Annual Report • Mar 30, 2022
Annual Report
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2021-12-31 ifrs-full:OtherReservesMember 529900DTKNXL0AXQFN28 2021-01-01 2021-12-31 ifrs-full:RetainedEarningsMember 529900DTKNXL0AXQFN28 2021-12-31 ifrs-full:RetainedEarningsMember 529900DTKNXL0AXQFN28 2021-01-01 2021-12-31 aed:ReserveForShareOfNetIncomeAndOtherComprehensiveIncomeOfEquityMethodInvestMember 529900DTKNXL0AXQFN28 2021-12-31 aed:ReserveForShareOfNetIncomeAndOtherComprehensiveIncomeOfEquityMethodInvestMember 529900DTKNXL0AXQFN28 2021-01-01 2021-12-31 aed:NetResultOfPeriodMember 529900DTKNXL0AXQFN28 2021-12-31 aed:NetResultOfPeriodMember 529900DTKNXL0AXQFN28 2021-01-01 2021-12-31 ifrs-full:EquityAttributableToOwnersOfParentMember 529900DTKNXL0AXQFN28 2021-12-31 ifrs-full:EquityAttributableToOwnersOfParentMember 529900DTKNXL0AXQFN28 2021-01-01 2021-12-31 ifrs-full:NoncontrollingInterestsMember 529900DTKNXL0AXQFN28 2021-12-31 ifrs-full:NoncontrollingInterestsMember iso4217:EUR iso4217:EUR xbrli:shares Building futureproof healthcare real estate ANNUAL FINANCIAL REPORT 2021 4 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 12 LETTER TO THE STAKEHOLDERS 2 BUILDING FUTUREPROOF HEALTHCARE REAL ESTATE Our tagline says it all. Aedifica is a Belgian listed company that is specialised in offering innovative and sustainable real estate concepts to our care operators and their residents across Europe, focusing in particular on housing for elderly people with care needs. Social sustainability is a fundamental driving force for us: we want to create added value for society at large by developing innovative real estate concepts that are tailored to the needs of residents and that improve their quality of life. We don’t just invest in properties, we invest in society. We aim to offer our shareholders a reliable real estate investment with an attractive return based on the successful strategy we developed throughout the past 16 years: combining a high-quality diverse portfolio that generates recurring and indexed rental income with industry leading long-term partners and an experienced team. Aedifica is listed on Euronext Brussels (2006) and Euronext Amsterdam (2019). Since 2020, Aedifica has been part of the BEL 20, the leading share index of Euronext Brussels. Housing with care – 1 14 AEDIFICA IN 2021 98 CORPORATE GOVERNANCE STATEMENT 38 BUSINESS REVIEW 32 OUR STRATEGY 2 – BUILDING FUTUREPROOF HEALTHCARE REAL ESTATE 12 – LETTER TO THE STAKEHOLDERS 14 – AEDIFICA IN 2021 32 – OUR STRATEGY 34 - Business strategy 36 - CSR strategy 38 – BUSINESS REVIEW 40 - Financial report 60 - Property report 90 - CSR report in brief 98 – CORPORATE GOVERNANCE STATEMENT 134 – AEDIFICA ON THE STOCKMARKET 140 – RISK FACTORS 152 – EPRA 164 – FINANCIAL STATEMENTS 232 – ADDITIONAL INFORMATION 2 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 STEFAAN GIELENS CEO RAISING THE BAR Aedifica builds futureproof healthcare real estate. We proved that once again in 2021 with a number of major concrete examples. We develop and invest in innovative residential and care concepts, paying careful attention to the sustainability of these buildings. Our starting point here is that care users and those around them have to be able to enjoy a positive experience tailored to their care needs. Society's expectations about how care is organised are changing. The bar is being raised, and rightly so. As a reference player in European healthcare real estate, our mission is therefore to translate the new views about living conditions and care into buildings. So together with those who run these buildings, Aedica oers care users innovative real-estate concepts that modernise care, especially elderly care, from various points of view. The well-being of the care user is the rst and most important priority. In care homes, we counter loneliness by creating a pleasant living environment that connects people with other residents, with family, friends or neighbours. We put forward innovative solutions allowing couples with diering care needs to stay together. In addition, care facilities are increasingly geared to care on a small scale, oering residents a safe and secure environment. We also enhance the dignity of senior citizens by designing living areas that give them autonomy and enable them to look after themselves for as long as possible. For Aedica, care facilities are not an island. Several complementary care functions are increasingly being combined on a single campus. In this way, we create care nodes that are at the service not only of the residents, but also of the local community. The healthcare real estate of the future should not only provide an attractive care concept tailored to the needs of the user. It also has to be sustainable. Our strategy therefore aims to achieve (net) zero carbon emissions by 2050. To this end, in 2021 we devised a sustainable development framework to be applied to new development projects. In this context, we not only approach sustainability from an ecological perspective. We also focus on the well-being and comfort of the residents. Building futureproof healthcare real estate FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE – 3– 3 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 4 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 Finland The basic idea behind service communities is that the combination of several types of care can make a positive contribution to the well-being of the care user. Bringing a care home for senior citizens and a children’s day care centre under one roof stimulates interac - tion that is valuable for both age groups. ‘Our service communities are designed to enrich the lives of senior citizens and children by bringing them into contact with one another and enabling them to share experiences’, says Juho Malmi, marketing manager of Hoivatilat. ‘This way, we not only counter loneliness among senior citizens, but we also teach chil- dren how to interact with elderly people.’ Both age groups have their own building and these are connected by a common inner court- yard. There, the residents can sit on a bench and watch the children having fun in the play - ground. Common activities are also arranged. ‘The children come and visit the elderly folk regularly, so that they can sing and play around a specic topic together’, Juho Malmi says. ‘The day care centre at our service community in Lahti, for example, focuses on music and organises weekly performances for the older residents. They always look forward to the children’s visits and nd it fun to watch them play. It keeps them alert, even if they don’t have the energy to take part themselves.’ Service communities in Finland OLD AND YOUNG HAND IN HAND The ‘service community’ concept, as developed in Finland by Aedifica subsidiary Hoivatilat, offers the ideal environment in which to combine various types of care and services on a single campus for those who use the building and for local residents. In this way, old and young go – almost literally – hand in hand. Near our campus in Tuusula there is a family where both the child and the grandparents are looked after in the same service community. For them, it’s an ideal solution: the grandparents get the care they need, but they still remain in contact with their grandchild. Plus, it's great for the parents because when they fetch their child in the evening, they can see their own parents at the same time. JUHO MALMI – MARKETING MANAGER HOIVATILAT FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE – 5– 5 TUUSULA ISOKARHUNKIERTO • TUUSULA, FI LAHDEN VALLESMANNINKATU • LAHTI, FI INVOLVED NEIGHBOURHOOD As well as a combination of care for the elderly and child care, service communities oer other types of care and services. Depending on the needs of the local residents, the campus can also include a restaurant, a store or even a dog day care facility. So the local residents are involved and the buildings create a functional meeting place for the community. ‘By combining care and other services, we respond to the changing expectations of our society’, Juho Malmi explains. ‘Families can easily visit grandparents in the care home when they are fetching the children and then run errands or take a meal home. In this way, we improve well-being and quality of life in the neighbourhood: the elderly are less lonely, children are exposed to various stimuli and parents can arrange their time more eciently.’ Hoivatilat’s service communities are the perfect example of what the future of healthcare real estate in Finland will look like. Our state-of-the-art care campuses combine elderly care and child day care and are perfectly integrated into their environment, so they form a care node for the local community. JUHO MALMI – MARKETING MANAGER HOIVATILAT INNOVATION IN FINLAND In the Finnish ‘service community’ concept, spontaneous and organised meetings between young and old improve the well- being of the care user. • Elderly people feel less lonely • Children learn to interact with elderly people • Improvement of the quality of life in the neighbourhood AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 6 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 CUSTOMISED INCLUSIVE CARE Care and well-being are approached differently in Klein Veldekens than in traditional care homes. Residents with differing care profiles find a new home on Aedifica’s innovative care campus in Geel. It has 132 spacious apartments that give them every opportunity to retain their autonomy and their dignity. In addition, the campus acts as a care node for the neighbourhood. Belgium Klein Veldekens in Geel Creating well-being for residents is central to the Klein Veldekens philosophy. The spacious apartments on the campus play an important role here. ‘The spatial quality of housing strengthens the identity and autonomy of the residents and that is crucial for their well-being’, says Michiel Verhaegen, director at the non-prot organisation Astor, which developed and runs the campus. ‘Grandchildren, family and friends come by more often and stay longer because they can spend time in a spacious and pleasant environment with our residents. By strengthening these social links, we coun- ter loneliness and create well-being for our residents.’ As well-being is closely connected to dig- nity, Klein Veldekens helps the residents to live as freely and independently as they can. Self-care is encouraged as much as pos- sible. ‘Unlike in conventional care homes, Living apart was hard. If your wife has to go into a care home, you wonder whether she is being properly looked after there. The big advantage here is that we can stay together with the cosiness of our own home, while my wife gets the care she needs. WALTER STOELMANS, KLEIN VELDEKENS RESIDENT FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE – 7– 7 KLEIN VELDEKENS • GEEL, BE INNOVATION IN BELGIUM The positive experience of the residents at Klein Veldekens begins with the dignity of being able to look after themselves for as long as possible. • The independence maintains residents’ well-being • The spacious apartments strengthen the feeling of being ‘at home’ • Residents never have to move again because care needs change •Residentswithdieringcareproleslivetogetheron the campus • This campus also serves as a care node for the neighbourhood Klein Veldekens in Geel each apartment has its own kitchen. So residents can not only cook for themselves, but they can also have meals with family without having to go to a communal area. In this way, the apartments increase the privacy of the residents’ own families.’ Never move again Well-being is also enhanced by the exibility of the care on oer. The great advantage of this is that residents no longer have to move when their care needs increase. ‘People can move in even though they don’t yet need any care. The apartment remains theirs, regardless of how their care needs change’, Verhaegen explains. ‘In a conventional context, elderly people have to move from their senior’s apartment to a care home when they need more care, because the care funding is granted per room. With us, that is not the case. As a pilot project supported by the Flemish government, Klein Veldekens can grant care funding exibly, depending on the care needs of the residents, regardless of the type of home they are in. So residents no longer need to move when their care needs increase.’ ‘This new system also oers a solution for couples’, Verhaegen goes on. ‘Here, couples with diering care needs do not have to be separated when one partner needs more care than the other. Even if both partners need a lot of care, they can carry on living together as a couple.’ And there’s more. Klein Veldekens was designed as an inclusive social project. On the campus, not only do the elderly nd a new home, but younger people with care needs owing, for example, to a brain injury or a congenital impairment live here, too. The care campus also endeav- ours to involve and activate the neighbourhood as much as possible. The restaurant is accessible to everyone and can also be used as a co-working facility. In addition, the campus oers complementary care functions for local people, such as child day care and a doctor’s surgery. AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 8 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 MORE SECURITY THANKS TO THE SMALL SCALE OF CARE HUBS Small-scale elderly care facilities improve the residents’ quality of life by offering them more security and social contact in a small community. By dividing care homes into care hubs, small- scale care for the elderly is possible within a larger structure, as well. Germany INNOVATION IN GERMANY Thesmallscaleofa‘carehub’oers residents a positive experience and enhances their well-being as they feel safer and more secure. • Having familiar faces nearby counters loneliness • Care always provided by the same staincreasestrust • The care of residents with dementia also takes on a new dimension here Seniorenquartier Weyhe The care hub concept is based on the principle that care and living on a small scale oer residents more security. Here, the larger structure of a care home is divided into small communities (hubs) in terms of both buildings and the operational aspects. These hubs function independently of one another. They comprise a maximum of 12 apartments that are connected to one another by communal areas such as a living room, a dining area and a garden with a terrace. In the communal areas of the care hub, residents share their lives with one another and take part in activities together. Having other people closer by encourages more social con- tact, with the result that residents feel less lonely. Because they always see the same familiar faces in their small com- munity, they have a greater feeling of security and safety, in contrast to larger communities. Elderly people receive round-the-clock care from sta permanently assigned to their hub. This not only increases condence among the residents, but also makes the care home concept ‘pandemic-proof’ because sta only look after a limited number of elderly people. As the care hub concept focuses on familiarity and security, it is also par - ticularly suitable when it comes to caring for those with dementia. Aedica’s care campus in Weyhe, Germany, provides a dierentiated care programme and combines conventional and more luxurious rooms with a care hub for people with dementia. ‘Care hubs are a perfect example of how modern architec- ture can underpin the care of people with dementia’, says Volker Feldkamp of EMVIA Living, which runs the Weyhe care facility. ‘By creating more nearness and security, the concept makes a substantial contribution to residents’ well-being and we are able to provide the best possible care.’ By creating more nearness and security, the concept makes a substantial contribution to residents’ well-being and we are able to provide the best possible care. VOLKER FELDKAMP - EMVIA LIVING SENIORENQUARTIER WEYHE • WEYHE, DE FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE – 9– 9 CREATING WELL-BEING FOR PEOPLE WITH DEMENTIA In the Netherlands, the care hub concept has been developed further and geared specifically to the needs of people with dementia. The small-scale care facilities run by Martha Flora have a ‘Meander’ that consists of various colourful living areas and connects residents’ apartments with one another. The spacious, pleasant living environment makes a substantial contribution to the well-being of residents and care staff alike. MARTHA FLORA HILVERSUM • HILVERSUM, NL Our sta are stimulated by the Meander, too. They feel proud and motivated and get satisfaction out of working in such a lovely environment. CORNÉLIE SCHOLTEN – MARTHA FLORA INNOVATION IN NETHERLANDS The ‘Meander’ builds on the care hub concept, but goes a step further. It creates a positive experience for residents because the colourful and spaciouslivingareasoerthem peace and quiet, but at the same time additional stimuli. •Theconcepthasbeenspecically designed for dementia care • It reduces stress as the living environmenthasaprotectiveeect The Meander forms the basis of this innovative care concept for people with dementia. This communal living area includes a kitchen, a living room, a library, a workshop and a gar- den where residents can eat together, meet one another, take part in activities or welcome family. A care facility usually has two Mean- ders and each Meander connects 12 to 14 apartments. ‘Each area has its own atmosphere and stim - uli’, says Cornélie Scholten, business manager at Martha Flora. ‘So residents can always nd a spot where they feel comfortable. In the Meander, our residents can meet one another when they feel the need and have opportuni - ties to take part in various activities.’ The Meander concept was designed speci - cally for people with dementia on the basis of scientic research and practical experience of dementia care. ‘The use of colour, the light, the materials and the architecture in the Meander are geared to giving people with dementia a feeling of safety and security’, Scholten goes on. ‘Covering an average of 250 m², a Meander provides a lot of additional living space, which considerably lowers the stress level of our residents and noticeably improves their quality of life.’ In addition, the Meander stimulates the well - being not only of the residents, but of the care sta as well. ‘Yes, our sta are stimulated by the Meander, too. They feel proud and moti - vated and get satisfaction out of working in such a lovely environment. Thanks to the space and the peace and quiet of the Mean- der, they can give their full attention to the residents.’ Netherlands De MeanderSeniorenquartier Weyhe AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 10 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 Sustainable construction and maintenance As well as developing innovative healthcare real estate concepts, Aedifica invests in sustainable real estate construction and maintenance. Each day, Aedifica strives to make its portfolio more sustainable and in 2021, the group has proven its role as a pioneer in this field once again. In order to reach (net) zero carbon emissions for the entire real estate portfolio by 2050, Aedica has drawn up an assessment framework for each country in which the group operates that takes account of local regulations. This framework lays down the technical requirements for the construction of new, sustainable care homes in terms of the environment, energy conservation, resident health and quality of use. The group adopts a broad approach to sustainable development, not only from an ecological perspective but also by taking into consideration residents’ well-being and comfort. However, Aedica already goes further than this theoretical framework. Examples from the Netherlands and Germany prove this. TOWARDS CARBON NEUTRALITY IN THE NETHERLANDS The development projects in the Netherlands are usually already in line with Aedica’s sustainable development framework, as compliance with the Dutch national stand- ards of the Gemeentelijke Praktijkrichtlijn (GPR - municipal code of practice) is encouraged or even integrated into the planning permission process. This standard is fully in line with the Dutch version of Aedica’s sustainable develop - ment framework. The group’s Dutch portfolio already includes ve completed buildings and seven projects underway that comply with the assessment framework and the GPR standard. The completed buildings achieve an average GPR score of 8.1 (comparable to a ‘BREEAM Excellent’ certicate). When these care facilities were assessed during 2021, various improvements were made to the buildings in consultation with the stakeholders (contractors, developers and opera - tors). Among other things, measures were taken to increase the proportion of renewable energy, further reduce water consumption and improve the ventilation ow rate. FOCUS AREAS OF AEDIFICA’S SUSTAINABLE DEVELOPMENT ASSESSMENT FRAMEWORK Energy conservation E.g., measures to reduce energy consumption and increase the proportion of renewable energy Environment E.g., measures to reduce water consumption and promote biodiversity Health E.g., guaranteeing good air quality and circulation Quality of life E.g., optimising the accessibility of the building VILLA NUOVA • VORDEN, NL FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE – 11– 11 DIE ROSE IM KALLETAL • KALLETAL, DE FIRST CARBON-NEUTRAL BUILDING IN GERMANY With low energy demand of <75 kWh/m², Die Rose im Kal- letal, in the German state of North Rhine-Westphalia was a relatively energy-ecient care facility as soon as it opened. As the building was recently connected to a local biomass power plant, the whole care home is now supplied entirely with renewable energy. The building is therefore Aedica’s rst facility in Germany to achieve net carbon neutrality. The care facility largely fullls the requirements of Aedica’s sustainable development framework in Germany. Moreover, in consultation with the operator, Aedica has decided to invest in the installation of solar panels on the roof. Die Rose im Kalletal • Low-energy building connected to a local biomass power plant • Aedica’s rst building in Germany with 100% renewable energy • In addition, Aedica is now investing in solar panels 12 8.1 CARE FACILITIES WITH GPR- CERTIFICATE IN THE NETHERLANDS AVERAGE SCORE OF DUTCH GPR-COMPLIANT BUILDINGS MARTHA FLORA ROTTERDAM • ROTTERDAM, NL AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 12 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE Letter to the stakeholders Dear stakeholder, In 2021, Aedica has shown that it continues to live up to its ambitions as a leading European healthcare real estate investor. The international expansion continued unabated with numerous completions and acquisitions across the eight European countries in which the Group operates. The market’s condence in Aedica’s growth strategy was not only reected in three capital increases that raised over €330 million, but also in the successful issuance of an inaugural €500 million Sustainability Bond supported by an investment-grade S&P credit rating, strengthening the Group to continue its growth momentum and sustainability eorts. EUROPEAN EXPANSION In 2021, Aedica rearmed its international ambitions by implementing its rst investments in Ireland and Spain. Throughout the year, the Group carried out investments and announced new projects of approx. €943.5 million in 100 care properties. Furthermore, a total of 41 projects from the investment programme amounting to approx. €289 million were completed. All the investments carried out in 2021 have increased Aedica’s real estate portfolio to 587 sites with a capacity of more than 32,700 residents and over 11,000 children. The fair value of the real estate portfolio increased by approx. €1,082 million (+28%) to €4,896 million (compared to €3,815 million at the beginning of the nancial year). In addition, as of 31 December 2021, the Group has a total investment programme in pre-let development projects and acquisitions in progress of approx. €767 million. Consider- ing this investment programme, Aedica’s total portfolio is expected to reach the €5.5 billion mark by the end of 2024. SOUND RESULTS Aedica focuses not only on investments and growth but also on managing its existing real estate assets. The result of this eort in 2021 is reected in an excellent rental income of €232.1 million (€187.5 million a year earlier, an increase of approx. 24%). The EPRA Earnings are above budget and amount to €151.5 million, i.e. €4.35 per share. Aedica’s total prot amounts to €282 million. Aedica demonstrated its ability to grow the company while main- taining a strong focus on nancial performance through an increase in earnings per share and a sound debt-to-assets ratio. Based on these results, Aedica’s Board of Directors will propose to the Annual General Meeting on 10 May 2022 a gross dividend of €3.40 per share (subject to a reduced withholding tax of 15%). Aedica owes these excellent results for the past nancial year to the enthusiasm, competence and commitment of all its employees. The Board of Directors would therefore sincerely like to congratulate and thank the Aedica team for its contribution to the Group’s development. SUSTAINABLE GROWTH Aedica is paying more attention than ever to sustainability and puts its objectives into practice by investing in the (re) development and renovation of care properties (e.g. nearly zero-energy buildings in Ireland and the Netherlands, etc.). The Group’s ambitious sustainability strategy is paying o, as evidenced by the scores of dierent ESG assessments. The GRESB score, the Green Star Rating and the MSCI rat- ing all increased signicantly, while the Sustainalytics Risk FOR 2022, THE BOARD ANTICIPATES A 9% INCREASE IN THE GROSS DIVIDEND TO €3.70 PER SHARE. SERGE WIBAUT, CHAIRMAN OF THE BOARD OF DIRECTORS – 13 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION – 13 Rating continued to decrease and the Group’s Sustainability Report was awarded an EPRA sBPR Gold Award for the second year in a row. In addition, Aedica issued its rst Sustainability Bond for a total size of €500 million, bringing the Group’s sustainable nancing to 28%. FUTURE GROWTH In 2021, Aedica once again proved that it can deliver on its growth ambitions even in a volatile macroeconomic environment. The Group intends to continue along this path in 2022 as well. In the new year, Aedica already demon- strated its ambitions in terms of international growth with the completion of a series of projects in the Netherlands, Germany and Finland. In addition, various new investment opportunities are being analysed. Even without taking into account new investments, the Group’s future growth is assured by its extensive investment programme. Through the combination of new investments and existing agreements on the development, acquisition, renovation, expansion and redevelopment of numerous sites, Aedica can build up a portfolio of high-quality buildings that oer attractive net returns and further strengthen its position as a European market reference in listed healthcare real estate. For the 2022 nancial year, EPRA Earnings are expected to amount to €4.77 per share. The Board of Directors anti- cipates a 9% increase in the gross dividend to €3.70 per share. Serge Wibaut Chairman of the Board of Directors In 2021, Aedica once again proved that it can deliver on its growth ambitions even in a volatile macroeconomic environment. STEFAAN GIELENS, CEO STEFAAN GIELENS • SERGE WIBAUT Stefaan Gielens Chief Executive Ocer 14 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE For more than fifteen years, Aedifica has been building the healthcare real estate of the future. Thanks to our successful strategy, our real estate portfolio has grown by an average of 24% annually to €4.9 billion. In 2021, we have again fulfilled our ambitions as international reference player by implementing a sizeable amount of new investments, completing over 40 development projects and adding Ireland and Spain as new countries to the portfolio. The fact that investors like Aedifica's recipe was reflected in the strong demand for the Group’s inaugural Sustainability Bond supported by S&P’s investment-grade credit rating and several successful capital increases. – 15 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 41 DEVELOPMENT PROJECTS COMPLETED >€ 330 m RAISED ON CAPITAL MARKETS >€ 940 m NEW INVESTMENTS MADE & PROJECTS ANNOUNCED 8 countries IRELAND & SPAIN ADDED 16 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE BELGIUM 83 sites 8,600 residents 507,500 m² €1,213 m fair value €74 m in pipeline 22 years WAULT 1 5.3% rental yield 2 UNITED KINGDOM 102 sites >6,700 residents 297,400 m² €822 m fair value €66 m in pipeline 22 years WAULT 1 6.4% rental yield 2 GERMANY 101 sites >10,300 residents 588,700 m² €1,058 m fair value €352 m in pipeline 23 years WAULT 1 5.2% rental yield 2 FINLAND 198 sites 3,000 residents & 10,600 children 229,700 m² €860 m fair value €100 m in pipeline 12 years WAULT 1 5.4% rental yield 2 NETHERLANDS 72 sites >3,200 residents 348,200 m² €564 fair value €75 m in pipeline 18 years WAULT 1 5.5% rental yield 2 SPAIN 1 plot of land €3 m in pipeline SWEDEN 22 sites 120 residents & 600 children 16,000 m² €78 m fair value €8 m in pipeline 13 years WAULT 1 5.0% rental yield 2 IRELAND 9 sites >780 residents 43,000 m² €92 m fair value €89 m in pipeline 24 years WAULT 1 5.3% rental yield 2 1. Weighted average unexpired lease term. 2. Based on the fair value (re-assessed every three months). For healthcare real estate, the gross yield and the net yield are generally equal (‘triple net’ contracts) with the operating charges, the maintenance costs and the rents on empty spaces related to the operations generally being supported by the operator in Belgium, the United Kingdom, Ireland and (often) the Netherlands. In Germany, Finland and Sweden (and the Netherlands, in some cases), the net yield is generally lower than the gross yield, with certain charges remaining the responsibility of the owner, such as the repair and maintenance of the roof, structure and facades of the building (‘double net’ contacts). 