are owner-occupied property and included in the bal- ance sheet line item “Property, plant and equipment”. An in- vestment property generates cash flows largely independently of the other assets held by an entity. This distinguishes invest- ment property from owner-occupied property. Kojamo’s investment property portfolio consists of the com- pleted properties, properties under construction and renova- tion, leased plots (right-of-use assets) and the plot reserve. Properties classified as trading properties as well as properties classified as held for sale are included in the Group’s property portfolio but excluded from the balance sheet item “Investment properties”. A property is reclassified from “Investment proper- ties” under “Trading properties” in the event of a change in the use of the property, and under “Investment property held for sale”, when the sale of an investment property is deemed highly probable. An investment property is derecognised from the balance sheet on disposal or when the investment property is perma- nently withdrawn from use and no future economic benefits are expected from its disposal. Capital gains and losses on dispos- als are presented netted as a separate line item in the compre- hensive income statement. Restrictions on investment properties Some of the investment properties are subject to legislative di- vestment and usage restrictions. The so-called non-profit re- strictions apply to the owning company, and the so-called property-specific restrictions apply to the investment owned. The non-profit restrictions include, among other things, perma- nent restrictions on the company’s operations, distribution of profit, lending and provision of collateral, and the divestment of investments. The property-specific restrictions include fixed- term restrictions on the use of apartments, the selection of res- idents, the determination of rent and the divestment of apart- ments. Measurement of investment property Investment property is measured initially at acquisition cost, in- cluding related transaction costs, such as transfer taxes and professional fees, as well as capitalised expenditure arising from eligible modernisation. The acquisition cost also includes related borrowing costs, such as interest costs and arrange- ment fees, directly attributable to the acquisition or construc- tion of an investment property. The capitalisation of borrowing costs is based on the fact that an investment property is a qualifying asset, i.e. an asset that necessarily takes a substan- tial period of time to get ready for its intended use or sale. The capitalisation commences when the construction of a new building or extension begins and continues until such time as the asset is substantially ready for its intended use or sale. Capitalisable borrowing costs are either directly attributable costs accrued on the funds borrowed for a construction project or costs attributable to a construction project. After initial recognition, investment property is measured at fair value and the changes in fair value are recognised through profit or loss in the period in which they are observed. Fair value gains and losses are presented netted as a separate line item in the comprehensive income statement. Fair value refers to the price that would be received from selling an asset, or paid for transferring a liability, in an ordinary transaction be- tween market participants on the measurement date. The valu- ation techniques used by Kojamo are described below. Fair value hierarchy Inputs used in determining fair values (used in the valuation techniques) are classified on three levels in the fair value hier- archy. The fair value hierarchy is based on the source of in- puts. Level 1 inputs Quoted prices (unadjusted) in active markets for identical in- vestment property. Level 2 inputs Inputs other than quoted prices included within Level 1 that are observable for the investment property, either directly or indi- rectly. Level 3 inputs Unobservable inputs for investment property. An investment property measured at fair value is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measure- ment. The fair value measurement for all of the investment property of Kojamo has been categorised as a Level 3 fair value, as observable market information for the determination of fair values has not been available. Board of Directors’ Report and Financial Statements 2023 50 Hallituksen toimintakertomus ja tilinpäätös Valuation techniques The fair values of investment properties measured by Kojamo are based on transaction value or balance sheet value (acqui- sition cost). Income value (yield value) The measurement of value is based on 10-year discounted cash flow (DCF) calculations, in which the terminal value of the property is calculated based on direct capitalisation and net yield in year 11. The discount rate is the 10-year cash flow yield requirement plus inflation. On completion, newly developed properties are moved from balance sheet value measurement to yield value measurement in the quarter they are completed in. The development margin, if any, is recognised as income in connection with this transition. Completed properties acquired by the Group are measured in their first quarter using the acquisition cost and subsequently using the yield value method. The yield value method is used to measure the value of properties that are not subject to restrictions. The yield value method is also used to measure the value of properties that can be sold as entire properties but not apartment by apartment due to restrictions stipulated by the legislation concerning state-subsidised rental housing. The disposal of such properties is only possible when the entire property is sold, and it must be sold to a party that will con- tinue to use the property for the provision of rental housing until the restrictions expire. The rents for such properties can be set freely. The yield value method is used to meas-ure the value of properties that belong to the following re-striction groups: free of restrictions, subject to extension restrictions, 20-year interest subsidy, 10-year interest subsidy. The yield requirements are analysed on a quarterly basis in connection with valuation. The determination of the yield requirement is based on the size of the municipality. In larger cities, several area-specific yield requirements are determined while, in smaller cities, the yield requirement is set at the municipal level. The yield requirement for terraced houses is increased by 20 basis points. Properties with a particularly large proportion of premises that are not in residential use (in excess of 40% of the total floor area) are analysed separately. The change in yield requirement based on the age of the property is as follows: more than 15 years from completion or renovation +12.5%, more than 30 years from completion or renovation +22.5%. Provision for modernisation investments: Age of the property or the number of years since the completion of the most recent renovation Provision (€/m 2 /month) 0−10 years 0.25 11−30 years 1.00 31−40 years 1.50 >40 years 2.00 Provisions for modernisation investments are used in 10-year discounted cash flow calculations. Acquisition cost (balance sheet value) The balance sheet value is used for the measurement of resi- dential and commercial properties whose disposal price is re- stricted under the legislation governing state-subsidised rental properties, meaning that their disposal price cannot be deter- mined freely. In addition, the setting of rents for such proper- ties is, as a rule, based on the cost principle, which means that the rent levels cannot be determined freely. The balance sheet value method is used to measure the value of properties that belong to the following restriction groups: ARAVA (state -subsidised rental properties), and 40-year inter- est subsidy. The fair value of property development projects, the plot re- serve and shares and holdings related to investment proper- ties is their original acquisition cost. Business combinations and asset acquisition Acquisitions of investment properties by Kojamo are ac- counted for as an acquisition of asset or a group of assets, or a business combination within the scope of IFRS 3 Business Combinations. Reference is made to IFRS 3 to determine whether a transaction is a business combination. This requires the management’s judgment. IFRS 3 is applied to the acquisition of investment property when the acquisition is considered to constitute an entity that is treated as a business. Usually, a single property and its rental agreement does not constitute a business entity. To constitute a business entity, the acquisition of the property should include acquired operations and people carrying out these operations, such as marketing of properties, manage- ment of tenancies and property repairs and renovation. The consideration transferred in the business combination and the detailed assets and accepted liabilities of the acquired en- tity are measured at fair value on the acquisition date. Goodwill is recognised at the amount of consideration transferred, inter- est of non-controlling shareholders in the acquiree and previ- ously held interest in the acquiree minus Kojamo’s share of the fair value of the acquired net assets. Goodwill is not amortised, but it is tested for impairment at least annually. Acquisitions that do not meet the definition of business in ac- cordance with IFRS 3 are accounted for as asset acquisitions. In this event, goodwill or deferred taxes, etc., are not recog- nised. Board of Directors’ Report and Financial Statements 2023 51 Hallituksen toimintakertomus ja tilinpäätös 3.2 Non-current assets held for sale Kojamo had no non-current assets held for sale in 2023 and 2022. Accounting policies If the sale of an operative rental investment property is deemed highly probable, such a property is transferred from the balance sheet item “Investment property” to “Investment property held for sale”. On that date, the carrying amount of the property is considered to be recovered principally through a sale transaction rather than through continuing use in rental. For a property to be classified as held for sale, the sale must be deemed highly probable and the investment property must be immediately salable in its current condition under general and ordinary terms of sale, the management must be commit- ted to an active plan to sell the property, Kojamo must have in- itiated a project to find a buyer and complete the plan, the property must be actively marketed at a price that is reasona- ble in relation to its fair value and the sale must be expected to be completed within 12 months of the classification. Investment properties classified as held for sale are measured at fair value (fair value hierarchy level 3). 3.3 Trading properties The value of Kojamo’s trading property shares amounted to EUR 0.0 (0.1) million at the end of the financial year. Trading properties are reclassified to financial assets EUR 0.1 million during the financial year 2023. A write-down of EUR 0.0 million has made on the trading properties during the financial year 2022. Accounting policies Trading properties include properties meant for sale that do not meet Kojamo’s objectives due to their location, type or size. A property is reclassified from the balance sheet item “In- vestment properties” under “Trading properties” in the event of a change in the use of the property. This is evidenced by the commencement of development with a view to sale. If an in- vestment property is being developed with a view to a sale, it will be accounted for as a trading property. Trading properties are measured at the lower of the acquisition cost or the net realisation value. The net realisation value is the estimated selling price in the ordinary course of business deducted by the estimated costs necessary to make the sale. If the net realisation value is lower than the carrying amount, an impairment loss is recognised. When a trading property becomes an investment property measured at fair value, the difference between the fair value on the transfer date and its previous carrying amount is recog- nised in the income statement under “Profit/loss on sales of trading properties”. Kojamo’s trading properties include mainly individual apart- ments ready for sale, business premises and parking facilities that are meant for sale but have not been sold by the balance sheet date. 3.4 Commitments and contingent liabilities related to investment properties Acquisition agreements related to investments Unrecognised acquisition agreements related to work in progress M€ 31 Dec 2023 31 Dec 2022 New development under construction 10.0 145.1 Preliminary agreements for new construction 24.7 48.7 Renovation 8.8 27.6 Total 43.6 221.4 Other liabilities Value added tax refund liabilities M€ 31 Dec 2023 31 Dec 2022 Value added tax refund liabilities 5.5 4.6 Land purchase liabilities M€ 31 Dec 2023 31 Dec 2022 Transaction prices based on target building rights and draft plans 13.5 13.5 Liabilities for municipal infrastructure 3.7 3.7 Board of Directors’ Report and Financial Statements 2023 52 Hallituksen toimintakertomus ja tilinpäätös Information on collateral related to financing is presented in note 4.7. Construction liability The land use agreement related to the zoned areas Suurpelto I and II in Espoo is subject to schedules for construction sanc- tioned with delay penalties. The zoned areas are divided into three execution areas in the agreement. Kojamo holds building rights in these areas as fol- lows: area 2 – 10,350 (10,350) floor sq.m. and area 3 – 3,200 (7,600) floor sq.m. The agreement stipulates that all of the res- idential building rights have to be used up by November 2013 in area 2 and by November 2016 in area 3. This schedule has not been fully met. The delay penalty is graded based on the period of delay and can at most, if the delay has continued for at least five years, be equal to half of the land use payments in accordance with the agreement. According to the agreement, the City of Espoo may, should circumstances change, lower the penalty or waive it altogether. One of the plot located in Vantaa include an obligation related to the form of ownership and financing sanctioned with con- tractual penalties. Some plots located in the City of Helsinki are subject to an ob- ligation to use them for rental housing. There is a contractual penalty for breaching this obligation. Disputes Kojamo has some individual disputes pending, but the com- pany considers them to be of negligible value. Other commitments Lumo Kodit Oy, a subsidiary of Kojamo, finalised the purchase of properties located in Helsinki at Onnentie 18, Sofianlehdon- katu 5, Tukholmankatu 10, Agricolankatu 1, Albertinkatu 40– 42, Abrahaminkatu 1–3, Kalevankatu 41, Eerikinkatu 32–38 and Bulevardi 31 from the City of Helsinki on 16 October 2017. Under the terms of the agreement, the fixed sales price is set at EUR 80.9 million, as determined by a valuation based on existing building rights to develop further commercial provision. The additional purchase prices are determined on the basis of the actual uses and additional floor area when the building per- mit for each site has been approved. The city plan has entered into force in the properties at Abrahaminkatu 1–3, Bulevardi 31, Onnentie 18, Tukholmankatu 10, Kalevalankatu 41, Alber- tinkatu 40–42 and Agricolankatu 1. The building permit has en- tered into force at Bulevardi 31 and the conversion project into apartments has been completed during 2023. Koy Eerikinkatu 32–36 has been sold in 2023. Accounting policies A contingent liability is a potential obligation resulting of past events and may be incurred depending on the outcome of an uncertain future event that is beyond the Group’s control (such as the result of pending legal proceedings). In addition, an ex- isting obligation that will probably not require meeting the liabil- ity to pay or the amount of which cannot be reliably determined is considered as a contingent liability. Contingent liabilities are presented in the notes. Board of Directors’ Report and Financial Statements 2023 53 Hallituksen toimintakertomus ja tilinpäätös 4. Financing and equity 4.1 Equity The following table shows changes in the number of shares and changes in equity items: M€ Number of shares (million) Share capital Share issue premium Fair value reserve Reserve for invested unrestricted equity Retained earnings Equity attributable to shareholders of the parent company Equity in total 1 Jan 2023 247.1 58.0 35.8 43.0 164.4 3,541.4 3,842.7 3,842.7 Transactions with shareholders -96.0 -96.0 -96.0 Profit for the financial period -89.0 -89.0 -89.0 Other comprehensive income -31.8 -31.8 -31.8 31 Dec 2023 247.1 58.0 35.8 11.2 164.4 3,356.4 3,625.9 3,625.9 M€ Number of shares (million) Share capital Share issue premium Fair value reserve Reserve for invested unrestricted equity Retained earnings Equity attributable to shareholders of the parent company Equity in total 1 Jan 2022 247.1 58.0 35.8 -31.0 164.4 4,036.0 4,263.3 4,263.3 Transactions with shareholders -94.8 -94.8 -94.8 Profit for the financial period -399.8 -399.8 -399.8 Profit for the financial period 74.0 74.0 74.0 31 Dec 2022 247.1 58.0 35.8 43.0 164.4 3,541.4 3,842.7 3,842.7 Board of Directors’ Report and Financial Statements 2023 54 Hallituksen toimintakertomus ja tilinpäätös Kojamo plc has one share class. The share has no nominal value. All issued shares have been paid for in full. The number of shares issued as at 31 December 2023 was 247,144,399. Each share entitles its holder to one vote at the General Meet- ing of Shareholders. There are no voting restrictions related to the shares. All shares carry an equal right to dividends and other distribution of Kojamo plc’s assets. Kojamo was listed on the Nasdaq Helsinki Stock Exchange in June 2018. In connection with the listing, Kojamo issued 17,665,039 new shares. Description of equity funds: Share premium reserve Kojamo plc has no such instruments in force that would accrue a share premium under the Limited Liability Companies Act currently in effect. The share premium was generated under the previous Limited Liability Companies Act. Fair value reserve The fair value reserve contains the changes in fair values of the derivatives used to hedge cash flow. Invested non-restricted equity reserve The reserve for invested unrestricted equity contains equity in- vestments and that part of the share subscription price that has not specifically been allocated to share capital. Dividends Kojamo’s objective is to be a stable dividend payer whose an- nual dividend payment will be at least 60 per cent of FFO, pro- vided that the Group’s equity ratio is 40 per cent or more and taking account of the company’s financial position. A dividend of 0.39 per share was paid in EUR 2023. After the balance sheet date, 31 December 2023, the Board of Directors has proposed that no dividend for 2023 be paid. Restrictions related to Kojamo’s equity Kojamo’s retained earnings for 2023, EUR 3,356.4 (3,541.4) million, include a total of EUR 134.4 (133.7) million of equity subject to profit distribution restrictions relating to non-profit operations. Equity subject to profit distribution restrictions in- cludes the measurement of investment property at fair value. Current authorisations Kojamo’s Annual General Meeting on 16 March 2023 author- ised the Board of Directors to decide on the repurchase and/or acceptance as pledge of an aggregate maximum of 24,714,439 of the company’s own shares according to the pro- posal of the Board of Directors. The proposed amount of shares corresponds to approximately 10 per cent of all the shares of the company. The authorisation will remain in force until the closing of the next Annual General Meeting, however no longer than until 30 June 2024. The Board has not used the authorisation. The Board of Directors was also authorised to decide on the issuance of shares and the issuance of special rights entitling to shares as referred to in Chapter 10, Section 1 of the Com- panies Act according to the proposal of the Board of Directors. The number of shares to be issued on the basis of the authori- sation shall not exceed an aggregate maximum of 24,714,439 shares, which corresponds to approximately 10 per cent of all the shares of the company. The authorisation applies to both the issuance of new shares and the conveyance of own shares held by the company. The authorisation will remain in force un- til the closing of the next Annual General Meeting, however no longer than until 30 June 2024. The Board has not used the authorisation. Furthermore, the Annual General Meeting decided that an ad- dition is made to the Articles of Association to allow the Board of Directors, at their discretion, to arrange a General Meeting as a virtual meeting without a meeting venue, as proposed by the Board of Directors. The change has been made to the Arti- cles of Association in 2023. Accounting policies An equity instrument is any contract that demonstrates a resid- ual interest in Kojamo’s assets after deducting all of its liabili- ties. The share capital consists of the parent company’s ordi- nary shares classified as equity. Transaction costs directly at- tributable to the issue of new shares are presented in equity as a deduction, net of tax, from the proceeds. Where any Group company purchases parent company’s shares (treasury shares), the consideration paid, including any directly attributable transaction costs (net of taxes), is de- ducted from equity attributable to the owners of the parent company, until the shares are cancelled or reissued. Where such shares are subsequently sold or reissued, any considera- tion received, net of any directly attributable transaction costs and net of taxes, is directly recognised in equity attributable to the owners of the parent company. Dividend distribution to the parent company’s shareholders is recognised as a liability in the consolidated balance sheet in the period in which the dividends are approved by the com- pany’s General Meeting of Shareholders. Some of the Group companies are subject to revenue recogni- tion restrictions under the non-profit provisions of housing leg- islation, according to which an entity cannot pay its owner more than the profit regulated by housing legislation. The com- panies in question can pay their owner a four per cent return on own funds invested in them that have been confirmed by the Housing Finance and Development Centre of Finland (ARA). Board of Directors’ Report and Financial Statements 2023 55 Hallituksen toimintakertomus ja tilinpäätös 4.2 Financial income and expenses Items recognised through profit or loss M€ 1–12/2023 1–12/2022 Interest income 3.2 1.6 Valuation changes on financial assets recognised at fair value through profit or loss 1.1 7.6 Gains on the disposal of financial assets recognised at fair value through profit or loss 0.2 0.1 Other financial income * 9.0 0.2 Financial income, total 13.5 9.6 Interest expenses Interest expenses on financial liabilities measured at amortised cost -92.7 -49.5 Interest expenses on interest rate derivatives 15.6 -9.9 Interest expenses on lease agreements -2.9 -2.7 Valuation changes on financial assets recognised at fair value through profit or loss -0.9 -2.3 Losses on the disposal of financial assets recognised at fair value through profit or loss -0.1 0.0 Other financial expenses -3.8 -2.6 Financial expenses, total -84.8 -67.0 Financial income and expenses, total -71.3 -57.4 Other comprehensive income M€ 1–12/2023 1–12/2022 Cash flow hedges -39.8 92.4 Total -39.8 92.4 * Includes 8.7 M€ the profit from the repurchase of bonds The changes to cash flow hedging come from interest rate de- rivatives. Accounting policies Interest income Interest income is recognised over time using the effective in- terest method Dividend income Dividend income is recognised when the right to receive pay- ment has arisen. Borrowing costs Borrowing costs are usually recognised as financial costs in the financial year during which they are incurred. However, borrowing costs attributable to qualifying assets, that is, mainly borrowing costs attributable to Kojamo’s investment properties, such as interest costs and arrangement fees, directly resulting from the acquisition or construction of the above assets, are capitalised as part of the cost of the asset. The capitalisation principles of borrowing costs are described in more detail un- der the accounting policies concerning investment properties in section 3.1 Investment properties. Transaction costs directly attributable to the acquisition of loans that can be allocated to a particular loan are included in the loan’s original amortised cost and allocated as financial ex- penses using the effective interest method. Board of Directors’ Report and Financial Statements 2023 56 Hallituksen toimintakertomus ja tilinpäätös 4.3 Financial assets and liabilities by valuation category 31 Dec 2023 Carrying Fair value M€ value total LEVEL 1 LEVEL 2 LEVEL 3 total Financial assets Measured at fair value Interest rate derivatives 30.4 30.4 30.4 Financial assets recognised at fair value through profit or loss 4.1 3.3 0.8 4.1 Measured at amortised cost Cash and cash equivalents 15.0 15.0 15.0 Trade receivables 7.5 7.5 Financial liabilities Measured at fair value Interest rate derivatives 17.3 17.3 17.3 Measured at amortised cost Other interest-bearing liabilities 1,607.3 1,604.7 1,604.7 Bonds 1,993.2 1,831.5 1,831.5 Trade payables 1.8 1.8 31 Dec 2022 Carrying Fair value M€ value total LEVEL 1 LEVEL 2 LEVEL 3 total Financial assets Measured at fair value Interest rate derivatives 54.0 54.0 54.0 Financial assets recognised at fair value through profit or loss 104.7 84.1 19.9 0.7 104.7 Measured at amortised cost Cash and cash equivalents 119.4 119.4 119.4 Trade receivables 6.4 6.4 Financial liabilities Measured at fair value Interest rate derivatives 1.4 1.4 1.4 Measured at amortised cost Other interest-bearing liabilities 1,339.3 1,225.1 1,225.1 Bonds 2,338.9 2,073.2 2,073.2 Trade payables 21.6 21.6 Board of Directors’ Report and Financial Statements 2023 57 Hallituksen toimintakertomus ja tilinpäätös Accounting policies Financial assets and liabilities measured at fair value are clas- sified into three fair value hierarchy levels in accordance with the reliability of the valuation technique: Level 1: The fair value is based on quoted prices for identical instru- ments in active markets. Level 2: A quoted market price exists in active markets for the instru- ment, but the price may be derived from directly or indirectly quoted market data. Fair values are measured using valuation techniques. Their inputs are based on quoted market prices, including e.g. market interest rates, credit margins and yield curves. Level 3: There is no active market for the instrument, the fair value can- not be reliably derived and input data used for the determina- tion of fair value is not based on observable market data. There were no transfers between the hierarchy levels in 2023. The fair value of floating rate loans is the same as their nomi- nal value, as the margins of the loans correspond to the mar- gins of new loans. The fair values of bonds are based on mar- ket price quotations. The fair values of other fixed-rate liabili- ties are based on discounted cash flows, in which market inter- est rates are used as input data. Level 3 reconciliation Financial assets recognised at fair value through profit or loss M€ 31 Dec 2023 31 Dec 2022 Beginning of period 0.7 0.7 Change 0.1 0.0 End of period 0.8 0.7 Investments measured at fair value through profit and loss on hierarchy level 3 are investments in unlisted securities and they are mainly measured at acquisition cost, as their fair value cannot be reliably measured in the absence of an active market. With regards to these items, it is evaluated that the ac- quisition cost is an appropriate estimate of fair value. Accounting policies Recognition and measurement The classification of financial assets is based on the nature of cash flows and the business models specified for the assets in question. Kojamo applies the following principles to the classi- fication of financial assets and liabilities and their recognition, derecognition and measurement. Financial assets and liabili- ties are presented as non-current items if the remaining ma- turity exceeds 12 months and as current items if the remaining maturity is less than 12 months. Financial instruments are classified on initial recognition into the following measurement groups: measured at amortised cost, measured at fair value through profit or loss and financial assets measured at fair value in other comprehensive income. Financial assets and liabilities measured at amor- tised cost Financial assets measured at amortised cost are non-deriva- tive financial assets with fixed or determinable payments. They are solely related to payments of principal and interest, and they are not held for trading. Financial assets obtained by handing over cash, goods or ser- vices directly to a debtor are measured at amortised cost. Kojamo’s financial assets measured at amortised cost consist of trade receivables and other receivables, loan receivables and other receivables, which include cash and cash equiva- lents. Fixed-term deposits with a maturity of three months at most are included in cash and cash equivalents. Financial liabilities measured at amortised cost include issued bonds, other interest-bearing liabilities and trade payables. They are recognised initially at fair value. Transaction costs di- rectly attributable to the acquisition of loans, such as arrange- ment fees that can be allocated to a particular loan, are de- ducted from the original amortised cost of the loan. Other fi- nancial liabilities are subsequently measured at amortised cost using the effective interest method. The difference between the proceeds and the redemption value is recognised as a fi- nancial expense through profit or loss over the loan period. Financial assets and liabilities recognised at fair value through profit or loss Financial assets measured at fair value through profit or loss include fund investments, investments in unlisted shares and commercial papers as well as other investment instruments that are not deposits. Financial assets and liabilities recognised at fair value through profit or loss include interest rate derivatives that are not sub- ject to hedge accounting in accordance with IFRS 9. Realised and unrealised gains and losses from changes in fair value are recognised in the comprehensive income statement in the period in which they arise. Board of Directors’ Report and Financial Statements 2023 58 Hallituksen toimintakertomus ja tilinpäätös Impairment of financial assets The assessment of credit losses is based on expected credit losses. The method takes into account a possible increase in credit risk. The impairment model is applied to financial assets recognised at amortised cost, the most significant item being sales receivables. Impairment loss is immediately recognised in the income state- ment. If the value is later restored, the reversal of the impair- ment is recognised in equity for equity instruments and through profit or loss for other investments. The impairment model is based on credit losses estimated on the basis of experience. If there is no active market for the financial instrument, judg- ment is required to determine fair value and impairment. Exter- nal mark to market valuations may be used for some interest rate derivatives. Recognition of impairment is considered if the impairment is significant or long-lasting. If the amount of im- pairment loss decreases during a subsequent financial year and the decrease can be considered to be related to an event occurring after the recognition of impairment, the impairment loss will be reversed. 4.4 Interest-bearing liabilities M€ 31 Dec 2023 31 Dec 2022 Non-current liabilities Bonds 1,558.7 2,139.2 Loans from financial institutions 1,353.3 1,092.7 Interest subsidy loans 18.8 26.2 Lease liability 76.4 72.4 Non-current liabilities total 3,007.2 3,330.5 Current liabilities Bonds 434.5 199.8 Loans from financial institutions 110.6 108.4 Interest subsidy loans 0.2 0.3 Commercial papers 39.7 30.9 Other loans 6.0 6.2 Lease liability 2.2 2.1 Current liabilities total 593.2 347.7 Total interest-bearing liabilities 3,600.4 3,678.2 Board of Directors’ Report and Financial Statements 2023 59 Hallituksen toimintakertomus ja tilinpäätös Two green bonds have been issued within Kojamo’s Green Fi- nance Framework, the proceeds of which have been used to build energy-efficient buildings. In May 2021, Kojamo issued the first green bond of EUR 350 million, with a maturity of 8 years. The maturity date is 28 May 2029, and the bond carries a fixed annual coupon of 0.875%. The EUR 300 million green bond issued in March 2022 has a maturity of 4 years. The maturity date is 31 March 2026, and the fixed annual coupon rate is 2.0%. Both loans are unsecured and made under the EUR 2.5 billion EMTN programme established by Kojamo plc in 2020. An un- secured bond of EUR 500 million was also issued under the EMTN programme in 2020. The bond matures on 27 May 2027, and it carries a fixed annual coupon rate of 1.875%. In addition, Kojamo has an unsecured bond issued in 2018, of which the remaining nominal amount is EUR 415.5 million. It matures on 7 March 2025 and carries a fixed annual coupon of 1.625%. In 2017, Kojamo plc issued an unsecured bond, of which the remaining nominal amount is EUR 434.5 million. The bond matures on 19 June 2024, and its fixed annual coupon rate is 1.50%. All five bonds are listed on the official list of the Irish Stock Exchange. Interest-bearing liabilities related to financing Other than cash M€ 1 Jan 2023 Cash flow changes 31 Dec 2023 Non-current interest-bearing liabilities 3,258.0 500.0 -827.2 2,930.8 Non-current lease liabilities 72.4 4.0 76.4 Current interest-bearing liabilities 345.6 -566.0 811.4 591.0 Current lease liabilities 2.1 -1.8 1.8 2.2 Total interest-bearing liabilities 3,678.2 -67.7 -10.0 3,600.4 Other than cash M€ 1 Jan 2022 Cash flow changes 31 Dec 2022 Non-current interest-bearing liabilities 3,165.2 450.0 -357.2 3,258.0 Non-current lease liabilities 69.7 2.8 72.4 Current interest-bearing liabilities 97.9 -111.0 358.7 345.6 Current lease liabilities 1.8 -1.6 1.9 2.1 Total interest-bearing liabilities 3,334.5 337.4 6.3 3,678.2 The changes arising from cash flows consist of the withdrawal of EUR 500.0 (450.0) million and repayment of EUR -574.5 (- 91.6) million of non-current loans, the withdrawal EUR 135.8 (205.8) million and repayment EUR -127.2 (-225.2) million of short-term commercial papers and other loans and the repay- ment of lease liabilities. Changes not involving cash flows mainly consist of transfers to current liabilities. Board of Directors’ Report and Financial Statements 2023 60 Hallituksen toimintakertomus ja tilinpäätös 4.5 Derivative instruments Fair values of derivative instruments 31 Dec 2023 31 Dec 2022 M€ Positive Negative Net Net Interest rate derivatives Interest rate swaps, cash flow hedging 30.1 -16.2 13.8 52.4 Interest rate swaps, not in hedge accounting 0.4 -1.1 -0.7 0.2 Total 30.4 -17.3 13.1 52.5 Nominal values of derivative instruments M€ 31 Dec 2023 31 Dec 2022 Interest rate derivatives Interest rate swaps, cash flow hedging 1,141.0 746.9 Interest rate swaps, not in hedge accounting 40.0 40.6 Total 1,180.9 787.5 Items under hedge accounting M€ 31 Dec 2023 31 Dec 2022 Cash flow hedging Nominal value Hedged loans 1,160.6 814.4 Interest rate derivatives 1,141.0 746.9 Fair value of derivatives Positive 30.1 53.3 Negative -16.2 -0.9 Net 13.8 52.4 Effective portion Recognised in other comprehensive income -39.8 92.4 Ineffective portion Recognised in the income statement - - During the financial year, EUR -39.8 (92.4) million was recog- nised in the fair value reserve from interest rate derivatives classified as cash flow