3. Fair value of the marketable investment properties including assets classied as held for sale and the right of use related to plots of land held in ‘leasehold’ in accord- ance with IFRS 16. NEW 2021 NEW 2021 2021 – 17 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION € 232 m RENTAL INCOME 114 EMPLOYEES 28% SUSTAINABLE FINANCING BBB with stable outlook S&P CREDIT RATING Sustainability strategy UPDATED Human rights policy IMPLEMENTED Charter for responsible supplier relations IMPLEMENTED € 4.35/share EPRA EARNINGS 75 MEN € 3.40/share GROSS DIVIDEND 39 WOMEN 42.6% DEBT-TO-ASSETS RATIO 40 years AVERAGE AGE €55,000 IN CHARITY DONATIONS IN FULL EXPANSION FINANCIALS OUR TEAM CORPORATE SOCIAL RESPONSIBILITY 587 SITES +91 20 years WAULT 1 5.5% RENTAL YIELD 2 100% OCCUPANCY RATE >32,700 RESIDENTS +5,100 € 4,744 m FAIR VALUE 3 (+€ 1,071 m) 2,030,000 m² +279,000 m² € 767 m IN PIPELINE 18 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE RÉSIDENCE LE DOUAIRE • ANDERLUES, BE DEVELOPMENT PROJECT TO BE COMPLETED SORGVLIET • LINTER, BE In 2021, Aedifica acquired a care home and announced a forward purchase amounting to approx. €37 million. In addition, the Group announced that it will invest €47 million in the redevelopment of eight Brussels care homes. Four extension and renovation projects were completed as well. By improving the sustainability of our portfolio, we not only contribute to a solution for the climate crisis, we also have an opportunity to invest in adaptations that improve the quality of life of residents and strengthen social cohesion. STÉPHANIE LOMME, COUNTRY MANAGER BELGIUM FUTURE-PROOFING PROJECT IN 8 BRUSSELS CARE HOMES In May 2021, Aedifica announced a €47 million investment in the redevel- opment of eight care homes in Brussels, focussing on social and environmental sustainability. Thanks to this future-proof- ing project, the Group can guarantee that high-quality care will continue to be pro- vided in these care properties in the future. • Improving the comfort and experience of residents • creation of new care wards and com - mon living areas • renovation of bathrooms • optimisation of wheelchair access • Investing in the energy eciency of the buildings • installation of energy-ecient systems • installation of new windows • replacement of insulation • installation of new ventilation systems • Works to be carried out from 2022 to 2027 • Repositioning of existing healthcare real estate oers Aedica signicant devel- opment potential for the future (in terms of upgrading its own portfolio and as a source of new acquisitions) €84 million IN NEW INVESTMENTS MADE & PROJECTS ANNOUNCED 4 PROJECTS COMPLETED Belgium – 19 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION SENIORENZENTRUM ALTE ZWIRNEREI • GERSDORF, DE - Germany SENIORENQUARTIER WOLFSBURG • WOLFSBURG, DE DEVELOPMENT PROJECT ASPIDA PFLEGECAMPUS PLAUEN • PLAUEN, DE In 2021, Aedifica’s portfolio in Germany crossed the €1 billion mark through the acquisition of 22 care homes and the completion of seven development projects. In addition, construction started on five care campuses from the second framework agreement with Specht Gruppe concluded in 2020. Thanks to our sizeable investment programme, Aedica is taking a major step forward in expanding its German portfolio. As such, we continue to build the healthcare real estate of the future while providing a solution for the care and housing needs of Germany’s ageing population. HEINZ BEEKMANN, COUNTRY MANAGER GERMANY In Germany, Aedica has a sizeable investment programme of numerous new developments and refurbishment projects amounting to more than €350 million and representing 46% of the total investment programme. Upon completion of these projects, the German portfolio will amount to over €1.4 billion, making it Aedica’s most extensive portfolio in a single country. €356 million IN NEW INVESTMENTS MADE & PROJECTS ANNOUNCED >€1 billion TOTAL PORTFOLIO SIZE 7 PROJECTS COMPLETED >€350 million INVESTMENT PROGRAMME CONNECTING GENERATIONS Aedica’s care home in Plauen brings together dierent generations and provides care not only for the elderly, but also for young people who can no longer live independently. Because young people have dierent care needs from older people, this innovative care campus oers generation-specic services so that everyone can feel at home. In addition to a video lounge, gym, roof terrace, etc., there are regular excursions for residents to concerts and events. 20 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE WAARDER MOLENDIJK • WAARDER, NL DEVELOPMENT PROJECT TO BE LTS WINSCHOTEN • WINSCHOTEN, NL In 2021, Aedifica acquired two fully operational care residences and added seven new development projects to its investment programme in the Netherlands. As a result, the Group implemented and announced approx. €63 million in new investments. Four development projects were completed as well. Joining forces with Dunavast- Sonneborgh opens up new opportunities for continued growth in the Netherlands, in particular in the non-prot segment. Thanks to our combined experience, even more Dutch seniors can count on us for sustainable, innovative care concepts that put residents centre stage and give them space to receive care in the ways they prefer. CHARLES-ANTOINE VAN AELST, CIO STRATEGIC PARTNERSHIP WITH DUNAVAST-SONNEBORGH In October 2021, Aedica entered into a strategic partnership with Dunavast-Son- neborgh to jointly develop healthcare real estate in the Netherlands, in particular in the non-prot segment. • Dunavast and Sonneborgh are experi- enced real estate developers and inves- tors with an extensive network in the non-prot segment of the Dutch care market. • Prime opportunity for Aedica to access a new pipeline of quality (re)develop- ment projects. • Focus on sustainability: latest NZEB- standards will be applied. • Ambition to develop a portfolio of approx. €100 million. • 2 development projects in Alphen a/d Rijn and Waarder amounting to €15 million already announced in December 2021. €63 million IN NEW INVESTMENTS MADE & PROJECTS ANNOUNCED 4 PROJECTS COMPLETED Strategic partnership IN THE NON-PROFIT SEGMENT Netherlands – 21 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION United Kingdom AEDIFICA’S LOCAL UK TEAM ABBOTS WOOD MANOR • HAILSHAM, UK Aedifica made investments and announced new projects in the UK amounting to approx. €110 million. Five care homes were acquired in the course of the year, with three development projects added to the investment programme. In addition, two forward purchases and two extension projects were completed. The UK healthcare real estate market oers Aedica many opportunities for further growth. The UK’s population aged 80 and over is expected to double to 10% of the total population by 2050. In addition, the market is still very fragmented due to the large number of local private players operating small and outdated buildings. BRUCE WALKER, COUNTRY MANAGER UK A LOCAL TEAM IN THE UK Aedica has established a local team in the United Kingdom by integrating its long-time British asset management partner Layland Walker. By welcoming the team into the Aed- ica family, we are creating a perfect opportu- nity to further expand our activities in the UK. • Nearly 20 years of experience in asset management • Excellent long-term working relationships with tenants • Extensive network in the UK healthcare market • All current sta joined the Aedica team, ensuring continuity €110 million IN NEW INVESTMENTS MADE & PROJECTS ANNOUNCED 4 PROJECTS COMPLETED Local team ESTABLISHED AYLESBURY MARTIN DALBY • AYLESBURY, UK DEVELOPMENT PROJECT TO BE 22 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE LOHJA SAHAPIHA • LOHJA, FI HELSINKI KANSANTIE • HELSINKI, FI DEVELOPMENT PROJECT TO BE In 2021, the Hoivatilat team made investments and announced new projects in Finland amounting to approx. €95 million. Seven care properties were acquired over the year, with nine development projects added to the investment programme. In addition, 20 development projects amounting to €85 million were completed. The projects in our Finnish investment programme are designed and developed by our local Hoivatilat team. The regularity with which we add new projects to our development pipeline highlights the continued appetite of Finnish care operators and cities for our real estate concepts. As the demand for our care properties remains high, we look forward to further developing our activities in Northern Europe. Together we create a better society. ATTE NIITTYLÄ, CEO HOIVATILAT FINLAND LOHJA SAHAPIHA This service community in Lohja is the perfect example of what the future of healthcare real estate in Finland looks like: a state-of-the-art care campus combining elderly care and child day care provided by two dierent care opera- tors, perfectly integrated in its neigbourhood. • Up to 50 elderly people and 60 children • Specically designed to enrich their lives by creating opportunities for them to meet and share experiences • Outdoor area with playground • Operated by Attendo & Pilke €95 million IN NEW INVESTMENTS MADE & PROJECTS ANNOUNCED 20 PROJECTS COMPLETED Finland HELSINKI KANSANTIE This modern school is designed and devel- oped by our Hoivatilat team, as its bid was selected in a tender by the city of Helsinki. • Up to 360 children • Focus on environmental standards and energy eciency by including installa- tions for geothermal and solar energy • Operated by the municipality of Helsinki • Estimated completion date: Q4 2022 – 23 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION Sweden In 2021, Aedifica acquired a large portfolio of 16 recent healthcare properties, further strengthening our position in the Swedish market. In addition, the construction of a new specialist residential care centre for people with special needs was announced in August, while two schools were completed in the second half of 2021. As in Finland, the projects in our Swedish investment programme are designed and developed by our local Hoivatilat team. ACQUISITION OF 16 CARE HOMES FOR PERSONS WITH DISABILITIES In September 2021, Aedica acquired a sizea- ble portfolio of 14 existing care properties and two development projects. • €53 million total investment • Specically designed to provide care and housing to persons with special needs • 114 residents • 7 operators private & non-prot • Stockholm metropolitan area main locations • Contribution in kind €56 million IN NEW INVESTMENTS MADE & PROJECTS ANNOUNCED 2 PROJECTS COMPLETED SPECIALIST RESIDENTIAL CARE CENTRE The acquisition of the portfolio of 16 care properties has an important strategic value, as it has given us the opportunity to increase our visibility in the Swedish market and develop relationships with new operators and municipalities. This opens new opportunities for the further expansion of our portfolio through own developments. MARIA FRID, CEO HOIVATILAT SWEDEN KÄLLBERGA • NYNÄSHAMN, SE DESIGN OF A SCHOOL UNDER CONSTRUCTION 24 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE DUBLIN STEPASIDE • DUBLIN, IE DEVELOPMENT PROJECT TO BUNCLODY CARE HOME • BUNCLODY, IE BRÍDHAVEN • MALLOW, IE In 2021, Aedifica took its first steps into Ireland with a sizeable series of investments in seven existing care homes and five new development projects. In less than a year, the Group has accumulated a portfolio of that will amount to approx. €180 million upon completion of the announced projects. Aedica did not miss its mark when it entered Ireland. Since our rst investment in February 2021, we have developed a signicant portfolio that strengthened our position and visibility in the Irish market. STEFAAN GIELENS, CEO DEVELOPMENT OF THREE SUSTAINABLE CARE HOMES In October 2021, Aedica announced the con- struction of three new care homes in Tramore, Waterford City and Kilkenny. Delivering on our sustainability commitments, all three care homes will be very energy ecient buildings. • €44 million total investment • >270 residents requiring continuous care • energy-ecient systems applying latest NZEB-regulations • Q1 2023 expected completion date • experienced operator with a solid track record February 2021 FIRST INVESTMENTS €179 million IN NEW INVESTMENTS MADE & PROJECTS ANNOUNCED Ireland – 25 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION Spain At the end of 2021, Aedifica announced its first investment in Spain. The Group's ambition is to invest €75 million in the development of a series of greenfield projects with an experienced local partner. The first projects will start construction in 2022. Spain provides an attractive investment opportunity, as the care market is still relatively fragmented and the ageing population and a lack of adequate senior housing will lead to increasing demand for high-quality healthcare real estate. And we are already working on the further development of our activities in Spain. SVEN BOGAERTS, CM&AO Ambition INITIAL PORTFOLIO OF 1,000 units €75 million INVESTMENT DEVELOPING FUTUREPROOF CARE HOMES IN SPAIN Aedica and Neurocare Home are joining forces and have signed a partnership agreement to combine their expertise in healthcare oper- ations and healthcare real estate. Within the framework of this agreement, Aedica aims to invest in a series of high-quality care home projects to be developed by Neurocare Home, that will operate the care properties upon com- pletion. This allows Aedica, in cooperation with an experienced local partner, to acquire healthcare real estate that will be newly built and futureproof. First phase • up to ve projects will break ground in 2022 • Madrid, Castile-León & Andalusia • rst plot of land acquired Innovative residential care concept • small-scale care hubs within large-scale infrastructure • green open-air patios on each oor • single rooms with ensuite bathrooms • focus on sustainability Leases • 5.5% initial rental yield • 30-year triple net • fully indexed to CPI Neurocare home • extensive experience in developing health- care real estate • solid business model for operating care homes • currently operating 420 beds in three care homes • actively expanding its operations in Spain 26 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 2021 highlights €500 MILLION SUSTAINABILITY BOND In September, Aedica has successfully priced its rst benchmark Sustainability Bond for a total size of €500 million. The strong investor demand for Aedica was evidenced by an orderbook of €1.8 billion, more than 3.6 times covering the deal size. The proceeds will be used to (re) nance environmentally sustainable care properties under the updated Sustainable Finance Framework. page 50 >€330 MILLION RAISED ON CAPITAL MARKETS Aedica completed one capital increase in cash and two capital increases by contribution in kind, raising more than €330 million and providing the Group with sucient nancial resources for further growth. page 51 INVESTMENT-GRADE CREDIT RATING In August, Aedica received its rst issuer credit rating by S&P Global. The Group was assigned a BBB investment-grade rating with a stable outlook. The rating allows Aedica to benet from better access to capital markets with attractive nancing conditions and to appeal to a broader investor base. page 50 BBB with stable outlook S&P CREDIT RATING SENIORENZENTRUM ALTE ZWIRNEREI • GERSDORF, DE – 27 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION € 943.5 m IN NEW INVESTMENTS & PROJECTS IN 100 SITES We are delighted that our sta already recognised Aedica as a ‘Great Place to Work' in our rst survey participation. WERNER DIGNEF, HR MANAGER 41 projects OF THE INVESTMENT PROGRAMME COMPLETED TOTALLING €289 MILLION These solid results are a great reward for the eorts made by the team over the past year. Thanks to our ambitious CSR action plan, we will continue to make progress on corporate social responsibility in the coming years. RAOUL THOMASSEN, COO TWO NEW COUNTRIES ADDED TO THE PORTFOLIO In 2021, Aedica further diversied its portfolio and made its rst invest- ments in Ireland and Spain. In Ireland, Aedica has already announced investments of €180 million, while in Spain the Group has entered into a partnership agreement for the development of an initial portfolio of €75 million. pages 24-25 IMPROVEMENT OF ALL SUSTAINABILITY SCORES Aedica’s ambitious sustainability strategy is paying o, as evidenced by the scores of dierent ESG assessments. The GRESB score, the Green Star Rating and the MSCI rating all increased signicantly, while the Sustainalytics Risk Rating continued to decrease and the Group’s Sustainability Report was awarded an EPRA sBPR Gold Award for the second year in a row. 2021 2020 EPRA sBPR Gold Gold GRESB 66 57 Sustainalytics Risk Rating Low (11.9) Low (17.8) MSCI BBB BB AEDIFICA IS A ‘GREAT PLACE TO WORK’ In 2021, Aedica conducted an employee survey with Great Place to Work among its teams in Belgium, the Netherlands and Germany. After the survey and an in-depth analysis of the company culture, Aedica was already recognised as a great workplace in its rst participation, allowing it to carry the Great Place to Work Certied ® label throughout 2022. The Finnish and Swedish Hoivatilat team was awarded the label as well. page 96 28 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE CUSTOMER PROXIMITY AT THE CENTRE OF AEDIFICA'S ORGANISATIONAL STRUCTURE As Aedica continues to grow and expand into new coun- tries, the Group streamlined its corporate structure in 2021. In the course of 2021, an operating model was designed that eciently interweaves Aedica’s core business activi- ties at the level of the head oce and the local teams, while maximising local responsiveness and knowledge sharing. Local responsiveness with HQ-support • Each local team focuses on Aedica’s core business activities, while relying on the Brussels head oce for support services (Finance, Legal, HR, IT, etc.). Centres of excellence for knowledge sharing • To support the local teams in their business activi- ties, ‘centres of excellence’ were established, bringing together the expertise and know-how of the dierent country teams and encouraging further cooperation and communication. These centres of excellence are coor- dinated by the head oce and cooperate with country representatives. New operating model • Customer-centric: proximity to local markets • Agile: rapid decision-making • Robust governance & control: clear lines of accountability and ownership for sta • Values: promoting a common corporate culture in all teams • Scalable to new countries This futureproof operating model enables us to further replicate our success formula in each of the countries in which we operate, while respecting the unique client requirements in each local market. With this new way of working, Aedica is equipped to continue its growth trajectory in a sustainable way. Our new structure leverages the strengths we have built up over the years and provides a platform for sharing knowledge and best practices. – 29 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION FINANCE TRANSFORMATION After Aedica implemented an ‘enterprise resource plan- ning’ (ERP) system in 2020 to run corporate reporting through one central system, the Group further rolled out the system in 2021 and extended it to the foreign subsid - iaries. A treasury management system was implemented providing visibility and reporting to optimise cash, manage liquidity and monitor debt and intercompany loans. Aedica now has the right tools in place for oversight and control with streamlined processes across the Group. • Insourcing of the accounting of Dutch, German, British and Luxembourg entities to the Brussels head oce • Implementation of a treasury management system (TMS) • Improved data quality and eciency in nancial reporting to support and create value for the business Since all countries’ reporting is managed through a single central system, we can maintain our exible business structure with short decision lines within a growing organisation. We can now easily scale up and extend our processes to other regions and segments. As of January 2021, the accounting of about 36 entities was managed on the ERP system from the Brussels head oce; by the end of 2021, that number had already increased to 45 entities. 30 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 1 Consolidated income statement - analytical format (x €1,000) 31/12/2021 (12 months) 31/12/2020 (12 months - restated period) 31/12/2020 (18 months) Rental income 232,118 187,535 259,505 Rental-related charges -686 -2,753 -3,344 Net rental income 231,432 184,782 256,161 Operating charges -38,105 -33,228 -44,539 Operating result before result on portfolio 193,327 151,554 211,622 EBIT margin (%) 83.5% 82.0% 82.6% Financial result excl. changes in fair value -32,162 -28,323 -38,755 Corporate tax -9,718 -7,703 -11,530 Share in the profit or loss of associates and joint ventures accounted for using the equity method in respect of EPRA Earnings 360 798 1,568 Non-controlling interests in respect of EPRA Earnings -328 -158 -187 EPRA Earnings (owners of the parent) 151,479 116,168 162,718 Denominator (IAS 33) 34,789,526 27,472,976 26,512,206 EPRA Earnings (owners of the parent) per share (€/share) 4.35 4.23 6.14 EPRA Earnings 151,479 116,168 162,718 Changes in fair value of financial assets and liabilities 14,813 -5,587 -2,169 Changes in fair value of investment properties 160,211 5,069 25,049 Gains and losses on disposals of investment properties 534 -1,827 -559 Tax on profits or losses on disposals -559 0 0 Negative goodwill / goodwill impairment -3,540 0 0 Deferred taxes in respect of EPRA adjustments -46,452 -11,041 -14,811 Share in the profit or loss of associates and joint ventures accounted for using the equity method in respect of the above 6,011 1,180 3,007 Non-controlling interests in respect of the above -673 -68 -167 Roundings 0 0 0 Profit (owners of the parent) 281,824 103,894 173,068 Denominator (IAS 33) 34,789,526 27,472,976 26,512,206 Earnings per share (owners of the parent - IAS 33 - €/share) 8.10 3.78 6.53 1. In order to allow comparison with the previous period (due to the extension of the 2019/2020 nancial year), the gures as of 31 December 2020 were derived on a 12-month basis (with the exception of the denominators (IAS 33) which were recalculated for each period). 2. See Note 44.6. +24% +30 % RENTAL INCOME EPRA EARNINGS – 31 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION Investment properties (x €1,000) 31/12/2021 31/12/2020 Marketable investment properties in fair value incl. assets classified as held for sale 4,686,521 3,621,522 Right of use of plots of land 57,947 51,825 Development projects 151,954 141,320 Total of investment properties in fair value incl. assets classified as held for sale 4,896,422 3,814,667 Net asset value per share (in €) 31/12/2021 31/12/2020 Net asset value after deduction of the 2019/2020 dividend 2 , excl. changes in fair value of hedging instruments 77.35 65.75 Effect of the changes in fair value of hedging instruments -0.75 -1.58 Net asset value after deduction of the 2019/2020 dividend 2 76.60 64.17 Number of share outstanding (excl. treasury shares) 36,308,157 33,086,572 Consolidated balance sheet (x €1,000) 31/12/2021 31/12/2020 Investment properties including assets classified as held for sale 4,896,422 3,814,667 Other assets included in debt-to-assets ratio 258,725 252,274 Other assets 6,720 234 Total assets 5,161,867 4,067,175 Equity Equity excl. changes in fair value of hedging instruments 2,808,488 2,222,523 Effect of the changes in fair value of hedging instruments -27,317 -52,212 Non-controlling interests 4,226 2,625 Equity 2,785,397 2,172,936 Liabilities included in debt-to-assets ratio 2,197,130 1,757,683 Other liabilities 179,339 136,556 Total equity and liabilities 5,161,867 4,067,175 Debt-to-assets ratio (%) 42.6% 43.2% Key performance indicators according to the EPRA principles 31/12/2021 (12 months) 31/12/2020 (18 months) EPRA Earnings (in €/share) 4.35 6.14 EPRA NRV (in €/share) 88.36 74.01 EPRA NTA (in €/share) 76.05 62.92 EPRA NDV (in €/share) 72.35 58.70 EPRA Net Initial Yield (NIY) (in %) 4.9% 5.2% EPRA Topped-up NIY (in %) 5.1% 5.3% EPRA Vacancy Rate (in %) 0.5% 0.2% EPRA Cost Ratio (including direct vacancy costs) (in %) 16.7% 18.5% EPRA Cost Ratio (excluding direct vacancy costs) (in %) 16.7% 18.5% 32 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 Our strategy Aedifica specialises in investments in European healthcare real estate, with a particular focus on housing for elderly people with care needs. Thanks to our successful strategy over the past sixteen years, our Group has established itself as a market reference in listed healthcare real estate in Europe and aims to further reinforce this position in the coming years. The Group’s strategy is bearing fruit. The fair value of our real estate portfolio reached €4.9 billion, averaging a compound annual growth rate of 24%. This growth allows Aedifica to implement several economies of scale, further optimising its performance. FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE – 33– 33 Economies of scale • Optimal portfolio management with renowned partners, taking into account the changing sustainability requirements • Strong risk diversication • Increased capacity to seize investment opportunities • Greater share liquidity • Easy access to capital markets Optimising performance • Predictable revenues • Optimisation of xed costs • Improvement of EPRA Earnings per share and, consequently, shareholder return • Remaining societally relevant for all stakeholders AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 34 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE Business strategy GROWTH POTENTIAL INVESTING IN THE INCREASING NEED FOR HEALTHCARE REAL ESTATE EXPERTISE LEVERAGING EXPERTISE AND KNOWLEDGE DEVELOPED OVER THE PAST 16 YEARS Aedifica’s strategy relies on four main pillars: growth potential, expertise, diversification and Corporate Social Responsibility 1 . By investing in a sector with a demographically driven growth potential, leveraging our expertise and diversifying our investments along three axes, Aedifica sets the stage for continued growth in the years to come. • As by 2060 more than 10% of the European population will be over 80 years old, healthcare real estate will be in high demand for the next 40 years. • Ageing will affect the ‘consumption’ of care, impacting the development of other care segments and related activities, such as acute care, outpatient care and specialised care. These evolutions will drive the development of (new) healthcare real estate segments (patient hotels, rehabilitation centres, hospitals, medical centres, mental health centres, residential care centres for people with a disability, etc.). • Care providers are further expanding and adapting their activities. Private and public operators increasingly rely on private investors to fund healthcare real estate infrastructure that meets the changing needs of society. • Aedica develops long-term partnerships with its care operators, understanding their specic needs while supporting their long-term growth. • The Group is an involved and proactive investment partner with an offer that ranges from development to redevelopment, acquisition and/or renovation of buildings, always combining innovative care concepts, new technologies and sustainability. 1 2 1. See page 36-37. – 35 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION – 35 GEOGRAPHICAL BREAKDOWN IN FAIR VALUE (%) BREAKDOWN OF CONTRACTUAL RENTS BY TENANT GROUP (%) BREAKDOWN OF BUILDING TYPES IN FAIR VALUE (%) 11% Korian 7% Colisée 6% Azurit Rohr 5% Orpea 4% Maria Mallaband 4% EMVIA 4% Vulpia 4% Bondcare 4% Attendo 3% Burlington 48% Other <3% 65% Elderly care homes 17% Mixed-use elderly care buildings 7% Child day care centres 7% Other care segments 4% Senior housing 26% Belgium 23% Germany 18% Finland 18% United Kingdom 12% Netherlands 2% Ireland 2% Sweden DIVERSIFICATION DIVERSIFYING IN TERMS OF GEOGRAPHY, TYPE OF TENANTS AND TYPE OF BUILDINGS Pan-European platform • 8 countries • Proven track record in entering new markets and creating a platform for further growth: local proximity combined with economies of scale • ‘Plug-and-play’ business model that can be rolled out to new markets • Geographical diversication prevents over-reliance on a specic care concept or single social security system and enables further diversication of our tenant base • Further exploration of new European markets Multitude of tenant groups • >130 groups of professional and specialised healthcare providers • Diversied income streams: no single tenant generates more than 12% of the Group’s total rental income • Further diversication of our tenant base Dierent building types • Primary focus on healthcare real estate for the elderly • Also investing in real estate for other types of care: childcare, specialist care for people with a disability, mental health care, rehabilitation care, (special) education, etc. • Combining multiple types of care at a single location 3 36 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE CSR strategy Sustainable entrepreneurship is an integral part of Aedifica’s DNA. We believe that our company’s long-term growth and success depend on the well-being of our buildings’ residents and, more generally, on our relevance to society. Committed to supporting the people and communities around us and protecting the planet, we join forces with our operational partners to make environmentally and socially responsible investments and developments. – 37 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION – 37 OUR CSR FRAMEWORK Our Corporate Social Responsibility Strategy is focused on three main areas: reducing our environmental foot- print, strengthening our stakeholder relationships and continuing to grow into a sustainable organisation that leads the healthcare real estate sector in Europe. OUR PARTNERS STRENGTHENING RELATIONSHIPS WITHIN THE HEALTHCARE REAL ESTATE SECTOR • Optimising relationships with operators • Sharing knowledge in healthcare sector concerning sustainable real estate • Connecting with our communities and better understand the needs of clients and operators • Being the leading healthcare real estate investor in Europe that cares about its residents OUR ORGANISATION BEING A LEADER IN THE HEALTHCARE REAL ESTATE SECTOR • Investing in the training and development of our team • Having a robust Health & Well-being programme in place • Remaining attractive for future healthcare real estate experts • Meeting ethical standards at its core foundation • Providing a working environment for a diverse workforce • Having governance policies and procedures in place OUR PORTFOLIO REDUCING ENVIRONMENTAL IMPACT, OPERATIONAL COSTS AND RISKS • Measuring and reducing environmental impact • Minimising risks (safety, technical, materials etc.) • Complying with (future) building regulations • Optimising internal comfort • Stimulating eco-ecient investments by operators and/or third parties • Meeting needs of future senior housing 38 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE Business review MAGAZINE LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY OUR BUSINESS REVIEW CORPORATE GOVERNANCE € 4.35/share EPRA EARNINGS 42.6 % DEBT-TO-ASSETS RATIO € 232 m RENTAL INCOME 20 years WAULT + 24 % CAGR 1 € 4.9 bn FAIR VALUE OF REAL ESTATE PORTFOLIO IMPLEMENTED IN EACH COUNTRY Sustainable development framework GRESB, MSCI, SUSTAINALYTICS & EPRA SBPR Improved sustainability scores LABEL OBTAINED Great Place to Work – 39– 39 * Alternative Performance Measure (APM) in accordance with ESMA (European Securities and Market Authority) guidelines published on 5 October 2015. For many years, Aedica has been using Alternative Performance Measures in its nancial communications based on the guidelines issued by the ESMA. Some of these APMs are recommended by the European Public Real Estate Association (EPRA) while others have been dened by the industry or by Aedica in order to provide readers with a better understanding of its results and performance. The APMs used in this Annual Financial Report are identied with an asterisk (). Performance measures dened by IFRS standards or by Law are not considered as APMs, nor are those which are not based on the consolidated income statement or the balance sheet. The APMs are dened, annotated and connected with the most relevant line, total or subtotal of the nancial statements, in Note 44 of the Consolidated Financial Statements. 