hedges. A total of EUR 1.2 (1.2) million was transferred from cash flow hedging to be recognised through profit or loss. The interest rate derivatives mature between 2024 and 2035. At the balance sheet date, the average maturity of interest rate swaps was 3.7 (4.0) years. Board of Directors’ Report and Financial Statements 2023 61 Hallituksen toimintakertomus ja tilinpäätös Accounting policies Kojamo uses derivative instruments only for hedging purposes. Kojamo uses interest rate derivatives to hedge its exposure to changes in future interest payment cash flows concerning long-term loans. The majority of interest rate derivatives is subject to cash flow hedge accounting in accordance. Deriva- tive instruments that do not meet the requirements concerning the application of hedge accounting, or instruments to which Kojamo has decided not to apply hedge accounting, are in- cluded in financial assets or liabilities measured at fair value through profit or loss. These instruments are classified as held for trading. Fluctuations in Kojamo’s result caused by changing electricity prices has been managed since 2022 by using elec- tricity purchase agreements. The unrealised gains and losses from the measurement of de- rivatives are presented on the balance sheet under current and non-current assets or under liabilities in the item Derivative in- struments. The hedged items are presented on the balance sheet under Loans as non-current or current liabilities. Changes in the fair values of derivatives included in hedge ac- counting are recognised in components of other comprehen- sive income insofar as the hedging is effective. Changes in value are reported in the fair value reserve in equity. Interest payments arising from interest rate derivatives are recognised in interest expenses to profit or loss. The ineffective portion of a hedge is immediately recognised in financial items in the comprehensive income statement. The gains and losses accu- mulated in equity are recognised in the income statement at the same time with the hedged item. Changes in value from derivatives not included in hedge ac- counting are recognised in financial items through profit and loss. 4.6 Financial risk management The financial risks associated with Kojamo’s business are managed in accordance with the treasury policy confirmed by Kojamo plc’s Board of Directors. The objective is to protect Kojamo against unfavourable changes in the financial market. The management of financial risk is centralised in the Kojamo’s Treasury unit. Interest rate risk The most significant financial risk is related to interest rate fluc- tuations affecting the loan portfolio. This risk is managed through fixed interest rates and interest rate derivatives. The greatest interest rate risk is associated with loans from finan- cial institutions, bonds and commercial papers. These risks are hedged by using interest rate derivatives according to Kojamo’s treasury policy. The targeted hedging ratio is 50–100 per cent. On the financial statements date, the proportion of fixed-rate loans and loans hedged with interest rate derivatives (the hedging ratio) was 93 (84) per cent. The interest rate risk associated with interest subsidy loans is reduced by the state’s interest subsidy. Interest subsidy loans are not hedged with in- terest rate derivatives. The effects of changes in market interest rates on the compre- hensive income statement and equity are evaluated in the ta- ble below. The interest rate position affecting the comprehen- sive income statement includes floating rate loans and interest rate derivatives not included in hedge accounting. The effect on equity results from changes in the fair values of interest rate derivatives included in hedge accounting. Interest rate sensitivity 31 Dec 2023 31 Dec 2022 Income Comprehensive Income Comprehensive statement income statement income M€ 1% -0.1% 1% -0.1% 1% -0.1% 1% -0.1% Floating rate loans -14.4 1.4 0.0 0.0 -9.9 0.9 0.0 0.0 Interest rate derivatives 11.1 -1.1 33.6 -3.5 7.5 -0.8 22.4 -2.3 Total effect -3.4 0.3 33.6 -3.5 -2.3 0.1 22.4 -2.3 The deferred tax effect is not included in the calculation. Liquidity and refinancing risk Kojamo secures its liquidity through sufficient cash funds, the commercial paper programme and supporting credit facility agreements. Cash flow from the rental business is stable, and the sufficiency of liquidity is monitored with regular cash flow forecasts. Kojamo’s liquidity remained good during the financial year. At the end of the financial year, the Group’s cash and cash equiv- alents stood at EUR 15.0 million and financial assets at EUR 3.3 million. In order to ensure its liquidity, Kojamo plc has a commercial paper programme of EUR 250 million, committed credit facility agreements amounting to EUR 275 million and a EUR 5 mil- lion non-committed credit facility agreement. A total of EUR 39.7 million of the commercial paper programme had been is- sued at the end of the financial year. All credit facilities were unused at the balance sheet date. In addition, the EUR 425 million syndicated loan signed in October was unwithdrawn at the end of the financial year. The table below presents the expiration of the Group’s commit- ted unused credit facilities. The credit facilities are ready for withdrawal according to the Group’s financing needs. Board of Directors’ Report and Financial Statements 2023 62 Hallituksen toimintakertomus ja tilinpäätös Expiration of the Group's committed credit facilities 31 Dec 2023 31 Dec 2022 Within 1 1-2 2-5 Within 1 1-2 2-5 M€ year years years Total year years years Total Undrawn committed credit facilities - - 275.0 275.0 25.0 - 275.0 300.0 In the past few years, the functioning of the financial market has been affected by stricter bank regulation. In 2023, the un- certainty in the financial market and the strong rise in interest rates were reflected on bank lending and the cost of financing. Due to Kojamo’s strong financial position and stable cash flow, the availability of financing remained good. Kojamo has a credit rating of Baa2 with a negative outlook from Moody’s. The availability of financing is ensured by maintaining Kojamo’s good reputation among financiers and by keeping the equity ratio and loan to value at an appropriate level. The Group’s aim is to ensure access to different financing sources. The refinancing risk is reduced by diversifying the loan portfo- lio with respect to financing sources, financial instruments and maturities. The maturity distribution of the financing portfolio is actively monitored and Kojamo prepares for the maturing of large loans well in advance. The following table shows the cash flows of the contractual re- payments and interest payments of the Group’s financial liabili- ties. The cash flows of interest rate derivatives have remained positive in current interest rate levels. Maturity profile of financial liabilities 31 Dec 2023 Within 1 2–5 6–10 11–15 M€ year years years years Later Bonds 466.2 1,274.6 353.1 - - Loans from financial institutions 185.1 1,398.6 94.5 53.3 1.1 Interest subsidy loans 0.9 3.4 4.4 5.0 15.5 Commercial papers 40.0 - - - - Other loans - 6.0 - - - Interest rate derivatives 23.7 51.5 10.6 1.9 - Lease liabilities 4.7 17.8 21.8 20.8 92.6 Trade payables 1.8 - - - - Total 722.4 2,751.8 484.4 81.0 109.1 31 Dec 2022 Within 1 2–5 6–10 11–15 M€ year years years years Later Bonds 237.3 1,891.5 356.1 - - Loans from financial institutions 138.5 855.0 282.8 60.9 1.2 Interest subsidy loans 0.7 2.1 3.2 4.2 19.2 Commercial papers 31.0 - - - - Other loans - 6.2 - - - Interest rate derivatives -2.1 -4.2 -1.2 -0.3 - Lease liabilities 4.6 17.1 21.0 20.3 92.5 Trade payables 21.6 - - - - Total 431.7 2,767.7 662.0 85.1 112.9 Price risk Unexpected changes in electricity pricing may expose com- pany to price risk. Kojamo has hedged it’s electricity price risk by using electricity purchase agreements. Kojamo’s surplus cash may be invested in accordance with the principles approved in the treasury policy. Financial assets measured at fair value through profit or loss are subject to a price risk that is mitigated through the diversification of invest- ment assets. The investments do not involve a currency risk. Kojamo’s level 1 and 2 financial assets measured at fair value through profit or loss are low-risk investments in short-term interest rate funds or other highly liquid investments that can be redeemed on short notice and are therefore suitable for cash management. The effect of a one percentage point increase (decrease) on the comprehensive income statement would be EUR 0.0 (-0.0) million. Financial assets classified at level 3 consist mostly of strategic investments in unlisted shares. The impact of one percentage point increase (decrease) of these prices on the financial statement would be EUR 0.0 (-0.0) million. The figures do not take the tax effect into account. Board of Directors’ Report and Financial Statements 2023 63 Hallituksen toimintakertomus ja tilinpäätös Credit risk and counterparty risk Kojamo does not have any significant credit risk concentra- tions. The majority of sales receivables consists of rent receiv- ables, which are efficiently diversified. In addition, the use of security deposits mitigates the credit risk associated with rent receivables. Credit risk is analysed based on the age distribu- tion of trade receivables and by the degree of success of debt collection measures, and the risk is expected to remain at the current level. Age distribution of sales and rent receivables 31 Dec 2023 31 Dec 2022 M€ % M€ % Less than a month 4.7 63.9 4.1 63.9 1–3 months 2.2 23.5 1.5 23.5 3–6 months 0.5 7.3 0.5 7.3 6–12 months 0.1 2.3 0.1 2.3 More than a year 0.1 3.0 0.2 3.0 Total 7.5 100.0 6.4 100.0 Investments and derivative instruments involve a counterparty risk in financing activities. This risk is managed with a diverse portfolio of financially stable counterparties. Accounting policies Financial assets include rent receivables and trade receivables as well as interest receivables that are not held for sale and that have been obtained by handing over cash, goods or ser- vices directly to a debtor. They are measured initially at fair value and subsequently at amortised cost. The balance sheet value is adjusted according to the amount of expected credit losses. Impairment of financial assets For financial assets, the loss allowance is recognised at an amount equal to the lifetime expected credit losses. The ex- pected credit loss is recognised through profit or loss. Currency risk Kojamo’s cash flows are euro-denominated, and the business does not involve any currency risk. Management of capital structure Kojamo’s aim is to achieve a capital structure that best en- sures Kojamo’s strategic long-term operations, promotes the company’s growth targets and is optimal with respect to the prevailing market situation. In addition to the financial result, Kojamo’s capital structure is affected by factors such as capital expenditure, asset sales and acquisitions, dividend payments, equity-based facilities and measurement at fair value. Kojamo’s strategic targets include an equity ratio of more than 40 per cent and Loan to Value (LTV, a measure of net debt rel- ative to the value of investment properties) of less than 50 per cent. Kojamo’s equity ratio on 31 December 2023 was 44.5 (45.3) per cent, and Loan to Value (LTV) was 44.6 (43.7) per cent. Kojamo’s interest-bearing liabilities totalled EUR 3,600.4 (3,678.2) million at the end of the financial year. Kojamo’s financing agreements include financial covenants re- lated to the gearing ratio, the proportion of secured loans of the balance sheet, the amount of unencumbered assets and the capacity of the business to cover its interest liabilities. Kojamo fulfilled the terms of the covenants during the financial year. According to the terms and conditions of Kojamo’s unsecured bonds, the Group’s solvency ratio shall be less or equal to 0.65, secured solvency ratio less or equal to 0.45 and cover- age ratio more than or equal to 1.8. At the end of the financial year, the solvency ratio was 0.44 (0.42), the secured solvency ratio was 0.10 (0.09) and the coverage ratio was 3.6 (3.8). These covenants are included in addition to the bonds in drawn or undrawn financing agreements. According to the terms and conditions of certain financial agreements, the Group’s Loan to Value (LTV) shall not exceed 60 per cent and the interest cover ratio (ICR) shall be at least 1.8. At the end of the financial year, the interest cover ratio was 3.2 (3.9). These covenants are included in drawn or un- drawn financial agreements. Board of Directors’ Report and Financial Statements 2023 64 Hallituksen toimintakertomus ja tilinpäätös 4.7 Guarantees and commitments M€ 31 Dec 2023 31 Dec 2022 Loans covered by pledges on property and shares as collateral 839.3 780.7 Pledges given 1,691.6 922.2 Shares 293.2 102.1 Pledged collateral, total ¹ ⁾ 1,984.9 1,024.3 Other collaterals given Mortgages and shares 8.1 8.1 Guarantees ² ⁾ 723.5 756.4 Other collateral, total 731.6 764.5 ¹ ⁾ Pledged mortgages and shares relate in some cases to the same properties. The collaterals for the syndicated loan made in October 2023 was given at the time of signing, but the loan was unwithdrawn at the end of the financial year. ² ⁾ Guarantees given mainly relate to parent company guarantees given on behalf of Group companies’ loans and some of these loans have also mortgages or shares as collaterals. Kojamo and its subsidiaries have made commitments restrict- ing the assignment and pledging of shares owned by them. The contingent liabilities related to investment properties are presented in note 3.4. Board of Directors’ Report and Financial Statements 2023 65 Hallituksen toimintakertomus ja tilinpäätös 5. Income taxes 5.1 Current tax expense The tax expense in the income statement is broken down as follows M€ 1–12/2023 1–12/2022 Current tax expense -16.4 -17.3 Taxes for previous financial years -0.1 0.0 Change in deferred taxes 39.8 117.2 Total 23.3 100.0 Tax effects relating to components of other comprehensive income M€ 1–12/2023 1–12/2022 Cash flow hedges Before taxes -39.8 92.4 Tax effect 8.0 -18.5 After taxes -31.8 74.0 Reconciliation between the tax expense shown in the income statement and tax calculated using the parent company’s tax rate M€ 1–12/2023 1–12/2022 Profit before taxes -112.3 -499.8 Taxes calculated using the current tax rate (20%) 22.5 100.0 Tax-exempt income/non-deductible costs -0.2 0.1 Utilisation of confirmed tax losses 0.6 0.8 Change of deferred tax assets on unused confirmed tax losses 0.7 -0.9 Taxes from previous periods -0.1 0.0 Other -0.1 -0.1 Adjustments total 0.8 0.0 Total taxes recognised in profit or loss 23.3 100.0 Accounting policies The tax expense in the comprehensive income statement com- prises current tax and the change in deferred tax liabilities and receivables. Income tax is recognised in profit and loss, except when income tax is related to items recognised directly in eq- uity or components of other comprehensive income. In this event, the tax is also included in these items. Current taxes are calculated from taxable profit determined in Finnish tax legislation with reference to a valid tax rate, or a tax rate that is in practice approved by the balance sheet date. Taxes are adjusted by possible taxes related to previous years. As a rule, deferred tax assets and liabilities are recognised for all temporary differences between the carrying amounts and tax bases of assets and liabilities using the liability method. Ac- quisitions of individual assets constitute an exception to this rule. At Kojamo, these assets include such investment prop- erty acquisitions that do not meet the criteria of business enti- ties and are, therefore, classified as asset acquisitions. The most significant temporary difference in the Group is the difference between the fair values and tax bases of investment properties owned by Kojamo. After the initial recognition, the investment property is measured at fair value through profit and loss at the end of the reporting period. Other temporary differences arise, for example, from the measurement of finan- cial instruments at fair value. A deferred tax asset is recognised only to the extent that it is probable that future taxable profit will be available to Kojamo against which temporary differences can be utilised. The eligi- bility of the deferred tax asset for recognition is reassessed on the last day of each reporting period. Deferred tax liabilities are usually recognised in the balance sheet in full. Deferred taxes are determined applying those tax rates (and tax laws) that will probably be valid at the time of paying the tax. Tax rates in force on the last day of the reporting period are used as the tax rate, or tax rates for the year following the financial year if they are in practice approved by the last day of the reporting period. Board of Directors’ Report and Financial Statements 2023 66 Hallituksen toimintakertomus ja tilinpäätös 5.2 Deferred tax assets and liabilities Changes to deferred tax assets and liabilities Recognised Recognised in other through compre- profit hensive Other M€ 1 Jan 2023 or loss income changes 31 Dec 2023 Deferred tax assets Confirmed losses 0.8 0.7 - 1.5 Cash flow hedges 0.2 3.1 - 3.2 Other items/transfers 0.5 -0.3 - 0.2 Lease agreements 14.9 0.8 - 15.7 Total 16.4 1.1 3.1 - 20.6 Set-off of deferred tax of lease agreements -14.9 -0.8 - -15.7 Deferred tax assets 1.5 0.3 3.1 - 4.9 Deferred tax liabilities Investment properties measured at fair value and residential building provisions 862.3 -39.5 - 822.8 Cash flow hedges 10.9 -4.9 - 6.0 Other items/transfers 0.4 0.0 - 0.5 Lease agreements 14.9 0.8 - 15.7 Total 888.6 -38.7 -4.9 - 845.0 Set-off of deferred tax of lease agreements -14.9 -0.8 - -15.7 Deferred tax liabilities 873.7 -39.5 -4.9 - 829.3 Recognised Recognised in other through compre- profit hensive Other M€ 1 Jan 2022 or loss income changes 31 Dec 2022 Deferred tax assets Confirmed losses 0.9 -0.1 - 0.8 Cash flow hedges 8.2 -8.1 - 0.2 Other items/transfers 0.9 -0.5 - 0.5 Lease agreements 14.3 0.6 - 14.9 Total 24.4 0.1 -8.1 - 16.4 Set-off of deferred tax of lease agreements -14.3 -0.6 - -14.9 Deferred tax assets 10.1 -0.5 -8.1 - 1.5 Deferred tax liabilities Investment properties measured at fair value and residential building provisions 979.9 -117.6 0.0 862.3 Cash flow hedges 0.5 10.4 - 10.9 Electricity derivatives measured at fair value 0.1 -0.1 - - Other items/transfers 0.6 -0.1 - 0.4 Lease agreements 14.3 0.6 - 14.9 Total 995.3 -117.2 10.4 0.0 888.6 Set-off of deferred tax of lease agreements -14.3 -0.6 - -14.9 Deferred tax liabilities 981.0 -117.8 10.4 0.0 873.7 Board of Directors’ Report and Financial Statements 2023 67 Hallituksen toimintakertomus ja tilinpäätös Expiration years for unrecognised confirmed losses Year of expiration M€ 2024−2025 2026−2027 2028−2029 2030−2031 2032−2033 Total Confirmed losses 0.2 0.5 0.1 0.0 0.0 0.8 Unrecognised deferred tax 0.0 0.1 0.0 0.0 0.0 0.2 Accounting policies Recognition of deferred tax assets Determining whether to recognise a deferred tax asset on the balance sheet requires the management’s judgment. A de- ferred tax asset is recognised to the extent that it is probable that future taxable profit will be available to Kojamo against which deductible temporary differences or tax losses carried forward can be utilised. A deferred tax asset recognised in a previous reporting period is recognised as an expense in the income statement, if Kojamo is not expected to accrue enough taxable income to utilise the temporary differences or unused losses that constitute the basis for the deferred tax asset. Recognition principle of deferred taxes (investment properties) As a rule, the deferred tax for investment properties measured at fair value is determined assuming that the temporary differ- ence will reverse through selling. Kojamo can usually dispose of an investment property either by selling it in the form of property or by selling the shares in the company, such as a housing company. Exception to the initial recognition of deferred taxes As a rule, deferred tax assets and liabilities are recognised for all temporary differences between the carrying amounts and tax bases of assets and liabilities. An exception to this principal rule is constituted by acquisitions of single investment proper- ties, which are not considered to meet the definition of busi- ness according to IFRS 3 Business Combinations -standard. In this case, they are classified as asset acquisitions, for which no deferred tax is recorded in the balance sheet at initial recognition. As such, the classification of property acquisitions as business acquisitions and asset acquisitions (described in more detail in note 3.1) also affects the recognition of deferred taxes. 6. Other balance sheet items 6.1. Lease agreements Leases The right-of-use assets recognised in investment properties consist of land lease contracts measured at fair value. The fair value of land lease contracts is the present value of the lease payments for the remaining lease term discounted by the in- cremental borrowing rate. Kojamo’s lease liability is measured by discounting the lease liabilities of the leases within the scope of the standard at their present value, using the man- agement’s estimate of Kojamo’s incremental borrowing rate as the discount factor. The incremental borrowing rate will be de- termined on the commencement date of the lease. The weighted average incremental borrowing rate of the lease lia- bility was 3.9 (3.8) per cent on 31 December 2023. The right-of-use assets recognised in property, plant and equipment are car leasing agreements. Depreciation on the right-of-use asset is recognised as straight-line depreciation over the lease term. The balance sheet items do not include the service components of leases or non-deductible value added taxes. The weighted average incremental borrowing rate of the lease liability was 1.3 (1.3) per cent on 31 Decem- ber 2023. The cash flows of the contractual repayments and interest pay- ments of the Group’s financial liabilities are presented for lease liabilities in note 4.6 Financial risk management. Expenses associated with right-of-use assets included in in- vestment properties (leases for plots of land) are recognised in the comprehensive income statement under Profit/loss on fair value of investment properties and the interest expenses allo- cated to the lease liability are recognised in financial ex- penses. The expenses associated with car leasing agreements are recognised in depreciation and financial expenses. The payments of the lease liability are stated in the financing cash flow. Board of Directors’ Report and Financial Statements 2023 68 Hallituksen toimintakertomus ja tilinpäätös Right-of-use assets M€ 31 Dec 2023 31 Dec 2022 Fair value od Leases for plots of land 1 Jan * 73.8 70.6 Increases/decreases 5.2 4.3 Profit/loss on fair value of investment properties -1.3 -1.1 Fair value of Leases for plots of land 31 Dec 77.8 73.8 * Land lease contracts are measured at fair value and are recognised in investment properties. M€ 31 Dec 2023 31 Dec 2022 Car leasing agreements 1 Jan * 1.7 1.7 Increases/decreases -0.1 0.0 Acquisition cost 31 Dec 1.6 1.7 Accumulated depreciation 1 Jan -0.9 -0.8 Depreciation, amortisation and impairment -0.5 -0.4 Increases/decreases 0.6 0.3 Accumulated depreciation -0.8 -0.9 Car leasing agreements 1 Jan 0.8 0.9 Car leasing agreements 31 Dec 0.8 0.8 * Car leasing agreements are recognised in property, plant and equipment. Right-of-use assets total on 1 Jan 74.6 71.5 Right-of-use assets total on 31 Dec 78.6 74.6 Lease liabilities M€ 31 Dec 2023 31 Dec 2022 Lease liabilities on 1 Jan 74.6 71.5 New leases 1.9 2.2 Repayments of lease liabilities -1.8 -1.6 Other non-cash movements 3.9 2.5 Lease liabilities on 31 Dec 78.6 74.6 Lease liabilities M€ 31 Dec 2023 31 Dec 2022 Non-curret liabilities Investment property, leases for plot of land 76.0 72.1 Depreciation, amortisation and impairment, car leasing agreements 0.4 0.3 Non-curret liabilities total 76.4 72.4 Current liabilities Investment property, leases for plot of land 1.8 1.7 Depreciation, amortisation and impairment, car leasing agreements 0.4 0.4 Current liabilities total 2.2 2.1 Lease liabilities total 78.6 74.6 Board of Directors’ Report and Financial Statements 2023 69 Hallituksen toimintakertomus ja tilinpäätös 6.2 Intangible assets Other Intangible intangible M€ rights assets Total Acquisition cost 1 Jan 2023 0.1 1.2 1.3 Increases - 0.1 0.1 Decreases -0.1 -0.1 -0.2 Acquisition cost 31 Dec 2023 0.0 1.2 1.2 Accumulated depreciation 1 Jan 2023 -0.1 -0.5 -0.6 Decreases 0.1 0.1 0.2 Depreciation for the financial year - -0.2 -0.2 Accumulated depreciation 31 Dec 2023 0.0 -0.7 -0.7 Carrying value 1 Jan 2023 0.0 0.7 0.7 Carrying value 31 Dec 2023 0.0 0.6 0.6 Other Intangible intangible M€ rights assets Total Acquisition cost 1 Jan 2022 0.1 1.1 1.2 Increases - 0.1 0.1 Acquisition cost 31 Dec 2022 0.1 1.2 1.3 Accumulated depreciation 1 Jan 2022 -0.1 -0.3 -0.4 Depreciation for the financial year 0.0 -0.2 -0.2 Accumulated depreciation 31 Dec 2022 -0.1 -0.5 -0.6 Carrying value 1 Jan 2022 0.0 0.8 0.8 Carrying value 31 Dec 2022 0.0 0.7 0.7 Accounting policies Intangible assets are recognised in the balance sheet only in the event that the acquisition cost of the asset can be reliably determined and the expected future financial benefit related to the asset will probably benefit Kojamo. Any other costs are im- mediately recognised as expenses. Intangible assets are val- ued at acquisition cost less amortisation and any impairment loss. Kojamo’s intangible assets consist of licences and IT sys- tems. Intangible assets are amortised on a straight-line basis over their estimated useful lives. Intangible assets with a time limit are amortised over the life of the contract. The amortisation periods for intangible assets are fiver to twenty years. Research costs are recognised as an expense as incurred. Development costs are recognised as intangible assets in the balance sheet, provided that they can be reliably determined, the product or process is technically and commercially feasi- ble, it will probably generate financial benefit in the future and Kojamo has the resources required for completing the re- search work and for using or selling the intangible asset. The residual value, useful life and amortisation method of the asset are checked at least at the end of each financial year. When necessary, they are adjusted to reflect changes in the expectations on financial benefit. Kojamo’s consolidated balance sheet did not include goodwill in the periods being presented. The accounting for cloud computing arrangements depends on whether the cloud-based software classifies as a software in- tangible asset or a service contract. Those arrangements where Kojamo does not have control over the underlying soft- ware are accounted for as service contracts providing the Group with the right to access the cloud provider’s application software over the contract period. The ongoing fees to obtain access to the application software, together with related con- figuration or customisation costs incurred, are recognised un- der Other operating expenses when the services are received. Board of Directors’ Report and Financial Statements 2023 70 Hallituksen toimintakertomus ja tilinpäätös 6.3 Property, plant and equipment M€ Land areas Connection and Right- Other Total of-use tangible charges Buildings equipment assets assets Acquisition cost 1.1.2023 5.4 0.1 26.5 3.5 1.7 1.4 38.7 Increases - - 0.1 0.0 -0.1 - 0.1 Decreases - - - -0.4 - 0.0 -0.4 Hankintameno 31 Dec 2023 5.4 0.1 26.6 3.2 1.6 1.4 38.4 Accumulated depreciation 1 Jan 2023 - - -6.2 -3.1 -0.9 -0.1 -10.3 Depreciation for the financial year - - -0.4 -0.1 -0.5 0.0 -1.0 Decreases - - - 0.4 0.6 - 1.0 Accumulated depreciation 31 Dec 2023 - - -6.6 -2.9 -0.8 -0.1 -10.4 Carrying value 1 Jan 2023 5.4 0.1 20.3 0.4 0.8 1.3 28.4 Carrying value 31 Dec 2023 5.4 0.1 20.0 0.3 0.8 1.3 28.0 Machinery Right- Other Connection and of-use tangible M€ Land areas charges Buildings equipment assets assets Total Acquisition cost 1 Jan 2022 5.4 0.1 26.5 3.3 1.7 1.4 38.4 Increases - - 0.0 0.2 0.0 - 0.2 Acquisition cost 31 Dec 2022 5.4 0.1 26.5 3.5 1.7 1.4 38.7 Accumulated depreciation 1 Jan 2022 - - -5.7 -3.0 -0.8 -0.1 -9.6 Depreciation for the financial year - - -0.4 -0.1 -0.4 0.0 -1.0 Decreases - - 0.0 0.0 0.3 - 0.3 Accumulated depreciation 31 Dec 2022 - - -6.2 -3.1 -0.9 -0.1 -10.3 Carrying value 1 Jan 2022 5.4 0.1 20.8 0.3 0.9 1.3 28.8 Carrying value 31 Dec 2022 5.4 0.1 20.3 0.4 0.8 1.3 28.4 Accounting policies Property, plant and equipment consist of assets held and used by the company, mainly buildings and land areas, as well as machinery and equipment. The right-of-use assets include car leasing agreements, which are described in more detail in note 6.1. Property, plant and equipment are measured at their original acquisition cost, less accumulated depreciation and possible impairment losses, adding capitalised costs related to modern- isations. The acquisition cost includes costs that are directly attributable to the acquisition of the property, plant and equipment item. If the item consists of several components with different useful lives, they are treated as separate items of property, plant and equipment. In this case, costs related to the replacement of a component are capitalised, and any remaining carrying amount is derecognised from the balance sheet in connection with the replacement. Government grants received for the ac- quisition of property, plant and equipment are recorded as a reduction of the acquisition cost of said property, plant and equipment asset. The grants are recognised in income as lower depreciation charges over the useful life of the asset. Costs that arise later as a result of additions, replacements of parts or maintenance, such as modernisation costs, are in- cluded in the carrying amount of the property, plant and equip- ment asset only in the event that the future financial benefit re- lated to the asset will probably benefit Kojamo and the acquisi- tion cost can be reliably determined. Maintenance and repair expenses are recognised immediately through profit and loss. Depreciation on property, plant and equipment is recognised as straight-line depreciation during the useful life. No deprecia- tion is charged on land, as land is considered to have an indef- inite useful life. The depreciation periods based on economic useful life are as follows: Buildings 67 years Machinery and equipment in buildings 10–50 years Capitalised renovations and repairs 10–50 years IT hardware 4–5 years Base stations 7 years Office equipment 10 years Multifunction devices 6-8 years Board of Directors’ Report and Financial Statements 2023 71 Hallituksen toimintakertomus ja tilinpäätös Gains and losses from sales and disposals of property, plant and equipment are recognised in the income statement and presented as other operating income and expenses. Impairment of property, plant and equipment At least once a year, Kojamo carries out an assessment of the possible signs of impairment of property, plant and equipment. In practice, this is usually an asset group-specific assessment. If any signs of impairment are detected, the recoverable amount of the asset is determined. The recoverable amount is the higher of an asset’s fair value less costs to sell and its value in use. The value in use is based on the expected future net cash flows resulting from the asset, discounted to the present. The recoverable amount is compared with the asset’s carrying amount. An impairment loss is recognised if the recoverable amount is lower than the carrying amount. Impairment losses are recognised in the statement of income. In connection with the recognition of the impairment loss, the useful life of the amortisable/depreciable asset is reassessed. The impairment loss will be reversed later if the circumstances change and the recoverable amount has increased after the recognition of the impairment loss. However, reversal of im- pairment loss shall not exceed the asset’s carrying amount less impairment loss. 6.4 Non-current receivables M€ 31 Dec 2023 31 Dec 2022 Loan receivables from associated companies 4.7 4.8 Loan receivables from others 1.6 1.7 Non-current accrued income 0.1 0.2 Total 6.5 6.7 6.5 Current trade and other receivables M€ 31 Dec 2023 31 Dec 2022 Trade receivables 7.5 6.4 Receivables from associated companies 0.0 0.2 Loan receivables 0.1 0.1 Other receivables 1.3 2.2 Prepaid expenses and accrued income 8.0 2.1 Total 17.0 11.1 Specification of prepaid expenses and accrued income 31 Dec 2023 31 Dec 2022 Rental services 1.0 1.4 Prepayments 0.4 0.1 Interest 6.2 0.1 Other prepaid expenses and accrued income 0.4 0.5 Total 8.0 2.1 The fair value of trade receivables and other receivables matches their carrying amount. 6.6 Provisions and other non-current liabilities Provisions Provisions include EUR 0.1 (0.3) million in ten-year guarantee reserves for Lumo Kodit Oy’s (VVO Rakennuttaja Oy’s) founder construction, estimated on the basis of experience. Accounting policies Provisions are recognised in the balance sheet when all the following criteria are met: ● Kojamo has a present legal or constructive obligation as a result of past events ● it is probable that an outflow of resources will be required to settle the obligation ● the amount of the obligation can be reliably estimated. Provisions may result from restructuring plans, onerous con- tracts or obligations related to the environment, legal action or taxes. The amount recognised as provision is the management’s best estimate of costs required for settling an existing obligation on the last day of the reporting period. Where it can be expected some of a provision to be reimbursed, the reimbursement is recognised as a separate asset but only when the reimburse- ment is virtually certain. Board of Directors’ Report and Financial Statements 2023 72 Hallituksen toimintakertomus ja tilinpäätös Other non-current liabilities M€ 31 Dec 2023 31 Dec 2022 Security deposits received 4.3 4.3 Other liabilities, investments 0.6 0.8 Total 4.9 5.0 Other non-current liabilities comprise mainly received security deposits. 