1. Compound annual growth rate of the portfolio since Dec. 2006 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 40 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 1. OUR INVESTMENTS 1.1 INVESTMENTS, COMPLETIONS AND DISPOSALS IN 2021 € Name Type Location Date Investment (€ million) 2 Pipeline (€ million) 3 Gross rental yield (approx. %) Completion/ implemen - tation Lease Operator Belgium 20 64 8 Orpea care homes Renovation & redevelopment (focus on sustainability) Brussels 28/05/2021 - 47 In line with general BE rental yield 2024-2027 15-year lease extension - NNN Orpea Domaine de la Rose Blanche Acquisition Durbuy 29/06/2021 20 - 4.5% - 27 yrs - NNN My-Assist Résidence le Douaire Forward purchase Anderlues 10/10/2021 - 17 4.5% Q1 2024 27 yrs - NNN Vulpia Germany 286 70 Azurit portfolio (19 sites) Acquisition Germany 31/03/2021 245 - 5% - 25 yrs - NN Azurit 5 care campuses that are part of the 2 nd framework agreement with Specht Gruppe Acquisition & development Germany 29/06/2021 8 70 5% 2022-2023 30 yrs - NNN Master lease with Specht Gruppe Haus Wedau & Haus Marxloh Acquisition Duisburg 26/11/2021 18 - 5.5% - 25 yrs - NN Procuritas Sz Borna Acquisition Borna 01/12/2021 15 - 5% - 25 yrs - NN Azurit Netherlands 23.5 39 Stepping Stones Blaricum 4 Acquisition & development Blaricum 26/01/2021 1 3 5.5% Q2 2022 NNN Korian Netherlands Martha Flora Oegstgeest Acquisition & development Oegstgeest 25/02/2021 2 5 5.5% Q2 2022 25 yrs - NNN Martha Flora Zuyder Haven Oss & Buyten Haven Dordrecht Acquisition Oss & Dordrecht 30/03/2021 8 - 6% - WAULT 12 yrs - NN Zorghaven Groep Martha Flora Breda Acquisition & development Breda 28/05/2021 2.5 5 5.5% Q4 2022 25 yrs - NNN Martha Flora De Volder Staete Acquisition & development Almere 06/07/2021 1.5 10 5.5% Q4 2022 25 yrs - NNN Amado Zorg & Stichting Pinahuis Alphen Raadhuisstraat 5 Acquisition & development Alphen a/d Rijn 16/12/2021 3 4 5.5% Q4 2022 15 yrs - NN Stichting Fundis Financial report 1 € 943.5 m IN NEW INVESTMENTS & PROJECTS IN 100 SITES 1. This nancial report is based on the Consolidated Financial Statements. However, it also includes some information on the statutory accounts, but this is always specif- ically mentioned. The complete statutory nancial statements and the statutory Management Report will be registered at the National Bank of Belgium within the legal deadlines and may be obtained free of charge on the Company’s website (www.aedica.eu) or upon request at the head oce. 2. The amounts in this column include the contractual value of the plots of land and the existing buildings. These investments generate rental income (sites under construction also generate limited rental income (except in Finland, Sweden and Spain), in particular for the plots of land that have already been acquired). 3. The amounts in this column are the budgets for development projects that Aedica will nance or acquisitions of which the conditions precedent will be fullled in the course of the coming months. The development projects are listed in the overview of the investment programme (see pages 83-85). – 41 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION – 41 Name Type Location Date Investment (€ million) 2 Pipeline (€ million) 3 Gross rental yield (approx. %) Completion/ implemen - tation Lease Operator Waarder Molendijk 5 Acquisition & development Waarder 16/12/2021 3 5 5.5% Q2 2023 15 yrs - NN Stichting Fundis Tiel Bladergroenstraat Acquisition & development Tiel 16/12/2021 2.5 7 5.5% Q2 2023 20 yrs - NNN Saamborgh United Kingdom 6 80 30 Abbot Care Home Stanley Wilson Lodge St Fillans Care Home Acquisition Harlow Saffron Walden Colchester 14/01/2021 45 - 5.5% - 30 yrs - NNN Excelcare Shipley Canal Works Acquisition & development Shipley 05/03/2021 2 8 6% Q3 2022 30 yrs - NNN Burlington Aylesbury Martin Dalby Acquisition & development Aylesbury 17/05/2021 2 10 7% Q4 2022 30 yrs - NNN Maria Mallaband Wellingborough Glenvale Park Acquisition & development Welling- borough 02/07/2021 3 12 5.5% Q1 2022 35 yrs - NNN Halcyon Care Homes The Uplands Acquisition Shrewsbury 25/10/2021 14 - 6.5% - 30 yrs - NNN Bondcare Corby Priors Hall Park 7 Development Corby 26/11/2021 14 - 5.5% - 30 yrs - NNN Halcyon Care Homes Finland 29.5 65 Jyväskylä Haukankaari Development Jyväskylä 28/01/2021 - 3 6% Q1 2022 20 yrs - NN Rinnekoti Turku Herttuankulma Development Turku 28/01/2021 - 6 6% Q4 2022 20 yrs - NN Ikifit Espoo Rajamännynahde Acquisition Espoo 01/02/2021 4 - 6.5% - 20 yrs - NN Pihlanjantertut Ry Laukaa Peurungantie Acquisition Laukaa 19/02/2021 4 - 6.5% - 15 yrs - NN Peurunka Oy Tampereen Haiharansuu Development Tampere 15/03/2021 - 3 6.5% Q1 2022 15 yrs - NN Tampereen ensija turvakoti Kokkola Ilkantie Kokkola Metsämäentie Kokkola Kärrytie Acquisition Kokkola 28/06/2021 12.5 - 7% - WAULT 8 yrs - NN Multiple tenants Kangasala Vällintie Development Kangasala 28/06/2021 - 2.5 6.5% Q4 2022 15 yrs - NN Pilke Oulu Juhlamarssi Development Oulu 28/06/2021 - 7 6.5% Q3 2022 15 yrs - NN Attendo Kotka Särmääjänkatu 8 Development Kotka 31/08/2021 3 - 6.5% - 15 yrs - NN Autismisäätiö Kuopio Opistotie Development Kuopio 06/09/2021 2 11 6% Q4 2022 15 yrs - NN Norlandia Helsinki Ensikodintie Redevelopment Helsinki 30/09/2021 - 12 6% Q4 2022 30 yrs - NN Helsingin Ensikoti Tampere service community Development Tampere 30/09/2021 1 9 6% Q1 2023 20 yrs - NN 2 experienced operators Helsinki Kansantie Development Helsinki 20/10/2021 - 11.5 6% Q4 2022 20 yrs - NN Municipality of Helsinki Nurmijärven Luhtavillantie 9 Development Nurmijärvi 31/12/2021 3 - 7% - 15 yrs - NN Pilke 4. This project is being developed within the joint venture with the Korian group. Aedica and Korian will each nance 50% of the total budget. This table only considers the part of the budget that will be nanced by Aedica. 5. This project is being developed within the joint venture with Dunavast-Sonneborgh, in which Aedica holds a 75% stake. 6. Amounts in £ and SEK were converted into € based on the exchange rate of the transaction date. 7. Development project announced on 22 March 2021 and construction completed on 26 November 2021. 8. Development project announced in Q1 2021 and construction completed on 31 August 2021. 9. Development project announced in Q1 2021 and construction completed on 31 December 2021. 42 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE Name Type Location Date Investment (€ million) 1 Pipeline (€ million) 2 Gross rental yield (approx. %) Completion/ implemen - tation Lease Operator Sweden 3 47.5 8 16 specialist residential care centres Acquisition subject to outstanding conditions Sweden 08/09/2021 47 6 4.5% 2 buildings in 2022 WAULT 13 yrs - NN Multiple tenants Enköping Litslenavägen Development Enköping 19/08/2021 0.5 2 6% Q3 2022 15 yrs - NN Serigmo Care KÅS Ireland 97 81.5 Brídhaven Acquisition Mallow 12/02/2021 25 - 5.5% - 25 yrs - NNN Virtue Waterford care home New Ross care home Bunclody care home Killerig care home Acquisition Waterford New Ross Bunclody Killerig 17/06/2021 26 - 5.5% - 25 yrs - NNN Virtue Millbrook Manor Acquisition & extension Saggart 26/07/2021 13 4 5.5% Q3 2022 25 yrs - NNN Coolmine Caring Services Group St. Doolagh’s Acquisition & development Balgriffin 26/07/2021 5 14.5 5.5% Q3 2022 25 yrs - NNN Coolmine Caring Services Group Dublin Stepaside Acquisition & development Dublin 23/08/2021 5 25 5.5% Q3 2023 25 yrs - NNN Virtue Altadore Nursing Home Acquisition Dublin 08/10/2021 18 - 5% - 25 yrs - NNN Virtue Tramore Nursing Home, Kilbarry Nursing Home & Kilkenny Nursing Home Acquisition & development Tramore, Waterford City & Kilkenny 19/10/2021 5 38 5.5% Q3 2022 - Q1 2023 25 yrs - NNN Mowlam Healthcare Spain 2.5 - Salamanca Raimundo Acquisition & development Salamanca 22/10/2021 2.5 - 5.5% 2023 30 yrs - NNN Neurocare Home Total 586 357.5 1. The amounts in this column include the contractual value of the plots of land and the existing buildings. These investments generate rental income (sites under construction also generate limited rental income (except in Finland, Sweden and Spain), in particular for the plots of land that have already been acquired). 2. The amounts in this column are the budgets for development projects that Aedica will nance or acquisitions of which the conditions precedent will be fullled in the course of the coming months. The development projects are listed in the overview of the investment programme (see pages 83-85). 3. Amounts in £ and SEK were converted into € based on the exchange rate of the transaction date. 4. For completed development projects, the amounts in this column only include the works that were carried out. For acquisitions of which the outstanding conditions have been fullled, this amount includes the contractual value of the plots of land and the existing buildings. – 43 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION – 43 Name Type Location Date Investment (€ million) 4 Gross rental yield (approx. %) Lease Operator Belgium 13.5 Kasteelhof Extension Dendermonde 01/01/2021 3 5.5% 30 yrs - NNN Korian Belgium De Duinpieper Extension & renovation Ostend 01/06/2021 3 5.5% 27 yrs - NNN Dorian groep Sorgvliet Extension Linter 09/07/2021 6 5% 20-year lease extension - NNN Korian Belgium Plantijn Extension Kapellen 25/08/2021 1.5 5% 27-year lease extension - NNN Armonea Germany 112 Seniorenquartier Kaemenas Hof Development Bremen 29/03/2021 15 >5% 30 yrs - NNN EMVIA Living Seniorenquartier Heiligenhafen Development Heiligenhafen 30/04/2021 13 >5% 30 yrs - NNN EMVIA Living Seniorenquartier Espelkamp Development Espelkamp 17/05/2021 15 >5% 30 yrs - NNN EMVIA Living SARA Senioren- residenz Haus III Forward purchase Bitterfeld-Wolfen 31/05/2021 10 5.5% WAULT 28 yrs - NN SARA Seniorenquartier Weyhe Development Weyhe 29/09/2021 15 >5% 30 yrs - NNN EMVIA Living Seniorenquartier Wolfsburg Development Wolfsburg 21/12/2021 28 >5% 30 yrs - NNN EMVIA Living Seniorenquartier Cuxhaven Development Cuxhaven 22/12/2021 16 >5% 30 yrs - NNN EMVIA Living Netherlands 35 Villa Nuova Development Vorden 23/02/2021 5 5.5% 20 yrs - NNN Korian Netherlands Nieuw Heerenhage Development Heerenveen 15/06/2021 20 5.5% 25 yrs - NNN Stichting Rendant Martha Flora Hulsberg Development Hulsberg 17/11/2021 5 5.5% 25 yrs - NNN Martha Flora Martha Flora Dordrecht Development Dordrecht 08/12/2021 5 5.5% 25 yrs - NNN Martha Flora United Kingdom 3 36.5 Hamberley Hailsham Forward purchase Hailsham 28/01/2021 16 5.5% 25 yrs - NNN Hamberley Care Homes Bessingby Hall Extension Bessingby 31/01/2021 1 6% WAULT 22 yrs - NNN Burlington The Sycamores Extension Wakefield 10/06/2021 1 6% WAULT 18 yrs - NNN Burlington Priesty Fields Forward purchase Congleton 20/10/2021 18.5 5.5% 30 yrs - NNN Handsale 41 projects OF THE INVESTMENT PROGRAMME COMPLETED TOTALLING €289 MILLION 44 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE Name Type Location Date Investment (€ million) 1 Gross rental yield (approx. %) Lease Operator Finland 85 Kempele Ihmemaantie Development Kempele 22/01/2021 2 6.5% 20 yrs - NN Kotoisin Oulunsalon Vihannestie Development Oulu 26/02/2021 1 7% 15 yrs - NN Siriuspäiväkodit Porin Kerhotie Development Pori 19/03/2021 3 7% 15 yrs - NN Dagmaaria Lohjan Sahapiha (elderly care) Development Lohja 30/06/2021 7 6% 15 yrs - NN Attendo Lohjan Sahapiha (child day-care) Development Lohja 30/06/2021 1 6% 15 yrs - NN Pilke Kuopion Männistönkatu Development Kuopio 30/06/2021 5 6% 15 yrs - NN Municipality of Kuopio Kuopion Amerikanraitti Extension Kuopio 15/07/2021 1 8% 15 yrs - NN Priimi Lohja Porapojankuja Development Lohja 16/07/2021 2 5.5% 20 yrs - NN Aspa Raahe care home Development Raahe 15/08/2021 7.5 5.5% 15 yrs - NN Municipality of Raahe Kajaani Uitontie Development Kajaani 31/08/2021 3 7% 20 yrs - NN Suomen Kristilliset Hoivakodit Oulu Ukkoherrantie Development Oulu 17/09/2021 2.5 6.5% 20 yrs - NN Rinnekoti Kuusankosken Keva Development Kouvola 30/09/2021 2.5 6.5% 15 yrs - NN Validia Oulu Salonpään koulu Development Oulu 30/09/2021 6 7% 25 yrs - NN Municipality of Oulu Espoon Matinkartanontie Development Espoo 08/11/2021 19 6.5% 25 yrs - NN Kristillinen koulu Oulu Valjastie Development Oulu 30/11/2021 5 9% 25 yrs - NN Municipality of Oulu Salo Papinkuja Development Salo 30/11/2021 4 6% 20 yrs - NN Huhtihovi Hämeenlinna Kampuskaarre Development Hämeenlinna 15/12/2021 3 6.5% 20 yrs - NN Stafiko Jyväskylä Harjutie Development Jyväskylä 21/12/2021 2.5 7% 15 yrs - NN Musiikkipäiväkoti Priimi Turun Lemmontie Development Turku 29/12/2021 3 6% 15 yrs - NN Rinnekoti Helsingin Työn- johtajankadun Seppä 3 Development Helsinki 30/12/2021 5 6% 10 yrs - NN Pääkaupungin turvakoti Sweden 2 7 Upplands Väsby Havregatan Development Upplands Väsby 01/08/2021 3.5 6.5% 15 yrs - NN Norlandia Förskolor Förskola Kallinge Development Ronneby 15/11/2021 3.5 7% 15 yrs - NN Täby- pedagogerna Total 289 1. For completed development projects, the amounts in this column only include the works that were carried out. For acquisitions of which the outstanding conditions have been fullled, this amount includes the contractual value of the plots of land and the existing buildings. 2. Amounts in £ and SEK were converted into € based on the exchange rate of the transaction date. – 45 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION – 45 Name Location Country Date Selling price (€ million) 2 Randolph House Scunthorpe United Kingdom 08/02/2021 1.3 De Notelaar (plot of land) Olen Belgium 22/03/2021 0.3 Service-Residenz Schloss Bensberg Bergisch Gladbach Germany 30/06/2021 17.5 Martha Flora Lochem Lochem Netherlands 02/08/2021 2.0 The Elms Sutton United Kingdom 26/08/2021 0.9 Bois de la Pierre (plot of land) Waver Belgium 24/09/2021 0.2 Residentie La Tour Roermond Netherlands 06/10/2021 9.7 Vinea Domini (plot of land) Witmarsum Netherlands 19/11/2021 0.0 Devonshire House & Lodge Elburton Heights Plymouth United Kingdom 23/11/2021 7.7 De Notelaar (plot of land) Olen Belgium 14/12/2021 0.2 Residentie Sibelius Oss Netherlands 22/12/2021 14.2 Total 54.0 46 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 1.2 IMPORTANT EVENTS AFTER 31 DECEMBER 2021 Name Type Location Date Investment (€ million) 1 Pipeline (€ million) 2 Gross rental yield (approx. %) Comple- tion/ implemen- tation Lease Operator United Kingdom 3 - 16 Market Drayton Great Hales Development Market Drayton 17/02/2022 - 16 6% Q1 2023 30 yrs - NNN MMCG Finland - 10 Liminka Saunarannantie Development Liminka 16/03/2022 - 2.5 6% Q3 2022 15 yrs - NN Pilke Kerava Lehmuskatu Development Kerava 16/03/2022 - 7.5 6% Q4 2022 20 yrs - NNN Municipality of Kerava Ireland 5.5 26.5 Dublin Crumlin Development Dublin 16/03/2022 5.5 26.5 5.5% Q4 2023 25 yrs - NNN Bartra Healthcare Total 5.5 52.5 Name Type Location Date Investment (€ million) 4 Gross rental yield (approx. %) Lease Operator Germany 7 Seniorenhaus Lessingstrasse Acquisition subject to outstanding conditions Wurzen 01/02/2022 7 5.5% 25 yrs - NN Seniorenhaus Lessingstrasse Netherlands 23 LLT Almere Buiten Development Almere 01/02/2022 7 5.5% 20 yrs - NNN Saamborgh Het Gouden Hart Soest 5 Development Soest 04/02/2022 3 5.5% NNN Korian Netherlands Het Gouden Hart Lelystad 5 Development Lelystad 25/02/2022 4 5.5% NNN Korian Netherlands Martha Flora Goes Development Goes 28/02/2022 5 5.5% 25 yrs - NNN Martha Flora Stepping Stones Blaricum 5 Development Blaricum 28/02/2022 4 5.5% NNN Korian Netherlands Finland 3 Jyväskylä Haukankaari Development Jyväskylä 31/01/2022 3 6% 20 yrs - NN Rinnekoti Total 33 1. The amounts in this column include the contractual value of the plots of land and the existing buildings. These investments generate rental income (sites under construction also generate limited rental income (except in Finland, Sweden and Spain), in particular for the plots of land that have already been acquired). 2. The amounts in this column are the budgets for development projects that Aedica will nance or acquisitions of which the conditions precedent will be fullled in the course of the coming months. 3. Amounts in £ and SEK were converted into € based on the exchange rate of the transaction date. 4. For completed development projects, the amounts in this column only include the works that were carried out. For acquisitions of which the outstanding conditions have been fullled, this amount includes the contractual value of the plots of land and the existing buildings. 5. This project was developed within the joint venture with the Korian group. Aedica and Korian each nanced 50% of the total budget. This table only considers the part of the budget that was nanced by Aedica. – 47 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION – 47 Name Location Country Date Selling price (€ million) Oulun Rakkakiventie Ylöjärven Mustarastaantie Oulun Kehätie Porin Palokärjentie Sipoon Satotalmantie Vihdin Pengerkuja Joutsenon Päiväkoti Siilinjärven Honkarannantie Kouvolan Pappilantie Oulu Ylöjärvi Oulu Pori Sipoo Vihti Lappeenranta Siilinjärvi Kouvola Finland 28/01/2022 29 Total 29 48 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE In France, care operator Orpea has been under scrutiny related to revelations made in the French media, aecting the elderly care sector. Allegations against Orpea France include care negligence of elderly people in some of Orpea’s care homes, mismanagement prioritising prot over care and fraudulent activities. Orpea represents 5% of Aedica’s contractual rental income (Bel - gium: 3%; Germany: 1%; Netherlands: 1%). Aedica does not own any healthcare properties in France. Based on current information, no material impact is expected on rents for Aedica’s care properties operated by Orpea. Operators in Europe take care of elderly people in a highly regulated and controlled environment. Incidents regarding quality of care have occurred in the past in several other European countries. Such reported incidents will normally lead to multiple inspections by the competent authorities and/or specic sanctions (e.g., a temporary admission ban or – in excep- tional cases – the closure of a care home). Generally, the supervising authorities will apply specic focus on the enforcement and execution of a remedial plan by the targeted operator. Ultimately, such incidents could lead to legislative changes aiming to improve the quality of care throughout the sector in a certain country or region. When imposing new regulations, authorities however tend to avoid disrupting the market or the operators themselves, as this could lead to the opposite of the pursued goal, which is the improvement of quality of care. Aedica rmly believes that well balanced regulations and adequate inspections should lead to fewer incidents and market turmoil, and to an optimal situation for residents, operators and all stakeholders involved in this market. As a reminder, when analysing potential investment or development cases and when managing its portfolio of standing assets, Aedica monitors both nancial and non-nancial KPIs of its assets to the extent permitted by local market regulations and practices. The main nancial KPI is the rent cover ratio allowing to assess the sustainability of the rent based on normal revenue and cost assumptions. Regarding non-nancial KPIs, Aedica takes into account a tenant’s quality and reputation based on publicly available information such as healthcare inspection reports, which are discussed with the operator. As always when signicant incidents involving care operators are reported, Aedica will evaluate and, if necessary, adjust its own proce- dures based on the results of public investigations. – 49 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION – 49 2. COVID-19 IMPACT The impact of the Covid-19 pandemic on society in general could still be felt during 2021. However, the vaccination programmes – including booster shots – that have been rolled out across Europe since 2021 and the emergence of new Covid-19 variants that appear to cause less severe illness have led to a signicant improvement in the situation. At the end of 2021, there was no longer any indication of excess mortality due to the virus. The pandemic therefore had no material impact on the Group’s results as at 31 December 2021. Since the start of 2021, vaccination programmes have been rolled out in all countries in which Aedica operates, with priority given to care home residents and sta. Now that the vaccination – including boost - ers – of these priority groups is complete in most European countries, many operators report that the public’s perception of the risk posed by care homes will quickly alter for the better and that the care operators’ occupancy levels (which fell by around 5 to 10% in some countries owing to excess mortality, a halt to admissions or other factors such as visitor restrictions) are rising again. The rst signs of a change in trend started to emerge in the second quarter of 2021, leading in general to improved resident occupancy rates by the end of 2021. Although the ‘Omicron wave’ at the end of 2021 and the beginning of 2022 might temporarily slow down the resident occupancy recovery, it is generally believed that the positive trend will continue in 2022. Operator’s report- ing 1 is also showing an improved rent cover, owing to the improving occupancy. It has nevertheless been pointed out that some increased costs, specically relating to sta shortages during the ‘Covid-19 waves’ are still impacting rent covers. Despite the pandemic, there has been no material negative impact on rent payments. This is partly due to the fact that the average occupancy rate of the care home operators in all the countries in the portfolio has been maintained at a level that enables tenants to continue to fulll their obligations. In addition, (local) authorities in various countries have approved aid programmes to (partly) cover the additional costs incurred by care home operators as a result of the Covid-19 measures. In several countries these programmes are however ending or ended in the course of 2021. The healthcare real estate investment market was very dynamic in 2021, characterised in general by yield compression. The sound mar- ket fundamentals of healthcare real estate (ageing of the population, market consolidation of care operators and public nancing of care) remain intact and are even being strengthened by the crisis. In addition, Aedica’s development projects are proceeding as expected since construction projects are continuing normally. Aedica believes it is well placed, in terms of the strength of its balance sheet, its liquidity position, tenant base and the diversication of the portfolio, to absorb the short-term risks of the Covid-19 pandemic (namely the possible negative impact of the pandemic on the ability of care home operators to pay their rent) and the general volatility of the macro-economic climate resulting from the pandemic, but also to continue to follow and support the growth of the care sector in Europe and the resulting need for healthcare real estate. 1. The level of detail in the reporting received from operators varies from country to country. For example, rent covers are not available in all countries in which Aedica operates. 50 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 3. MANAGEMENT OF FINANCIAL RESOURCES 3.1 CREDIT RATING In August 2021, Aedica received its rst issuer credit rating by S&P Global. The Group was assigned a BBB investment-grade rating with a stable outlook. Aedica has engaged in this nancial rating process in order to benet from an enhanced access to capital markets with attractive nancing conditions (see section 3.2 below), while appealing to a broader investor base. According to S&P, this rating reects the strength of Aedica’s balance sheet and business model. The stable outlook reects the predictable rental income supported by resilient health care assets and overall long leases which should continue to generate stable cash ows over the next few years. S&P’s credit rating research is available on Aedica’s website. 3.2 ISSUANCE OF A €500 MILLION SUSTAINABILITY BOND On 2 September 2021, Aedica has successfully priced its rst bench- mark Sustainability Bond for a total size of €500 million. The notes are issued with a tenor of 10 years paying a xed coupon of 0.75% per annum. The strong investor demand for Aedica was evidenced by an orderbook of €1.8 billion, more than 3.6 times covering the deal size. The proceeds of the issuance of the Sustainability Bond will be used to (re)nance environmentally sustainable healthcare assets as dened in the Company’s updated Sustainable Finance Framework. V.E. provided a Second Party Opinion on the alignment of the Sustainable Finance Framework with relevant international standards, including the ICMA Green- and Social Bond Principles. The bond is listed on the Luxembourg Stock Exchange (Euro MTF Market) since 9 September 2021. 3.3 FINANCIAL DEBTS 5% Investment credits 33% Term loans 11% Revolving loans 10% USPP GBP 24% Sustainable bond 4% Medium-term notes 13% Short-term treasury notes € 900 800 700 600 500 400 300 200 100 0 Treasury notes USPP GBP Bond Drawn credit lines Undrawn credit lines 31/12/22 31/12/23 31/12/24 31/12/25 31/12/26 31/12/27 >31/12/27 100 90 80 70 60 50 40 30 20 10 0 Fixed rate debt Swaps Caps Unhedged floating rate debt 31/12/21 31/12/22 31/12/23 31/12/24 31/12/25 This Sustainability Bond is a further building block in Aedica’s long-term sustainability strategy, bridging the nancing strategy and our CSR ambitions. INGRID DAERDEN, CFO – 51 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION – 51 1. Assuming debt 31/12/2021 unchanged. 2. Amounts in £ were converted into € based on the exchange rate of 31 December 2021 (1.18879 £/€). 3. Without regard to short-term treasury notes and uncommitted credit lines. 4. See press release of 24 June 2021. During the 2021 nancial year, Aedica further strengthened its nancial resources. The Group has secured new, long-term nancing with due dates between 2024 and 2033 totalling €1,329 million: • a bond (‘USPP’) of £180 million was successfully issued through a private placement with US, UK and Canadian institutional investors. The bonds have maturities of 7 and 12 years with a coupon of 2.58% and 2.79% respectively; • a private placement of €10 million with a term of seven years was concluded at a xed interest rate of 1.329%; • bank loans totalling €370 million were contracted by Aedica NV/SA, of which €305 million was new nancing and €65 million was early renancing (of which €40 million was a ‘green loan’ under Aedica’s Sustainable Finance Framework); • bank loans of €235 million (of which €135 million were used to re- nance investment loans) were contracted by Hoivatilat Oyj; • Aedica successfully issued its rst benchmark Sustainability Bond for an amount of €500 million with a tenor of 10 years and a coupon of 0.75% per annum (see section 3.2 above). These various transactions underline Aedica’s wish to further diversify its sources of nancing and to integrate ESG criteria into its nancial policy. Taking these elements into account, the maturity dates of Aedica’s nancial debts as of 31 December 2021 are as follows: Financial debt (in € million) 2 Lines Utilisation of which treasury notes 31/12/2022 389 319 276 31/12/2023 371 166 - 31/12/2024 432 256 - 31/12/2025 540 175 - 31/12/2026 351 189 - 31/12/2027 92 92 50 >31/12/2027 889 889 37 Total as of 31 December 2021 3,064 2,087 363 Weighted average maturity (in years) 3 4.7 5.7 - Without regard to short-term nancing (short-term treasury notes), the weighted average maturity of the nancial debts as of 31 December 2021 is 5.7 years. The available liquidity after deduction of the short-term commercial paper stood at €701 million on 31 December 2021. As of 31 December 2021, Aedica’s consolidated debt-to-assets ratio amounted to 42.6%. Aedica extended and increased its hedge ratio by closing new forward starting swaps and some caps to hedge the interest rate risk. In addition, the USPP and the benchmark bond issue have rebalanced Aedica’s mix of xed and oating rate debt. On 31 December 2021, the nancial debt is hedged against interest rate risk for 90.3%, i.e. the ratio of the sum of the xed rate debt and the notional amount of derivatives divided by the total nancial debt (31 December 2020: 72.9%). The hedging’s weighted average maturity is 6.6 years. 