6.7 Current trade payables and other payables M€ 31 Dec 2023 31 Dec 2022 Advances received 6.2 6.2 Trade payables 1.8 21.6 Other debts 1.4 1.5 Accrued expenses and deferred income 66.0 49.2 Total 75.4 78.5 Specification of accrued expenses and deferred income 31 Dec 2023 31 Dec 2022 Rental services 8.8 2.7 Investments 11.2 9.9 Personnel expenses 6.0 5.8 Interest 38.6 30.7 Other items 1.4 0.0 Total 66.0 49.2 7. Other notes 7.1 Adjustments to cash flow from operating activities M€ 1–12/2023 1–12/2022 Depreciation 1.3 1.2 Financial income and expenses 71.3 57.4 Income taxes -23.3 -100.0 Share of result of associated companies -0.1 -0.1 Profit/loss on fair value of investment properties 295.4 682.0 Profit/loss on the disposal of investment properties -0.2 -0.2 Other adjustments 0.8 -0.8 Total 345.0 639.4 7.2 Related party transactions Related parties Kojamo plc’s related parties include its subsidiaries, associ- ated companies and joint arrangements as well as key man- agement personnel, comprising the members of the Board of Directors, the CEO and other members of the Management Team and the close members of their families and the corpora- tions over which they exercise control. Parties holding 20 per cent or more of the shares of Kojamo are generally considered as related parties. Shareholders whose shareholding remains below 20 per cent are considered as related parties if they are otherwise considered to have considerable influence. Kojamo’s subsidiaries, joint arrangements and associated companies are presented in Note 7.3. Board of Directors’ Report and Financial Statements 2023 73 Hallituksen toimintakertomus ja tilinpäätös Employee benefits of key management personnel M€ 1–12/2023 1–12/2022 Wages and salaries to management CEO -0.6 -0.4 Other members of the Management Team -1.1 -1.0 Members of the Board and its committees -0.1 -0.1 Total wages and salaries for the management -1.7 -1.5 Share-based payments CEO -0.1 -0.5 Other members of the Management Team -0.1 -0.7 Members of the Board and its committees -0.3 -0.3 Share-based payments total -0.5 -1.5 Funded pension plans -0.2 -0.2 Defined contribution pension plans -0.4 -0.4 Total -2.7 -3.6 Salaries and wages to the CEO, the Board of Directors and the Board`s committees 1,000 € 1–12/2023 1–12/2022 Jani Nieminen, CEO -625.4 -970.0 Board of Directors and its committees Mikael Aro, Chairman of the Board -80.5 -78.8 Mikko Mursula, Vice chairman of the board -52.1 -50.9 Reima Rytsölä -10.0 -45.0 Anne Koutonen -52.1 -51.5 Minna Metsälä - -9.7 Kari Kauniskangas -47.1 -35.3 Matti Harjuniemi -8.8 -45.0 Catharina von Stackelberg-Hammarén -45.3 -44.4 Andreas Segal -38.2 - Annica Ånäs -36.1 - Board of Directors and its committees total -370.1 -360.3 Total * -995.5 -1,330.3 * The salaries and wages include share-based payments Board of Directors’ Report and Financial Statements 2023 74 Hallituksen toimintakertomus ja tilinpäätös For the 2023–2024 term of office, the Board of Directors has been paid fees totalling EUR 367.8 thousand. EUR 370.1 thou- sand is allocated to the financial year 2023. Annual fee is paid as company shares and cash so that approximately 40 per cent of the annual fee will be paid as Kojamo plc’s shares and the rest will be paid in cash. Kojamo employees do not receive additional compensation for serving as Board members or the CEO of Group companies. The management’s pension commitments and sev- erance payments The retirement age for the CEO and the members of the Man- agement Team is 63 years. The CEO and the members of the Management Team belong to a contribution-based pension system in which an insurance premium corresponding to two months’ taxable income is paid annually into a group pension insurance plan. In accordance with the terms of the insurance, the insurance savings can be withdrawn starting from the age of 63 or as a supplementary pension complementing earnings- related pension. The costs of the statutory pension plan for the CEO and the members of the Management Team were EUR 0.4 (0.4) million, and payments to the voluntary pension plan amounted to EUR 0.2 (0.2) million. If the company terminates the CEO’s contract, the period of notice is 12 months, during which time the CEO does not have an obligation to work. If the CEO terminates the contract, the period of notice is three months. No separate severance pay is stipulated by the CEO’s contract. If the Company terminates the contract of another member of the Management Team, the period of notice is six months, dur- ing which time they are under no obligation to work. If a mem- ber of the Management Team terminates the contract, the pe- riod of notice is three months. The severance payment corre- sponds to six months’ salary. Share-based incentive plan Kojamo has a long-term share-based incentive plan for execu- tives in effect. The remuneration is based on the realisation of Kojamo’s key performance indicators in relation to the Group’s strategic targets. The potential incentives under the plan are based on: ● for the performance period 2021–2023: total revenue and FFO. ● for the performance period 2022–2024: total revenue, FFO and apartment-specific CO2 emission reduction target. ● for the performance period 2023–2025: total revenue, FFO and apartment-specific CO2 emission reduction target for years 2023–2025, and Loan to Value ratio. If the three ongoing earning periods were accrued in full, the maximum remuneration would be a sum corresponding to 385,211 Kojamo shares, of which half would be paid in Kojamo shares and half in cash. The fair value of the share-based re- wards is measured based on Kojamo plc’s share price at the time of initiating the plan and taking into account the dividend estimates for the coming years. On 15 February 2023, Kojamo’s Board of Directors approved to establish a new restricted share programme for the years 2023-2025. The programme will be used in specific situations decided by the Board of Directors separately. The programme consists of individual, annually commencing maximum three- year long restricted share plans within which the participants have the opportunity to receive a fixed number of shares as a long-term incentive and retention award. 2023-2025 commit- ment period will last until the end of 2025 and the possible re- ward will be paid during the year following the expiry of the pe- riod partially in shares in the company and partially in cash. The maximum gross number of shares to be granted is 50,000 shares. In the financial year 2023, the effect of the share-based incen- tive plan for key personnel on Kojamo’s result was EUR -0,2 (-0.4) million. Other related party information The members of the Board of Directors or corporations over which they exercise control owned a total of 57,783 (55,754) shares and share-based rights in the company or in compa- nies belonging to the same Group as the company. The members of the Management Team or corporations over which they exercise control owned a total of 163,115 (190 033) shares and share-based rights in the company or in compa- nies belonging to the same Group as the company. These shares represent 0.09 (0.10) per cent of the company’s entire share capital. Kojamo had no related party transactions deviating from the company’s normal business operations in 2022 and 2023. Board of Directors’ Report and Financial Statements 2023 75 Hallituksen toimintakertomus ja tilinpäätös 7.3 The Group’s subsidiaries, associated com- panies and joint arrangements Accounting policies Consolidation policies The consolidated financial statements include the parent com- pany Kojamo plc, the subsidiaries, investments in associated companies and interests in joint arrangements (joint opera- tions). Subsidiaries Subsidiaries are companies that are under the parent com- pany’s control. Kojamo is considered to control an entity when Kojamo is exposed to, or has rights to, variable returns from its involvement in the entity and has the ability to affect those re- turns through its control over the entity. The control is usually based on the parent company’s direct or indirect holding of more than 50 per cent of the voting rights in the subsidiary. Should facts or circumstances change in the future, Kojamo will reassess whether it continues to have control over the en- tity. Mutual shareholdings are eliminated using the acquisition cost method. Subsidiaries acquired during the financial year are consolidated in the financial statements from the day of acqui- sition, when the Group gained control of the company. Di- vested subsidiaries are consolidated until the date of divest- ment, when control ceases. Intra-Group transactions, receiva- bles, liabilities, essential internal margins and internal profit distribution have been eliminated in the consolidated financial statements. The result for the financial year and total comprehensive in- come are allocated to the owners of the parent company, as Kojamo had no non-controlling interests in 2023 and 2022. Associated companies Associated companies are entities over which Kojamo has considerable influence. Considerable influence is basically de- fined as Kojamo holding 20–50 per cent of the votes in the company, or Kojamo as otherwise exercising considerable in- fluence but not having control in the company. Holdings in as- sociated companies are consolidated in the financial state- ments using the equity method from the date of acquiring con- siderable influence until the date when the considerable influ- ence ends. The Group’s share of the results of associated companies is shown in a separate line on the income state- ment. Joint arrangements A joint arrangement is an arrangement in which two or more parties have joint control. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unani- mous consent of the parties sharing control. A joint arrangement is either a joint operation or joint venture. In a joint operation, Kojamo has rights to the assets and obli- gations for the liabilities relating to the arrangement, whereas a joint venture is an arrangement in which Kojamo has rights to the net assets of the arrangement. All of Kojamo’s joint ar- rangements are joint operations. They include those housing companies and mutual real estate companies in which Kojamo has a holding of less than 100 per cent. In these companies, the shares held by Kojamo carry entitlement to have control over specified premises. Kojamo includes in its consolidated financial statements on a line-by-line basis and in proportion to its ownership its share of the assets and liabilities on the balance sheet related to joint operations as well as its share of any joint assets and liabili- ties. In addition, Kojamo recognises its income and expenses related to joint operations, including its share of the income and expenses from joint operations. Kojamo applies this pro- portional consolidation method to all the joint operations de- scribed hereinabove, regardless of Kojamo’s holding. If the proportionally consolidated companies have such items on the consolidated comprehensive income statement or balance sheet that solely belong to Kojamo or other owners, these items are dealt with accordingly also in Kojamo’s consolidated financial statements. Board of Directors’ Report and Financial Statements 2023 76 Hallituksen toimintakertomus ja tilinpäätös Group structure 31 December 2023 Associated Units Subsidiaries companies Kojamo plc 10 1) 2 Parent companies of sub-groups Lumo Kodit Oy 355 34 Lumo Vuokratalot Oy 10 3 2) Lumo Asumisen Palvelut Oy 1 6 Kojamo Palvelut Oy 1 Total 377 44 ¹ ⁾ Includes the parent companies of the sub-groups and other subsidiaries listed ² ⁾ 1 of the associated company is subsidiary at Kojamo Group level Parent company Group Subsidiaries and joint arrangements holding % holding % Kojamo plc Kojamo Holding Oy Helsinki 100.00 100.00 Kojamo Palvelut Oy Helsinki 100.00 100.00 Lumo Asumisen Palvelut Oy Helsinki 100.00 100.00 Lumo Kodit Oy Helsinki 100.00 100.00 Lumo Vuokratalot Oy Helsinki 100.00 100.00 Lumohousing 11 Oy Helsinki 100.00 100.00 Lumohousing 12 Oy Helsinki 100.00 100.00 Lumohousing 2 Oy Helsinki 100.00 100.00 VVO Hoivakiinteistöt Oy Helsinki 100.00 100.00 Kotinyt Oy Helsinki 100.00 100.00 Parent company Group Subsidiaries and joint arrangements holding % holding % Lumo Kodit Oy As Oy Helsingin Leikosaarenpuisto Helsinki 98.64 98.64 As Oy Helsingin Mustalahdentie 1 Helsinki 100.00 100.00 As Oy Helsingin Vuopuisto Helsinki 98.71 98.71 As Oy Kuopion Havuketo Kuopio 100.00 100.00 As Oy Turun Puistokatu 12 Turku 100.00 100.00 As Oy Vantaan Junkkarinkaari 7 Vantaa 100.00 100.00 As. Oy Helsingin Haapaniemenkatu 11 Helsinki 100.00 100.00 As. Oy Kuopion Kaarenkulma Kuopio 100.00 100.00 As. Oy Malski 3, Lahti Lahti 100.00 100.00 Asunto Oy Espoon Ajurinkuja 1 Espoo 100.00 100.00 Asunto Oy Espoon Forstmestarinpiha 2 Espoo 100.00 100.00 Asunto Oy Espoon Henttaan Puistokatu 16 Espoo 100.00 100.00 Asunto Oy Espoon Henttaankaari A Espoo 100.00 100.00 Asunto Oy Espoon Jousenpuistonkatu 8 Espoo 100.00 100.00 Asunto Oy Espoon Kilonportti 3 Espoo 100.00 100.00 Asunto Oy Espoon Kirkkojärventie 10 C Espoo 100.00 100.00 Asunto Oy Espoon Kirkkojärventie 10 D Espoo 100.00 100.00 Asunto Oy Espoon Kivenlahdenkatu 2 Espoo 100.00 100.00 Asunto Oy Espoon Klariksentie 6 Espoo 100.00 100.00 Asunto Oy Espoon Koivu-Mankkaan tie 1 Espoo 100.00 100.00 Asunto Oy Espoon Korkoontie 6 Espoo 100.00 100.00 Asunto Oy Espoon Koronakatu 1 Espoo 100.00 100.00 Asunto Oy Espoon Kulovalkeantie 21 B Espoo 100.00 100.00 Asunto Oy Espoon Likusterikatu A Espoo 100.00 100.00 Board of Directors’ Report and Financial Statements 2023 77 Hallituksen toimintakertomus ja tilinpäätös Asunto Oy Espoon Linnustajankuja 2 Espoo 100.00 100.00 Asunto Oy Espoon Luoteisrinne 7 A-D Espoo 100.00 100.00 Asunto Oy Espoon Marinkallio 4 Espoo 100.00 100.00 Asunto Oy Espoon Marinkallio 6 Espoo 100.00 100.00 Asunto Oy Espoon Marinkallio 8 Espoo 100.00 100.00 Asunto Oy Espoon Nihtitorpankuja 1A Espoo 100.00 100.00 Asunto Oy Espoon Nihtitorpankuja 1D Espoo 100.00 100.00 Asunto Oy Espoon Nihtitorpankuja 3 Espoo 100.00 100.00 Asunto Oy Espoon Niittykatu 15 Espoo 100.00 100.00 Asunto Oy Espoon Niittykatu 8 Espoo 100.00 100.00 Asunto Oy Espoon Niittykummuntie 12 B Espoo 100.00 100.00 Asunto Oy Espoon Niittykummuntie 12 E Espoo 100.00 100.00 Asunto Oy Espoon Nöykkiönlaaksontie 7 Espoo 100.00 100.00 Asunto Oy Espoon Piispanristi 2 Espoo 100.00 100.00 Asunto Oy Espoon Rastasniityntie 1 A Espoo 100.00 100.00 Asunto Oy Espoon Rastasniityntie 1 B Espoo 100.00 100.00 Asunto Oy Espoon Reelinkikatu 2 Espoo 100.00 100.00 Asunto Oy Espoon Runoratsunkatu 11 Espoo 100.00 100.00 Asunto Oy Espoon Saunalahdenkatu 2 Espoo 100.00 100.00 Asunto Oy Espoon Servinkuja 3 Espoo 100.00 100.00 Asunto Oy Espoon Soukanrinne Espoo 100.00 100.00 Asunto Oy Espoon Suurpelto 44 Espoo 100.00 100.00 Asunto Oy Espoon Suurpelto 5 Espoo 100.00 100.00 Asunto Oy Espoon Tietäjäntie 3 Espoo 100.00 100.00 Asunto Oy Espoon Ulappakatu 1 Espoo 100.00 100.00 Asunto Oy Espoon Uuno Kailaan katu 4 Espoo 100.00 100.00 Asunto Oy Espoon Uuno Kailaan katu 5 Espoo 100.00 100.00 Asunto Oy Espoon Uuno Kailaan katu 6 Espoo 100.00 100.00 Asunto Oy Espoon Valakuja 8 Espoo 100.00 100.00 Asunto Oy Espoon Ylismäenkuja 14 Espoo 100.00 100.00 Asunto Oy Espoon Ylismäentie 12 A-B Espoo 100.00 100.00 Asunto Oy Espoon Ylismäentie 12 C-D Espoo 100.00 100.00 Asunto Oy Espoon Ylismäentie 12 E Espoo 100.00 100.00 Asunto Oy Espoon Ylismäentie 12 F Espoo 100.00 100.00 Asunto Oy Helsingin Annankatu 5 Helsinki 100.00 100.00 Asunto Oy Helsingin Bahamankatu 8 Helsinki 100.00 100.00 Asunto Oy Helsingin Bulevardi 31 Helsinki 100.00 100.00 Asunto Oy Helsingin Capellan puistotie 4 Helsinki 100.00 100.00 Asunto Oy Helsingin Eerik VII Helsinki 100.00 100.00 Asunto Oy Helsingin Fregatti Dygdenin kuja 5 Helsinki 100.00 100.00 Asunto Oy Helsingin Haapsalunkuja 4 Helsinki 100.00 100.00 Asunto Oy Helsingin Hela-aukio 4 Helsinki 100.00 100.00 Asunto Oy Helsingin Helatehtaankatu 3 Helsinki 100.00 100.00 Asunto Oy Helsingin Henrik Borgströmin tie 2 Helsinki 100.00 100.00 Asunto Oy Helsingin Hesperiankatu 18 Helsinki 100.00 100.00 Asunto Oy Helsingin Hilapellontie 2c Helsinki 100.00 100.00 Asunto Oy Helsingin Hilapellontie 2d Helsinki 100.00 100.00 Asunto Oy Helsingin Hopeatie 9 Helsinki 100.00 100.00 Asunto Oy Helsingin Höyrykatu 8 Helsinki 100.00 100.00 Asunto Oy Helsingin Iso Roobertinkatu 30 Helsinki 100.00 100.00 Asunto Oy Helsingin Juhana Herttuan tie 8 Helsinki 100.00 100.00 Asunto Oy Helsingin Junailijankuja 9a Helsinki 100.00 100.00 Asunto Oy Helsingin Jätkänkallio Helsinki 100.00 100.00 Asunto Oy Helsingin Kadetintie 6 Helsinki 100.00 100.00 Asunto Oy Helsingin Kahvipavunkuja 3 Helsinki 100.00 100.00 Board of Directors’ Report and Financial Statements 2023 78 Hallituksen toimintakertomus ja tilinpäätös Asunto Oy Helsingin Kahvipavunkuja 4 Helsinki 100.00 100.00 Asunto Oy Helsingin Kantelettarentie 15 Helsinki 100.00 100.00 Asunto Oy Helsingin Karavaanikuja 2 Helsinki 100.00 100.00 Asunto Oy Helsingin Karhulantie 13 Helsinki 100.00 100.00 Asunto Oy Helsingin Karibiankuja 4 Helsinki 100.00 100.00 Asunto Oy Helsingin Katariinankartano Helsinki 100.00 100.00 Asunto Oy Helsingin Katariinankoski Helsinki 100.00 100.00 Asunto Oy Helsingin Katontekijänkuja 1 Helsinki 100.00 100.00 Asunto Oy Helsingin Kauppakartanonkuja 3 Helsinki 100.00 100.00 Asunto Oy Helsingin Kaustisenpolku 3 Helsinki 100.00 100.00 Asunto Oy Helsingin Keinulaudantie 2a Helsinki 100.00 100.00 Asunto Oy Helsingin Keinulaudantie 2b Helsinki 100.00 100.00 Asunto Oy Helsingin Keinulaudantie 2c Helsinki 100.00 100.00 Asunto Oy Helsingin Keinutie 9d Helsinki 100.00 100.00 Asunto Oy Helsingin Kellosilta 8b Helsinki 100.00 100.00 Asunto Oy Helsingin Kivensilmänkuja 3 Helsinki 100.00 100.00 Asunto Oy Helsingin Klaavuntie 11 Helsinki 100.00 100.00 Asunto Oy Helsingin Koirasaarentie 23 Helsinki 100.00 100.00 Asunto Oy Helsingin Kontulantie 19 Helsinki 100.00 100.00 Asunto Oy Helsingin Koskikartano Helsinki 100.00 100.00 Asunto Oy Helsingin Kotkankatu 9 Helsinki 100.00 100.00 Asunto Oy Helsingin Kuuluttajankatu 2 Helsinki 100.00 100.00 Asunto Oy Helsingin Lapinmäentie 8 Helsinki 100.00 100.00 Asunto Oy Helsingin Lapinmäentie 10 Helsinki 100.00 100.00 Asunto Oy Helsingin Lauttasaarentie 27 Helsinki 100.00 100.00 Asunto Oy Helsingin Leikkikuja 2 Helsinki 100.00 100.00 Asunto Oy Helsingin Leonkatu 21 Helsinki 100.00 100.00 Asunto Oy Helsingin Liikkalankuja 4 Helsinki 100.00 100.00 Asunto Oy Helsingin Lumo One Helsinki 100.00 100.00 Asunto Oy Helsingin Luotsikatu 1a Helsinki 100.00 100.00 Asunto Oy Helsingin Lönnrotinkatu 30 Helsinki 100.00 100.00 Asunto Oy Helsingin Maasälväntie 5 ja 9 Helsinki 100.00 100.00 Asunto Oy Helsingin Madetojankuja 1b Helsinki 100.00 100.00 Asunto Oy Helsingin Marjatanportti Helsinki 100.00 100.00 Asunto Oy Helsingin Melkonkatu 12 B Helsinki 100.00 100.00 Asunto Oy Helsingin Messeniuksenkatu 1B Helsinki 100.00 100.00 Asunto Oy Helsingin Minervankatu 4 Espoo 100.00 100.00 Asunto Oy Helsingin Oulunkylän tori 3 Helsinki 100.00 100.00 Asunto Oy Helsingin Palmsenpolku 2 Helsinki 100.00 100.00 Asunto Oy Helsingin Papinpöydänkuja 3 Helsinki 100.00 100.00 Asunto Oy Helsingin Pertunpellontie 6 Helsinki 100.00 100.00 Asunto Oy Helsingin Pertunpellontie 8 Helsinki 100.00 100.00 Asunto Oy Helsingin Plazankuja 5 Helsinki 100.00 100.00 Asunto Oy Helsingin Posetiivari Helsinki 100.00 100.00 Asunto Oy Helsingin Punahilkantie 6 Helsinki 100.00 100.00 Asunto Oy Helsingin Punakiventie 13 Helsinki 100.00 100.00 Asunto Oy Helsingin Punakiventie 15 Helsinki 100.00 100.00 Asunto Oy Helsingin Pärnunkatu 4 Helsinki 100.00 100.00 Asunto Oy Helsingin Ratarinne Helsinki 100.00 100.00 Asunto Oy Helsingin Retkeilijänkatu 1 Helsinki 100.00 100.00 Asunto Oy Helsingin Ristipellontie 6 Helsinki 100.00 100.00 Asunto Oy Helsingin Ristiretkeläistenkatu 19 Helsinki 100.00 100.00 Asunto Oy Helsingin Risupadontie 6 Helsinki 100.00 100.00 Asunto Oy Helsingin Saariniemenkatu 6 Helsinki 100.00 100.00 Asunto Oy Helsingin Strömbergintie 4 E Helsinki 100.00 100.00 Board of Directors’ Report and Financial Statements 2023 79 Hallituksen toimintakertomus ja tilinpäätös Asunto Oy Helsingin Sörnäistenkatu 12 Helsinki 100.00 100.00 Asunto Oy Helsingin Tankomäenkatu 7 Helsinki 100.00 100.00 Asunto Oy Helsingin Tankomäenkatu 9 Helsinki 100.00 100.00 Asunto Oy Helsingin Tenderinlenkki 6 Helsinki 100.00 100.00 Asunto Oy Helsingin Tenderinlenkki 8 Helsinki 100.00 100.00 Asunto Oy Helsingin Tilketori 2 Helsinki 96.81 96.81 Asunto Oy Helsingin Tulisuontie 1 Helsinki 100.00 100.00 Asunto Oy Helsingin Tuulensuunkuja 3 Helsinki 100.00 100.00 Asunto Oy Helsingin Valanportti Helsinki 100.00 100.00 Asunto Oy Helsingin Vanha Helsingintie 20 Helsinki 100.00 100.00 Asunto Oy Helsingin Vanhaistentie 1 d Helsinki 100.00 100.00 Asunto Oy Helsingin Vinsentinaukio 4 Helsinki 100.00 100.00 Asunto Oy Helsingin Von Daehnin katu 8 Helsinki 100.00 100.00 Asunto Oy Helsingin Vuorenpeikontie 5 Helsinki 100.00 100.00 Asunto Oy Helsingin Välimerenkatu 8 Helsinki 100.00 100.00 Asunto Oy Hilapellontie 4 Helsinki 100.00 100.00 Asunto Oy Hyvinkään Astreankatu 27 Hyvinkää 100.00 100.00 Asunto Oy Hyvinkään Merino Hyvinkää 100.00 100.00 Asunto Oy Hyvinkään Mohair Hyvinkää 100.00 100.00 Asunto Oy Hyvinkään Värimestarinkaari 3 Hyvinkää 100.00 100.00 Asunto Oy Hämeenlinnan Aurinkokatu 10 Hämeenlinna 100.00 100.00 Asunto Oy Hämeenlinnan Hallituskatu 14 Hämeenlinna 100.00 100.00 Asunto Oy Hämeenlinnan Hilpi Kummilantie 16 Hämeenlinna 100.00 100.00 Asunto Oy Hämeenlinnan Kajakulma Hämeenlinna 73.97 73.97 Asunto Oy Hämeenlinnan Keilakatu 4 Hämeenlinna 100.00 100.00 Asunto Oy Hämeenlinnan Kummilantie 6 Hämeenlinna 100.00 100.00 Asunto Oy Hämeenlinnan Linnaniemenkatu 1 Hämeenlinna 100.00 100.00 Asunto Oy Hämeenlinnan Linnankatu 3b Hämeenlinna 100.00 100.00 Asunto Oy Hämeenlinnan Pikkujärventie 9 Hämeenlinna 100.00 100.00 Asunto Oy Hämeenlinnan Uusi-Jukola Hämeenlinna 100.00 100.00 Asunto Oy Hämeentie 48 Helsinki 100.00 100.00 Asunto Oy Jyväskylän Heinämutka 5 Jyväskylä 100.00 100.00 Asunto Oy Jyväskylän Honkaharjuntie 14b Jyväskylä 100.00 100.00 Asunto Oy Jyväskylän Jontikka 4 Jyväskylä 100.00 100.00 Asunto Oy Jyväskylän Kelokatu 4 Jyväskylä 100.00 100.00 Asunto Oy Jyväskylän Kerkkäkatu 1 Jyväskylä 100.00 100.00 Asunto Oy Jyväskylän Kerkkäkatu 3 Jyväskylä 100.00 100.00 Asunto Oy Jyväskylän Kerkkäkatu 4 Jyväskylä 100.00 100.00 Asunto Oy Jyväskylän Keskisentie 1 Jyväskylä 100.00 100.00 Asunto Oy Jyväskylän Kilpisenkatu 14 Jyväskylä 100.00 100.00 Asunto Oy Jyväskylän Kyllikinkatu 5 Jyväskylä 100.00 100.00 Asunto Oy Jyväskylän Mannisenmäentie 6-8 Jyväskylä 100.00 100.00 Asunto Oy Jyväskylän Mannisenrinne 2 Jyväskylä 100.00 100.00 Asunto Oy Jyväskylän Runkotie 3b Jyväskylä 100.00 100.00 Asunto Oy Jyväskylän Runkotie 5 C Jyväskylä 100.00 100.00 Asunto Oy Jyväskylän Tellervonkatu 8 Jyväskylä 98.67 98.67 Asunto Oy Jyväskylän Tervalankatu 6 Jyväskylä 100.00 100.00 Asunto Oy Jyväskylän Tiilitehtaantie 44 Jyväskylä 100.00 100.00 Asunto Oy Jyväskylän Tiilitehtaantie 46 Jyväskylä 100.00 100.00 Asunto Oy Jyväskylän Väinönkatu 15 Jyväskylä 100.00 100.00 Asunto Oy Jyväskylän Yliopistonkatu 40b Jyväskylä 100.00 100.00 Asunto Oy Järvenpään Antoninkuja 3 Järvenpää 100.00 100.00 Asunto Oy Järvenpään Metallimiehenkuja 2 Järvenpää 100.00 100.00 Asunto oy Järvenpään Pajalantie 23 F Järvenpää 100.00 100.00 Asunto Oy Järvenpään Reki-Valko Järvenpää 100.00 100.00 Board of Directors’ Report and Financial Statements 2023 80 Hallituksen toimintakertomus ja tilinpäätös Asunto Oy Järvenpään Rekivatro Järvenpää 100.00 100.00 Asunto Oy Järvenpään Sibeliuksenkatu 27 Järvenpää 100.00 100.00 Asunto Oy Kalasääksentie 6 Espoo 100.00 100.00 Asunto Oy Kauniaisten Asematie 10 Kauniainen 100.00 100.00 Asunto Oy Kauniaisten Bredantie 8 Kauniainen 100.00 100.00 Asunto Oy Kauniaisten Kavallinterassit Kauniainen 100.00 100.00 Asunto Oy Kauniaisten Thurmaninpuistotie 2 Kauniainen 100.00 100.00 Asunto Oy Kaustisenpolku 5 Helsinki 100.00 100.00 Asunto Oy Keravan Eerontie 3 Kerava 100.00 100.00 Asunto Oy Keravan Palopolku 3 Kerava 100.00 100.00 Asunto Oy Keravan Santaniitynkatu 17 Kerava 100.00 100.00 Asunto Oy Keravan Tapulikatu 30 Kerava 100.00 100.00 Asunto Oy Keravan Tapulitori 1 Kerava 100.00 100.00 Asunto Oy Keravan Tapulitori 2 Kerava 100.00 100.00 Asunto Oy Kirkkonummen Vernerinkuja 5 Kirkkonummi 100.00 100.00 Asunto Oy Kivivuorenkuja 1 Vantaa 100.00 100.00 Asunto Oy Kivivuorenkuja 3 Vantaa 100.00 100.00 Asunto Oy Konalantie 14 Helsinki 100.00 100.00 Asunto Oy Kuopion Haapaniemenkatu 13 Kuopio 100.00 100.00 Asunto Oy Kuopion Itkonniemenkatu 4b Kuopio 100.00 100.00 Asunto Oy Kuopion Kelkkailijantie 4 Kuopio 100.00 100.00 Asunto Oy Kuopion Sompatie 7 Kuopio 100.00 100.00 Asunto Oy Kuopion Sompatie 9 Kuopio 100.00 100.00 Asunto Oy Kuopion Tulliportinkatu 30 Kuopio 100.00 100.00 Asunto Oy Kuopion Vilhelmiina Kuopio 100.00 100.00 Asunto Oy Kuopion Vuorikatu 22 Kuopio 100.00 100.00 Asunto Oy Lahden Kauppakatu 38 Lahti 100.00 100.00 Asunto Oy Lahden Radanpää 6 Lahti 100.00 100.00 Asunto Oy Lahden Saimaankatu 60 a Lahti 100.00 100.00 Asunto Oy Lahden Sorvarinkatu 5 Lahti 100.00 100.00 Asunto Oy Lahden Vanhanladonkatu 2 Lahti 100.00 100.00 Asunto Oy Lahden Vihdinkatu 4 Lahti 100.00 100.00 Asunto Oy Lahden Vihdinkatu 6 Lahti 100.00 100.00 Asunto Oy Lappeenrannan Gallerianpolku Lappeenranta 100.00 100.00 Asunto Oy Lappeenrannan Koulukatu 13 Lappeenranta 100.00 100.00 Asunto Oy Lappeenrannan Sammonkatu 3-5 B Lappeenranta 100.00 100.00 Asunto Oy Lappeenrannan Upseeritie 12 Lappeenranta 100.00 100.00 Asunto Oy Lintukallionrinne 1 Vantaa 100.00 100.00 Asunto Oy Mäntsälän Hemmintie 2 Mäntsälä 100.00 100.00 Asunto Oy Mäntsälän Karhulantie 2 Mäntsälä 100.00 100.00 Asunto Oy Naantalin Palomäenkatu 5 Naantali 100.00 100.00 Asunto Oy Nurmijärven Mahlamäentie 16 Nurmijärvi 100.00 100.00 Asunto Oy Nurmijärven Ratsutilantie 2 Nurmijärvi 100.00 100.00 Asunto Oy Oulun Kitimenpolku 21 Oulu 100.00 100.00 Asunto Oy Oulun Koskelantie 19 Oulu 100.00 100.00 Asunto Oy Oulun Kurkelankuja 1 B Oulu 100.00 100.00 Asunto Oy Oulun Peltolankaari 1 Oulu 100.00 100.00 Asunto Oy Oulun Revonkuja 1 Oulu 100.00 100.00 Asunto Oy Oulun Tervahanhi 1 Oulu 99.10 99.10 Asunto Oy Oulun Tietolinja 11 Oulu 100.00 100.00 Asunto Oy Pirtinketosato Kuopio 63.55 63.55 Asunto Oy Pohtolan Kynnys Espoo 100.00 100.00 Asunto Oy Pohtolan Kytö Espoo 100.00 100.00 Asunto Oy Rientolanhovi Tampere 100.00 100.00 Asunto Oy Rovaniemen Koskikatu 9 Rovaniemi 100.00 100.00 Board of Directors’ Report and Financial Statements 2023 81 Hallituksen toimintakertomus ja tilinpäätös Asunto Oy Rovaniemen Tukkivartio Rovaniemi 100.00 100.00 Asunto Oy Salamankulma Turku 62.99 62.99 Asunto Oy Tampereen Keskisenkatu 4 Tampere 100.00 100.00 Asunto Oy Tampereen Keskisenkatu 8 A Tampere 100.00 100.00 Asunto Oy Tampereen Koipitaipaleenkatu 9 Tampere 100.00 100.00 Asunto Oy Tampereen Lentokonetehtaankatu 5 Tampere 100.00 100.00 Asunto Oy Tampereen Meesakatu 2 Tampere 100.00 100.00 Asunto Oy Tampereen Myrskynkatu 4 Tampere 100.00 100.00 Asunto Oy Tampereen Nuolialantie 44 Tampere 100.00 100.00 Asunto Oy Tampereen Näsilinnankatu 40 Tampere 100.00 100.00 Asunto Oy Tampereen Pohtolan Pohja Tampere 100.00 100.00 Asunto Oy Tampereen Satakunnankatu 21 Tampere 100.00 100.00 Asunto Oy Tampereen Tieteenkatu 3 Tampere 100.00 100.00 Asunto Oy Tampereen Tuomiokirkonkatu 32 Tampere 100.00 100.00 Asunto Oy Tampereen Tutkijankatu 7 Tampere 100.00 100.00 Asunto Oy Toppilan Tuulentie 2 Oulu 100.00 100.00 Asunto Oy Tuiran Komuntalo Oulu 100.00 100.00 Asunto Oy Turun Ahterikatu 12 Turku 100.00 100.00 Asunto Oy Turun Aurinkorinne Turku 81.50 81.50 Asunto Oy Turun Hippoksentie 31 G Turku 100.00 100.00 Asunto Oy Turun Hippoksentie 33 A Turku 100.00 100.00 Asunto Oy Turun Kotkankatu 2 Turku 100.00 100.00 Asunto Oy Turun Laivurinkatu 4 Turku 100.00 100.00 Asunto Oy Turun Lemminkäisenkatu 17 Turku 100.00 100.00 Asunto Oy Turun Reelinkikatu 7 Turku 100.00 100.00 Asunto Oy Turun Riitasuonkatu 28 Turku 100.00 100.00 Asunto Oy Turun Työnjohtajankatu 1 Turku 100.00 100.00 Asunto Oy Turun Vänrikinkatu 2 Turku 100.00 100.00 Asunto Oy Tuusulan Bostoninkaari 2 Tuusula 100.00 100.00 Asunto Oy Tuusulan Kievarinkaari 4 Tuusula 100.00 100.00 Asunto Oy Vantaan Antaksentie 3 Vantaa 100.00 100.00 Asunto Oy Vantaan Arinatie 10 Vantaa 100.00 100.00 Asunto Oy Vantaan Elmontie 11 Vantaa 100.00 100.00 Asunto Oy Vantaan Esikkotie 9 Vantaa 100.00 100.00 Asunto Oy Vantaan Haltiantie 12 Vantaa 100.00 100.00 Asunto Oy Vantaan Haltiantie 14 Vantaa 100.00 100.00 Asunto Oy Vantaan Hiiritornit Vantaa 100.00 100.00 Asunto Oy Vantaan Kaivokselantie 5 b Vantaa 100.00 100.00 Asunto Oy Vantaan Kaivokselantie 5 f Vantaa 100.00 100.00 Asunto Oy Vantaan Keikarinkuja 3 Vantaa 100.00 100.00 Asunto Oy Vantaan Kielotie 34 Vantaa 100.00 100.00 Asunto Oy Vantaan Kilterinaukio 4 Vantaa 100.00 100.00 Asunto Oy Vantaan Kilterinkaari 2 Vantaa 100.00 100.00 Asunto Oy Vantaan Krassitie 8 Vantaa 98.10 98.10 Asunto Oy Vantaan Laajaniityntie 2a Vantaa 100.00 100.00 Asunto Oy Vantaan Lauri Korpisen katu 10 Vantaa 100.00 100.00 Asunto Oy Vantaan Lauri Korpisen katu 8 Vantaa 100.00 100.00 Asunto Oy Vantaan Lautamiehentie 11 Vantaa 100.00 100.00 Asunto Oy Vantaan Lautamiehentie 9 Vantaa 100.00 100.00 Asunto Oy Vantaan Lehtikallio 4 Vantaa 100.00 100.00 Asunto Oy Vantaan Leinelänkaari 13 Vantaa 100.00 100.00 Asunto Oy Vantaan Leinelänkaari 14 Vantaa 100.00 100.00 Asunto Oy Vantaan Leineläntie 10 Vantaa 100.00 100.00 Asunto Oy Vantaan Leineläntie 3 Vantaa 100.00 100.00 Asunto Oy Vantaan Liesikuja 8 Vantaa 100.00 100.00 Board of Directors’ Report and Financial Statements 2023 82 Hallituksen toimintakertomus ja tilinpäätös Asunto Oy Vantaan Martinlaaksonpolku 4 Vantaa 100.00 100.00 Asunto Oy Vantaan Neilikkapolku Vantaa 100.00 100.00 Asunto Oy Vantaan Pyhtäänkorvenkuja 4 ja 6 Vantaa 100.00 100.00 Asunto Oy Vantaan Pyhtäänkorventie 15f Vantaa 100.00 100.00 Asunto Oy Vantaan Pyhtäänkorventie 25 Vantaa 100.00 100.00 Asunto Oy Vantaan Pähkinämetsä Vantaa 100.00 100.00 Asunto Oy Vantaan Pähkinäpolku Vantaa 100.00 100.00 Asunto Oy Vantaan Pähkinärinteentie 41 Vantaa 100.00 100.00 Asunto Oy Vantaan Ruukkupolku 14 Vantaa 100.00 100.00 Asunto Oy Vantaan Tammistonvuori Vantaa 100.00 100.00 Asunto Oy Vantaan Tarhurintie 6 Vantaa 100.00 100.00 Asunto Oy Vantaan Teeritie 2 Vantaa 100.00 100.00 Asunto Oy Verkkotie 3 Hämeenlinna 100.00 100.00 Asunto Oy Vuorikummuntie 9 Helsinki 100.00 100.00 Asunto Oy Vähäntuvantie 6 Helsinki 100.00 100.00 Katajapysäköinti Oy Tampere 50.93 50.93 Kiint. Oy Taivaskero 2 Vantaa 100.00 100.00 Kiinteistö Oy Espoon Gräsantörmä 1 C ja D Espoo 100.00 100.00 Kiinteistö Oy Helsingin Abrahaminkatu 1 Helsinki 100.00 100.00 Kiinteistö Oy Helsingin Agricolankatu 1 Helsinki 100.00 100.00 Kiinteistö Oy Helsingin Albertinkatu 40 Helsinki 100.00 100.00 Kiinteistö Oy Helsingin Eerikinkatu 38 Helsinki 100.00 100.00 Kiinteistö Oy Helsingin Kalevankatu 39a Helsinki 100.00 100.00 Kiinteistö Oy Helsingin Kalevankatu 39b Helsinki 100.00 100.00 Kiinteistö Oy Helsingin Kalevankatu 39c Helsinki 100.00 100.00 Kiinteistö Oy Helsingin Kalevankatu 41 Helsinki 100.00 100.00 Kiinteistö Oy Helsingin Kalevankatu 43 Helsinki 100.00 100.00 Kiinteistö Oy Helsingin Onnentie 18 Helsinki 100.00 100.00 Kiinteistö Oy Helsingin Sofianlehdonkatu 5 Helsinki 100.00 100.00 Kiinteistö Oy Helsingin Somerontie 14 Helsinki 100.00 100.00 Kiinteistö Oy Helsingin Tukholmankatu 10 Helsinki 100.00 100.00 Kiinteistö Oy Kotitontuntie 1 Espoo 100.00 100.00 Kiinteistö Oy Lintulahdenpenger Helsinki 100.00 100.00 Kiinteistö Oy Malminhaka Tampere 90.00 90.00 Kiinteistö Oy Mannerheimintie 168 Helsinki 82.61 82.61 Kiinteistö Oy Saarensahra Tampere 100.00 100.00 Kiinteistö Oy Siilinjärven Kirkkorinne Siilinjärvi 100.00 100.00 Kiinteistö Oy Tampereen Kyllikinkatu 15 Tampere 100.00 100.00 Kiinteistö Oy Tuureporin Liiketalo Turku 100.00 100.00 Kiinteistö Oy Uuno Kailaan kadun Pysäköinti Espoo 100.00 100.00 Kiinteistö Oy Vantaan Karhunkierros 1 C Vantaa 86.58 86.58 Kiinteistö Oy Vantaan Pyhtäänpolku Vantaa 100.00 100.00 Kiinteistö Oy Ylä-Malmintori Helsinki 100.00 100.00 Koy Espoon Ylismäentie 12 Pysäköinti Espoo 100.00 100.00 Lumo Espoon Ylismäentie Oy Helsinki 100.00 100.00 Lumo Hankeyhtiö 2 Oy Helsinki 100.00 100.00 Lumo Holding 50 Oy Helsinki 100.00 100.00 Lumohousing 13 Oy Helsinki 100.00 100.00 Lumohousing 14 Oy Helsinki 100.00 100.00 Lumohousing 15 Oy Helsinki 100.00 100.00 Lumohousing 16 Oy Helsinki 100.00 100.00 Lumohousing 17 Oy Helsinki 100.00 100.00 Lumohousing 18 Oy Helsinki 100.00 100.00 Lumohousing 19 Oy Helsinki 100.00 100.00 Ylismäentie Pysäköinti Oy Helsinki 100.00 100.00 Board of Directors’ Report and Financial Statements 2023 83 Hallituksen toimintakertomus ja tilinpäätös Asunto Oy Helsingin Kantelettarentie 15 osakkuusyhtiö: Kiinteistö Oy Sävelkorttelin Parkkihalli Helsinki 31.19 65.35 Asunto Oy Helsingin Vanhaistentie 1 d osakkuusyhtiö: Kiinteistö Oy Sävelkorttelin Parkkihalli Helsinki 34.16 65.35 Subsidiaries and joint arrangements Parent company Group holding % holding % Lumo Vuokratalot Oy Asunto Oy Espoon Asemakuja 1 Espoo 100.00 100.00 Asunto Oy Espoon Piilipuuntie 25 Espoo 100.00 100.00 Asunto Oy Espoon Piilipuuntie 31 Espoo 100.00 100.00 Asunto Oy Helsingin Vaakamestarinpolku 2 Helsinki 100.00 100.00 Asunto Oy Kuopion Niemenkatu 5 Kuopio 100.00 100.00 Asunto Oy Oulun Jalohaukantie 1 Oulu 100.00 100.00 Asunto Oy Oulun Tuiranmaja Oulu 100.00 100.00 Kiinteistö Oy Nummenperttu Hämeenlinna 100.00 100.00 Kiinteistö Oy Vehnäpelto Vantaa 100.00 100.00 A subsidiary of Kiinteistö Oy Vehnäpelto Kiinteistö Oy Viljapelto Vantaa 55.56 76.67 Parent company Group Subsidiaries and joint arrangements holding % holding % Kojamo Palvelut Oy Piispanristin Pysäköinti Oy Espoo 100.00 100.00 Parent company Group Subsidiaries and joint arrangements holding % holding % Kojamo Palvelut Oy Kiinteistö Oy Mannerheimintie 168a Helsinki 100.00 100.00 Parent company Group Associated companies and joint arrangements holding % holding % Kojamo plc Asunto Oy Nilsiän Ski Nilsiä 28.33 28.33 SV-Asunnot Oy Helsinki 50.00 50.00 Lumo Asumisen Palvelut Oy Asemamiehenkadun Pysäköinti Oy Helsinki 48.94 48.94 Haltian Pysäköinti Oy Vantaa 39.25 39.25 Kiinteistö Oy Espoon Pegasos Pysäköinti Espoo 27.23 27.23 Kiinteistö Oy Nihtitorpankujan Parkki Espoo 34.38 34.38 Kiinteistö Oy Säterinkallion Pysäköinti Espoo 46.41 46.41 Louhen Pysäköinti Oy Helsinki 32.00 32.00 Lumo Kodit Oy Asunto Oy Espoon Otsonkulma Espoo 28.98 28.98 Hatanpäänhovin Pysäköinti Oy Tampere 41.88 41.88 Kiinteistö Oy Bäckisåker Espoo 50.00 50.00 Kiinteistö Oy Jyväskylän Torikulma Jyväskylä 42.63 42.63 Kiinteistö Oy Mannerheimintie 40 Helsinki 29.42 29.42 Kiinteistö Oy Myllytullin Autotalo Oulu 24.39 24.39 Kiinteistö Oy Oulun Tullivahdin Parkki Oulu 33.60 33.60 Kiinteistö Oy Pohjois-Suurpelto Espoo 50.00 50.00 Kiinteistö Oy Tampereen Tieteen Parkki Tampere 41.71 41.71 Lehtolantien Pysäköinti Oy Riihimäki 22.60 22.60 Leinelän Kehitys Oy Vantaa 20.00 20.00 Lintulammenkadun Pysäköintilaitos oy Kerava 39.19 39.19 Marin autopaikat Oy Espoo 21.00 21.00 Mummunkujan pysäköinti Oy Tampere 26.51 26.51 Board of Directors’ Report and Financial Statements 2023 84 Hallituksen toimintakertomus ja tilinpäätös Paavolan Parkki Oy Lahti 24.93 32.98 Pihlajapysäköinti Oy Tampere 30.56 30.56 Ristikedonkadun Lämpö Oy Salo 34.40 34.40 Ruukinpuiston Pysäköinti Oy Kerava 23.49 23.49 Ruukuntekijäntien paikoitus Oy Vantaa 26.24 26.24 SKIPA Kiinteistöpalvelut Oy Espoo 20.63 20.63 Suurpellon Kehitys Oy Espoo 50.00 50.00 Virvatulentien Pysäköinti Oy Helsinki 25.15 25.15 Miilun alueen huolto Oy Salo 28.57 28.57 Asunto Oy Vantaan Lehtikallio 4: Kiinteistö Oy Lehtikallion pysäköinti Vantaa 39.84 39.84 Asunto Oy Järvenpään Sibeliuksenkatu 27: Kiinteistö Oy Järvenpään Tupalantalli Järvenpää 33.51 33.51 Asunto Oy Vantaan Leinelänkaari 13: Leinelänkaaren Pysäköinti Oy Vantaa 21.63 21.63 Asunto Oy Oulun Revonkuja 1: Kiinteistö Oy Revonparkki Oulu 20.37 20.37 Asunto Oy Tampereen Keskisenkatu 4: Kiinteistö Oy Tampereen Seponparkki Tampere 29.91 45.98 Asunto Oy Vantaan Arinatie 10: Kiinteistö Oy Arinaparkki Vantaa Vantaa 25.59 25.59 Asunto Oy Lahden Radanpää 6: Asemantaustan Pysäköinti Oy Lahti 39.76 39.76 Asunto Oy Espoon Ajurinkuja 1: Kiinteistö Oy Valliparkki Espoo 31.31 31.31 Asunto Oy Vantaan Lautamiehentie 9: Sandbackan Autopaikat Oy Vantaa 24.62 44.23 Asunto Oy Espoon Forstmestarinpiha 2: Kiinteistö Oy Espoon Lehto Espoo 25.00 25.00 Asunto Oy Vantaan Kaivokselantie 5 b: Kiinteistö Oy Vantaan Pumppupuiston Parkki Vantaa 11.45 24.20 Asunto Oy Vantaan Kaivokselantie 5 f: Kiinteistö Oy Vantaan Pumppupuiston Parkki Vantaa 12.75 24.20 Lumo Vuokratalot Oy Asunto Oy Viljapelto Vantaa 21.11 76.67 Kiinteistö Oy Keinulaudantie 4 Helsinki 41.62 41.62 Pajalan Parkki Oy Järvenpää 31.44 44.06 7.4 Effects of Russia’s war of aggression in Ukraine on Kojamo The continuation of Russia's war of aggression is still reflected in the recovery of the world economy. The development of the Finnish economy was weak last year. Energy prices, which had risen sharply due to the war, fell during the year, but in general, inflation continued to be high. The rise in prices af- fected Kojamo's maintenance costs, especially in the begin- ning of the year regarding heating costs and electricity prices. 