3.4 EQUITY In 2021, Aedica completed one capital increase in cash and two capital increases by contribution in kind, raising more than €330 million. These capital increases strengthened Aedica’s equity position and partly nanced acquisitions and development projects while maintaining a strong balance sheet, giving the Group sucient nancial resources for further growth. Capital increase of €286 million On 9 June 2021, Aedica successfully launched a capital increase in cash within the authorised capital by way of an accelerated bookbuilding with international institutional investors (an ‘ABB’) for a gross amount of €286 million. On 15 June 2021, the Company issued 2,800,000 new shares at an issue price of €102 per share, i.e. €285,600,000 (including share premium). The new shares were immediately admitted to trading and are entitled to a pro rata temporis dividend for the 2021 nancial year as from 15 June 2021 (coupon no. 29 and following). Within the framework of this transaction, coupon no. 28, representing the right to the pro rata temporis dividend for the period from 1 January 2021 to 14 June 2021 inclusive, was detached on 11 June 2021. Contribution in kind of €20 million On 29 June 2021, the acquisition of the Domaine de la Rose Blanche care home in Durbuy (Belgium) was carried out through the contribution in kind of the building and the plot of land in Aedica NV/SA. As consid- eration for the contribution, 184,492 new Aedica shares were issued following a capital increase by the Board of Directors within the frame - work of the authorised capital. The new shares have been listed since 29 June 2021 and are entitled to a pro rata temporis dividend for the 2021 nancial year as from 15 June 2021 (coupon no. 29 and following). Contribution in kind of €27 million On 8 September 2021, the Group acquired 14 buildings and the related plots of land 4 through the contribution in kind of 100% of the shares in the Swedish real estate company that (indirectly) controls the portfolio. As consideration for the contribution, 237,093 new Aedica shares were issued following a capital increase by the Board of Directors within the framework of the authorised capital. The new shares have been listed since 8 September 2021 and are entitled to a pro rata temporis dividend for the 2021 nancial year as from 15 June 2021 (coupon no. 29 and following). Following this transaction, the total number of Aedica shares amounts to 36,308,157 and the share capital amounts to €958,091,797.21. 52 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 4. SUMMARY OF THE CONSOLIDATED FINANCIAL STATEMENTS 4.1 CONSOLIDATED RESULTS 1 Consolidated income statement - analytical format (x €1,000) 31/12/2021 31/12/2020 (12 months - restated period) 31/12/2020 (18 months) Rental income 232,118 187,535 259,505 Rental-related charges -686 -2,753 -3,344 Net rental income 231,432 184,782 256,161 Operating charges -38,105 -33,228 -44,539 Operating result before result on portfolio 193,327 151,554 211,622 EBIT margin (%) 83.5% 82.0% 82.6% Financial result excl. changes in fair value -32,162 -28,323 -38,755 Corporate tax -9,718 -7,703 -11,530 Share in the profit or loss of associates and joint ventures accounted for using the equity method in respect of EPRA Earnings 360 798 1,568 Non-controlling interests in respect of EPRA Earnings -328 -158 -187 EPRA Earnings (owners of the parent) 151,479 116,168 162,718 Denominator (IAS 33) 34,789,526 27,472,976 26,512,206 EPRA Earnings (owners of the parent) per share (€/share) 4.35 4.23 6.14 EPRA Earnings 151,479 116,168 162,718 Changes in fair value of financial assets and liabilities 14,813 -5,587 -2,169 Changes in fair value of investment properties 160,211 5,069 25,049 Gains and losses on disposals of investment properties 534 -1,827 -559 Tax on profits or losses on disposals -559 0 0 Negative goodwill / goodwill impairment -3,540 0 0 Deferred taxes in respect of EPRA adjustments -46,452 -11,041 -14,811 Share in the profit or loss of associates and joint ventures accounted for using the equity method in respect of the above 6,011 1,180 3,007 Non-controlling interests in respect of the above -673 -68 -167 Roundings 0 0 0 Profit (owners of the parent) 281,824 103,894 173,068 Denominator (IAS 33) 34,789,526 27,472,976 26,512,206 Earnings per share (owners of the parent - IAS 33 - €/share) 8.10 3.78 6.53 The consolidated turnover (consolidated rental income) of the 2021 nan- cial year (1 January 2021 – 31 December 2021) amounted to €232.1 million, an increase of approx. 24% as compared to the turnover of the previous nancial year (1 January 2020 – 31 December 2020: €187.6 million). 1. In order to allow comparison with the previous period (due to the extension of the 2019/2020 nancial year), the gures as of 31 December 2020 were derived on a 12-month basis (with the exception of the denominators (IAS 33) which were recalculated for each period). Acquisitions are accounted for on the date of the eective transfer of control. These operations therefore present dierent impacts on the income statement, depending on whether they took place at the beginning, during, or at the end of the period. – 53 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION – 53 Consolidated rental income (x €1,000) 2021.01- 2021.03 2021.04- 2021.06 2021.07- 2021.09 2021.10- 2021.12 2021.01 - 2021.12 2020.01 - 2020.12 Var. (%) on a like-for-like basis ° Var. (%) Belgium 15,428 15,425 15,797 15,898 62,548 58,228 +1.0% +7.4% Germany 9,302 10,007 12,393 13,269 44,971 35,625 +0.8% +26.2% Netherlands 7,302 7,523 7,895 7,709 30,429 24,627 +1.2% +23.6% United Kingdom 11,551 11,698 13,182 13,480 49,911 41,754 +1.6% +19.5% Finland 9,387 9,695 9,947 10,768 39,797 27,029 +0.8% +47.2%°° Sweden 217 218 591 932 1,958 272 +0.8% +621.0%°° Ireland 164 354 843 1,143 2,504 - +0.0% - Spain - - - - - - +0.0% - Total 53,351 54,920 60,648 63,198 232,118 187,535 +1.9% +23.8% ° The variation on a like-for-like basis is shown for each country in the local currency. The total variation on a like-for-like basis is shown in the Group currency. °° Hoivatilat included in the consolidation scope of the Aedica group on 10 January 2020. Aedica’s consolidated rental income by country is presented in the table above. In order to allow comparison with the previous nancial year, the variation on a like-for-like basis was calculated on a 12-month period. The increase in consolidated rental income demonstrates the relevance of Aedica’s investment strategy and can be attributed to the large number of sites that Aedica has added to its portfolio through the completion of new acquisitions and the delivery of development projects from the investment programme. The variation on a like-for-like basis in the UK is impacted by Aedica’s plan to redevelop two properties in the UK portfolio (which has an impact on the contribution of these properties in the rental income during the preparation and execution of the redevelopment). Excluding these eects, the variation on a like-for-like basis for the United Kingdom amounts to +3.5%. After deduction of the rental-related charges (€0.7 million), the net rental income amounts to €231.4 million (+25% compared to 31 December 2020). The property results amounts to €230.5 million (31 December 2020: €184.8 million). This result, less other direct costs, leads to a property operating result of €222.9 million (31 December 2020: €178.6 million). This implies an operating margin of 96.3% (31 December 2020: 96.7%). After deducting overheads of €30.9 million (31 December 2020: €27.1 million) and taking into account other operating income and charges, the operating result before result on the portfolio has increased by 28% to reach €193.3 million (31 December 2020: €151.6 million). This implies an EBIT margin of 83.5% (31 December 2020: 82.0%). Taking into account the cash ows generated by hedging instru- ments, Aedica’s net interest charges amount to €27.5 million (31 December 2020: €25.1 million). The average eective interest rate including commitment fees is 1.6%, lower than in the previous nancial year (1.7%). Taking into account other income and charges of a nancial nature, and excluding the net impact of the revaluation of hedging instruments to their fair value (non-cash movements accounted for in accordance with IAS 39 are not included in the EPRA Earnings as explained below), the nancial result excl. changes in fair value rep- resents a net charge of €32.2 million (31 December 2020: €28.3 million). Corporate taxes are composed of current taxes, deferred taxes and exit tax. In conformity with the special tax system of Belgian RRECs, the taxes included the EPRA Earnings (31 December 2021: €9.7 million; 31 December 2020: €7.7 million) consist primarily of tax on the result of consolidated subsidiaries, tax on prots generated outside of Belgium and Belgian tax on Aedica’s non-deductible expenditures. In the Dutch subsidiaries, for the sake of caution it was decided to opt for a common law tax burden in the result, notwithstanding the fact that the subsidiary still has a claim to the application of the scally transparent regime of a ‘Fiscale Beleggingsinstelling (‘Tax Investment Institution’). Deferred taxes are described below. The share in the result of associates and joint ventures includes the result of the participation in Immobe NV/SA which has been consoli- dated since 31 March 2019 using the equity method. EPRA Earnings (see page 155) reached €151.5 million (31 December 2020: €116.2 million), or €4.35 per share (31 December 2020: €4.23 per share), based on the weighted average number of shares outstanding and taking into account the higher number of shares resulting from the 2020 and 2021 capital increases. This result (absolute and per share) is higher than the budgeted amount of €4.28 that was announced in the interim statement of the Board of Directors of the third quarter 2021. 54 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE The income statement also includes elements with no monetary impact (i.e., non-cash) that vary in line with external market parameters. These consist amongst others of changes in the fair value of investment properties (accounted for in accordance with IAS 40), changes in the fair value of nancial assets and liabilities (accounted for in accordance with IAS 39), other results on portfolio, exit tax and deferred taxes (arising from IAS 40): • Over the entire nancial year, the combined changes in the fair value of marketable investment properties 1 and development projects represent an increase of €160.2 million for the period (31 December 2020: €5.1 million). • In order to limit the interest rate risk stemming from the nanc- ing of its investments, Aedica has put in place long-term hedges which allow for the conversion of variable-rate debt to xed-rate debt, or to capped-rate debt. Moreover, the nancial instruments also reect put options granted to certain minority shareholders which are the subject of appraisal at fair value. Changes in the fair value of nancial assets and liabilities taken into the income state - ment as of 31 December 2021 represent an income of €14.8 million (31 December 2020: a charge of €5.6 million) following the increase of the long-term interest rates. • Capital gains on disposals (31 December 2021: €0.5 million; 31 December 2020: -€1.8 million) are also taken into account here. • Impairment of goodwill (31 December 2021: charge of €3.5 million) related to the acquisition of the shares of British asset management company Layland Walker. • Deferred taxes in respect of EPRA adjustments (charge of €46.5 million as of 31 December 2021, compared to a charge of €11.0 million on 31 December 2020) include two elements. Deferred taxes (charge of €46.2 million as of 31 December 2021, compared to a charge of €11.1 million on 31 December 2020) arose from the recognition at fair value of buildings located abroad, in conformity with IAS 40. The exit tax (charge of €0.3 million as of 31 December 2021, compared to an income of €0.1 million as of 31 December 2020) corresponds to the variation between the estimated exit tax at the moment of acquisition of companies and the estimated exit tax at their anticipated merger dates. Taking into account the non-monetary elements described above, the profit (owners of the parent) amounts to €281.8 million (31 December 2020: €103.9 million). The basic earnings per share (as dened by IAS 33) is €8.10 (31 December 2020: €3.78). The adjusted statutory result as dened in the annex to the Royal Decree of 13 July 2014 regarding RRECs, amounts to €138.9 million (31 December 2021, 12 months; 31 December 2020: €139.7 million, 18 months) – as calculated in the Abridged Statutory Financial Statements on page 230 – or €3.98 per share (31 December 2020: €5.24 per share). – 55 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION – 55 1. That change corresponds to the sum of the positive and negative variations of the fair value of the buildings as of 31 December 2020 or the time of entry of new buildings in the portfolio, and the fair value estimated by the valuation experts as of 31 December 2021. 2. The investment properties are represented at their fair value as determined by the valuation experts (Cushman & Wakeeld NV/SA, Stadim BV/SRL, CBRE GmbH, Jones Lang LaSalle SE, Cushman & Wakeeld VOF, CBRE Valuation & Advisory Services BV, Cushman & Wakeeld Debenham Tie Leung Ltd, Jones Lang LaSalle Finland Oy, JLL Valuation AB and CBRE Unlimited Company). 3. IFRS requires that the costs incurred to raise capital are recognised as a decrease in the capital reserves. 4. This amount relates exclusively to the payment of the nal dividend. As the interim dividend of €3.00 (gross) per share was distributed in October 2020, it was already accounted for in the gures as of 31 December 2020. 4.2 CONSOLIDATED BALANCE SHEET Consolidated balance sheet (x €1,000) 31/12/2021 31/12/2020 Investment properties including assets classified as held for sale 4,896,422 3,814,667 Other assets included in debt-to-assets ratio 258,725 252,274 Other assets 6,720 234 Total assets 5,161,867 4,067,175 Equity Equity excl. changes in fair value of hedging instruments 2,808,488 2,222,523 Effect of the changes in fair value of hedging instruments -27,317 -52,212 Non-controlling interests 4,226 2,625 Equity 2,785,397 2,172,936 Liabilities included in debt-to-assets ratio 2,197,131 1,757,683 Other liabilities 179,339 136,556 Total equity and liabilities 5,161,867 4,067,175 Debt-to-assets ratio (%) 42.6% 43.2% As of 31 December 2021, investment properties including assets classied as held for sale represent 95% (31 December 2020: 94%) of the assets recognised on Aedica’s balance sheet, valued in accord- ance with IAS 40 2 at €4,896 million (31 December 2020: €3,815 million). This heading includes: • Marketable investment properties including assets clas- sied as held for sale (31 December 2021: €4,687 million; 31 December 2020: €3,622 million) increase in the amount of €1,065 million. The net growth in the fair value of marketable investment properties is attributed primarily to €635 million from investment operations, to -€53 million from divestment operations, to €289 million from the completion of development projects, to €44 million from exchange rate dierences and to €150 million from the change in the fair value of marketable investment properties. The change in the fair value of marketable investment properties, as assessed by independent valuation experts, are broken down as follows: - Belgium: +€23.1 million (+0.6%); - Germany: +€25.4 million (+0.7%); - Netherlands: +€13.4 million (+0.4%); - United Kingdom: +€28.7 million (+0.8%); - Finland: +€51.9 million (+1.4%); - Sweden: +€5.1 million (+0.1%); - Ireland: +€2.1 million (+0.1%). • Development projects (31 December 2021: €152 million; 31 December 2020: €141 million) consist primarily of investment properties under construction or renovation. They are part of a mul- ti-annual investment programme (see pages 83-85). • The right of use related to plots of land held in ‘leasehold’ in accordance with IFRS 16 (31 December 2021: €58 million; 31 December 2020: €52 million). The item ‘Other assets included in debt-to-assets ratio’ includes, amongst other things, goodwill amounting to €161.7 million arising from the acquisition of Hoivatilat, which is the positive dierence between the price paid for the shares of Hoivatilat Oyj and the accounting value of the acquired net assets, and holdings in associated companies and joint ventures. This includes the remaining stake of 25% in Immobe NV, which amounts to €40.5 million as of 31 December 2021 (31 December 2020: €37.0 million). The other assets included in the debt-to-assets ratio represent 5% of the total balance sheet (31 December 2020: 6%). Since Aedica’s incorporation, its capital has increased as a result of various real estate activities (contributions, mergers, etc.) and capital increases in cash. As of 31 December 2021 3 , the Company’s capital amounts to €958 million (31 December 2020: €873 million). Equity (also called net assets), which represents Aedica’s intrinsic net value and takes into account the fair value of its investment portfolio, amounts to: • €2,808 million excluding the eect of the changes in fair value of hedging instruments (31 December 2020: €2,223 million, including the €47 million dividend distributed in May 2021 4 ); • or €2,781 million taking into account the eect of the changes in fair value of hedging instruments (31 December 2020: €2,170 million, including the €47 million dividend distributed in May 2021 4 ). 56 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE As of 31 December 2021, liabilities included in the debt-to-assets ratio (as dened in the Royal Decree of 13 July 2014 on RRECs) reached €2,197 million (31 December 2020: €1,758 million). Of this amount, €2,081 million (31 December 2020: €1,667 million) is eectively drawn on the Company’s credit lines. Aedica’s consolidated debt- to-assets ratio amounts to 42.6% (31 December 2020: 43.2%). The table below sets out the Group’s additional consolidated debt capacity assuming a debt-to-assets-ratio of 65% (maximum debt-to-assets ratio permitted for Belgian RRECs), 60% (maximum debt-to-assets ratio given Aedica’s existing bank commitments) and 50% (maxi- mum debt-to-assets ratio based on Aedica’s nancial policy). The additional consolidated debt capacity is expressed in constant assets (that is, excluding growth in the real estate portfolio), in variable assets (that is, taking into account growth in the real estate portfolio) and as the decrease in the fair value of investment properties that the current balance sheet structure can absorb. Other liabilities of €179 million (31 December 2020: €137 million) represent primarily the fair value of hedging instruments (31 December 2021: €33 million; 31 December 2020: €51 million) and the deferred taxes (31 December 2021: €121 million; 31 December 2020: €75 million). Additional consolidated debt capacity Debt-to-assets ratio 50% 60% 65% In constant assets (in € million) 380 896 1,154 In variable assets (in € million) 761 2,240 3,296 Decrease in fair value of investment properties (in %) -15.5% -30.5% -36.2% 4.3 NET ASSET VALUE PER SHARE Excluding the non-monetary eects (i.e., non-cash) of the changes in fair value of hedging instruments 1 and after accounting for the distribution of the 2019/2020 nal dividend in May 2021 2 , the net asset value per share based on the fair value of investment properties amounted to €77.35 as of 31 December 2021 (31 December 2020: €65.75 per share). Net asset value per share (in €) 31/12/2021 31/12/2020 Net asset value after deduction of the 2019/2020 dividend, excl. changes in fair value of hedging instruments 77.35 65.75 Effect of the changes in fair value of hedging instruments -0.75 -1.58 Net asset value after deduction of the 2019/2020 dividend 76.60 64.17 Number of shares outstanding (excl. treasury shares) 36,308,157 33,086,572 € 3.40/share 85 % PROPOSED GROSS DIVIDEND FOR 2021 STATUTORY PAY-OUT RATIO – 57 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION – 57 1. The eect of the changes in fair value of hedging instruments of -€0.75 per share as of 31 December 2021 is the impact in equity of the fair value of hedging instruments, which is negative for €27.3 million, mainly booked in the liabilities on the balance sheet. 2. Recall that IFRS requires the presentation of the annual accounts before appropriation. The net asset value of €67.17 per share as of 31 December 2020 (as published in the 2019/2020 Annual Financial Report) thus included the nal dividend distributed in May 2021, and should now be adjusted by €1.43 per share in order to compare with the value as of 31 December 2021. This amount corresponds to the total amount of nal dividends paid (€47.2 million), divided by the total number of shares outstanding as of 31 December 2020 (33,086,572). 3. See page 139 for more information about Aedica’s 2021 dividend. 4. As a RREC investing more than 80% of its portfolio in residential European healthcare real estate, the withholding tax for Aedica investors amounts to only 15%. See section 4.2 of the ‘Standing Documents’ for more information on the tax treatment of dividends, as well as section 4.3 of the ‘Risk factors’ chapter. 4.5 CONSOLIDATED CASH FLOW STATEMENT The consolidated cash ow statement included in the attached Con- solidated Financial Statements shows total cash ows for the period of -€8.2 million (31 December 2020: +€8.1 million), which is made up of net cash from operating activities of +€198.3 million (31 December 2020: +€181.1 million), net cash from investing activities of -€820.9 million (31 December 2020: -€1,210.1 million), and net cash from nancing activities of +€614.4 million (31 December 2020: +€1,037.1 million). 4.6 APPROPRIATION OF THE RESULTS The Board of Directors proposes to the Annual General Meeting of 10 May 2022 to approve the Aedica SA’s Annual Accounts of 31 December 2021 (of which a summary is provided in the chapter ‘Abridged Statutory Financial Statements’ on page 230). The Board of Directors also proposes to distribute a gross dividend of €3.40 for the 2021 nancial year 3 , resulting in a statutory pay-out ratio of 85%. The dividend will be paid in May 2022 after the annual accounts have been approved by the Annual General Meeting of 10 May 2022. The dividend will be split between coupon no. 28 (€1.5370) and coupon no. 29 (€1.8630). The net dividend per share after deduction of 15% 4 withholding tax will amount to €2.89, split between coupon no. 28 (€1.30645) and coupon no. 29 (€1.58355). The statutory result for the 2021 nancial year will be submitted as presented in the table on page 230. The proposed dividend respects the requirements laid down in Article 13, § 1, paragraph 1 of the Royal Decree of 13 July 2014 regarding RRECs considering it is greater than the required minimum pay-out of 80 % of the adjusted statutory result, after deduction of the debt reduction over the nancial year. 58 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 5. OUTLOOK FOR 2022 The outlook presented below has been developed by the Board of Direc- tors as part of the preparation of the budget for the 2022 nancial year on a comparable basis with the Company’s historical nancial information. 5.1 ASSUMPTIONS External factors • The indexation rates of rents and charges vary by country and in most countries are linked to the (health) consumer price index. Indexation of the UK healthcare portfolio is generally based on the retail price index with contractual oors and caps. • Valuation of investment properties: no assumptions are made regarding uctuations in the portfolio’s fair value. Changes in the fair value of the portfolio have no impact on EPRA Earnings. • Average interest rate before capitalised interests: 1.64% based on the Euribor rate curve of 9 February 2022, bank margins, and hedges currently in place. • Foreign exchange: future uctuations in the exchange rate may aect the value of the investment properties in the United Kingdom and Sweden, the rental income and the net result of Aedica, which are all expressed in Euro. In the forecasts below, exchange rates GBP/ EUR of 1.15 and SEK/EUR of 0.10 have been applied. Internal factors • Rents: rent forecasts are based on current contractual rates and take indexation into account. The projected rental income includes assumptions regarding future portfolio additions (completion of build- ings currently under development and possible acquisitions for which the timing cannot be determined with certainty). • Real estate charges: the assumptions concerning real estate charges relate to internal and external real estate management costs (man- agement fees, etc.), repair and maintenance costs, general taxes and property tax, and insurance. • Operating charges and overheads: this forecast includes, amongst other things, employee benets, IT, oce, consultancy services, administrative and accounting fees, and fees directly associated with the listing of the Company’s shares. • Investment programme: - Delivery of projects from the committed pipeline of €335 million in 2022. - Hypothetical new investments in 2022 are assumed to amount to €800 million, in addition to deliveries from the committed pipe- line. It is assumed that €450 million of these new investments will immediately generate cash ow. The outlook is sensitive not only to the amount of hypothetical new investments, but also to the timing during the year. - The cash out in 2022 related to the investment programme described above amounts to approx. €900 million. This mainly concerns (i) cash outows related to the execution of the committed develop- ment pipeline amounting to approx. €350 million, (ii) additional– not yet committed – investments which are assumed to be carried out during the 2022 nancial year, amounting to approx. €450 million, and generating rental incomes in line with today’s market practice for 4 months on average, and (iii) additional– not yet committed – projects with assumed cash payments of approx. €100 million during the 2022 nancial year. • Financial assumptions: - Debt-to-assets ratio below 50% at the end of 2022. - Changes in the fair value of hedging instruments for nancial debts (IAS 39) are not modelled as they have no impact on EPRA Earn - ings, and are not estimable. Thus, these changes have no impact on the projections presented below. • Divestment assumption: assumption related to the sale of some assets as part of a limited portfolio rotation amounting to approx. €100 million. • Taxes: taxes mainly include tax on prots of consolidated subsidiar- ies, tax on prots generated by Aedica NV/SA abroad and Belgian tax on Aedica NV/SA’s non-deductible expenditures. As a result of international growth, the tax burden increases. – 59 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION – 59 5.2 FINANCIAL PROJECTIONS On the basis of the currently available information and the projected real estate portfolio, and without any unforeseen developments, the Board of Directors estimates the rental income for the 2022 nancial year to reach €269 million. This results in €175 million in EPRA Earnings. Taking into account the higher number of shares resulting from the 2021 capital increases (see section 3.2), the Board of Directors anticipates EPRA Earnings per share of €4.77 per share – an increase of 9.6% compared to 2021 – and a gross dividend of €3.70 per share – an increase of 8.8%. This outlook is based on an assumption of €450 million of additional cash-generating investments outside the development pipeline. The outlook takes into account the current knowledge and assessment of the (geo)political and nancial context and the Covid-19 pandemic. The Board of Directors continues to pay close attention to the shifting economic, nancial and (geo)political context, as well as the associated impact on the Group’s activities, the economic growth, interest curves, development costs and energy costs. Outlook for 2022 Estimated rental income €269 million EPRA Earnings €175 million EPRA Earnings per share €4.77 Gross dividend €3.70 60 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Compound annual growth rate: 24% 360 453 566 619 728 971 1,065 1,456 1,661 1,964 2,636 3,815 4,896 € June June June June June June June Dec Dec 100 80 60 40 20 0 7 6 5 4 3 2 1 0 100 95 88 86 77 70 45 32 26 18 23 17 18 14 12 15 18 18 1 2 2 5 12 12 14 17 2 9 13 2013 2014 2015 2016 2017 2018 2019 2020 2021 Ireland Sweden Finland United Kingdom Netherlands Germany Belgium Ireland Sweden Finland United Kingdom Netherlands Germany Belgium 17 23 1. OUR PORTFOLIO AS OF 31 DECEMBER 2021 6.4 5.4 5.0 5.3 5.55.25.3 Average 5.5 – 61 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION – 61 Average 90% Private 7% Non-profit 3% Public 27% ≤5 yrs 18% 6-10 yrs 9% 11-15 yrs 36% >15 yrs 10% Project 74% ≥15 years 26% <15 years 11% Korian 7% Colisée 6% Azurit Rohr 5% Orpea 4% Maria Mallaband 4% EMVIA 4% Vulpia 4% Bondcare 4% Attendo 3% Burlington 48% Other <3% 30 25 20 15 10 5 0 Ireland Sweden Finland United Kingdom Netherlands Germany Belgium None of the buildings in Aedica’s portfolio represents more than 3% of total consolidated assets. Overall occupancy rate for the year ended 31 December 2021 is 100%. Aedica’s investment properties are insured for a total value of €5,012 million. 20 years WAULT 22 23 18 22 12 13 24 62 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 65% Elderly care homes 4% Senior housing 17% Mixed-use elderly care buildings 7% Children day care centres 7% Other care segments ELDERLY CARE HOMES Elderly care homes provide long-term accommodation for seniors who continuously rely on collective domestic services, assistance with daily tasks and nursing or paramedical care. SENIOR HOUSING Senior housing is aimed at elderly people who want to live independently with access to care and services on request. The care properties consist of individual housing units where the elderly live independently, with common service facilities that can be used on an optional basis. MIXED-USE ELDERLY CARE BUILDINGS Mixed-use elderly care buildings combine within one building (or within several buildings on one site) housing units for both seniors requiring continuous care and seniors who want to live independently with care services available on demand. Moreover, the Group invests in care campuses that combine elderly care with other complementary care functions such as day-care centres, medical centres, medical practices, children day-care centres, housing for people with a disability, etc. CHILDREN DAY CARE CENTRES In northern Europe, we also invest in children day-care centres that pro- vide childcare for children aged 0 to 6, either as stand-alone centres or in combination with other care or school facilities. These day nurseries (‘pre-school’) provide childcare for children aged 0 to 6. OTHER CARE BUILDINGS The other care buildings in our portfolio accommodate various care activities (some combined with housing) and various target groups (regardless of age) with high or specic permanent or temporary care needs due to disability, illness or other circumstances such as addiction treatment, emergency childcare, special education, etc. – 63 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION – 63 64 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE Number of sites % Contractual rents 31/12/2021 % Contractual rents 31/12/2020 Belgium 83 25% 29% Korian Belgium 1 28 8% 9% Armonea 2 20 7% 8% Vulpia 12 4% 5% Orpea 3 9 3% 3% Astor vzw 1 1% 1% Orelia Group 1 0% 0% My-Assist 1 0% - Vivalto Home 1 0% 0% Emera 4 1 0% 0% Other 9 2% 2% Germany 101 21% 17% Azurit Rohr 24 6% 1% EMVIA 19 4% 3% Vitanas 12 3% 4% Residenz Management 8 1% 2% Orpea 3 5 1% 2% Argentum 7 1% 1% Alloheim 4 1% 1% Cosiq 3 1% 1% Convivo 3 1% 1% Korian Germany 1 1 0% 0% DRK Kreisverband Nordfriesland e. V. 1 0% 0% Johanniter 1 0% 0% Volkssolidarität 1 0% 0% Procuritas 2 0% - ATV Lemförde GmbH 1 0% - Specht Gruppe 1 0% - Other 8 1% 2% Netherlands 72 12% 14% Korian Netherlands 1 22 3% 3% Vitalis 3 2% 2% Martha Flora 10 1% 1% NNCZ 5 1% 1% Compartijn 3 6 1% 1% Domus Magnus 4 1% 1% Stichting Oosterlengte 3 0% 1% Stichting Rendant 1 0% 0% Stichting Leger des Heils Welzijns- en Gezondheidszorg 1 0% 0% Zorghaven Groep 2 0% - Saamborgh 2 0% 0% Wonen bij September 3 1 0% 0% Stichting Fundis 2 0% - Other 10 2% 2% 1. Korian Group. 