7.5 Events after the financial year In January 2024, Kojamo plc announced as a stock exchange release that Kojamo plc issued EUR 200 million unsecured green notes as a private placement. The new notes were is- sued under the company’s EMTN programme as an increase to the company’s notes maturing on 28 May 2029. The pro- ceeds of the issue will be used for the refinancing of projects in accordance with the company’s Green Finance Framework. Board of Directors’ Report and Financial Statements 2023 85 Hallituksen toimintakertomus ja tilinpäätös Key figures, the formulas used in their calculation, and reconciliation calcula- tions in accordance with ESMA guidelines Formula 2023 2022 2021 2020 2019 Total revenue, M€ 442.2 413.3 391.7 383.9 375.3 Net rental income, M€ 1 297.2 280.1 262.3 257.6 247.3 Net rental income margin, % 2 67.2 67.8 67.0 67.1 65.9 Profit/loss before taxes, M€ 3 -112.3 -499.8 1,278.9 391.2 1,031.3 EBITDA, M€ 4 -39.9 -441.3 1,334.8 447.6 1,083.1 EBITDA margin, % 5 -9.0 -106.8 340.8 116.6 288.6 Adjusted EBITDA, M€ 6 255.1 240.4 228.5 222.6 210.3 Adjusted EBITDA margin, % 7 57.7 58.2 58.3 58.0 56.0 Funds From Operations (FFO), M€ ¹ ⁾ 8 167.2 160.7 153.1 151.4 140.7 FFO margin, % 9 37.8 38.9 39.1 39.5 37.5 Funds From Operations (FFO) per share, € 10 0.68 0.65 0.62 0.61 0.57 FFO excluding non-recurring costs, M€ 11 167.2 160.7 153.1 151.4 140.7 Adjusted Funds From Operations (AFFO), M€ 12 140.5 138.2 141.1 124.3 110.0 Investment properties, M€ ² ⁾ 8,038.8 8,150.2 8,327.5 6,863.1 6,260.8 Financial occupancy rate, % 26 93.0 92.0 93.9 96.4 97.2 Interest-bearing liabilities, M€ 13 3,600.4 3,678.2 3,334.5 3,053.3 2,674.2 Return on equity, % (ROE) 14 -2.4 -9.9 27.0 9.8 30.3 Return on investment, % (ROI) 15 -0.4 -5.7 19.2 7.4 20.5 Equity ratio, % 16 44.5 45.3 49.0 45.6 46.9 Loan to Value (LTV), % ³ ⁾ 17 44.6 43.7 37.7 41.4 40.5 Unencumbered asset ratio, % 18 74.7 87.1 86.3 79.4 69.8 Coverage ratio 19 3.6 3.8 3.9 4.1 4.2 Solvency ratio 20 0.44 0.42 0.36 0.39 0.39 Secured solvency ratio 21 0.10 0.09 0.09 0.14 0.20 Earnings per share, € -0.36 -1.62 4.14 1.27 3.34 Equity per share, € 14.67 15.55 17.25 13.39 12.51 Dividend/share, € ⁴ ⁾ - 0.39 0.38 0.37 0.34 Dividend/earnings, % 22 - - 9.2 29.1 10.2 Price/Earnings ratio (P/E) 23 - - 5.1 14.3 4.9 Effective dividend yield, % 24 - 2.8 1.8 2.0 2.1 Gross investments, M€ 25 190.7 501.6 356.9 371.2 259.9 Average number of personnel 315 316 321 315 305 ¹ ⁾ The formula used in the calculation was changed 2021 regarding current taxes from disposals. The comparison figures for 2020 have been adjusted to reflect the current calculation method ² ⁾ Including Non-current assets held for sale ³ ⁾ Excluding Non-current assets held for sale ⁴ ⁾ 2023: the Board of Directors proposes to the Annual General Meeting that no dividend be paid for 2023 Alternative Performance Measures Kojamo presents Alternative Performance Measures to illus- trate the financial development of its business operations and improve comparability between reporting periods. The Alterna- tive Performance Measures, i.e. performance measures that are not based on financial reporting standards, provide signifi- cant additional information for the management, investors, an- alysts and other parties. The Alternative Performance Measures should not be considered substitutes for IFRS per- formance measures. Board of Directors’ Report and Financial Statements 2023 86 Hallituksen toimintakertomus ja tilinpäätös Formulas used in the calculation of the key figures Alternative Performance Measures specified in accordance with ESMA Guidelines 1) Net rental income = Total revenue - Maintenance expenses - Repair expenses Net rental income measures the profitability of the Group’s rental business after the deduction of maintenance and repair costs. 2) Net rental income = Net rental income x 100 margin, % Total revenue This figure reflects the ratio between net rental income and total revenue. Net rental income - Administrative expenses + Other operating income - Other operating 3) Profit/loss before taxes = expenses +/- Profit/loss on sales of investment properties +/- Profit/loss on sales of trading properties +/- Profit/loss on fair value of investment properties - Depreciation, amortisation and impairment losses +/- Financial income and expenses +/- Share of result from associated companies Profit/loss before taxes measures profitability after operative costs and financial expenses. Profit/loss for the period + Depreciation, amortisation and impairment losses -/+ Financial 4) EBITDA = income and expenses -/+ Share of result from associated companies + Current tax expense + Change in deferred taxes EBITDA measures operative profitability before financial expenses, taxes and depreciation. 5) EBITDA = EBITDA x 100 margin, % Total revenue EBITDA margin discloses EBITDA in relation to net sales. Profit/loss for the period + Depreciation, amortisation and impairment losses -/+ Profit/loss 6) Adjusted = on sales of investment properties -/+ Profit/loss on sales of trading properties -/+ Profit/loss EBITDA on sales of other non-current assets -/+ Profit/loss on fair value of investment properties for the period -/+ Financial income and expenses -/+ Share of result from associated companies+ Current tax expense + Change in deferred taxes Adjusted EBITDA measures the profitability of the Group’s underlying rental operations excluding gains/losses on sale of properties and unrealised value changes of investment properties. 7) Adjusted EBITDA = Adjusted EBITDA x 100 margin, % Total revenue Adjusted EBITDA margin discloses adjusted EBITDA in relation to total revenue. 8) Funds From = Adjusted EBITDA - Adjusted net interest charges - Current tax expense +/- Current Operations (FFO) taxes from disposals FFO measures cash flow before change in net working capital. The calculation of this APM takes into account financial expenses and current taxes but excludes items not directly connected to rental operations, such as unrealised value changes. Board of Directors’ Report and Financial Statements 2023 87 Hallituksen toimintakertomus ja tilinpäätös 9) FFO margin, % = FFO x 100 Total revenue FFO margin discloses FFO in relation to total revenue. 10) FFO per share = FFO Weighted average number of shares outstanding during the financial period FFO per share illustrates FFO for an individual share. 11) FFO excluding = FFO + non-recurring costs non-recurring costs FFO measures cash flow before change in net working capital. The calculation of this APM takes into account financial expenses and current taxes but excludes items not directly connected to rental operations, such as unrealised value changes and non-recurring costs. 12) Adjusted FFO (AFFO) = FFO - Modernisation investments AFFO measures cash flow before change in net working capital, adjusted for modernisation investments. The calculation of this APM takes into account modernisation investments, financial expenses and current taxes but excludes items not directly connected to rental operations, such as unrealised value changes. 13) Interest-bearing liabilities = Non-current loans and borrowings + Current loans and borrowings Interest-bearing liabilities measures the Group’s total debt. 14) Return on = Profit for the period (annualised) x 100 equity, % (ROE) Total equity, average during the period ROE measures the financial result in relation to equity. This APM illustrates Kojamo’s ability to generate a return for the shareholders. 15) Return on = (Profit before taxes + Interests and other financial expenses) (annualised) x 100 investment, % (ROI) (Total assets - Non-interest-bearing liabilities), average during the period ROI measures the financial result in relation to invested capital. This APM illustrates Kojamo’s ability to generate a return on the invested funds. 16) Equity ratio, % = Total equity x 100 Balance sheet total - Advances received Equity to assets is an APM for balance sheet structure that discloses the ratio of equity to total capital. This APM illustrates the Group’s financing structure. 17) Loan to Value (LTV), % = Interest-bearing liabilities - Cash and cash equivalents x 100 Investment properties Loan to value discloses the ratio of net debt to investment properties. This APM illustrates the Group’s indebtedness. 18) Unencumbered asset = Unencumbered assets x 100 ratio, % Assets total This APM illustrates the amount of unencumbered assets relative to total assets. Board of Directors’ Report and Financial Statements 2023 88 Hallituksen toimintakertomus ja tilinpäätös 19) Coverage ratio = Adjusted EBITDA, rolling 12 months Adjusted net financial expenses, rolling 12 months The ratio between EBITDA and net financial expenses. This APM illustrates the Group’s ability to service its debts. 20) Solvency ratio = Interest-bearing debt - Cash and cash equivalents Assets total The solvency ratio illustrates the ratio of net debt to total assets. For this APM, interest-bearing debt includes interest-bearing liabilities, interest-bearing debt related to non-current assets held for sale and transaction prices due after more than 90 days. 21) Secured solvency ratio = Secured interest-bearing liabilities Assets total This APM illustrates the ratio of secured loans to total assets 22) Dividend/earnings, % = Dividend per share x 100 Earnings per share Dividend/earnings measures the ratio of dividends to earnings. This APM illustrates how large a proportion of its earnings the Group distributes to its shareholders. 23) Price/Earnings ratio = Closing price of the share (P/E) Earnings per share The P/E ratio illustrates the ratio between the share price and earnings per share. This APM illustrates the share’s payback period based on the closing price and current earnings. 24) Effective = Dividend per share x 100 dividend yield, % Closing price of the share Effective dividend yield illustrates the ratio between earnings per share and the share price. 25) Gross investments = Acquisition and development of investment properties + Modernisation investments + Capitalised borrowing costs This APM illustrates total investments including acquisitions, development investments, modernisation investments and capitalised interest. Other performance measures 26) Financial = Rental income x 100 occupancy rate, % Potential rental income at full occupancy Board of Directors’ Report and Financial Statements 2023 89 Hallituksen toimintakertomus ja tilinpäätös Reconciliation of key indicators M€ 2023 2022 2021 2020 2019 Profit/loss for the period -89.0 -399.8 1,023.4 312.9 825.2 Depreciation, amortisation and impairment 1.3 1.2 1.2 1.3 1.1 Profit/loss on sales of investment properties -0.2 -0.2 -0.3 0.7 -0.1 Profit/loss on sales of trading properties - 0.0 - - -0.2 Profit/loss on sales of other non-current assets -0.2 0.0 -0.3 - 0.0 Profit/loss on fair value of investment properties 295.4 682.0 -1,105.7 -225.8 -872.4 Financial income -13.5 -9.6 -4.8 -1.8 -2.6 Financial expenses 84.8 67.0 59.7 57.0 53.4 Share of result from associated companies -0.1 -0.1 -0.1 -0.2 -0.2 Current tax expense 16.5 17.3 18.8 16.9 19.9 Change in deferred taxes -39.8 -117.2 236.7 61.5 186.2 Adjusted EBITDA 255.1 240.4 228.5 222.6 210.3 Financial income and expenses -71.3 -57.4 -54.9 -55.3 -50.8 Profit/loss on fair value measurement of financial assets -0.2 -5.3 -3.2 1.0 1.1 Adjusted net interest charges -71.5 -62.7 -58.1 -54.2 -49.7 Current taxes from disposals 0.1 0.2 1.5 -0.1 n/a Current tax expense -16.5 -17.3 -18.8 -16.9 -19.9 FFO 167.2 160.7 153.1 151.4 140.7 Non-recurring costs - - - - - FFO excluding non-recurring costs 167.2 160.7 153.1 151.4 140.7 Equity 3,625.9 3,842.7 4,263.3 3,309.5 3,090.6 Assets total 8,158.3 8,482.3 8,716.8 7,261.5 6,590.4 Advances received -6.2 -6.2 -6.6 -6.6 -6.7 Equity ratio, % 44.5 45.3 49.0 45.6 46.9 Unencumbered investment properties 5,918.2 7,008.2 7,084.2 5,327.0 4,296.3 Non-current assets, other than investment properties 125.7 142.3 94.2 97.6 25.6 Current assets 46.9 238.9 340.5 342.7 277.6 Unencumbered assets total 6,090.8 7,389.3 7,518.8 5,767.3 4,599.6 Total assets 8,158.3 8,482.3 8,716.8 7,261.5 6,590.4 Unencumbered asset ratio, % 74.7 87.1 86.3 79.4 69.8 Adjusted EBITDA, rolling 12 months 255.1 240.4 228.5 222.6 210.3 Adjusted net interest charges, rolling 12 months -71.5 -62.7 -58.1 -54.2 -49.7 Coverage ratio 3.6 3.8 3.9 4.1 4.2 Interest-bearing liabities 3,600.4 3,678.2 3,334.5 3,053.3 2,674.2 Deferred purchase price due after 90 days - - - - 8.7 Cash and cash equivalents 15.0 119.4 197.0 210.5 137.3 Total indebtedness- Cash and cash equivalents 3,585.5 3,558.8 3,137.5 2,842.8 2,545.6 Total assets 8,158.3 8,482.3 8,716.8 7,261.5 6,590.4 Solvency ratio 0.44 0.42 0.36 0.39 0.39 Secured loans 839.3 780.7 809.5 1,048.5 1,298.1 Total assets 8,158.3 8,482.3 8,716.8 7,261.5 6,590.4 Secured solvency ratio 0.10 0.09 0.09 0.14 0.20 Board of Directors’ Report and Financial Statements 2023 90 Hallituksen toimintakertomus ja tilinpäätös PARENT COMPANY’S FINANCIAL STATEMENTS Parent company’s income statement, FAS € Note 1–12/2023 1–12/2022 Rental income 500,832.84 458,760.72 Sales revenue from administration 13,836,624.00 12,738,978.00 Total revenue 1 14,337,456.84 13,197,738.72 Other operating income 2 864.97 - Personnel costs 3 -4,120,711.66 -4,163,339.44 Depreciation, amortisation and impairment losses 4 -314,028.05 -272,914.17 Other operating expenses 5 -12,500,148.52 -12,779,120.58 Operating profit/loss -2,596,566.42 -4,017,635.47 Investment income 3,000.00 6,000.00 Financial income 77,782,715.73 48,706,918.17 Value adjustments in investments held as current assets 958,222.21 -902,860.39 Financial expenses -66,972,018.00 -47,164,988.71 Total amount of financial income and expenses 6 11,771,919.94 645,069.07 Profit/loss before appropriations and taxes 9,175,353.52 -3,372,566.40 Appropriations 7 -8,140,000.00 49,810,100.00 Income taxes 8 8,124.92 -9,326,991.24 Profit/loss for the period 1,043,478.44 37,110,542.36 Board of Directors’ Report and Financial Statements 2023 91 Hallituksen toimintakertomus ja tilinpäätös Parent company’s balance sheet, FAS € Note 31 Dec 2023 31 Dec 2022 ASSETS Non-current assets Intangible assets 9 Other long-term expenses 537,723.35 629,555.80 Intangible assets, total 537,723.35 629,555.80 Tangible assets 10 Land and water areas 4,519,052.14 4,520,734.02 Machinery and equipment 225,309.16 345,649.75 Other tangible assets 187,206.12 187,206.12 Tangible assets, total 4,931,567.42 5,053,589.89 Investments 11 Shares in subsidiaries 82,273,943.02 82,273,943.02 Shares in associates 176,951.96 176,951.96 Other securities and shares 594,029.89 594,029.89 Investments, total 83,044,924.87 83,044,924.87 Non-current assets, total 88,514,215.64 88,728,070.56 Current assets Non-current receivables 12 3,051,629,442.29 2,694,328,897.52 Current receivables 13 46,903,935.14 270,263,963.41 Finacial securities 14 20,120.68 90,851,215.89 Cash and cash equivalents 5,668,804.67 73,576,618.41 Current assets, total 3,104,222,302.78 3,129,020,695.23 ASSETS 3,192,736,518.42 3,217,748,765.79 SHAREHOLDERS EQUITY AND LIABILITIES Comprehensive income 15 Share capital 58,025,136.00 58,025,136.00 Share premium reserve 35,786,180.04 35,786,180.04 Contingency fund 16,920.33 16,920.33 Reserve for Invested unrestricted equity 167,856,001.50 167,856,001.50 Retained earnings -12,637,912.08 46,722,330.94 Profit for total period 1,043,478.44 37,110,542.36 Total equity 250,089,804.23 345,517,111.17 Liabilities Non-current liabilities 16 2,405,044,932.95 2,552,127,711.62 Current liabilities 17 537,601,781.24 320,103,943.00 Total liabilities 2,942,646,714.19 2,872,231,654.62 SHAREHOLDERS EQUITY AND LIABILITIES 3,192,736,518.42 3,217,748,765.79 Board of Directors’ Report and Financial Statements 2023 92 Hallituksen toimintakertomus ja tilinpäätös Parent company’s cash flow statement, FAS € 1–12/2023 1–12/2022 Cash flow from operating activities Profit/loss before appropriations and taxes 9,175,353.52 -3,372,566.40 Adjustments: Planned depreciation and impairment 314,028.05 272,914.17 Asset purchase 1,421.75 0.22 Financial income and expenses -10,813,697.73 -1,547,929.46 Other adjustments -84,469.77 -573,858.87 Cash flow from operating activities before change in working capital -1,407,364.18 -5,221,440.34 Change in working capital: Change in trade and other receivables -84,518.23 -2,426,783.44 Change in trade and other payables -528,317.23 -614,465.14 Cash flow from operating activities before financial items, provisions and taxes -2,020,199.64 -8,262,688.92 Interest paid and payments on other operational financial costs -62,116,354.87 -39,390,960.49 Financial income from operating activities Direct taxes paid 10,462,517.01 4,896,582.35 Direct taxes paid -13,246,578.35 -2,204,285.23 Cash flow from operating activities -66,920,615.85 -44,961,352.29 Cash flow from investing activities Acquistion of property, plant and equipment and intangible assets -211,433.81 -375,874.90 Capital gains on other investments - 20,000.00 Non-current loans, granted -380,000,000.00 -470,000,000.00 Repayments of non-current loan receivables 220,440,947.40 - Financial securities acquired -54,947,967.60 -140,991,008.37 Capital gains from financial securities 145,822,716.82 165,244,868.91 Interest and dividends received on investments 64,890,111.85 43,620,650.60 Cash flow from investing activities -4,005,625.34 -402,481,363.76 Cash flow from financing activities Non-current loans and borrowings, raised 500,000,000.00 450,000,000.00 Non-current loans and borrowings, repayments -412,600,000.00 -50,800,000.00 Current loans and borrowings, raised 135,768,487.40 205,438,139.03 Current loans and borrowings, repayments -126,961,996.33 -224,878,551.15 Change in the Group's internal bank -46,611,848.01 51,746,903.11 Dividens paid -96,386,315.61 -93,914,871.62 Group contributions received 49,810,100.00 54,508,725.00 Cash flow from financing activities 3,018,427.45 392,100,344.37 Change in cash and cash equivalents -67,907,813.74 -55,342,371.68 Cash and cash equivalents at the beginning of the period 73,576,618.41 128,918,990.09 Cash and cash equivalents at the end of the period 5,668,804.67 73,576,618.41 Board of Directors’ Report and Financial Statements 2023 93 Hallituksen toimintakertomus ja tilinpäätös Parent company accounting policies Kojamo plc’s financial statement have been prepared in ac- cordance with the provisions of the Finnish Accounting Act and the Finnish Limited Liability Companies Act. Income related to rental operations and com- pensation for administration costs Income related to rental operations and compensation for ad- ministration costs are recognised on an accrual basis during the agreement period. Valuation of fixed assets Tangible and intangible assets are recognised in the balance sheet at the original acquisition cost less depreciation accord- ing to plan and possible impairment. Depreciations according to plan are calculated as straight-line depreciation on the basis of the estimated useful life of the assets. The depreciation periods according to plan, based on the use- ful life, are as follows: IT hardware and software 4–5 years Base stations 7 years Multifunction devices 6–8 years Costs that arise later are included in the carrying amount of a tangible asset only if it is likely that the future economic benefit related to the asset will benefit the Group. Other repair and maintenance costs are recognised as incurred through profit and loss. Capital gains from the sale of fixed assets are recorded under other operating income and losses under other operating ex- penses. Development expenditure Capitalised development costs, depreciation periods and methods (Finnish Accounting Act 2:4.1, paragraph 3). Development expenses are capitalised as intangible assets when it can be shown that a development project will generate a probable future economic benefit and costs attributable to the development stage can be reliable measured. Capitalised development costs are presented as a separate item and depreciated over their useful life, at most 10 years. Other development costs are recognised in the income state- ment when they are incurred. Previously recognized develop- ment costs are not capitalised in subsequent periods. Valuation of financial assets Financial securities have been recognised at the lower of cost or market price on the balance sheet date. Statutory provisions Future costs and apparent losses with a reasonably estimable monetary value which will no longer generate future income and which Kojamo is obligated or committed to perform are recognised as expenses in the income statement and as statu- tory provisions in the balance sheet. Accrual of pension costs The pension cover of Group companies is handled by external pension insurance companies in all respects. Pension costs are recognised as costs in the income statement on an accrual basis. Accounting principles for the cash flow state- ment The cash flow statement has been compiled on the basis of the information in the income statement and balance sheet and their supplementary information. Cash and cash equivalents include bank accounts, liquid de- posit notes and certificates of deposit. Items denominated in foreign currencies All of the receivables and liabilities are euro-denominated. Derivative instruments Changes in the fair value of derivative instruments are pre- sented in the notes to the financial statement. Derivative instruments that hedge against the interest rate risks of long-term loans have not been entered into the bal- ance sheet. They are reported in the notes to the financial statement. The interest income and expenses based on derivative instru- ments are allocated over the agreement period and are used to adjust the interest rates of the hedged assets. Board of Directors’ Report and Financial Statements 2023 94 Hallituksen toimintakertomus ja tilinpäätös Notes to the parent company financial statements 1. Total revenue € 1–12/2023 1–12/2022 Intragroup revenue Plot rental income 364,871.16 334,220.52 Rental income, total 364,871.16 334,220.52 Central administration services 7,840,271.00 8,363,038.00 IT rental income 5,996,353.00 4,375,940.00 Other sales revenue, total 13,836,624.00 12,738,978.00 Intragroup revenue, total 14,201,495.16 13,073,198.52 Other operating revenue Plot rental income 135,961.68 124,540.20 Other operating revenue, total 135,961.68 124,540.20 Revenue, total 14,337,456.84 13,197,738.72 2. Other operating income € 1–12/2023 1–12/2022 Other operating income 864.97 - Total 864.97 0,00 3. Personnel costs € 1–12/2023 1–12/2022 Wages, salaries and fees -3,407,937.72 -3,347,832.35 Pension costs -635,225.78 -737,251.02 Other employer contributions -77,548.16 -78,256.07 Total -4,120,711.66 -4,163,339.44 The management’s performance bonuses have been calcu- lated based on the closing price on 29 December 2023. Board of Directors’ Report and Financial Statements 2023 95 Hallituksen toimintakertomus ja tilinpäätös Wages and salaries to the CEO, the Board of Directors and the Board’s committees € 1–12/2023 1–12/2022 CEO Jani Nieminen -625,423.37 -969,966.96 Fees paid to the Board of Directors and Board committees Mikael Aro -80,525.00 -78,825.00 Matti Harjuniemi -8,750.00 -44,950.00 Kari Kauniskangas -47,050.00 -35,250.00 Anne Koutonen -52,125.00 -51,450.00 Mikko Mursula -52,125.00 -50,850.00 Minna Metsälä - -9,700.00 Reima Rytsölä -9,950.00 -44,950.00 Andreas Segal -38,200.00 - Catharina Stackelberg-Hammarén -45,250.00 -44,350.00 Annica Ånas -36,100.00 - Total -995,498.37 -1,330,291.96 2023 2022 Average number of personnel 19 21 For the 2023–2024 term of office, the Board of Directors and the Board committees have been paid fees totalling EUR 367,800.00, of which EUR 370.075.00 is allocated to the finan- cial year 2023. The annual fee paid for the term of office begin- ning from the Annual General Meeting of 16 March 2023 was paid 60 per cent in cash and 40 per cent as shares. Kojamo plc’s CEO and Management Team receive total pay and their retirement age is 63 years. The pension liability is off- set by a pension insurance plan, in which an insurance pre- mium corresponding to two months’ taxable income is paid an- nually into a group pension insurance plan. The period of no- tice for terminating the CEO’s employment is 12 months. In 2023, the cost of the Finnish statutory pension plan for the CEO was EUR 136,769.27 (108,747.19), and payments to the voluntary pension plan amounted to EUR 69,554.50 (67,332.52). In 2023, the cost of the Finnish statutory pension plan for the whole Management Team was 404,900.16 (357,430.89), and payments to the voluntary pension plan amount to EUR 163,096.52 (229,846.96). 4. Depreciation according to plan € 1–12/2023 1–12/2022 Intangible assets - -8,241.96 Other long-term expenses Development expenses -193,687.46 -168,275.41 Other long-term expenses, total -193,687.46 -168,275.41 Machinery and equipment -120,340.59 -96,396.80 Total -314,028.05 -272,914.17 Board of Directors’ Report and Financial Statements 2023 96 Hallituksen toimintakertomus ja tilinpäätös 5. Other operating expenses € 1–12/2023 1–12/2022 Property tax -146,634.14 -146,634.15 Rents and maintenance charges -398,513.61 -472,747.88 Central administration -11,954,505.77 -12,157,675.88 Other operating expenses -495.00 -2,062.67 Total -12,500,148.52 -12,779,120.58 Audit fees KPMG Oy Ab Audit -191,343.00 -168,900.46 Statutory statements - -4,340.00 Tax services -9,276.00 -85,148.01 Advisory services -101,800.00 -200,506.39 Total -302,419.00 -458,894.86 6. Total amount of financial income and expenses € 1–12/2023 1–12/2022 Dividend income From others 3,000.00 6,000.00 Total 3,000.00 6,000.00 Interest income From Group companies 67,863,787.45 48,067,461.60 From others 985,967.37 314,619.05 Other financial income 8,932,960.91 324,837.52 Total 77,782,715.73 48,706,918.17 Dividend, interest and financial income total 77,785,715.73 48,712,918.17 Value adjustments in investments Value adjustments in investments held as current assets 958,222.21 55,361.82 Impairment of financial securities held as current assets - -958,222.21 Total 958,222.21 -902,860.39 Interest and other financial expenses To others -66,972,018.00 -47,164,988.71 Total -66,972,018.00 -47,164,988.71 Total financial income and expenses 11,771,919.94 645,069.07 7. Appropriations € 1–12/2023 1–12/2022 Group contributions, received - 49,810,100.00 Group contributions, given -8,140,000.00 - Total -8,140,000.00 49,810,100.00 Board of Directors’ Report and Financial Statements 2023 97 Hallituksen toimintakertomus ja tilinpäätös 8. Income tax € 1–12/2023 1–12/2022 Income tax on operational income -580.48 -9,334,936.88 Tax for earlier years 8,705.40 7,945.64 Total 8,124.92 -9,326,991.24 9. Intangible assets Development € Rights expenses Total Acquisition cost 1 Jan 2023 114,249.72 954,353.97 1,068,603.69 Increases - 101,855.01 101,855.01 Decreases -114,249.72 - -114,249.72 Acquisition cost 31 Dec 2023 0.00 1,056,208.98 1,056,208.98 Accumulated depreciation 1 Jan 2023 -114,249.72 -324,798.17 -439,047.89 Accumulated depreciation of decreases 114,249.72 - 114,249.72 Depreciation for the financial year - -193,687.46 -193,687.46 Accumulated depreciation 31 Dec 2023 0.00 -518,485.63 -518,485.63 Carrying value 31 Dec 2023 0.00 537,723.35 537,723.35 Development € Rights expenses Total Acquisition cost 1 Jan 2022 114,249.72 841,620.77 955,870.49 Increases - 112,733.20 112,733.20 Acquisition cost 31 Dec 2022 114,249.72 954,353.97 1,068,603.69 Accumulated depreciation 1 Jan 2022 -106,007.76 -156,522.76 -262,530.52 Depreciation for the financial year -8,241.96 -168,275.41 -176,517.37 Accumulated depreciation 31 Dec 2022 -114,249.72 -324,798.17 -439,047.89 Carrying value 31 Dec 2022 0.00 629,555.80 629,555.80 Board of Directors’ Report and Financial Statements 2023 98 Hallituksen toimintakertomus ja tilinpäätös 10. Tangible assets Other Machinery and tangible € Land areas equipment assets Total Acquisition cost 1 Jan 2023 4,520,734.02 1,457,310.93 187,206.12 6,165,251.07 Vähennykset - -4,275.79 - -4,275.79 Reductions -1,681.88 - - -1,681.88 Acquisition cost 31 Dec 2023 4,519,052.14 1,453,035.14 187,206.12 6,159,293.40 Accumulated depreciation 1 Jan 2023 -1,111,661.18 - -1,111,661.18 Accumulated depreciation of decreases 4,275.79 - 4,275.79 Depreciation for the financial year -120,340.59 - -120,340.59 Accumulated depreciation 31 Dec 2023 -1,227,725.98 - -1,227,725.98 Carrying value 31 Dec 2023 4,519,052.14 225,309.16 187,206.12 4,931,567.42 Other Machinery and tangible € Land areas equipment assets Total Acquisition cost 1 Jan 2022 4,520,734.02 1,267,846.93 187,206.12 5,975,787.07 Increases - 189,464.00 - 189,464.00 Acquisition cost 31 Dec 2022 4,520,734.02 1,457,310.93 187,206.12 6,165,251.07 Accumulated depreciation 1 Jan 2022 -1,015,264.38 - -1,015,264.38 Depreciation for the financial year -96,396.80 - -96,396.80 Accumulated depreciation 31 Dec 2022 -1,111,661.18 - -1,111,661.18 Carrying value 31 Dec 2022 4,520,734.02 345,649.75 187,206.12 5,053,589.89 11. Investments Other Shares in Shares in securities € subsidiaries associates and shares Total Acquisition cost 1 Jan 2023 82,273,943.02 176,951.96 594,029.89 83,044,924.87 Acquisition cost 31 Dec 2023 82,273,943.02 176,951.96 594,029.89 83,044,924.87 Carrying value 31 Dec 2023 82,273,943.02 176,951.96 594,029.89 83,044,924.87 Other Shares in Shares in securities € subsidiaries associates and shares Total Acquisition cost 1 Jan 2022 82,273,943.02 176,951.96 658,182.32 83,109,077.30 Decreases - - -64,152.43 -64,152.43 Acquisition cost 31 Dec 2022 82,273,943.02 176,951.96 594,029.89 83,044,924.87 Carrying value 31 Dec 2022 82,273,943.02 176,951.96 594,029.89 83,044,924.87 Board of Directors’ Report and Financial Statements 2023 99 Hallituksen toimintakertomus ja tilinpäätös 12. Non-current receivables € 31 Dec 2023 31 Dec 2022 Loan receivables from Group companies 3,044,703,938.60 2,686,944,886.00 Prepaid expenses and accrued income 6,925,503.69 7,384,011.52 Total 3,051,629,442.29 2,694,328,897.52 Amortized loan costs recognised in non-current receivables 6,849,348.88 7,202,392.20 13. Current receivables € 31 Dec 2023 31 Dec 2022 From Group companies Trade receivables 2,617,389.98 2,144,380.47 Loan receivables 15,000.00 198,215,000.00 Other receivables 25,925,987.92 64,355,999.34 From Group companies, total 28,558,377.90 264,715,379.81 Loan receivables 1,737.40 3,201.53 Other receivables 85,054.75 613,632.11 Prepaid expenses and accrued income 18,258,765.09 4,931,749.96 Total 46,903,935.14 270,263,963.41 Amortized loan costs recognised in current receivables 4,494,355.78 4,346,815.08 14. Financial securities € 31 Dec 2023 31 Dec 2022 Financial securities Other securities and funds 20,120.68 90,851,215.89 Total 20,120.68 90,851,215.89 Financial securities include fund units and money market funds. Board of Directors’ Report and Financial Statements 2023 100 Hallituksen toimintakertomus ja tilinpäätös 15. Comprehensive income € 31 Dec 2023 31 Dec 2022 Share capital as at 1 Jan 58,025,136.00 58,025,136.00 Share capital as at 31 Dec 58,025,136.00 58,025,136.00 Share premium as at 1 Jan 35,786,180.04 35,786,180.04 Share premium as at 31 Dec 35,786,180.04 35,786,180.04 Other reserves as at 1 Jan Contingency fund as at 1 Jan 16,920.33 16,920.33 Contingency fund as at 31 Dec 16,920.33 16,920.33 Reserve for invested unrestricted equity as at 1 Jan 167,856,001.50 167,856,001.50 Reserve for invested unrestricted equity as at 31 Dec 167,856,001.50 167,856,001.50 Other reserves as at 31 Dec 167,872,921.83 167,872,921.83 Retained earnings as at 1 Jan 83,832,873.30 141,255,213.86 Dividend payment -96,386,315.61 -93,914,871.62 Share-based incentive scheme -84,469.77 -618,011.30 Retained earnings as at 31 Dec -12,637,912.08 46,722,330.94 Profit for the period 1,043,478.44 37,110,542.36 Total 250,089,804.23 345,517,111.17 Calculation on distributable equity Reserve for invested unrestricted equity 167,856,001.50 167,856,001.50 Retained earnings -12,637,912.08 46,722,330.94 Profit for the period 1,043,478.44 37,110,542.36 Capitalised development costs -537,723.35 -629,555.80 Total 155,723,844.51 251,059,319.00 pcs 31 Dec 2023 31 Dec 2022 The number of shares in Kojamo plc 247,144,399 247,144,399 Kojamo plc’s registered share capital is EUR 58,025,136.00 and the company has 247,144,399 shares. Kojamo has a sin- gle series of shares, and each share entitles its holder to one vote in the Annual General Meeting. There are no voting re- strictions related to the shares. The shares have no nominal value. All shares carry an equal right to dividends and other distribution of Kojamo plc’s assets. The company shares be- long to the book-entry system. 16. Non-current liabilities € 31 Dec 2023 31 Dec 2022 Loans from financial institutions 839,038,998.42 401,638,998.42 Bonds 1,565,515,000.00 2,150,000,000.00 Accrued expenses, wages and salaries 490,934.50 285,149.40 Bond derivative profit periodisation 0.03 203,563.80 Total 2,405,044,932.95 2,552,127,711.62 Board of Directors’ Report and Financial Statements 2023 101 Hallituksen toimintakertomus ja tilinpäätös 17. Current liabilities € 31 Dec 2023 31 Dec 2022 Loans from financial institutions, instalments in the next financial year 435,285,000.00 200,800,000.00 Trade payables 269,463.01 1,045,785.55 Liabilities to Group companies Trade payables 1,097.40 417,290.93 Other debts 29,739,006.84 56,829,726.65 Other debts 40,239,137.62 30,990,823.98 Accrued expenses and deferred income Accrued financial liabilities 29,668,464.98 25,561,052.78 Personnel expenses 1,317,326.39 1,082,511.14 Tax liabilities - 2,242,076.04 Other items 877,687.91 2,158.71 Bond derivative profit periodisation 204,597.09 1,132,517.22 Total 537,601,781.24 320,103,943.00 18. Derivative instruments Interest rate derivatives € 31 Dec 2023 31 Dec 2022 Fair values of derivative instruments Interest rate derivatives Interest rate swap, cash flow hedging -6,458,592.65 14,636,094.37 Total -6,458,592.65 14,636,094.37 Nominal values of derivative instruments Interest rate derivatives Interest rate swap, cash flow hedging 630,800,000.00 156,400,000.00 Total 630,800,000.00 156,400,000.00 Hedge accounting is applied to interest rate swaps as their terms and conditions are similar to the terms and conditions of the hedged loan agreements Interest rate swaps have not been recognized through profit and loss. If the duration of the derivative is longer than that of the loan, it is highly likely that the loan will be extended. 19. Guarantees and commitments € 31 Dec 2023 31 Dec 2022 Loans that mature in more than five years Market-based loans 350,000,000.00 500,038,998.40 Loans for which montage on and shares in property have been given as a guarantee Loans from financial institutions 838,998.40 1,038,998.40 Mortgages given 4,015,000.00 4,015,000.00 Guarantees given Counter-guarantee 298,736,123.21 328,249,036.77 Board of Directors’ Report and Financial Statements 2023 102 Hallituksen toimintakertomus ja tilinpäätös 20. Other liabilities € 31 Dec 2023 31 Dec 2022 Car leasing liabilities Payable during the next financial year 121,389.00 81,264.76 Payable later 126,141.34 43,632.71 Price risk Unexpected changes in electricity pricing may expose com- pany to price risk. Kojamo has hedged it´s electricity price risk by using electricity purchase agreements. 21. Related party transactions The members of the Board of Directors or corporations over which they exercise control owned a total of 57,783 (55,754) shares and share-based rights in the company or in compa- nies belonging to the same Group as the company. The mem- bers of the management Team or corporations over which the exercise control owned a total of 163,115 (190,033) shares and share-based rights in the company or in companies be- longing to the same Group as the company. These shares rep- resent 0.09 (0.10) per cent of the company’s entire share capi- tal. The terms in related party transactions correspond to those observed in transactions between independent parties. Kojamo had no related party transactions deviating from the company’s normal business operations in 2023 and 2022. Board of Directors’ Report and Financial Statements 2023 103 Hallituksen toimintakertomus ja tilinpäätös SIGNATURES TO THE BOARD OF DIRECTORS’ REPORT AND FINANCIAL STATEMENTS Helsinki, February 15 2024 Mikael Aro Mikko Mursula Chairman of the Board of Directors Vice-Chairman of the Board of Directors Kari Kauniskangas Anne Koutonen Andreas Segal Catharina Stackelberg-Hammarén Annica Ånäs Jani Nieminen CEO A report on the audit has been issued today Helsinki, 15 February 2024 KPMG Oy Ab Petri Kettunen, APA

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