2. Colisée Group. 3. Orpea Group. 4. Emera Group. – 65 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION – 65 Number of sites % Contractual rents 31/12/2021 % Contractual rents 31/12/2020 United Kingdom 102 20% 21% Maria Mallaband 16 4% 4% Bondcare Group 21 4% 4% Burlington 21 3% 4% Care UK 12 2% 2% Renaissance 9 1% 2% Excelcare 3 1% - Harbour Healthcare 5 1% 1% Halcyon Care Homes 4 1% 1% Caring Homes 4 1% 1% Lifeways 2 1% 1% Handsale 1 0% 0% Hamberley Care Homes 1 0% 0% Barchester 1 0% 0% Other 2 1% 1% Sweden 22 2% 1% Olivia Omsorg 5 0% 0% Ambea 3 0% - Kunskapsförskolan 2 0% 0% Humana 3 0% - Frösunda Omsorg 3 0% - British mini 1 0% 0% TP 1 0% 0% Norlandia 1 0% 0% Ersta Diakoni 1 0% - MoGård 1 0% - Caritas Fastigheter 1 0% 0% Ireland 9 2% - Virtue 4 7 2% - Coolmine Caring Services Group 2 0% - Finland 198 18% 18% Attendo 33 4% 4% Municipalities 20 2% 2% Touhula 30 2% 2% Pilke 25 2% 2% Mehiläinen 15 2% 2% Norlandia 18 1% 1% Vetrea 5 0% 1% Esperi 3 0% 0% Sentica 3 0% 0% Aspa 3 0% 0% Priimi 2 0% 0% Musiikkikoulu Rauhala 2 0% 0% Rinnekoti 2 0% 0% KVPS 2 0% 0% Auruslusäätiö 1 0% - Peurunka Oy 1 0% - Pihlanjantertut Ry 1 0% - Other 32 4% 3% TOTAL 587 100% 100% 66 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE Aedica’s real estate portfolio is operated by more than 130 tenant groups. Three groups operate properties in multiple countries in which the Group operates: Korian, Orpea and Emera. The weight of these groups in Aedica’s contractual rents is broken down by country in the table below. Tenant Country Number of sites 31/12/2021 31/12/2020 Korian 51 11% 13% Belgium 28 8% 9% Germany 1 0% 0% Netherlands 22 3% 3% Orpea 21 5% 6% Belgium 9 3% 3% Germany 5 1% 2% Netherlands 7 1% 1% Emera 8 2% 0% Belgium 1 0% 0% Ireland 7 2% - – 67 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION – 67 2. SUMMARY OF INVESTMENT PROPERTIES 2.1 INVESTMENT PROPERTIES AS OF 31 DECEMBER 2021 Name Total surface (m²) Residents Child- ren Contractual rents 1 Estimated rental value (ERV) 1 Construction year (refurbishment) Location Marketable investment properties 1,893,950 30,638 11,251 €255,447,783 €255,530,857 Belgium 507,461 8,552 0 €63,874,707 €62,385,240 Korian Belgium 161,242 2,754 0 €20,039,456 Kasteelhof 5,346 102 0 €545,997 1994 (2020) Dendermonde Ennea 1,848 34 0 €215,961 1998 Sint-Niklaas Wielant 4,834 112 0 €576,354 1997 (2001) Anzegem/Ingooigem Résidence Boneput 2,993 76 0 €486,534 2003 Bree Résidence Aux Deux Parcs 1,618 68 0 €455,174 1987 (2020) Jette Résidence l'Air du Temps 7,197 137 0 €931,737 1994 (2016) Chênée Au Bon Vieux Temps 7,868 104 0 €901,323 2016 Mont-Saint-Guibert Op Haanven 6,587 111 0 €716,052 2001 (2016) Veerle-Laakdal Résidence Exclusiv 4,253 104 0 €757,801 1993 (2013) Evere Séniorie Mélopée 2,967 70 0 €529,022 1993 (2010) Molenbeek St-Jean Séniorie de Maretak 5,684 122 0 €563,184 2006 (2008) Halle Résidence du Plateau 8,069 143 0 €1,359,932 1994 (2007) Wavre De Edelweis 6,914 122 0 €822,791 1992 (2014) Begijnendijk Residentie Sporenpark 9,261 127 0 €1,131,763 2013 Beringen Résidence Les Cheveux d’Argent 4,996 99 0 €460,586 1988 (2002) Jalhay ‘t Hoge 4,632 81 0 €742,631 1972 (2018) Kortrijk Helianthus 4,799 67 0 €501,212 2006 (2014) Melle Villa Vinkenbosch 9,153 114 0 €1,002,469 2016 (2018) Hasselt Heydeveld 6,167 110 0 €663,198 2017 Opwijk Oosterzonne 4,948 77 0 €774,563 2016 Zutendaal De Witte Bergen 8,262 119 0 €1,095,504 2006 Lichtaart Seniorenhof 3,116 52 0 €337,238 1997 Tongeren Beerzelhof 5,025 61 0 €357,239 2007 Beerzel Uilenspiegel 6,863 97 0 €779,490 2007 Genk Coham 6,956 120 0 €939,061 2007 Ham Sorgvliet 6,932 110 0 €867,291 2021 Linter Ezeldijk 7,101 105 0 €766,360 2016 Diest Les Jardins de la Mémoire 6,852 110 0 €758,988 2006 (2018) Anderlecht Armonea 131,789 2,163 0 €17,074,642 Les Charmes en Famenne 3,165 96 0 €323,922 1975 (2012) Houyet Séniorie La Pairelle 6,016 140 0 €815,705 2012 (2015) Wépion Residentie Gaerveld 1,504 20 0 €181,200 2008 Hasselt Gaerveld 6,994 115 0 €844,703 2008 (2010) Hasselt Pont d'Amour 8,984 146 0 €1,057,624 2011 (2015) Dinant Marie-Louise 1,959 30 0 €394,222 2014 Wemmel Hestia 12,682 208 0 €1,476,436 2014 (2018) Wemmel Koning Albert I 7,775 110 0 €982,206 2012 (2014) Dilbeek Eyckenborch 8,771 141 0 €1,207,019 2004 (2014) Gooik Rietdijk 2,155 66 0 €375,056 1994 (2012) Vilvoorde Larenshof 6,988 117 0 €1,112,730 2011 (2014) Laarne Ter Venne 6,634 102 0 €1,079,067 2010 (2012) Sint-Martens-Latem Plantijn 7,310 110 0 €1,122,653 1975 (2021) Kapellen Salve 6,730 117 0 €1,147,003 2014 Brasschaat Huize Lieve Moenssens 4,597 78 0 €602,360 2017 Dilsen-Stokem De Stichel 8,429 152 0 €962,676 2018 Vilvoorde De Notelaar 8,651 94 0 €1,011,965 2011 Olen 1. See glossary. 68 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE Name Total surface (m²) Residents Child- ren Contractual rents 1 Estimated rental value (ERV) 1 Construction year (refurbishment) Location Overbeke 6,917 113 0 €883,346 2012 Wetteren Senior Flandria 7,501 108 0 €656,552 1989 Bruges Rembertus 8,027 100 0 €838,197 2020 Mechelen Vulpia 91,625 1,327 0 €10,681,070 ‘t Spelthof 4,076 100 0 €807,156 2021 Binkom Twee Poorten 8,413 129 0 €1,040,189 2014 Tienen Demerhof 10,657 120 0 €1,001,463 2013 Aarschot Halmolen 9,200 140 0 €1,091,349 2013 Halle-Zoersel La Ferme Blanche 4,240 90 0 €574,693 2016 Remicourt Villa Temporis 8,354 103 0 €819,036 1997 (2017) Hasselt Residentie Poortvelden 5,307 60 0 €477,929 2014 Aarschot Leopoldspark 10,888 153 0 €1,285,784 2016 Leopoldsburg Residentie Den Boomgaard 6,274 90 0 €715,483 2016 Glabbeek Blaret 9,578 107 0 €1,123,521 2016 Sint-Genesius-Rode Residentie Kartuizerhof 10,845 128 0 €998,445 2018 Sint-Martens-Lierde Résidence de la Paix 3,793 107 0 €746,023 2017 Evere Orpea 47,985 1,144 0 €7,311,928 Château Chenois 6,354 100 0 €957,813 2006 (Project) Waterloo New Philip 3,914 111 0 €513,733 1991 (Project) Forest Jardins de Provence 2,280 72 0 €431,263 1996 (2008) Anderlecht Bel-Air 5,350 161 0 €784,115 1997 (Project) Schaerbeek Résidence Grange des Champs 3,396 75 0 €463,966 1994 (Project) Braine-l'Alleud Résidence Augustin 4,832 94 0 €570,510 2006 (Project) Forest Résidence Parc Palace 6,719 162 0 €1,347,922 1991 (Project) Uccle Résidence Service 8,716 175 0 €1,386,434 1976 (Project) Uccle Résidence du Golf 6,424 194 0 €856,172 1989 (Project) Anderlecht Astor vzw 15,792 132 0 €1,750,000 Klein Veldekens 15,792 132 0 €1,750,000 2020 Geel Orelia Group 6,013 101 0 €946,149 Le Jardin Intérieur 6,013 101 0 €946,149 2018 Frasnes-lez-Avaing Hof van Schoten 8,313 101 0 €851,073 Hof van Schoten 8,313 101 0 €851,073 2014 Schoten My-Assist 7,203 121 0 €875,000 Domaine de la Rose Blanche 7,203 121 0 €875,000 2014 Durbuy Vivalto home 6,003 107 0 €664,862 Familiehof 6,003 107 0 €664,862 2016 Schelle Dorian groep 5,400 115 0 €739,124 De Duinpieper 5,400 115 0 €739,124 2021 Ostend Résidence de La Houssière 4,484 94 0 €626,139 Résidence La Houssière 4,484 94 0 €626,139 2006 Braine-le-Comte Buitenhof VZW 4,386 80 0 €584,500 Buitenhof 4,386 80 0 €584,500 2005 (2008) Brasschaat Sint Franciscus 5,824 58 0 €335,602 Klein Veldeken 5,824 58 0 €335,602 1998 (2014) Asse Emera 4,020 84 0 €428,450 In de Gouden Jaren 4,020 84 0 €428,450 2005 Tienen Bremdael VZW 3,500 66 0 €356,750 Bremdael 3,500 66 0 €356,750 1994 (2012) Herentals Pierre Invest SA 2,272 65 0 €475,572 Bois de la Pierre 2,272 65 0 €475,572 1955 (2018) Wavre Le Carrosse 1,290 36 0 €102,414 La Boule de Cristal 1,290 36 0 €102,414 1993 (1998) Wanlin Other 320 4 0 €31,975 Villa Bois de la Pierre 320 4 0 €31,975 1955 (2000) Wavre 1. See glossary. – 69 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION – 69 Name Total surface (m²) Residents Child- ren Contractual rents 1 Estimated rental value (ERV) 1 Construction year (refurbishment) Location Germany 510,981 9,136 0 €54,488,897 €54,917,423 Azurit Rohr 148,967 2,742 0 €15,135,647 Seniorenresidenz Sonneberg 4,876 101 0 €583,416 1889 (2011) Sonneberg Seniorenresidenz Cordula 1 4,970 75 0 €312,051 1970 (2017) Rothenberg Seniorenresidenz Cordula 2 1,204 39 0 €162,267 1993 (2017) Rothenberg Pflege-und Betreuungs- zentrum Dornum 11,203 106 0 €426,000 1993 (2016) Dornum Sz Weimar 7,609 144 0 €883,008 2019 Weimar Sz Haus Asam 6,701 168 0 €919,800 1996 Rohr Sz Laaberg 6,710 105 0 €574,875 2004 Tann-Eiberg Sz Grünstadt 5,201 140 0 €766,500 2003 Grünstadt Sz Berghof 2,838 78 0 €427,050 2005 Rinteln Sz Abundus 7,023 150 0 €821,250 1993 Abundus Sz Bad Höhenstadt 4,668 95 0 €520,125 1998 Fürstenzell Sz Hutthurm 5,344 108 0 €591,300 1992 Sz Hutthurm Sz Gensingen 7,269 144 0 €840,960 2007 Gensingen Sz Hildegardis 14,927 196 0 €1,159,635 2017 Langenbach Pz Wiesengrund 3,054 52 0 €303,680 2006 Langenbach Sz Großalmerode 3,202 83 0 €513,920 2017 Großalmerode Sz Bad Köstritz 8,448 196 0 €1,073,100 2014 Bad Köstritz Sz Talblick 4,647 95 0 €520,125 2010 Grasellenbach Sz Birken 3,075 83 0 €454,425 2010 Birken-Honigsessen Sz Altes Kloster 4,939 80 0 €493,480 2009 Much Sz Alte Zwirnerei 8,350 104 0 €569,400 2010 Gersdorf Sz St. Benedikt 7,768 124 0 € 656,270 2017 Passeau Sz Sörgenloch 7,995 148 0 € 837,310 2014 Sörgenloch Sz Borna 6,946 128 0 € 725,700 2012 Borna EMVIA 97,209 1,471 0 €10,484,319 Berlin Zehlendorf 4,540 180 0 €989,123 2002 Berlin Schwerin 5,000 87 0 €646,800 2019 Schwerin Seniorenquartier Kaltenkirchen 6,650 123 0 € 916,800 2020 Kaltenkirchen Seniorenquartier Lübbecke 4,240 80 0 € 576,276 2019 Lübbecke Seniorenwohnpark Hartha 10,715 177 0 € 769,931 1996 (2010) Tharandt Seniorenpflegezentrum Zur alten Linde 4,208 82 0 € 387,069 2004 Rabenau Seniorenquartier Wolfsburg 17,742 141 0 € 1,561,410 2021 Wolfsburg Seniorenquartier Heiligenhafen 7,391 104 0 € 734,880 2021 Heiligenhafen Seniorenquartier Espelkamp 9,458 113 0 € 857,874 2021 Espelkamp Seniorenquartier Beverstedt 5,475 80 0 € 563,850 2020 Beverstedt Seniorenquartier Kaemenas Hof 7,057 75 0 € 700,253 2021 Bremen Seniorenquartier Weyhe 7,373 109 0 € 871,570 2021 Weyhe Seniorenquartier Cuxhaven 7,360 120 0 € 908,484 2021 Cuxhaven Vitanas 86,611 1,614 0 €7,513,690 Am Kloster 5,895 136 0 €757,143 2002 Halberstadt Rosenpark 4,934 79 0 € 473,228 2001 Uehlfeld Patricia 7,556 174 0 € 1,057,497 2001 (2010) Nürnberg St. Anna 7,176 161 0 € 934,970 2001 Höchstadt Frohnau 4,101 107 0 € 594,852 2018 Berlin Am Schnäfersee 12,658 187 0 € 650,879 Project Reinickendorf 70 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE Name Total surface (m²) Residents Child- ren Contractual rents 1 Estimated rental value (ERV) 1 Construction year (refurbishment) Location Am Stadtpark 7,297 135 0 501,192 Project Berlin Am Bäkepark 3,828 90 0 456,000 1999 Berlin Rosengarten 7,695 165 0 €550,000 Project Berlin Am Parnassturm 7,042 84 0 €296,333 Project Plön Am Marktplatz 4,880 79 0 €148,545 Project Wankendorf Am Tierpark 13,549 217 0 €1,093,050 Project Ueckermünde Residenz Management 24,564 442 0 €3,427,566 Die Rose im Kalletal 4,027 96 0 € 686,451 2009 Kalletal Haus Matthäus 2,391 50 0 €367,677 2009 Olpe-Rüblinghausen Haus Elisabeth 3,380 80 0 €588,284 2010 Wenden-Rothemühle Bremerhaven I 6,077 85 0 €939,841 2016 Bremerhaven Bremerhaven II 2,129 42 0 €306,396 2003 Bremerhaven Cuxhaven 810 9 0 €106,918 2010 Cuxhaven Sonnenhaus Ramsloh 5,750 80 0 €432,000 2006 Saterland-Ramsloh Orpea 20,507 444 0 €3,180,003 Seniorenresidenz Mathilde 3,448 75 0 € 572,777 2010 Enger Seniorenresidenz Klosterbauerschaft 3,497 80 0 €609,585 2010 Kirchlengern Sz Bonifatius 3,967 80 0 €620,679 2009 Rheinbach Seniorenresidenz Am Stübchenbach 5,874 130 0 €808,447 2010 Bad Harzburg Seniorenresidenz Kierspe 3,721 79 0 €568,514 2011 Kierspe Argentum 20,396 420 0 €2,307,493 Haus Nobilis 3,186 70 0 € 530,275 1950 (2015) Bad Sacha Haus Alaba 2,560 64 0 €227,261 1903 (1975) Bad Sacha Haus Concolor 5,715 74 0 €515,124 1950 (2008) Bad Sacha Haus Arche 531 13 0 €75,754 1900 (1975) Bad Sacha Seniorenheim am Dom 4,310 126 0 €671,079 2008 Halberstadt Seniorenheim J.J. Kaendler 4,094 73 0 €288,000 1955 (2020) Meissen Alloheim 18,695 388 0 €2,326,357 SZ AGO Herkenrath 4,000 80 0 € 586,606 2010 Bergisch Gladbach SZ AGO Dresden 5,098 116 0 €583,233 2012 Dresden SZ AGO Kreischa 3,670 84 0 €416,517 2011 Kreischa Bonn 5,927 108 0 €740,000 2018 Bonn Convivo 11,845 202 0 €1,3 86,305 Park Residenz 6,113 79 0 €650,400 1899 (2001) Neumünster Seniorenhaus Wiederitzsch 3,275 63 0 €365,000 2018 Leipzig Haus am Jungfernstieg 2,457 60 0 €370,905 2010 Neumünster Cosiq 17,060 264 0 €1,6 99,041 Seniorenresidenz an den Kienfichten 4,332 88 0 €460,069 2017 Dessau-Rosslau Pflegeteam Odenwald 1,202 32 0 €228,684 1995 (2012) Wald-Michelbach Wohnstift am Weinberg 11,526 144 0 €1,010,288 Project Kassel SARA 12,196 162 0 €1,1 40,000 SARA Seniorenresidenz 12,196 162 0 €1,140,000 1964 (2021) Bitterfeld-Wolfen Korian Germany 7,618 151 0 €9 01,228 Haus Steinbachhof 7,618 151 0 €901,228 2017 Chemnitz Procuritas GmbH 7,050 127 0 €9 53,000 Haus Wedau 3,892 70 0 €460,000 2007 Duisburg Haus Marxloh 3,158 57 0 €493,000 2007 Duisburg Aspida 5,095 120 0 €7 07,925 Pflegecampus Plauen 5,095 120 0 €707,925 2020 Plauen 1. See glossary. – 71 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION – 71 Name Total surface (m²) Residents Child- ren Contractual rents 1 Estimated rental value (ERV) 1 Construction year (refurbishment) Location Advita Pegedienst 6,422 91 0 €48 9,396 Advita Haus Zur Alten Berufsschule 6,422 91 0 €489,396 2016 Zschopau Johanniter 3,950 74 0 €523 ,443 Johanniter-Haus Lüdenscheid 3,950 74 0 €523,443 2006 Lüdenscheid Seniorenresidenz Laurentiusplatz 5,506 79 0 €51 5,400 Laurentiusplatz 5,506 79 0 €515,400 2018 Wuppertal ATV Lemförde GmbH 4,741 85 0 €4 44,000 Seniorenresidenz Lemförde 4,741 85 0 €444,000 2007 Lemförde Deutsches Rotes Kreuz Kreisverband Nordfriesland e. V. 4,088 83 0 €5 43,331 DRK Käthe-Bernhardt-Haus 4,088 83 0 €543,331 2008 Husum Volkssolidarität 4,141 83 0 €45 5,303 Goldene Au 4,141 83 0 €455,303 2010 Sonneberg Auriscare 4,320 94 0 €35 5,449 BAVARIA Senioren- und Pflegeheim 4,320 94 0 €355,449 Project Sulzbach-Rosenberg Netherlands 311,935 2,727 0 €29,723,418 €31,416,175 Korian Netherlands 53,342 563 0 €6,673,259 Saksen Weimar 2,291 42 0 € 549,671 2015 Arnhem Spes Nostra 2,454 30 0 €488,056 2016 Vleuten HGH Kampen 3,610 37 0 €529,416 2017 Kampen HGH Leersum 2,280 26 0 €434,454 2018 Leersum Stepping Stones Leusden 1,655 21 0 €266,039 2019 Leusden Zorghuis Smakt 2,111 30 0 €214,649 1950 (2010) Smakt Zorgresidentie Mariëndaal 8,728 75 0 €816,098 1870 (2011) Velp Sorghuys Tilburg 1,289 22 0 €285,168 2020 Berkel-Enschot De Statenhof 6,468 58 0 €568,956 2017 Leiden Residentie Boldershof 2,261 33 0 €382,144 1974 (2020) Amersfoort HGH Harderwijk 4,202 45 0 €594,978 2020 Harderwijk Franeker 10,750 70 0 €653,818 2016 Franeker Stepping Stones Zwolle 1,770 24 0 €331,330 2020 Zwolle Villa Casimir 1,273 20 0 €185,981 2020 Roermond Villa Nuova 2,200 30 0 €372,500 2021 Vorden Stichting Vitalis Residentiële Woonvormen 90,981 446 0 € 4,165,856 Imstenrade 57,181 263 0 € 2,227,334 2006 Heerlen Genderstate 8,813 44 0 €538,478 1991 Eindhoven Petruspark 24,987 139 0 €1,400,043 2018 Eindhoven Martha Flora 16,633 183 0 €3,033,416 Martha Flora Hilversum 4,055 31 0 €588,400 2017 Hilversum Martha Flora Den Haag 2,259 28 0 €592,258 2018 Den Haag Martha Flora Rotterdam 2,441 29 0 €556,003 2019 Rotterdam Martha Flora Bosch en Duin 2,241 27 0 €481,573 2018 Bosch en Duin Martha Flora Hoorn 780 12 0 €84,933 2012 Hoorn Martha Flora Dordrecht 2,405 28 0 €393,250 2021 Dordrecht Martha Flora Hulsberg 2,452 28 0 €337,000 2021 Hulsberg NNCZ 38,440 340 0 €2,901,040 Wolfsbos 11,997 93 0 €821,543 2013 Hoogeveen De Vecht 8,367 79 0 €697,280 2012 Hoogeveen De Kaap 6,254 61 0 €593,960 2017 Hoogeveen Krakeel 5,861 57 0 €512,911 2016 Hoogeveen WZC Beatrix 5,961 50 0 €275,347 1969 (1996) Hoogeveen 72 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE Name Total surface (m²) Residents Child- ren Contractual rents 1 Estimated rental value (ERV) 1 Construction year (refurbishment) Location Compartijn 15,606 173 0 €2,838,336 Huize de Compagnie 3,471 42 0 €614,349 2019 Ede Huize Hoog Kerckebosch 2,934 32 0 €565,818 2017 Zeist Huize Ter Beegden 1,983 19 0 €323,434 2019 Beegden Huize Roosdael 2,950 26 0 €449,428 2019 Roosendaal Huize Groot Waardijn 1,918 26 0 €437,619 2019 Tilburg Huize Eeresloo 2,350 28 0 €447,688 2019 Duizel Domus Magnus 8,072 99 0 €2,172,797 Holland 2,897 34 0 €882,847 2013 Baarn Benvenuta 924 10 0 €229,129 2009 Hilversum Molenenk 2,811 40 0 €736,282 2017 Deventer Villa Walgaerde 1,440 15 0 €324,540 2017 Hilversum Stichting Oosterlengte 18,878 152 0 €1,135,960 Het Dokhuis 4,380 32 0 €427,332 2017 Oude Pekela LTS Winschoten 11,698 84 0 €346,553 2020 Winschoten Verpleegcentrum Scheemda 2,800 36 0 €362,075 2020 Scheemda Stichting Rendant 13,142 126 0 €1,121,520 Nieuw Heerenhage 13,142 126 0 €1,121,520 2021 Heerenveen Stichting Laverhof 13,191 108 0 €1,193,702 Zorgcampus Uden 13,191 108 0 €1,193,702 2019 Uden Stichting Zorggroep Noorderboog 13,555 140 0 €861,816 Oeverlanden 13,555 140 0 €861,816 2017 Meppel Stichting Nusantara 4,905 70 0 €645,760 Rumah Saya 4,905 70 0 €645,760 2011 Ugchelen U-center BV 7,416 59 0 €602,551 U-center 7,416 59 0 €602,551 2015 Epen Stichting Leger des Heils Welzijns- en Gezondheidszorg 6,014 75 0 €649,635 De Merenhoef 6,014 75 0 €649,635 2019 Maarssen Zorggroep Apeldoorn 2,653 48 0 €441,034 Pachterserf 2,653 48 0 €441,034 2011 Apeldoorn Zorghaven Groep 3,489 36 0 €487,106 Zuyder Haven Oss 1,674 18 0 €272,419 2018 Oss Buyten Haven Dordrecht 1,815 18 0 €214,687 2016 Dordrecht Cardea 2,565 63 0 €322,678 OZC Orion 2,565 63 0 €322,678 2014 Leiderdorp Wonen bij September 1,466 20 0 €257,376 September Nijverdal 1,466 20 0 €257,376 2019 Nijverdal Omega 1,587 26 0 €219,576 Meldestraat 1,587 26 0 €219,576 2019 Emmeloord United Kingdom 2 286,394 6,541 0 €52,472,663 €51,549,501 £44,139,556 £43,363,000 Bondcare Group 64,483 1,484 0 £8,821,881 Alexander Court 3,347 82 0 £547,433 2002 Dagenham Ashurst Park 2,145 47 0 £470,000 1990 (2016) Tunbridge Wells Ashwood 2,722 70 0 £382,800 2001 (2017) Hayes Beech Court 2,135 51 0 £391,395 1999 Romford Beechcare 2,739 65 0 £703,687 1989 (2017) Darenth Bentley Court 3,755 77 0 £380,000 2009 (2016) Wednesfield Brook House 3,155 74 0 £506,143 2001 (2017) Thamesmead Chatsworth Grange 2,558 66 0 £271,443 1998 (2017) Sheffield Clarendon 2,132 51 0 £335,384 1998 (2017) Croydon Coniston Lodge 3,733 92 0 £421,680 2003 Feltham 1. See glossary. 2. Amounts in £ and SEK were converted into € based on the exchange rate of 31 December 2021 (1.18879 £/€ and 10.2887 SEK/€). 3. Asset classied as held for sale. – 73 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION – 73 Name Total surface (m²) Residents Child- ren Contractual rents 1 Estimated rental value (ERV) 1 Construction year (refurbishment) Location Derwent Lodge 2,612 62 0 £538,915 2000 Feltham Green Acres 2,352 62 0 £263,465 2000 (2017) Leeds Lashbrook House 1,741 46 0 £0 1995 (2016) Lower Shiplake Meadowbrook 3,334 69 0 £276,000 1991 (2015) Gobowen Moorland Gardens 3,472 79 0 £421,544 2004 Luton Springfield 3,153 80 0 £336,184 2000 Ilford The Fountains 2,510 62 0 £360,165 2000 Rainham The Mount 1,229 35 0 £0 2001 (2015) Wargrave The Grange 7,693 160 0 £723,025 2005 Southall The Hawthorns 4,558 73 0 £742,618 2011 Woolston The Uplands 3,411 81 0 £750,000 2007 Shrewsbury Maria Mallaband 50,213 1,142 0 £9,144,799 Ashmead 4,557 110 0 £1,033,072 2004 Putney Belvoir Vale 2,158 56 0 £742,630 1991 (2016) Widmerpool Blenheim 2,288 64 0 £284,148 2000 (2015) Ruislip Coplands 3,445 79 0 £598,029 1998 (2016) Wembley Eltandia Hall 3,531 83 0 £659,121 1999 Norbury Glennie House 2,279 52 0 £125,152 2005 (2014) Auchinleck Heritage 2,972 72 0 £863,721 2002 (2015) Tooting Kings Court (MM) 2,329 60 0 £257,950 2000 (2016) Swindon Knights Court 3,100 80 0 £552,152 1998 (2017) Edgware Ottery 3,513 62 0 £704,899 2019 Ottery St Mary River View 5,798 137 0 £963,465 2001 Reading The Windmill 2,332 53 0 £215,935 2007 (2015) Slough Deepdene 3,009 66 0 £865,152 2006 Dorking Princess Lodge 4,087 85 0 £305,844 2006 Swindon Minster Grange 4,815 83 0 £973,528 2012 York Burlington 49,705 1,234 0 £7,108,554 Bessingby Hall 2,471 65 0 £413,167 2005 (2014) Bessingby Cherry Trees 3 3,178 81 0 £241,186 1990 (2017) Barnsley Crystal Court 2,879 60 0 £566,610 2012 Harrogate Figham House 2,131 63 0 £528,230 2017 Beverley Foresters Lodge 2,241 69 0 £373,719 2017 Bridlington Grosvenor Park 2,312 61 0 £303,000 2004 (2016) Darlington Highfield Care Centre 3,260 88 0 £408,040 2003 (2015) Castleford Maple Court 3,045 64 0 £489,850 2018 Scarborough Maple Lodge 1,673 55 0 £229,865 1989 (2017) Scotton Priestley 1,520 40 0 £252,500 2002 (2016) Birstall Riverside View 2,362 59 0 £303,000 2004 (2016) Darlington Southlands 1,812 48 0 £279,730 1995 (2015) Driffield The Elms & Oakwood 5,361 80 0 £419,331 1995 (2016) Louth The Grange 2,919 73 0 £326,007 2005 (2015) Darlington The Hawthornes 1,512 40 0 £278,154 2003 (2017) Birkenshaw The Lawns 2,459 62 0 £235,672 2005 (2017) Darlington The Limes 3,414 97 0 £716,215 2017 Driffield The Lodge 2,226 53 0 £180,000 2003 (2016) South Shields The Sycamores 1,627 40 0 £363,792 2003 (2016) Wakefield York House 1,302 36 0 £200,485 1999 (2016) Dewsbury Care UK 32,368 740 0 £3,894,046 Armstrong House 2,799 71 0 £324,875 2006 (2016) Gateshead Cheviot Court 2,978 73 0 £551,842 2006 (2016) South Shields Church View 1,653 42 0 £139,073 2004 (2015) Seaham Collingwood Court 2,525 63 0 £500,663 2005 (2016) North Shields Elwick Grange 2,493 60 0 £308,186 2002 Hartlepool Grangewood Care Centre 2,317 50 0 £322,650 2005 (2016) Houghton Le Spring 74 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE Name Total surface (m²) Residents Child- ren Contractual rents 1 Estimated rental value (ERV) 1 Construction year (refurbishment) Location Hadrian House 2,487 55 0 £307,073 2002 (2016) Blaydon Hadrian Park 2,892 73 0 £251,444 2004 Billingham Ponteland Manor 2,160 52 0 £178,014 2003 (2016) Ponteland Stanley Park 3,240 71 0 £431,683 2006 (2015) Stanley The Terrace 2,190 40 0 £244,769 1800 (2016) Richmond Ventress Hall 4,635 90 0 £333,775 1994 (2017) Darlington Renaissance 22,414 512 0 £3,077,489 Beech Manor 2,507 46 0 £217,827 1995 (2017) Blairgowrie Jesmond 2,922 65 0 £462,701 2008 (2015) Aberdeen Kingsmills 2,478 60 0 £573,245 1997 (2010) Inverness Letham Park 2,954 70 0 £377,284 1995 (2017) Edinburgh Meadowlark 2,005 57 0 £171,870 1989 (2015) Forres Persley Castle 1,550 40 0 £229,457 1970 (2017) Aberdeen The Cowdray Club 2,581 35 0 £355,878 2009 (2016) Aberdeen Torry 3,028 81 0 £349,327 1996 (2016) Aberdeen Whitecraigs 2,389 58 0 £339,900 2001 Glasgow Excelcare 14,007 244 0 £2,247,000 Abbot Care Home 6,827 98 0 £781,000 2016 Harlow Stanley Wilson Lodge 3,766 75 0 £626,000 2010 Saffron Walden St Fillans 3,414 71 0 £840,000 2012 Colchester Halcyon Care Homes 10,144 198 0 £2,111,950 Hazel End 3,210 66 0 £734,400 2019 Bishops Stortford Marham House 3,435 66 0 £703,800 2020 Bury St. Edmunds Corby Priors Hall Park 3,499 66 0 £673,750 2021 Corby Hamberley Care Homes 7,177 129 0 £1,743,520 Richmond Manor 3,808 69 0 £949,520 2020 Ampthill Abbotts Wood Manor 3,369 60 0 £794,000 2021 Hailsham Lifeways 3,880 67 0 £1,244,000 Heath Farm 2,832 47 0 £884,000 2009 Scopwick Sharmers Fields House 1,048 20 0 £360,000 2008 (2010) Leamington Spa Caring Homes 8,898 221 0 £1,512,432 Brooklyn House 1,616 38 0 £349,020 2009 (2016) Attleborough Guysfield 2,052 51 0 £409,316 2000 (2015) Letchworth Hillside House and Mellish House 3,629 92 0 £485,434 2005 (2016) Sudbury Sanford House 1,601 40 0 £268,662 1998 (2016) East Dereham Harbour Healthcare 12,742 339 0 £1,567,662 Bentley Rosedale Manor 2,896 78 0 £392,341 2010 (2017) Crewe Cromwell Court 2,896 67 0 £271,016 1995 Warrington Hilltop Manor 2,809 80 0 £320,000 1995 (2015) Tunstall Oak Lodge 1,699 45 0 £300,000 1995 (2018) Chard Tree Tops Court 2,442 69 0 £284,305 1990 (2015) Leek Handsale 4,107 80 0 £855,000 Priesty Fields 4,107 80 0 £855,000 2021 Congleton Barchester 1,554 49 0 £310,000 Highfields (Notts) 1,554 49 0 £310,000 2008 (2016) Edingley Conniston Care 4,702 102 0 £501,223 Athorpe Lodge and The Glades 2 4,702 102 0 £501,223 1985 (2017) Sheffield Finland 229,694 2,994 10,641 €46,517,596 €46,460,436 Attendo 53,610 1,278 0 €10,241,357 Koy Vihdin Vanhan sepän tie 1,498 40 0 €327,438 2015 Nummela Koy Kouvolan Vinttikaivontie 1,788 48 0 €390,606 2015 Kouvola 1. See glossary. 2. Asset classied as held for sale. – 75 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION – 75 Name Total surface (m²) Residents Child- ren Contractual rents 1 Estimated rental value (ERV) 1 Construction year (refurbishment) Location Koy Lahden Vallesmanninkatu A 1,199 30 0 €254,827 2015 Lahti Koy Orimattilan Suppulanpolku 1,498 40 0 €344,717 2016 Orimattila Koy Espoon Vuoripirtintie (Hoivakoti 2.kerroksessa) 1,480 35 0 €306,684 2016 Espoo Koy Kajaanin Erätie 1,920 52 0 €351,687 2017 Kajaani Koy Heinolan Lähteentie 1,665 41 0 €330,196 2017 Heinola Koy Uudenkaupungin Puusepänkatu 1,209 30 0 €254,123 2017 Uusikaupunki Koy Porvoon Fredrika Runebergin katu 973 29 0 €261,094 2017 Porvoo Koy Pihtiputaan Nurmelanpolku 1,423 40 0 €255,260 2004 (2017) Pihtipudas Koy Nokian Näsiäkatu 1,665 41 0 €340,320 2017 Nokia Koy Oulun Ukkoherrantie B 878 20 0 €197,451 2017 Oulu Koy Keravan Männiköntie 862 27 0 €247,720 2017 Kerava Koy Lohjan Ansatie 1,593 40 0 €339,272 2017 Lohja Koy Uudenkaupungin Merimetsopolku C (HKO) 655 15 0 €142,448 2017 Uusikaupunki Koy Nurmijärven Ratakuja 856 20 0 €184,839 2017 Nurmijärvi Koy Rovaniemen Matkavaarantie 977 21 0 €181,275 2018 Rovaniemi Koy Mikkelin Ylännetie 8 982 22 0 €185,783 2018 Mikkeli Koy Euran Käräjämäentie 2,400 42 0 €113,809 2018 Eura Koy Vaasan Vanhan Vaasankatu 1,195 25 0 €215,640 2018 Vaasa Koy Oulun Sarvisuontie 1,190 27 0 €220,278 2019 Oulu Koy Vihdin Hiidenrannantie 1,037 23 0 €221,352 2019 Nummela Koy Kokkolan Ankkurikuja 1,218 31 0 €227,617 2019 Kokkola Koy Kuopion Portti A2 2,706 65 0 €598,310 2019 Kuopio Koy Pieksämäen Ruustinnantie 792 20 0 €150,666 2020 Pieksämäki Koy Kouvolan Ruskeasuonkatu 3,019 60 0 €497,057 2020 Kouvola Kotka Metsäkulmankatu 1,521 40 0 €309,895 2010 Kotka Vasaa Tehokatu 3,068 78 0 €466,967 2010 Vaasa Oulu Isopurjeentie 3,824 86 0 €735,189 2010 Oulu Teuva Tuokkolantie 834 18 0 €126,520 2010 Teuva Kokkola Ilkantie 3,353 73 0 €689,438 2016 Kokkola Kokkola Metsämäentie 1,078 26 0 €185,525 2014 Kokkola Kokkola Kärrytie 790 23 0 €169,456 2008 Kokkola Lohjan Sahapiha (child day-care) 2,470 50 0 €417,900 2021 Lohja Municipalities (multiple tenants) 28,653 189 1,872 €5,843,230 Koy Raahen Palokunnanhovi 423 0 60 €80,496 2010 Raahe Koy Siilinjärven Sinisiipi 568 0 72 €100,947 2012 Toivala Koy Mäntyharjun Lääkärinkuja 1,667 41 0 €284,527 2017 Mäntyharju Koy Uudenkaupungin Merimetsopolku B (PK) 661 0 78 €136,707 2017 Uusikaupunki Koy Siilinjärven Risulantie 2,286 30 0 €553,241 2018 Siilinjärvi Koy Ylivieskan Mikontie 1 847 15 0 €208,188 2018 Ylivieska Koy Ylivieskan Ratakatu 12 1,294 30 0 €278,124 2018 Ylivieska Koy Raahen Vihastenkarinkatu 800 0 120 €153,562 2018 Raahe Koy Jyväskylän Ailakinkatu 721 0 75 €199,140 2019 Jyväskylä 76 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE Name Total surface (m²) Residents Child- ren Contractual rents 1 Estimated rental value (ERV) 1 Construction year (refurbishment) Location Koy Siilinjärven Nilsiäntie 1,086 0 100 €205,133 2019 Siilinjärvi Koy Laihian Jarrumiehentie 630 0 75 €66,000 2019 Laihia Koy Mikkelin Sahalantie 1,730 0 150 €442,217 2019 Mikkeli Koy Rovaniemen Santamäentie 2,200 0 203 €359,863 2020 Rovaniemi Koy Vaasan Uusmetsäntie 2,519 0 210 €445,560 2020 Vaasa Koy Oulun Ruismetsä 2,140 0 205 €465,019 2020 Oulu Oulun Salonpään koulu 2,026 0 206 €597,600 2021 Oulunsalo Koy Kuopion Männistönkatu PK 2,104 0 168 €308,336 2021 Kuopio Koy Oulun Valjastie 1,901 0 150 €439,560 2021 Oulu Raahe care home 2,450 60 0 €431,693 2021 Raahe Kaskinen Bladintie 600 13 0 €87,316 2009 Kaskinen Touhula 23,356 0 2,742 €5,192,249 Koy Nurmijärven Laidunalue 477 0 57 €97,420 2011 Nurmijärvi Koy Oulun Paulareitti 1,128 0 144 €248,213 2013 Oulu Koy Kuopion Sipulikatu 564 0 72 €129,521 2013 Kuopio Koy Oulun Rakkakiventie 2 1,133 0 146 €241,107 2014 Oulu Koy Porvoon Peippolankuja 564 0 70 €135,690 2014 Porvoo Koy Pirkkalan Lehtimäentie 1,185 0 143 €271,954 2014 (2015) Pirkkala Koy Espoon Fallåkerinrinne 891 0 75 €203,600 2014 Espoo Koy Ylöjärven Mustarastaantie 2 1,333 0 164 €300,373 2014 Ylöjärvi Koy Tampereen Lentävänniemenkatu 1,205 0 143 €259,828 2015 (2019) Tampere Koy Turun Vähäheikkiläntie 1,464 0 157 €320,472 2015 Turku Koy Turun Vakiniituntie 567 0 60 €143,341 2015 Turku Koy Vantaan Koetilankatu 890 0 108 €214,372 2015 Vantaa Koy Espoon Tikasmäentie 912 0 108 €208,261 2015 Espoo Koy Kangasalan Mäntyveräjäntie 561 0 72 €137,886 2015 Kangasala Koy Ylöjärven Työväentalontie 707 0 84 €153,935 2015 Ylöjärvi Koy Vantaan Vuohirinne 896 0 108 €201,139 2016 Vantaa Koy Porvoon Vanha Kuninkaantie 670 0 84 €154,115 2016 Porvoo Koy Espoon Meriviitantie 769 0 96 €180,069 2016 Espoo Koy Vantaan Punakiventie 484 0 58 €120,354 2016 Vantaa Koy Mikkelin Ylännetie 10 625 0 72 €137,857 2016 Mikkeli Koy Espoon Vuoripirtintie 472 0 54 €106,421 2016 Espoo Koy Kirkkonummen Kotitontunkuja 565 0 72 €139,258 2017 Kirkkonummi Koy Varkauden Kaura-ahontie 1,260 0 150 €232,400 2012 Varkaus Koy Kotkan Loitsutie 620 0 78 €120,129 2017 Kotka Koy Tornion Torpin Rinnakkaiskatu 635 0 72 €124,957 2017 Tornio Koy Lahden Jahtikatu 894 0 72 €238,225 2018 Lahti Koy Kalajoen Hannilantie 663 0 75 €125,822 2018 Kalajoki Koy Iisalmen Petter Kumpulaisentie 644 0 72 €131,702 2018 Iisalmi 1. See glossary. 2. Asset classied as held for sale. – 77 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION – 77 Name Total surface (m²) Residents Child- ren Contractual rents 1 Estimated rental value (ERV) 1 Construction year (refurbishment) Location As Oy Oulun Figuuri 330 0 41 €62,564 2018 Oulu As Oy Kangasalan Freesia 252 0 35 €51,265 2018 Kangasala Mehiläinen 19,090 437 0 €3,971,218 Koy Oulun Kehätie 2 1,178 30 0 €271,892 2014 Oulu Koy Porin Ojantie 1,629 40 0 €344,996 2015 Pori Koy Jyväskylän Väliharjuntie 1,678 42 0 €360,707 2015 Vaajakoski Koy Espoon Hirvisuontie 823 20 0 €168,185 2017 Espoo Koy Hollolan Sarkatie 1,663 42 0 €368,593 2017 Hollola Koy Vihdin Pengerkuja 2 665 15 0 €135,852 2018 Vihti Koy Hämeenlinnan Jukolanraitti 1,925 40 0 €348,850 2018 Hämeenlinna Koy Sipoon Aarretie 964 21 0 €183,738 2018 Sipoo Koy Äänekosken Likolahdenkatu 771 15 0 €134,928 2019 Äänekoski Koy Riihimäen Jyrätie 741 16 0 €151,341 2019 Riihimäki Koy Oulun Siilotie 1,868 45 0 €384,684 2020 Oulu Oulun Villa Sulka 2,973 60 0 €663,276 2016 Oulu Mikkelin Kastanjakuja 963 20 0 €174,300 2019 Mikkeli Kuopion Oiva 619 17 0 €142,236 2019 Kuopio Nokian Luhtatie 630 14 0 €137,640 2018 Nokia Pilke 20,073 0 2,344 €4,156,089 Koy Mäntsälän Liedontie 645 0 66 €152,322 2013 Mäntsälä Koy Lahden Vallesmanninkatu B 561 0 72 €129,063 2015 Lahti Koy Kouvolan Kaartokuja 566 0 68 €132,109 2016 Kouvola Koy Nokian Vikkulankatu 993 0 126 €173,150 2016 Nokia Koy Vantaan Tuovintie 584 0 73 €141,199 2016 Vantaa Koy Porin Palokärjentie 2 986 0 108 €177,586 2016 Pori Koy Rovaniemen Ritarinne 1,186 0 132 €279,771 2016 Rovaniemi Koy Vantaan Mesikukantie 1,490 0 184 €311,181 2016 Vantaa Koy Varkauden Savontie 657 0 72 €127,960 2017 Varkaus Koy Pirkkalan Perensaarentie 1,313 0 168 €282,849 2017 Pirkkala Koy Jyväskylän Mannisenmäentie 916 0 102 €164,231 2017 Jyväskylä Koy Kaarinan Nurminiitynkatu 825 0 96 €170,351 2017 Kaarina Koy Porin Koekatu 915 0 96 €179,569 2018 Pori Koy Kajaanin Valonkatu 635 0 75 €143,535 2018 Kajaani Koy Mikkelin Väänäsenpolku 648 0 72 €128,755 2018 Mikkeli Koy Sotkamon Kirkkotie 547 0 72 €143,427 2018 Sotkamo Koy Oulun Soittajanlenkki 1,091 0 120 €220,411 2018 Oulu Koy Rovaniemen Mäkirannantie 530 0 75 €81,153 1989 Rovaniemi Koy Joutsenon Päiväkoti 2 658 0 76 €123,852 2019 Lappeenranta Koy Oulun Soittajanlenkki, expansion 654 0 75 €135,949 2019 Oulu As Oy Lahden Vuorenkilpi 703 0 90 €163,997 2019 Lahti Koy Rovaniemen Gardininkuja 653 0 76 €139,638 2020 Rovaniemi Koy Kontiolahden Päiväperhosenkatu 690 0 70 €139,871 2020 Lehmo Nurmijärvi Luhtavillantie 1,153 0 120 €221,760 2021 Klaukkala Lohjan Sahapiha (care home) 478 0 60 €92,400 2021 Lohja 78 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE Name Total surface (m²) Residents Child- ren Contractual rents 1 Estimated rental value (ERV) 1 Construction year (refurbishment) Location Norlandia 14,693 46 1,508 €2,991,706 Koy Sipoon Satotalmantie 2 497 0 60 €104,306 2016 Sipoo Koy Jyväskylän Haperontie 700 0 84 €136,245 2016 Jyväskylä Koy Espoon Oppilaantie 1,045 0 120 €198,118 2017 Espoo Koy Kuopion Rantaraitti 822 0 96 €162,540 2017 Kuopio Koy Ruskon Päällistönmäentie 697 0 84 €150,495 2017 Rusko Koy Kouvolan Pappilantie 2 567 0 65 €114,616 2017 Myllykoski Koy Uudenkaupungin Merilinnuntie 702 0 84 €146,276 2018 Uusikaupunki Koy Lahden Piisamikatu 697 0 84 €145,276 2018 Lahti Koy Turun Lukkosepänkatu 882 0 100 €189,694 2018 Turku Koy Sipoon Aarrepuistonkuja 668 0 75 €146,036 2018 Sipoo Koy Sastamalan Tyrväänkyläntie 706 0 84 €128,312 2018 Sastamala Koy Keuruun Tehtaantie 538 0 60 €111,115 2018 Keuruu Koy Mynämäen Opintie 697 0 84 €145,850 2019 Mynämäki Koy Ruskon Päällistönmäentie 505 0 60 €104,303 2019 Rusko Koy Siilinjärvi Honkarannantie 2 921 0 120 €192,099 2019 Siilinjärvi Koy Haminan Lepikönranta 575 0 80 €135,038 2019 Hamina Koy Jyväskylän Vävypojanpolku 769 0 84 €160,802 2019 Jyväskylä Tuusulan Isokarhunkierto 2,709 46 84 €520,586 2020 Tuusula Esperi 8,329 194 0 €1,985,887 Koy Loviisan Mannerheiminkatu 1,133 29 0 €308,590 2015 Loviisa Koy Kajaanin Menninkäisentie 1,178 30 0 €289,331 2016 Kajaani Koy Iisalmen Kangaslammintie 802 20 0 €176,971 2018 Iisalmi Seinäjoki Kutojankatu 5,217 115 0 €1,210,995 2018 Seinäjoki Kristillinen koulu 7,915 0 717 €1,548,695 Järvenpään Yliopettajankatu 1,784 0 180 €310,376 2020 Järvenpää Koy Espoon Matinkartanontie 6,131 0 537 €1,238,318 2021 Espoo Vetrea 6,540 138 0 €1,208,525 Koy Lappeenrannan Orioninkatu 935 22 0 €189,315 2018 Lappeenranta Porvoon Haarapääskyntie 886 17 0 €141,235 2019 Porvoo Kangasalan Rekiäläntie 1,240 28 0 €255,632 2019 Kangasala Koy Iisalmen Satamakatu 2,630 53 0 €477,451 2020 Iisalmi Jyväskylä Sulkulantie 850 18 0 €144,893 2017 Jyväskylä Multiple tenants (Mehiläinen & other) 4,154 53 0 €1,087,043 Vantaa Asolantie 4,154 53 0 €1,087,043 2012 Vantaa Sentica 2,642 0 318 €560,935 Koy Raision Tenavakatu 622 0 75 €139,497 2013 Raisio Koy Maskun Ruskontie 1,201 0 147 €259,216 2014 (2018) Masku Koy Paimion Mäkiläntie 820 0 96 €162,222 2018 Paimio 1. See glossary. 2. Asset classied as held for sale. – 79 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION – 79 Name Total surface (m²) Residents Child- ren Contractual rents 1 Estimated rental value (ERV) 1 Construction year (refurbishment) Location Aspa 2,433 70 0 €449,520 KEVA Lohja Porapojankuja 774 15 0 €127,827 2021 Lohja Loimaan Villa Inno 1,093 23 0 €203,197 2019 Loimaa Kouvolan Oiva 566 32 0 €118,496 2019 Kouvola Priimi 2,100 0 233 €398,807 Jyväskylä Harjutie 943 0 91 €169,200 2021 Vaajakoski Kuopion Amerikanraitti 1,157 0 142 €229,607 2017 (2021) Kuopio Rinnekoti 1,999 42 0 €327,360 Koy Turun Lemmontie 926 21 0 €166,080 2021 Turku Oulu Ukkoherrantie A 1,073 21 0 €161,280 2021 Oulu Hovi Group 1,978 32 0 €345,015 Nokia Kivimiehenkatu 1,978 32 0 €345,015 2012 Nokia KVPS 1,616 30 0 €299,619 Koy Jyväskylän Palstatie 825 15 0 €146,183 2019 Jyväskylä Koy Lahden keva makarantie 791 15 0 €153,436 2020 Lahti Paltan Palveluasunnot 1,507 24 54 €280,847 Koy Turun Paltankatu 1,507 24 54 €280,847 2019 Turku Pääkaupungin turvakoti 1,018 14 0 €250,317 Koy Helsingin Työnjohtajankadun Seppä 3 1,018 14 0 €250,317 2021 Helsinki Musiikkikoulu Rauhala 1,609 0 195 €340,230 Koy Laukaan Hytösenkuja 730 0 87 €169,797 2015 Laukaa Koy Laukaan Saratie 879 0 108 €170,433 2018 Laukaa Huhtihovi 1,199 30 0 €241,200 Salo Papinkuja 1,199 30 0 €241,200 2021 Salo Pihlajantertut 1,613 33 0 €259,812 Espoo Rajamännynahde 1,613 33 0 €259,812 2002 Espoo CTM 1,457 27 0 €276,727 Koy Janakkalan Kekanahontie 1,457 27 0 €276,727 2019 Janakkala Rebekan Hoitokoti 1,222 30 0 €253,890 Koy Iisalmen Vemmelkuja 1,222 30 0 €253,890 2019 Iisalmi Peurunka 1,086 22 0 €290,529 Laukaa Peurungantie 1,086 22 0 €290,529 2020 Laukaa Förkkeli 1,096 16 0 €207,278 Oulun Maininki 1,096 16 0 €207,278 2017 Oulu Sotehotellit 1,521 32 0 €246,528 Koy Ulvilan Kulmalantie 1,521 32 0 €246,528 2020 Ulvila Dagmaaria 1,199 32 0 €216,799 Porin Kerhotie 1,199 32 0 €216,799 2021 Pori Suomen Kristilliset Hoivakodit 1,178 27 0 €226,548 Kajaani Uitontie 1,178 27 0 €226,548 2021 Kajaani Serainakoti 1,180 30 0 €207,000 Hämeenlinna Kampuskaarre 1,180 30 0 €207,000 2021 Hämeenlinna K-P Hoitopalvelu 911 25 0 €226,418 226,418 Koy Kokkolan Vanha Ouluntie 911 25 0 €226,418 2017 Kokkola Validia 1,053 17 0 €252,715 243,680 Koy Kuusankosken Keva 1,053 17 0 €252,715 2021 Kouvola Siriuspäiväkodit 985 0 108 €218,868 Koy Limingan Kauppakaari 564 0 72 €132,424 2013 Tupos Oulunsalon Vihannestie 421 0 36 €86,444 2021 Oulu 80 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE Name Total surface (m²) Residents Child- ren Contractual rents 1 Estimated rental value (ERV) 1 Construction year (refurbishment) Location Vantaan Turvakoti 844 14 0 €192,912 Koy Vantaan Koivukylän Puistotie 844 14 0 €192,912 2019 Vantaa Ikit 995 30 0 €204,543 Koy Kangasalan Hilmanhov 995 30 0 €204,543 2009 Kangasala Hoivakymppi Oy 832 17 0 €192,038 Jyväskylä Martikaisentie 832 17 0 €192,038 2014 Jyväskylä Autismisäätiö 1,042 12 0 €184,800 Kotka Särmääjänkatu 1,042 12 0 €184,800 2021 Kotka Lapin Turkoosi Oy 960 0 120 €172,138 Koy Rovaniemen Muonakuja 960 0 120 €172,138 2020 Rovaniemi Folkhälsan 783 0 84 €151,223 Koy Turun Teollisuuskatu 783 0 84 €151,223 2017 Turku Kotoisin 824 18 0 €161,156 Kempeleen Ihmemaantie 824 18 0 €161,156 2021 Kempele Peikkometsä 659 0 72 €147,472 Koy Lahden Kurenniityntie 659 0 72 €147,472 2020 Villahde Tuike 677 0 75 €141,639 Koy Iisalmen Eteläinen Puistoraitti 677 0 75 €141,639 2018 Iisalmi Pikkutassu 646 0 72 €138,342 Koy Kajaanin Hoikankatu 646 0 72 €138,342 2019 Kajaani Jaarlin Päiväkodit 565 0 72 €130,032 Koy Hämeenlinnan Vanha Alikartanontie 565 0 72 €130,032 2015 Hämeenlinna Murunen 430 0 55 €98,341 Koy Ylivieskan Alpuumintie 430 0 55 €98,341 2019 Ylivieska Vacant 1,425 35 0 €0 Vaasa Mäkikaivontie 1,425 35 0 €0 2010 Vaasa Sweden 2 15,991 120 610 €3,892,002 €4,042,782 SEK 40,043,640 SEK 41,594,971 Olivia Omsorg 3,128 36 0 SEK 8,301,456 Gråmunkehöga LSS Boende 494 6 0 SEK 1,408,464 2020 Uppsala Tierp LSS Boende 494 6 0 SEK 1,350,000 2021 Tierp Almungeberg 1:21 535 6 0 SEK 1,342,344 2018 Uppsala Almungeberg 1:22 535 6 0 SEK 1,414,164 2021 Uppsala Hässlinge 2:3 1,070 12 0 SEK 2,786,484 2018 (2020) Enköping Ambea 2,272 30 0 SEK 5,569,392 Emmekalv 4:325 540 6 0 SEK 1,445,592 2019 Oskarshamn Steglitsan 2 800 12 0 SEK 2,061,900 2020 Växjö Saga 2 932 12 0 SEK 2,061,900 2021 Växjö Kunskapsförskolan 2,244 0 250 SEK 5,434,824 Norrtälje Östhamra Förskola 1,158 0 125 SEK 2,838,372 2020 Norrtälje Älmhult Kunskapsgatan 1,086 0 125 SEK 2,596,452 2020 Älmhult Humana 1,610 18 0 SEK 4,268,292 Nyby 3:68 540 6 0 SEK 1,422,708 2019 Laholm Hovsta Gryt 7:2 535 6 0 SEK 1,422,708 2019 Örebro Törsjö 3:204 535 6 0 SEK 1,422,876 2021 Örebro 1. See glossary. 2. Amounts in £ and SEK were converted into € based on the exchange rate of 31 December 2021 (1.18879 £/€ and 10.2887 SEK/€). 3. Although still under construction, these sites already generate limited rental incomes. This explains why they were included in this table and why the estimated rental value is not mentioned. – 81 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION – 81 Name Total surface (m²) Residents Child- ren Contractual rents 1 Estimated rental value (ERV) 1 Construction year (refurbishment) Location Frösunda Omsorg 1,668 18 0 SEK 3,975,156 Bälinge Lövsta 9:19 540 6 0 SEK 1,326,432 2012 Uppsala Sunnersta 120:2 & 120:4 593 6 0 SEK 1,326,432 2013 Uppsala Bälinge Lövsta 10:140 535 6 0 SEK 1,322,292 2013 Uppsala British mini 1,499 0 140 SEK 3,532,980 Eskilstuna Mesta 6:56 1,499 0 140 SEK 3,532,980 2020 Eskilstuna TP 1,097 0 120 SEK 2,408,100 Förskola Kallinge 1,097 0 120 SEK 2,408,100 2021 Ronneby Norlandia 905 0 100 SEK 2,259,996 Upplands Väsby Havregatan 905 0 100 SEK 2,259,996 2021 Upplands Väsby Ersta Diakoni 535 6 0 SEK 1,466,544 Västlunda 2:12 535 6 0 SEK 1,466,544 2020 Vallentuna MoGård 540 6 0 SEK 1,435,116 Anderbäck 1:60 540 6 0 SEK 1,435,116 2020 Nyköping Caritas Fastigheter 494 6 0 SEK 1,391,784 Heby LSS Boende 494 6 0 SEK 1,391,784 2020 Heby Ireland 31,494 568 0 €4,478,500 €4,759,300 Virtue 28,117 483 0 €3,723,000 Bridhaven 7,299 184 0 €1,400,000 1989 Mallow Waterford 3,888 64 0 €515,000 2018 Waterford New Ross 3,200 62 0 €370,000 2018 New Ross Bunclody 5,590 62 0 €345,000 2018 Bunclody Killerig 4,800 45 0 €170,000 2016 Carlow Altadore 3,340 66 0 €923,000 2015 Glenageary Coolmine Caring Services Group 3,377 85 0 €755,500 Milbrook Manor 3,377 85 0 €755,500 2001 (Project) Saggart Investment properties in joint venture - 50% share held by Aedifica 644 11 0 €97,867 Netherlands 1,288 21 0 €195,735 €195,735 Korian Netherlands 1,288 21 0 €195,735 Zorghuis Hengelo 1,288 21 0 €195,735 2017 Hengelo Properties in development 3 129,989 2,008 0 €2,772,005 Germany 77,705 1,204 0 €724,838 EMVIA 35,574 555 0 €330,304 Langwedel 8,250 113 0 €72,881 Project Langwedel Sehnde 6,012 90 0 €45,117 Project Sehnde Seniorenquartier Schwerin 5,235 87 0 €30,567 Project Schwerin Twistringen 5,660 99 0 €47,400 Project Twistringen Uetze 7,138 112 0 €50,400 Project Uetze Hamburg-Rissen 3,279 54 0 €83,939 Project Hamburg Specht Gruppe 23,594 384 0 €193,096 Seniorenquartier Gera 6,673 123 0 €19,476 Project Gera Seniorenquartier Gummersbach 10,564 161 0 €119,020 Project Gummersbach Stadtlohn 6,357 100 0 €54,600 Project Stadtlohn Argentum 5,292 91 0 €120,000 Haus Wellengrund 5,292 91 0 €120,000 Project Stemwede-Levern Residenz Management 7,650 80 0 €52,728 Quartier am Rathausmarkt 7,650 80 0 €52,728 Project Bremervörde Specht & Tegler 5,595 94 0 €28,710 Fredenbeck 5,595 94 0 €28,710 Project Fredenbeck 82 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE Name Total surface (m²) Residents Child- ren Contractual rents 1 Estimated rental value (ERV) 1 Construction year (refurbishment) Location Netherlands 29,751 395 0 €1,251,833 Martha Flora 6,217 76 0 €230,876 Martha Flora Goes 2,405 28 0 €66,189 Project Goes Martha Flora Oegstgeest 1,428 20 0 €74,832 Project Oegstgeest Martha Flora Breda 2,384 28 0 €89,855 Project Breda Stichting Fundis 4,738 60 0 €175,800 Alphen Raadhuisstraat 2,307 27 0 €83,250 Project Alphen a/d Rijn Waarder Molendijk 2,431 33 0 €92,550 Project Waarder Saamborgh 4,902 76 0 €280,050 LLT Almere Buiten 2,352 38 0 €157,500 Project Almere Tiel Bladergroenstraat 2,550 38 0 €122,550 Project Tiel SVE 4,981 52 0 €211,470 Hilversum SVE 4,981 52 0 €211,470 Project Hilversum Korian Netherlands 4,098 53 0 €176,875 Vinea Domini 2,175 27 0 €71,875 Project Witmarsum Natatorium 1,923 26 0 €105,000 Project Velp Valuas Zorggroep 1,925 26 0 €90,000 Koestraat Zwolle 1,925 26 0 €90,000 Project Zwolle Amado Almere - Stichting Pinahuis 2,890 52 0 €86,762 De Volder Staete 2,890 52 0 €86,762 Project Almere United Kingdom 2 10,957 193 0 €394,084 £331,500 Halcyon Care Homes 3,456 66 0 £125,000 Wellingborough Glenvale Park 3,456 66 0 £125,000 Project Wellingborough Maria Mallaband 3,702 61 0 £107,500 Aylesbury Martin Dalby 3,702 61 0 £107,500 Project Buckinghamshire Burlington 3,799 66 0 £99,000 Shipley Canal Works 3,799 66 0 £99,000 Project Shipley Ireland 11,576 216 0 €401,250 Virtue 6,063 119 0 €268,750 Dublin Stepaside 6,063 119 0 €268,750 Project Kilgobbin Coolmine Caring Services Group 5,513 97 0 €132,500 St. Doolagh’s 5,513 97 0 €132,500 Project Balgriffin Projects in development 3 in joint venture - 50% share held by Aedifica 5,893 73 0 €182,311 Netherlands 11,785 146 0 €364,621 Korian Netherlands 11,785 146 0 €364,621 HGH Lelystad 4,301 45 0 €129,375 Project Lelystad HGH Soest 2,634 36 0 €96,576 Project Soest HGH Woudenberg 2,150 36 0 €106,000 Project Woudenberg Stepping Stones Blaricum 2,700 29 0 €32,670 Project Blaricum Total investment properties 2,030,476 32,730 11,251 €258,499,966 1. See glossary. 2. Amounts in £ and SEK were converted into € based on the exchange rate of 31 December 2021 (1.18879 £/€ and 10.2887 SEK/€). 3. Although still under construction, these sites already generate limited rental incomes. This explains why they were included in this table and why the estimated rental value is not mentioned. – 83 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION – 83 2.2. INVESTMENT PROGRAMME AS OF 31 DECEMBER 2021 Projects and renovations (in € million) 2 Operator Current budget Invest. as of 31/12/2021 Future invest. Projects in progress 524 136 388 Completion 2022 302 119 182 Belgium 6 4 2 Residentie 't Spelthof Vulpia 6 4 2 Germany 95 36 60 Am Stadtpark Vitanas 5 2 3 Am Tierpark Vitanas 1 0 0 Quartier am Rathausmarkt 4 Residenz Management 16 6 10 Rosengarten Vitanas 8 4 4 Seniorenheim Haus Wellengrund 4 Argentum 8 7 1 Seniorenquartier Langwedel 4,5 EMVIA Living 16 4 12 Wohnstift am Weinberg Cosiq 10 7 3 Am Parnassturm Vitanas 3 1 3 Seniorenzentrum Berghof Azurit 2 0 2 Twistringen 4,6 EMVIA Living 13 5 8 Uetze 4,6 EMVIA Living 15 0 14 Netherlands 50 25 25 Residentie Boldershof Korian Netherlands 1 0 1 Vinea Domini 4 Korian Netherlands 4 3 1 LLT Almere Buiten 4,9 Saamborgh 7 6 1 Martha Flora Goes 4,9 Martha Flora 5 3 1 Het Gouden Hart Soest 4,7,9 Korian Netherlands 3 3 0 Het Gouden Hart Woudenberg 4,7 Korian Netherlands 4 2 2 Martha Flora Oegstgeest 4 Martha Flora 5 2 3 Martha Flora Breda 4 Martha Flora 5 0 5 Stepping Stones Blaricum 4,7,9 Korian Netherlands 4 3 1 Alphen Raadhuisstraat 4,8 Stichting Fundis 4 0 4 Waarder Molendijk 4,8 Stichting Fundis 5 0 5 HGH Lelystad 4,7,9 Korian Netherlands 4 4 1 United Kingdom 39 10 29 Burlington projects Burlington 2 0 1 Blenheim MMCG Maria Mallaband 7 0 7 Shipley Canal Works 4 Burlington 8 3 5 Wellingborough Glenvale Park 4 Halcyon Care Homes 12 4 8 Aylesbury Martin Dalby 4 Maria Mallaband 10 2 8 Finland 74 30 41 Finland – pipeline ‘child day care centres’ Multiple tenants 4 2 2 Finland – pipeline ‘elderly care homes’ Multiple tenants 31 15 16 Finland – pipeline ‘other’ Multiple tenants 39 13 22 Sweden 2 1 2 Sweden – pipeline 2022 Multiple tenants 2 1 2 Ireland 36 11 25 Tramore Nursing Home Mowlam Healthcare 15 5 10 St. Doolagh’s 4 Coolmine Caring Services Group 17 5 12 Millbrook Manor Coolmine Caring Services Group 4 1 3 4. Although still under construction, the sites already generate limited rental incomes, in particular for the plots of land that have already been acquired. Their values are therefore no longer mentioned in the table above. This explains why the estimated investment values dier from those mentioned earlier. 5. Part of the rst agreement with Specht Gruppe. 6. Part of the second framework agreement with Specht Gruppe. 7. This project is being developed within the joint venture with the Korian group. Aedica and Korian will each nance 50% of the total budget. This table only considers the part of the budget that will be nanced by Aedica. 8. This project is being developed within the joint venture with Dunavast-Sonneborgh, in which Aedica holds a 75% stake. 9. This project has already been completed after 31 December 2021 (see section 1.2 of the Financial Report). 84 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE Projects and renovations (in € million) 2 Operator Current budget Invest. as of 31/12/2021 Future invest. Completion 2023 199 16 183 Belgium 6 4 2 Bois de la Pierre Pierre Invest SA 2 0 2 Germany 96 9 87 Am Schäfersee Vitanas 10 3 7 Seniorenquartier Sehnde 1,2 EMVIA Living 12 1 11 Seniorenquartier Gera 1,2 Specht Gruppe 16 1 15 Seniorenquartier Schwerin 1,2 EMVIA Living 11 3 8 Haus Marxloh Procuritas 4 0 4 Seniorenzentrum Talblick Azurit 1 0 1 Stadtlohn 1,3 Specht Gruppe 15 0 15 Fredenbeck 1,3 Specht Gruppe 13 0 13 Hamburg-Rissen 1,3 EMVIA Living 14 0 13 Netherlands 20 0 20 Natatorium Korian Netherlands 3 0 3 De Volder Staete 1 Amado Zorg & Stichting Pinahuis 10 0 10 Tiel Bladergroenstraat 1 Saamborgh 7 0 7 Finland 26 2 24 Finland – pipeline ‘child day-care centres’ Multiple tenants 2 0 2 Finland – pipeline ‘elderly care homes’ Multiple tenants 8 1 8 Finland – pipeline ‘other’ Multiple tenants 16 2 14 Ireland 54 5 49 Kilbarry Nursing Home Mowlam Healthcare 15 2 13 Kilkenny Nursing Home Mowlam Healthcare 15 3 11 Dublin Stepaside 1 Virtue 25 0 25 Completion 2024 22 0 22 Germany 22 0 22 Am Marktplatz Vitanas 2 0 2 Seniorenquartier Gummersbach 1,2 Specht Gruppe 20 0 20 Completion 2025 1 0 1 Germany 1 0 1 Bavaria Senioren- und Pflegeheim Auriscare 1 0 1 Projects subject to outstanding conditions 232 0 232 Completion 2022 26 0 26 Netherlands 5 0 5 Zwolle Koestraat 1 Valuas 5 0 5 United Kingdom 15 0 15 Chard MMCG Maria Mallaband 15 0 15 Sweden 6 0 6 Singö 10:2 & Bergshammar Ekeby 6:66 Multiple tenants 6 0 6 Completion 2023 12 0 12 United Kingdom 12 0 12 Guysfield Caring Homes 12 0 12 Completion 2024 164 0 164 Belgium 35 0 35 Renovation project Orpea Brussels Orpea 18 0 18 Résidence le Douaire Vulpia 17 0 17 Germany 130 0 130 Specht Gruppe pipeline 2 (2024) 3 Specht Gruppe 130 0 130 – 85 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION – 85 1. Although still under construction, the sites already generate limited rental incomes, in particular for the plots of land that have already been acquired. Their values are therefore no longer mentioned in the table above. This explains why the estimated investment values dier from those mentioned earlier. 2. Part of the rst framework agreement with Specht Gruppe. 3. Part of the second framework agreement with Specht Gruppe. 4. This project has already been completed after 31 December 2021 (see section 1.2 of the Financial Report). 46% Germany 13% Finland 12% Ireland 10% Netherlands 10% Belgium 9% United Kingdom 1% Sweden 44% 2022 28% 2023 24% 2024 4% >2025 Projects and renovations (in € million) 2 Operator Current budget Invest. as of 31/12/2021 Future invest. Completion 2025 14 0 14 Belgium 14 0 14 Renovation project Orpea Brussels Orpea 14 0 14 Completion 2026 11 0 11 Belgium 11 0 11 Renovation project Orpea Brussels Orpea 11 0 11 Completion 2027 4 0 4 Belgium 4 0 4 Renovation project Orpea Brussels Orpea 4 0 4 Acquisitions subject to outstanding conditions 7 0 7 Completion 2022 7 0 7 Germany 7 0 7 Seniorenhaus Lessingstrasse 4 Seniorenhaus Lessingstrasse 7 0 7 Land reserve 4 4 0 TOTAL INVESTMENT PROGRAMME 767 140 627 Changes in fair value 8 Roundings 2 On balance sheet 150 Approx. €52,5 million need to be added to the total investment budget given the announcement of development projects in the United Kingdom and Ireland after 31 December 2021 (see section 1.2 of the Financial Report). Of the total investment budget, €33 million has already been car- ried out since 31 December 2021 (see section 1.2 of the Financial Report). 86 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 3. THE HEALTHCARE REAL ESTATE MARKET 1 EUROPEAN TRENDS In the European Union, the population of persons older than 80 years of age has increased by approx. 25% over the past decade to more than 26 million people (2020). This segment of the population is growing faster than other age groups. It is expected that this older segment of the European population will double to approx. 50 million people by 2050. In the coming decades, this demographic trend will further stimulate demand for healthcare real estate. European residential care centres are operated by dierent types of operators: public, non-prot and private operators. Their market share in the various countries diers, depending on the local social security system. At the European level, private care operators manage approx. 31% of the total number of beds in residential care centres (+300 bps in two years). Care providers in the consolidating private segment develop their activities on both domestic and foreign markets, while governments have only limited resources to meet the growing demand for care and are therefore more often focused on nancing care and care dependency than on providing care as a public operator. As a result, both private and public operators rely on private investors to fund healthcare real estate infrastructure that meets the needs of the ageing population. At the European level, the investment volume in residential care centres has increased sharply in recent years, in spite of the Covid-19 pandemic: from approx. €2 billion in 2015 to a record level of approx. €7.6 billion in 2020 – a testament to the resilience of the sector. It is mainly international investors who are responsible for this increase in investment volume. This trend is expected to continue in the near future as the European con- solidation of private healthcare providers is well under way and creating new opportunities for real estate investors. However, due to this strong interest in healthcare real estate, prime net yields continued to decline. Although the Covid-19 pandemic exerted pressure on care operators and temporarily impacted the occupancy rates of care homes (occupancy decreased by approx. 5-10% in some countries but has recovered in the second half of 2021 as vaccination programmes were rolled out), healthcare real estate remained an attractive segment for investors due to the solid market fundamentals that remained intact (ageing, consolidation, public funding). The impact of the pandemic on opera- tors’ income remained relatively limited, partly because the additional costs incurred in terms of sta and protective measures were (partially) compensated by the nancial support packages from governments. The vaccination programmes that were rolled out across Europe have given a new perspective to care operators and have had a positive eect on the operators’ occupancy levels 1. Source: Cushman & Wakeeld, CBRE, Jones Lang LaSalle, Eurostat, ONS & Aedica. The number of people aged 80 and over in Europe will double to 50 million by 2050. This demographic trend will further increase the demand for healthcare real estate. 40 35 30 25 20 15 10 5 0 65 + 70 + 75 + 80 + 85 + 2020 2030 2040 2050 2060 2070 2080 – 87 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION – 87 BELGIUM 5.6% of the Belgian population is over the age of 80, and by 2040, this segment of the population is expected to increase to 7.5%. Over the past few years, the number of beds has steadily grown to approx. 150,000 units spread across the country. Based on the demographic forecasts and the increase in life expectancy, it appears that the current increase in supply will not meet demand over time. Approx. 30% of the care home beds in Belgium are managed by the public sector, while the non-prot sector operates approx. 35% and the private sector operates the remain- ing 35% of the beds. However, there are regional dierences: in Flanders, approx. 50% of the beds are managed by the non-prot sector, while the private sector operates approx. 50% of the beds in Wallonia and even over 60% of the beds in Brussels. The three largest private players in Belgium currently manage approx. 25,000 beds (approx. 17% of the total number of beds The investment volume in Belgian care homes in 2021 is estimated at approx. €340 million (compared to €400 million in 2020). The prime net yield (based on triple net long leases) currently ranges from 4% to 4.5%, depending on the region. Despite the Covid-19 pandemic, healthcare real estate remained attractive to investors due to the solid market fundamentals (ageing, consolidation, public funding). 88 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE GERMANY In Germany, the number of people over the age of 80 will almost double to approx. 12% of the total population by 2050. Currently, there are approx. 970,000 beds available in more than 15,000 care homes. These care homes are operated by non-prot operators (approx. 53%), private operators (approx. 42%) and public operators (approx. 5%). Although the German healthcare real estate market is increasingly consolidating and privatising, it remains highly fragmented, with the ten largest pri - vate operators currently holding a market share of only approx. 13.6%. Forecasts predict that up to 366,000 extra beds will be needed by 2040. Thus, the ageing population oers signicant prospects for growth and consolidation. In some regions, demand already exceeds supply. However, the possibilities for creating new capacity in care homes are limited, due to the lack of construction sites as well as the high costs of plots of land and construction works (due to increasing ecological requirements and a shortage of building materials). Consequently, there is currently more investment in existing sites and renovations. Another problem facing operators is a shortage of trained healthcare workers. Not only in rural regions, but also in metropolitan areas it is becoming increasingly dicult to recruit qualied care professionals. To make careers as a nurse more attractive, the new federal government has committed itself not only to a nursing premium, but also to improve work- ing conditions and close the pay gap between nurses and geriatricians. Investor demand for healthcare real estate remains high, although supply is limited. In 2021, approx. €3.8 billion was invested in healthcare real estate, an increase of 8% compared to last year’s investment volume, largely due to a sizeable portfolio transaction. The prime net yield has further decreased to approx. 3.9%. NETHERLANDS 4.95% of the population in the Netherlands is currently over 80 years of age. This age group is expected to more than double to 10.7% of the total population by 2050. As a result of this demographic evolution, approx. 160,000 extra beds in residential care homes are expected to be needed by 2050, on top of the necessary redevelopment of the outdated existing care infrastructure. Of the current capacity of approx. 130,000 beds, approx. 94% are operated by non-prot operators. Private operators account for the remaining 6% and mainly operate small-scale sites with an average capacity of approx. 22 residents. Although the market share of the private sector is still small compared to the non-prot sector, the private sector has grown considerably in recent years. In the Netherlands, too, the healthcare market is consolidating. Pan-European players in particular are currently actively expanding their portfolios. Healthcare real estate remains an attractive long-term investment option, with approx. €1 billion invested in 2021. The most important factor for the decline in the total transaction volume was the shortage in quality investment properties. Yields continued to decrease over the past year as investors were afraid to lose their place at the negotiating table in light of the shortage of quality investment properties. The prime net yield is approx. 4.50% and is expected to decrease further in the future due to the great interest in healthcare real estate. UNITED KINGDOM An increasingly ageing population with higher care needs is expected to increase demand for healthcare real estate signicantly in the United Kingdom in the near future and oers favourable prospects for occu- pancy rates. Currently, 5.1% of the UK population is over the age of 80; this age group is expected to double to nearly 10% of the total popula- tion by 2060. The United Kingdom has a total of approx. 470,000 beds in residential care centres. With approx. 5,500 care home operators, many of which are independent private players operating small and outdated buildings, the UK’s senior care market is still very fragmented. The ve largest care home operators have a market share of 15% of the total bed capacity, while the top 10 account for approx. 21%. The senior care market in the UK is nanced by a mix of public funds (Local Authorities and the National Health Service) and private funds (self-payers). The share of residents who nance their stay with private funds has risen sharply in recent years (approx. 45% of the market). Persons who meet certain conditions as regards care needs can obtain social care services from Local Authorities (approx. 46%) after an evaluation of their nancial situation. The National Health Service nances seniors with primary care needs (approx. 9%). In 2021, the investment volume in the UK healthcare real estate market amounted to approx. £2.3 billion, of which approx. £1.1 billion was invested in care homes. Net yields remain diversied: prime real estate drops to approx. 4%, while mid-market real estate has a yield of 7% or more. One of the challenges facing care operators in 2022 is a lack of qualied sta due to the Brexit and the Covid-19 pandemic, which might lead to rising costs and prot compression. The German healthcare real estate market remains highly fragmented: the ten largest private operators have a market share of only 14%. – 89 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION – 89 FINLAND In Finland, approx. 5.7% of the total population was over 80 years old in 2020. This age group is projected to almost double to 10.8% of the population by 2040. Finland has a total of approx. 55,000 beds in resi - dential care centres. Private healthcare operators have a market share of around 50%. In the 2014-2018 period, the number of residents in private care homes grew by approx. 5% per year. In 2020, more than 60% of children aged 1 to 6 were enrolled full or part-time in a day care centre. Approx. 25% of day care centres are operated by the private sector. However, the share of private day care centres varies by municipality (up to 40% in some municipalities) and is expected to increase in the future. In Finland, municipalities are responsible for providing care to their res- idents. A municipality has two basic options to manage the provision of care: either to provide care itself as a public operator, or to organise care through outsourcing to private or non-prot care operators. In Finland, care services are funded by municipalities through national and local taxes. After a record €1.4 billion was invested in Finnish healthcare real estate in 2020, the investment volume dropped to around €200 million in 2021 as no large portfolios were traded and more investments were made in social real estate (such as schools, etc.). However, the demand for healthcare real estate remains high, while supply is limited. The prime net yield amounts to approx. 4.0-4.25%. SWEDEN Approx. 5.4% of the total population in Sweden is over 80 years of age. That number is expected to rise to 10.5% by 2070. In 2020, approx. 138,000 people were living in residential care centres (of which approx. 108,000 in elderly care homes and 30,000 in housing for people with special care needs). 46% of Swedish municipalities report a shortage of housing for people with special care needs and 35% report a shortage of housing for elderly people with care needs. In Sweden, municipalities are responsible for providing care to their residents. Municipalities have various options for providing adequate care, but the focus seems to shift to giving freedom of choice so that people can choose their own care provider. Private care operators, who have seen their market share rise sharply in recent years, are seen as a central part of that freedom of choice. In Sweden, care services are generally nanced with public funds. The pandemic did not aect the interest of investors, who con - tinued to consider healthcare real estate as a safe investment. In 2021, the investment volume in the Swedish healthcare real estate market amounted to approx. €1 billion (up from approx. €700 million in 2020 and in line with the record level of 2019). The prime net yield for elderly care homes amounts to 3.25%. IRELAND In Ireland (population 4.9 million), data from 2019 shows that approx. 14.2% of the total population is over 65 years old and approx. 3.2% is over 80. By 2030, almost a quarter of a million people (5.1%) will be over 80 and this will double to about 10.9% of the population by 2040. Ireland has a total of approx. 32,000 beds in care homes including those in the public and private sector. Just 20% are operated by the public sector while 70% are operated by the private sector (split 50:50 between groups and individual operators) and 10% are run by the non- prot sector. In Ireland, all care homes are entered into the ‘Nursing Home Support Scheme’ (budget of €956 million in 2021) which provides a guaranteed weekly rate per bed and is supported by government money to make up the shortfall for any residents that cannot aord care. The investment volume in Irish healthcare real estate increased to a record amount of almost €600 million during 2021 due to large port- folio transactions and an unprecedented amount of single asset deals as consolidation continues at pace. The demand for healthcare real estate remains high among new active investors, while supply is limited. Much of the remaining stock to be acquired is older, and in many cases, not futureproofed. Over the last 12-24 months, the prime net yield has decreased to approx. 5%. The Covid-19 situation in Ireland is relatively well under control since early 2021 as the vaccination programme has been rolled. Overall, healthcare real estate has proven to be resilient, with many deals being closed during the pandemic. SPAIN In Spain (population 47.3 million), data from 2020 shows that approx. 19.6% of the total population is over 65 years old and approx. 6.0% is over 80. By 2030, almost 3.1 million people (6.5%) will be over 80 and their number will rise to approx. 7.3% of the population by 2035. Spain has a total of approx. 383,000 beds in care homes (and an addi- tional 26,000 beds under construction), including those in the public and private sector. 61.5% are operated by the private sector, while 38.5% are operated by the public sector. In 2021, the total investment volume in Spanish care homes has increased to approx. €600 million, doubling from 2020. Investor interest drove the prime net yield down from 4.75% to 4.50% over the course of the year. This is because several new players made their rst acquisitions, while parties already active in the Spanish market continued to expand their position. Moreover, Spanish healthcare operators have ambitious expansion plans, as the current building stock is outdated and there are few attractive buildings on the market. Over the past two years, healthcare real estate has proven to be resilient, with many deals being closed during the pandemic. 90 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE At Aedifica we put ‘housing with care’ at the centre of all our business activities. This equally applies to our Corporate Social Responsibility strategy, performance and initiatives. We are committed to living up to this motto in an environmentally and socially responsible manner, in close cooperation with our operational partners. We believe that the growth of our company goes hand in hand with supporting the people and communities around us, without this compromising our planet. a Carbon neutral organisation b Building certifications c Climate change adaptation d Life-Cycle assessments (LCA) e Provide sustainable mobility solutions f Biodiversity g Efficient operations by operators h Carbon neutral portfolio i Engage with operators to reduce environmental impact j Talent development and training in the workplace k Diversity and equal opportunities l Health and well-being employees m Housing operators’ satisfaction, service quality n Health, safety and well- being at asset level o Provide quality healthcare services for society p Invest in research and development q A ccess to (green) finance r Ethics, compliance and integrity s Sustainable procurement t Data protection and cyber security u Compliance with (local) changing building regulations n e f s p k q t o a j l m u c b i•d g•h r EXTERNAL STAKEHOLDERS INTERNAL STAKEHOLDERS MATERIALITY MATRIX In 2021, we have undertaken another materiality assess- ment with the support of an independent external consult- ant. The assessment included a peer review, interviews with internal and external stakeholders, an online survey and internal presentations. The outcomes are presented in the materiality matrix above, with the most material topics plotted on the top right. Our sustainability eorts in the coming years will primarily focus on these topics. Based on the new matrix, we have updated our CSR framework and set out new commitments for the future, assuming our responsibility and responding to the topics of importance to the Group to the maximum extent possible. Those topics not presented in the top right of the matrix are relevant to our industry but are considered less mate- rial for Aedica in the coming years. This does not mean that we are not interested in these matters or that we won’t focus or communicate on them at all: it means Aedica’s eorts regarding those topics would not be as impactful considering our day-to-day operations. – 91 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION – 91 ALL INFORMATION CONCERNING AEDIFICA’S CORPORATE SOCIAL RESPONSIBILITY EFFORTS CAN BE FOUND IN OUR ANNUAL CSR REPORTS, WHICH ARE AVAILABLE ONLINE. WWW.AEDIFICA.EU ACTION PLAN FOR 2025 Aedica has developed a 2025 Action Plan, which was rst published in the 2018 Sustainability Report and puts Aedi- ca’s long-term goals into practice through concrete action points. The plan provides a practical framework for making the real estate portfolio more sustainable by, among other things, investing in energy-ecient systems (such as solar panels, thermal storage facilities, etc.) and for developing the relationship with Aedica’s various stakeholders (such as employees, shareholders, residents, etc.), while keeping in mind responsible business practices. In the 2021 CSR Report (to be published in June 2022), Aedica will provide an update on the Group’s progress in implementing the Action Plan and disclose the renewed objectives and actions for the coming years. OUR PORTFOLIO REDUCING ENVIRONMENTAL IMPACT, OPERATIONAL COSTS AND RISKS OUR PARTNERS STRENGTHENING RELATIONSHIPS IN THE HEALTHCARE REAL ESTATE SECTOR OUR ORGANISATION BEING A LEADER IN THE HEALTHCARE REAL ESTATE SECTOR OUR CSR FRAMEWORK Our Corporate Social Responsibility Strategy is focused on three main areas: reducing our environmental footprint, strengthening our stakeholder relationships and continuing to grow into a sustainable organisation that leads the healthcare real estate sector in Europe. For more details on Aedica’s CSR framework, see page 37. 92 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE Aedica commits to achieving net zero emissions for its entire portfolio by 2050 to meet the objectives of the Paris Agreement and thus con - tribute to addressing the climate crisis. Our action plan sets out how we will deliver on our promise to reduce the environmental footprint of our portfolio and that of our tenants. • (re)developing energy ecient buildings • investing in energy-ecient installations • introducing tools for building assessments • engaging with our operators to reduce their energy consumption SUSTAINABLE FINANCE FRAMEWORK In order to support Aedica’s commitment to achieving the objectives of its Action Plan, the Group has developed a Sustainable Finance Framework (on which a Secondary Party Opinion has been obtained). The proceeds from the nancial instruments that will be issued under this framework are used exclusively for the (re)nancing of sustainable buildings, projects concerning energy eciency and projects of a social nature. To be eligible for this type of nancing, the buildings or projects must meet the sustainability criteria described in the Sustainable Finance Framework. These criteria are aligned with the United Nations Sustain- able Development Goals (SDGs). In September 2021, Aedica successfully issued its rst benchmark Sustainability Bond under its Sustainable Finance Framework for a total amount of €500 million. See page 50. OUR PATHWAY TO CARBON NEUTRALITY Reducing the impact of global warming will largely depend on further eliminating greenhouse gas emissions as a result of energy consumption. The scope 1 and 2 carbon emissions of our business activities are very limited. Aedica is not directly involved in the operations of its care homes (generating scope 3 downstream emissions). As the operators are responsible for the daily management and maintenance of the buildings (including the technical equipment) and the way they purchase electricity, the Group only has a limited impact on the direct environmental per- formance of its buildings. However, as a leading healthcare real estate investor, Aedica takes responsibility and actively shares its knowledge with its operators on how to develop, maintain and operate our assets in an ecient, safe and sustainable manner. In order to achieve carbon neutrality, Aedica will be implementing a net zero carbon pathway. Net zero greenhouse gas emissions do not only refer to direct emissions (scope 1), but also to indirect emissions (scopes 2 and 3). Aedica’s greatest challenge will be to reduce scope 3 downstream carbon emissions (mainly energy consumed by operators and residents) which are more dicult to control. This will require a com- prehensive approach and cross-company cooperation, as will be out- lined in the pathway 1 . In addition, a short-term reduction target of 20% by 2025 has already been set for our scope 1 and scope 2 emissions. COMMITMENTS • ACHIEVING NET ZERO EMISSIONS FOR THE REAL ESTATE PORTFOLIO BY 2050 • APPLYING BUILDING ASSESSMENT (BA) STRATEGY TO 100% OF OUR PROPERTIES IN OPERATION BY 2025 • UNDERTAKING A CLIMATE CHANGE RISK ASSESSMENT IN 2023 OUR PORTFOLIO REDUCING OUR ENVIRONMENTAL IMPACT, OPERATIONAL COSTS AND RISKS Aedica commits to achieving net zero emissions for its entire portfolio by 2050 to meet the objectives of the Paris Agreement. In order to achieve carbon neutrality, Aedica will be implementing a net zero carbon pathway. 1. A detailed overview of Aedica’s net zero carbon pathway will be provided in Aedica’s 2021 CSR report (to be published in June 2022). – 93 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION – 93 BUILDING ASSESSMENTS FOR FUTUREPROOF ASSETS Aedica has developed a Building Assessment framework that provides our technical property management team with a structure to monitor the quality of each building along three essential pillars. 1. Identifying if sucient resources are allocated to maintenance 2. Assessing and benchmarking sustainability performance 3. Monitoring compliance with all applicable regulations Under triple net leases, these aspects are normally addressed by the operator, but as an owner Aedica continues to monitor the quality and implementation of these issues. The sustainability pillar of the building assessment framework provides for the implementation of a sustainable development framework in each country. This framework denes technical requirements regard- ing energy eciency, environmental aspects (e.g. measures to reduce water consumption and improve biodiversity), as well as health criteria (e.g. ventilation ow rates for air quality) and quality of life criteria for residents (e.g. accessibility) for future developments projects. Our development projects in the Netherlands typically already meet most of these criteria, as the Dutch version of our sustainable development framework is similar to the GPR-standard. See pages 10-11. Over the next two years, Aedica will carry out a climate change risk assessment to validate the ndings of the physical risk analysis con - ducted under the compliance pillar, focusing on the potential risks and opportunities resulting from climate change. This will provide the cor - porate team with a better understanding of the dierent risks (ooding, drought, heat stress, etc.) and the priorities on which Aedica and its operators should focus to adapt to these risks at building level. • In-depth internal assessments - according to the principles of the standard NEN2767 • On-site visits are being performed by our operations team • Share uniform approach between countries • Follow-ups with the operators • Energy data collection on annual basis • Dene and implement sustainable development guideline per country • Energy Performance Certicates (EPCs) and Energy Audits provide input for measures needed to improve the energy performance, including onsite renewable energy generation • Legislation and risk framework - across a standardised matrix (adapted to local regulations), a building is assessed for compliance. This ranges from building permits and elevator certicates to ood risk assessment • Provide assurance regarding the compliance of the structure and the installations to ensure the health and safety of residents and sta 2 Scope 2 indirect 4 6 2 Purchased energy Leased assets Leased healthcare properties Investments Construction activity Fuel and energy Waste generated in operations Employee commuting Business travel Company oces Company vehicles 94 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE Aedica is committed to bringing together the various stakeholder groups that have an impact on the daily lives of the residents and care sta who live and work in our buildings. The Group wants to be a part - ner to all these stakeholders, actively listening, sharing information and educating them on the latest trends in the real estate industry. Above all, relationships with our operators and communities are essential to creating long-term sustainable value. PARTNERS We continue to engage our partners by reaching out to them proactively and maintaining good relations. In this way, we try to understand their needs and discuss the issues they consider important. This open attitude underpins the Group’s identity and long-term vision. • continuously available to operators • organising formal and informal contact moments • organising satisfaction surveys OPERATOR ENGAGEMENT: MEASURE SUCCESS In 2021, an engagement survey to measure the operator satisfaction was organised. Overall, over 100 participants spread over 6 countries have completed the survey, representing a large part of our portfolio. The results of the survey provide useful insights about our current services and interactions, as well as potential additional needs and strategic priorities of operators. These results serve as a basis for improvements to Aedica’s collaboration and dialogue with its tenants. OPERATOR DAYS Aedica understands the challenging context in which our operators have to work every day. Their primary concern is providing healthcare to people in need and not necessarily the management and technical maintenance of the buildings. That is why Aedica will be organising Operator Days in every country where it operates. Once every three years, Aedica will invite all representatives of its care properties and share knowledge and best practices on the ecient management of properties, investment in innovation, new real estate-related care solu- tions and the risks and opportunities of climate change. By organising these Operator Days in each region, we can share knowledge gained in dierent regions and by working with multiple operators. CONTRIBUTING TO SOCIETY BY PROVIDING QUALITY CARE PROPERTIES As a healthcare real estate investor, Aedica contributes to a better society by creating innovative residential care concepts for a variety of care clients. Our main focus remains on elderly people requiring dierent types of residential care. However, during the past few years, we have also specialised in other types of housing and care accommodation, such as care facilities for people with disabilities, children day-care centres and schools. 65% Elderly care (for seniors requiring continuous care) 4% Elderly care (for independent seniors) 17% Elderly care (for independent seniors & seniors requiring continuous care combined) 7% Child day care 6% Specialist care (for those with disabilities) 1% School COMMITMENTS • INCREASING THE RESPONSE RATE OF OPERATORS PARTICIPATING IN ENGAGEMENT SURVEY • IMPLEMENTING A GREEN AWARENESS PROGRAMME FOR TENANTS • ORGANISING OPERATOR DAYS IN EACH REGION EVERY THREE YEARS • ORGANISING ANNUAL COMMUNITY DAYS FOR EMPLOYEES OUR PARTNERS STRENGTHENING OUR RELATIONSHIPS IN THE HEALTHCARE REAL ESTATE SECTOR – 95 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION – 95 COMMUNITY ENGAGEMENT In order to understand and connect with our communities, Aedica stimulates its employees to actively contribute towards the health and well-being of the residents and the communities of the buildings we own. During Community Days, employees will be able to take one day o to invest their time in increasing the attractiveness of our properties, supporting elderly residents or doing other volunteering activities. In 2021, Aedica donated over 55,000 € to charity and non-prot organisations. • Be.Source: an initiative that supports actions to improve the living conditions of vulnerable elderly people. • Boost for talents: an initiative that aims to give equal educational opportunities to young people from disad- vantaged backgrounds. • Music: as research shows that music has a positive eect on people suering from dementia, Aedica continued to support the Philomela Foundation, an organisation that provides classical concerts for residents of care homes in the Netherlands. Aedica also organised a series of Christmas concerts. • Pegecampus Plauen: Aedica made a donation to this care campus that brings together dierent generations to purchase rehabilitation equipment. • In Finland, employees visited a shelter to donate bed linen. SHARING KNOWLEDGE Every year we welcome interns to our oces and oer them the opportunity to gain valuable experience in a work environment. In addition, the members of our Executive Committee often share their knowledge at seminars in Belgium and abroad. Aedica CEO Stefaan Gielens is a frequent guest lecturer in the postgraduate programme in real estate studies at KU Leuven. He also regularly partici - pates in panel discussions within the real estate sector, as do other members of the Executive Committee. 96 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE At Aedica, we take ‘housing with care’ seriously in all our business activities. The principles of care that we apply to our real estate portfo- lio are also extended to our own workforce. By paying attention to the health and well-being of our employees and their families, we ensure that Aedica remains an attractive place to work. Through embedding our company values in our operations, we aim to lead the healthcare real estate sector: OUR VALUES Care • Implementing a robust health and well-being programme, developed by and for our employees • Providing flexible working conditions so employees have a positive work-life balance Agile • Offering employees a development plan that increases personal and professional skills to meet the challenging needs of our industry • Having succession planning in place for all key positions Transparency • Updating our internal codes, standards and guidelines to reflect industry best practice • Informing employees on the Code of Ethics annually Leadership • Measuring engagement levels through independent surveys to identify further improvements to our organisation and truly become an industry leader • Inspiring and recognising the talent working at Aedifica GOOD GOVERNANCE Aedica has a corporate culture characterised by honesty and integrity, a sense of responsibility, strict ethics and compliance with statutory rules and corporate governance standards. The Group also expects the same mentality from the parties with which it works. To guarantee these high ethical business standards, we have prepared a number of policy documents around topics such as sustainability and human rights. Corporate Governance Statement A GREAT PLACE TO WORK Similar to last year, Aedica held an employee engagement survey in 2021. However, this was the rst time we worked together with the ‘Great Place to work’ programme on a group level (the Finnish Hoivatilat team has been recognised as a Great Place to Work for several years). The survey gives us an in-depth insight into what our employees nd impor- tant and provides us with the right tools to improve our sta’s well-being and create a happy workforce. After the survey and an in-depth analysis of the company culture, Aedica was already recognised as a great workplace in its rst participation, allowing it to carry the Great Place to Work ® Certied label throughout 2022. OUR ORGANISATION BEING A LEADER IN THE HEALTHCARE REAL ESTATE SECTOR COMMITMENTS • ROLLING OUT THE AEDIFICA ACADEMY TO ALL REGIONS • ORGANISING ANNUAL EMPLOYEE SATISFACTION SURVEY • MANDATORY ANNUAL ETHICS TRAINING FOR EMPLOYEES • IMPLEMENTING HEALTH & WELL-BEING PROGRAMME IN OUR OFFICES – 97 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION – 97 In 2022, the HR team will start rolling out the Aedica Academy to all countries in which the Group operates. Aedica Academy is a training programme that not only consists of a number of manda- tory trainings on key topics within the company and the industry, but also allows employees to create their own programme for personal and professional development. The Aedica Academy builds on the Hoivatilat University that our Finnish colleagues established two years ago. TALENT DEVELOPMENT At Aedica, we have created a workplace culture in which employees receive continuous feedback combined with one formal yearly perfor - mance review with their manager. Aedica actively supports internal sta rotation because it tends to lead to improved skills and a better understanding of our company’s culture and internal processes. In addition, Aedica invests in the talent development of its sta by oering the ‘Aedica Academy’ training programme. EMPLOYEE HEALTH AND WELL-BEING A Health & Well-being Committee was set up in 2021 and met three times during the year. The Committee includes members of Human Resources, head oce employees and representatives from our local teams. The Committee has been working on our community engagement programme and will nalise an action plan in early 2022 based on the ndings of the annual employee engagement survey. 98 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 Corporate governance statement As a reference player in the European listed healthcare real estate sector, Aedifica attaches great importance to transparent, ethical and sound governance of the Company based on the conviction that this contributes to sustainable value creation in the long term for all of Aedifica’s stakeholders. The Board of Directors shall ensure that the corporate governance principles and processes developed for this purpose are appropriate for the Company at all times and comply with the applicable corporate governance regulations and standards. FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE – 99 99% ATTENDANCE RATE BOARD AND COMMITTEE MEETINGS New Dealing Code Human Rights Policy Anti-Money Laundering Policy Charter for Responsible Supplier Relations IMPLEMENTED IN 2021 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 100 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE This chapter provides an overview of the rules and principles on which the Company organises its corporate governance. These rules for transparent, ethical and sustainable governance aimed at long- term value creation for all stakeholders (shareholders, tenants and their residents, employees, the community and the environment) can also be found in Aedifica’s internal policies including: • Articles of Association • Corporate Governance Charter • Dealing Code • Code of Conduct • Internal procedure for reporting irregularities • Remuneration policy • Anti-bribery and corruption policy • Anti-money laundering policy • Internal privacy policy • Environmental policy • Human rights policy • Charter for responsible supplier relations Aedica has opted for a monistic or one-tier governance structure as stipulated in Articles 7:85 et seq. BCCA. This means that the Company is managed by a Board of Directors that has the power to perform all acts necessary or useful to achieve the purpose of the Company, with the exception of those acts for which the General Meeting is authorised according to the law, and is led by an Executive Committee that has been entrusted by the Board of Directors with the day-to-day management and operational functioning of the Company. In order to increase the overall eectiveness of the Board of Directors through focus, supervision and monitoring of important areas, the Board has established three specialised committees, consisting mainly of Independent Directors who have the expertise required to be members of such committees, namely the Audit and Risk Committee, the Nomination and Remuneration Committee and the Investment Committee. As required by RREC legislation and corporate governance rules, the Company also has an independent control function, the eectiveness whereof is ensured by the internal audit, compliance and risk management functions. As Aedica’s corporate mission (oering sustainable real estate solutions to professionals whose core business is the provision of care to persons in need throughout Europe) aims to sustainably pursue the interests of all its stakeholders, it has a Sustainability Steering Committee that examines how the Company’s sustainability objectives can be integrated into its policies and is responsible for developing and monitoring the sustainability action plan. The Sustainability Steering Committee’s proposals and plans are validated by the Executive Committee, which regularly reports on these matters to the Board of Directors. Finally, given the geographical diversity of the countries in which Aedica operates and in order to exchange relevant experience from these various markets, Aedica has a G10 group through which the members of the Executive Committee and the country managers meet regularly. This governance structure can be represented schematically as shown hereafter. Corporate governance statement – 101 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION In accordance with Article 3:6 §2 BCCA and the Royal Decree of 12 May 2019 specifying the code to be complied with regarding corporate governance by listed companies, Aedica applies the Belgian Corporate Governance Code 2020 (‘CG Code 2020’), taking into account the particularities relating to RREC legislation. The CG Code 2020 can be accessed on the website www.corporategovernancecommittee.be. The CG Code 2020 applies the comply or explain principle, whereby deviations from the recommendations must be justied. On the date of this Annual Financial Report, Aedica complies with all provisions of the CG Code 2020. The Corporate Governance Charter containing all the information on the governance rules applicable within the Company can be accessed on the Company’s website (www.aedica.eu). Aedica has implemented an eective internal control and risk management system, as required by the RREC legislation and by corporate governance rules. The development of this internal control and risk management system is the responsibility of Aedica’s Executive Committee. The Board of Directors is responsible for determining and evaluating the risks the Company may face and for monitoring the eectiveness of internal control. In accordance with RREC legislation, Aedica has appointed a risk manager, a compliance ocer and an internal auditor. Ms Ingrid Daerden (CFO, Executive Director and member of the Executive Committee) was appointed risk manager. She ensures the implementation of measures and procedures for identifying, monitoring and avoiding the risks that the Company may face. When risks actually occur, she takes measures to limit the impact of these risks and to assess and monitor their consequences as much as possible. Mr Thomas Moerman (General Counsel) was appointed compliance ocer. He ensures that the Company, its Directors, members of the Executive Committee, employees and agents comply with the legal rules relating to the integrity of the Company. The person in charge of the internal audit function continuously and independently assesses the activities of the Company and examines the eectiveness of the existing internal control procedures and methods. The internal audit function is performed by an external consultant, BDO Risk Advisory Services (represented by Mr Pierre Poncelet), under the supervision and responsibility of Ms Katrien Kesteloot (Independent Director). Aedica bases its risk management and internal control system on the COSO internal control model (Committee of Sponsoring Organisations of the Threadway Commission - www.coso.org). This model (2013 version) denes the requirements of an eective internal control system by 17 principles spread over ve components: • internal control environment • risk analysis • control activities • information and communication • supervision and monitoring Principle 1: the organisation demonstrates its commitment to integrity and ethical values. • Regarding ethics, Aedica has several internal policy guidelines that apply to its Directors, members of the Executive Committee and its employees. It has an ethical charter (‘Code of Conduct’) that is part of the Corporate Governance Charter. This Code of Conduct lays down rules on conicts of interest, professional secrecy, purchase and sale of shares, misuse of corporate property and respect for individuals. In addition, Aedica also has a policy against bribery and corruption and a human rights policy. Moreover, there are also internal procedures in place for reporting (suspected) irregularities and violations of the ethical standards pursued by Aedica. • Regarding integrity, Aedica complies with all legal requirements regarding conicts of interest (see below). In addition, Aedica also has a policy on the prevention of the use of the nancial system for the purposes of money laundering and terrorist nancing. Principle 2: the Board of Directors is independent from man- agement and supervises the development and operation of internal controls. Aedica’s Board of Directors has 11 members, 7 of whom are independent members within the meaning of Article 7:87 §1 BCCA. In view of their experience and their specic proles, the Directors have the necessary competences in the context of the exercise of their mandate (see skills matrix below). The Board of Directors monitors the eectiveness of the risk management and internal control measures taken by the Executive Committee. Principle 3: the Executive Committee determines, under the supervision of the Board of Directors, the structures, reporting procedures and the appropriate rights and responsibilities to achieve the objectives. Aedica has a Board of Directors, an Audit and Risk Committee, a Nomination and Remuneration Committee, an Investment Committee and an Executive Committee, the roles of which are described below. In accordance with the RREC legislation, the members of the Executive Committee are responsible for the day-to-day management of the Company, on which they report regularly to the Board of Directors. The Executive Committee is also responsible for the implementation and eectiveness of internal control and risk management measures. 102 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE Principle 4: the organisation undertakes to attract, train and retain competent employees within the organisation. The competence of the Executive Committee and of the sta is ensured by the implementation of recruitment processes based on dened proles and by the organisation of appropriate trainings. Aedica supports the personal development of its employees and oers them a comfortable and stimulating working environment tailored to their needs, by identifying their talents, and by helping to strengthen them. Sta changes are planned based on the career planning of employees and the likelihood of temporary (maternity leave, parental leave, etc.) or permanent (particularly retirement) departures. Principle 5: the organisation communicates with external parties regarding matters aecting the functioning of internal control. Each employee has at least one performance interview per year with his or her supervisor, based on a schedule that maps out the relations between the company and the employee. In addition, the remuneration and evaluation policy for the Executive Committee and sta is based on the setting of realistic and measurable objectives. A new benchmark study of the Executive Committee’s remuneration was ordered in early 2022. Principle 6: the organisation describes the objectives clearly enough to be able to identify and evaluate the risks relating to these objectives. Aedica’s objectives are clearly described in this annual nancial report on pages 34-37. The Company acts with due care in respect of risk culture. Principle 7: the organisation identies the risks for the achievement of its objectives and analyses these risks to determine how it should manage them. The Board of Directors identies and evaluates Aedica’s main risks on a quarterly basis and publishes its ndings in the annual and half-yearly nancial reports and interim statements. Risks are also monitored on an ad hoc basis outside the quarterly identication and assessment exercises by the Board of Directors at its meetings. In this respect, Aedica, with the help of a specialised consultant, has initiated in 2020 an in-depth review of its strategic risks. Aedica’s appetite for these risks has been assessed and the controls put in place have been documented. The risk analysis is regularly monitored and gives rise to remediation actions in relation to any identied vulnerabilities. More information on the risks can be found in the ‘Risk factors’ chapter in this annual nancial report. Principle 8: the organisation pays attention to the risk of fraud when assessing the risks that could jeopardise the achievement of the objectives. Any attempt to commit fraud is immediately investigated in order to mitigate the potential impact on the Company and to prevent further attempts. At the end of 2020 the Company adopted an anti-bribery and corruption policy and a policy on the prevention on the use of the nancial system for the purposes of money laundering and terrorist nancing. The policies clarify certain rules of conduct for the Company and its employees in these elds. Principle 9: the organisation identies and assesses changes that could have a signicant impact on the internal control system. Signicant changes are identied and analysed on a continuous basis by both the Executive Committee and the Board of Directors. This analysis is incorporated in the ‘Risk factors’ chapter. Principle 10: the organisation selects and develops control activities that contribute to the mitigation of risks to the achievement of objectives to acceptable levels. Each acquisition or disposal transaction can be reconstructed as to its origin, the parties involved, its nature, and the time and place at which it was carried out, on the basis of notarial deeds (direct acquisition or by way of contribution in kind, merger, demerger or partial demerger) or private deeds (indirect acquisition), and is subject, prior to its conclusion, to a control of compliance with the Company’s Articles of Association and with the legal and regulatory provisions in force: • Review of variances between budget and actuals, on a monthly basis by the Executive Committee, and on a quarterly basis by the Audit and Risk Committee and the Board of Directors. • Daily monitoring of key indicators, such as occupancy rate, trade receivables, aged debtors and cash position. • The principle of dual approval: - signing of contracts: two Directors jointly or two Executive Com - mittee members acting jointly; - approval of invoices: the responsible manager and a member of the Executive Committee, jointly; - payment of invoices: accountant in charge of the treasury and CFO (or CEO), jointly; - a specic delegation of authority is in place for treasury operations. In addition, the Company has introduced control measures to address its main nancial risks: - interest rate risk: implementation of hedges (mainly IRS and caps), contracted only with reference banks; - counterparty risk: use of dierent reference banks to ensure diver - sication of the origin of bank nancing; - currency risk: hedging instruments (mainly forward contracts) are used to hedge against a variation in the £/€ rate on future cash ows in £. A macro-hedge is also put in place to mitigate £/€ variations on the balance sheet. A part of the debt is contracted in £, which allows to mitigate the exchange rate variations on the valuation of the buildings. Following the acquisition of Hoivatilat, Aedica is also exposed to the SEK/€ exchange rate risk. Principle 11: the organisation selects and develops general IT controls to promote the achievement of its objectives. The technology used by the Company is selected according to an ‘integrated system approach’. Aedica relies on a fully operational ERP (SAP) to conduct its business. To manage the debt, Aedica uses a treasury management system (Reval) which communicates daily with the ERP. The security of access and the continuity of the systems data are entrusted to a partner based on a ‘service level agreement. In addition, leases are registered, and the most important contracts and documents are adequately preserved outside Aedica’s premises. Principle 12: the organisation develops control activities with a policy that determines what is expected and with procedures that put that policy into practice. The formalisation of documentation is part of a continuous process improvement objective, which also considers the balance between formalisation and company size. – 103 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION Principle 13: the organisation uses relevant and high-quality information to support the functioning of internal control. The information system used by the Company enables it to reliable and complete information on a timely basis, meeting both internal control and external reporting needs. Since July 2020, the Company has switched to a single ERP system for the entire group (SAP), except for Hoivatilat. Principle 14: the organisation communicates internally the information, including the objectives and responsibilities for internal control, that is necessary to support the operation of this internal control. The internal control information is communicated in a transparent manner within the Company with the aim of clarifying for everyone the organisation’s policies, procedures, objectives, roles and responsibilities. Communication is adapted to the size of the Company and consists mainly of general sta communication, working meetings and email exchanges. Principle 15: the organisation communicates with third parties on matters that aect the functioning of internal control. Extensive external communication (for shareholders – publication of occasional and periodic information – but also general communication to other stakeholders) is essential for a listed company and Aedica is dedicated to it on a daily basis. External communication of internal control follows to the process of preparing and publishing periodic information (drafted by the Executive Committee, reviewed by the Audit and Risk Committee and approved by the Board of Directors). Principle 16: the organisation selects, develops and carries out continuous and/or one-o evaluations to check whether the internal control components are present and whether they are functioning. In order to ensure that the components of the internal control are properly applied, Aedica has set up an internal audit function covering its main processes. The internal audit is organised according to a multi-year cycle. The specic scope of the internal audit is determined annually in consultation with the Audit and Risk Committee, the person responsible for the internal audit within the meaning of the RREC legislation (Ms Katrien Kesteloot, Independent Director - see above) and the internal auditor (see above). In view of the independence requirements and taking into account the principle of proportionality, Aedica has chosen to outsource the internal audit to a specialised consultant who is under the supervision and responsibility of the internal person responsible for the internal audit. Principle 17: the organisation evaluates and communicates internal control deciencies in a timely manner to those parties responsible for taking corrective action, including eective management and the Board of Directors, as appropriate. The recommendations issued by internal audit are communicated to the Audit and Risk Management Committee. The Committee ensures that the appropriate corrective measures are taken by the management. As of 31 December 2021, based on the transparency notices received, BlackRock, Inc. (transparency notice dated 5 July 2019) holds at least 5% of the voting rights in Aedica (see page 139). No other shareholder holds more than 5% of the capital. Notices under transparency legislation and control chains are available on the website. According to the denition of Euronext, the free oat amounts to 100%. There are no preferred shares. Each Aedica share entitles the holder to one vote at the General Meeting of Shareholders, except in cases of suspension of voting rights provided for by law. There is no legal or statutory limitation of voting rights whatsoever. As of 31 December 2021, Aedica is not subject to any control within the meaning of Article 1:14 BCCA, and has no knowledge of agreements that could lead to a change of control. On 31 December 2021, Aedica’s Board of Directors consisted of eleven members, seven of whom are independent within the meaning of Article 7:87 BCCA and Article 3.5 of the CG Code 2020. The Directors are listed on pages 104-107. They are appointed for a maximum term of three years by the General Meeting, which can remove them at any time. Directors can be reappointed. The full biographies for each of the members of the Board of Directors are available on Aedica’s website. Aedica takes into account various diversity aspects (such as gender, age, professional background, international experience, etc.) for the composition of its Board of Directors and its Executive Committee, in accordance with the Law of 3 September 2017 on the publication of non-nancial information and information on diversity by certain large companies and groups. Further information can be found in section 6 of this corporate governance statement. HUIZE ERESLOO – DUIZEL, NL 104 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE SERGE WIBAUT STEFAAN GIELENS, MRICS Chair – Independent Director Member of Audit and Risk Committee Belgian – 64 years Aedica Board mandate - Since 23.10.2015 - End of term: 05.2024 Experience Over 20 years in banking and nancial sector, including various senior leadership positions Aedica shareholding 200 Other active mandates Securex Assurance, Cigna Life Insurance Company of Europe NV/SA, Reacn NV/SA, Scottish Widows Europe Mandates expired during the last 5 years ADE, Alpha Insurance, Securex NV/SA, Eurinvest Partners NV/SA Chief Executive Ocer – Executive Manager Belgian – 56 years Aedica Board mandate - Since 03.02.2006 - End of term: 05.2024 Experience More than 15 years as CEO of Aedica which has evolved under his leadership from a small start-up to a European pure play healthcare real estate investor Aedica shareholding 14,701 Other active mandates Director of Happy Aairs BV and as permanent representative of Happy Aairs BV, director in Antemm NV/SA Mandates expired during the last 5 years Director of Immobe NV/SA and Forum Estates NV/SA – 105 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION SVEN BOGAERTS Executive Director Chief Mergers & Acquisitions Ocer – Chief Legal Ocer – Executive Manager Belgian – 44 years Aedica Board mandate - Since 08.06.2020 - End of term: 05.2023 Experience Almost 20 years, including 14 years as attorney specialised in business real estate transactions Aedica shareholding 3,936 Other active mandates / Mandates expired during the last 5 years Director of Immobe NV/SA INGRID DAERDEN Executive Director Chief Financial Ocer – Executive Manager Belgian – 47 years Aedica Board mandate - Since 08.06.2020 - End of term: 05.2023 Experience Over 20 years, including 10 years in real estate nancing Aedica shareholding 3,532 Other active mandates / Mandates expired during the last 5 years Director and business manager of JIND BV (the company was dissolved and liquidated), director of Immobe NV/SA; CFO of the OTN Systems Group JEAN FRANKEN Independent Director Chair of investment committee Member of Nomination and Remuneration Committee Belgian – 72 years Aedica Board mandate - Since 1.07.2013 - End of term: 05.2022 Experience Over 40 years in real estate sector, including various senior leadership positions Aedica shareholding 1,200 Other active mandates / Mandates expired during the last 5 years Director of Immobe NV/SA 106 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE PERTTI HUUSKONEN KATRIEN KESTELOOT Independent Director Fin – 65 years Aedica Board mandate - Since 08.06.2020 - End of term: 05.2023 Experience Almost 40 years in real estate, including various senior leadership positions Aedica shareholding 660 Other active mandates Chair of the Board of Directors and CEO of Lunacon Oy, Vice Chair of the Board of Directors of Ahlström Kiinteistöt Oy and Hoivatilat and Chair of the Board of Directors of Avain Yhtiöt Mandates expired during the last 5 years Chair of the Board of Directors of Lehto Group Oy and of Partnera Oy, Vice Chair of the Board of Directors of KPY Novapolis Oy, member of the Board of Directors of Pro Kapital Group AS and of Kaleva Kustannus Oy Independent Director Member of the Audit and Risk Committee Responsible for internal audit Belgian – 59 years Aedica Board mandate - Since 23.10.2015 - End of term: 05.2024 Experience Over 30 years in healthcare sector, notably over 20 years as CFO of UZ Leuven (university hospital) Aedica shareholding 71 Other active mandates CFO University Hospitals Leuven, director of Hospex NV/SA, VZW/ASBL Faculty Club KU Leuven and Rond VZW/ASBL, Chair of the Board of Directors and member of the Audit Committee of Emmaüs VZW/ASBL, member of the Treasury & Investment Committee UZL/LRD/KU Leuven Mandates expired during the last 5 years PhD in Economic Sciences and academic career at KU Leuven, member of various advisory bodies in the Flemish and Federal authorities, expert adviser in hospital funding at the Ministry of Social Aairs and Public Health. Professor at KU Leuven ELISABETH MAY-ROBERTI Independent Director Chair of the Nomination and Remuneration Belgian – 58 years Aedica Board mandate - Since 23.10.2015 - End of term: 05.2024 Experience Over 20 years in real estate sector, notably as Secretary General – General Counsel of Interparking Group (AG Insurance) Aedica shareholding 216 Other active mandates Various positions and mandates within the Interparking Group Mandates expired during the last 5 years Uniparc Nederland BV – 107 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION MARLEEN WILLEKENS LUC PLASMAN Independent Director Member of the Nomination and Remuneration and of the Investment Committee Belgian – 68 years Aedica Board mandate - Since 27.10.2017 - End of term: 05.2023 Experience Almost 40 years in real estate sector, including various senior leadership positions Aedica shareholding 381 Other active mandates Director of Vana Real Estate NV/SA, Business Manager of Elpee BV and Secretary General of BLSC Mandates expired during the last 5 years Various mandates within the Wereldhave Belgium Group, Managing Director of Immo Guwy NV/SA and Chair of BLSC Independent Director Chair of the Audit and Risk Committee Belgian – 56 years Aedica Board mandate - Since 27.10.2017 - End of term: 05.2023 Experience Almost 30 years as professor of accounting and auditing at the KU Leuven and BI Norwegian Business School Oslo (Norway) Aedica shareholding 37 Other active mandates Professor at KU Leuven, part-time research professor at BI Norwegian Business School, independent director and Chair of the Audit Committee of Intervest NV/SA Mandates expired during the last 5 years Various mandates at KU Leuven and BI Norwegian Business School and Chair of the Competence Examination Jury of the Institute of Registered Auditors CHARLES-ANTOINE VAN AELST Executive Director Chief Investment Ocer – Executive Manager Belgian – 36 years Aedica Board mandate - Since 08.06.2020 - End of term: 05.2023 Experience Almost 15 years, starting as corporate analyst with Aedica evolving to investment manager and chief investment ocer Aedica shareholding 3,839 Other active mandates Director of Immobe NV/SA and Davidis NV/SA Mandates expired during the last 5 years / 108 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE The members of the Board of Directors collectively bring together a wide set of competences required to lead the Company taking into account the Group’s activities and status as listed regulated real estate company. These competences range from strong experience in the real estate and healthcare market to functional skills in domains like audit & risk, M&A and sustainability. SKILLS AND EXPERTISE OF AEDIFICA’S BOARD OF DIRECTORS International business experience ESG / Sustainability M&A / Capital Markets Senior management experience Legal / Public Policy Risk Management Financial expertise Relevant professional experience in/knowledge of healthcare industry Real estate / REIT The Director’s mandate of Mr Jean Franken will expire immediately after the Ordinary General Meeting of 10 May 2022 and as Mr Franken will at that time have exceeded the age limit of 72, his mandate will not be proposed for renewal. The Nomination and Remuneration Committee reviewed in that context the composition of the Board of Directors to ensure that the relevant skills and experience (see above) are and continue to be represented to best oversee Aedica’s long-term strategy and the daily implementation thereof. This review resulted in the proposal of the Board to the Ordinary General Meeting for the appointment – subject to approval by the FSMA – of: • Ms Henrike Waldburg as Independent Non-Executive Director Ms Henrike Waldburg is Head of Investment Management Global at Union Investment Real Estate GmbH, one of the largest real estate investment managers in Europe. In that capacity she has responsibility for Union Investment’s transactions in the Americas and Asia Pacic and all retail transactions in Europe. Ms Waldburg will add to the Board over 20 years of solid investment management experience and expertise in Germany, Europe, USA and Asia-Pacic, gained in her tenure with Union Investment and previous positions at Ernst & Young and Arthur Andersen. She is a Fellow of the Royal Institution of Chartered Surveyors, executive board member of the European Council of Shopping Places and a member of the Board of Advisors of IRE|BS Immobilienakademie GmbH (International Real Estate Business School, University of Regensburg, Germany). She holds academic degrees from RWTH Aachen, European Business School (ebs Oestrich Winkel), SGMI St. Gallen and ESMT European School of Management and Technology, Berlin. • Mr Raoul Thomassen as Executive Director Mr Thomassen is today already member of the Executive Committee and Chief Operating Ocer. Next to his strong international experience as senior manager in international real estate investment, asset management and project development companies, he will in particular bring to the Board of Directors, other than his overall real estate experience, skills in the eld of ESG and sustainability. The full biography of Ms Henrike Waldburg and Mr Thomassen can be found on Aedica’s website. The Board of Directors aims to achieve sustainable value creation for Aedica’s shareholders and other stakeholders by dening the Company’s strategy and policy and developing entrepreneurial, responsible and ethical leadership that can implement this strategy and policy within a framework that enables eective control and risk management. During the 2021 nancial year, the Board of Directors met 13 times. In addition to the usual recurring topics (in particular operational and nancial reporting, communication policy, strategy and investment policy), the Board of Directors also met to discuss (among other things) the following topics: • Strategy: - the strategy and development of the company; • Operational: - Covid-19 crisis and impact on the portfolio. • Investment: - analysis and approval of investment, divestment and development/ redevelopment cases; - acquisition of healthcare real estate in new markets. • Financial: - the capital increase via an accelerated bookbuild (ABB) within the scope of the authorised capital; - two capital increases within the scope of the authorised capital via a contribution in kind to acquire real estate; - sustainable bond issuance. • Governance: - evaluation of the Board of Directors; - evaluation of the Executive Committee, determination of its objectives, xed and variable remuneration; - composition of the Board of Directors and the Executive Committee. • Human resources: - internal organisation of the Company and development of the organisational structure across the various countries in which the Aedica Group operates. • Internal control: - the organisation and activities of internal control (compliance, risk management and internal audit function). • ESG: - 2020 sustainability report and the sustainability action plan; - GRESB participation. – 109 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION Three specialised committees were established within the Board of Directors: an Audit and Risk Committee, a Nomination and Remuneration Committee and an Investment Committee, which assist and advise the Board of Directors in their specic areas. These committees do not have decision-making authority, but form an advisory body and report to the Board of Directors, which then makes the decisions. All committees are eligible to invite members of the Executive Committee as well as executive and management sta to attend committee meetings and to provide relevant information and insights related to their area of responsibility. Moreover, each committee is entitled to speak to any relevant person without a member of the Executive Committee being present. Each committee can also, at the Company’s expense, seek external professional advice on topics falling under the specic powers of the committee. However, the Chair of the Board of Directors must be informed of this in advance and with due regard at all times given the nancial consequences for the Company. After each committee meeting, the Board of Directors receives a report on the ndings and recommendations of the relevant committee as well as oral feedback at a subsequent board meeting. Audit and Risk Committee As at 31 December 2021, the Audit and Risk Committee consists of three Independent Directors: Ms Willekens (Chair of the Audit and Risk Committee), Ms Kesteloot and Mr Wibaut. Although the CEO and the CFO are not part of the Audit and Risk Committee, they attend the meetings. The current composition of the Audit and Risk Committee and the tasks entrusted to the committee satisfy the conditions imposed by the Law of 17 December 2008 on the establishment of an audit committee within listed and nancial companies. Aedica’s Independent Directors satisfy the criteria set out in Article 7:87 BCCA and Article 3.5 of the CG Code 2020. Moreover, all members of the Audit and Risk Committee have the necessary accounting and audit competence, both due to their level of education and their experience in this matter. The Audit and Risk Committee assists the Board of Directors in fullling its monitoring responsibilities for control purposes in the broadest sense. In general and without prejudice to the organisation of the internal audit function referred to in Article 17 of the RREC Law, the Audit and Risk Committee ensures the internal audit of the Company. The specic tasks of the Audit and Risk Committee may evolve depending on the circumstances. In carrying out its task, the Audit and Risk Committee’s main duties are: • monitoring the nancial reporting process; • monitoring the eectiveness of the internal control and risk management systems; • monitoring internal audit and its eectiveness; • monitoring the statutory audit of the annual accounts and the consolidated annual accounts, including monitoring of questions and recommendations formulated by the statutory auditor; • external audit, including the assessment and monitoring of the auditor’s independence. The Audit and Risk Committee reports regularly to the Board of Directors on the performance of its duties and in any event when the Board of Directors draws up the annual accounts, consolidated accounts and condensed nancial statements intended for publication. The committee met six times during the 2021 nancial year. The auditor of the Company was heard two times by the Audit and Risk Committee during the nancial year. The task of the Audit and Risk Committee is to monitor the accuracy and veracity of the reporting of the annual and six-monthly accounts, the quality of the internal and external control and the information provided to shareholders and the market. The main points discussed during the 2021 nancial year were: • quarterly review of the accounts, periodic press releases and nancial reports; • examination, together with the Executive Committee, of internal management procedures and independent control functions; • monitoring of normative and legal developments; • discussion of the internal audit report. MARTHA FLORA BOSCH EN DUIN • BOSCH EN DUIN, NL 110 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE Nomination and Remuneration Committee As at 31 December 2021, the Nomination and Remuneration Committee consists of three Independent Directors: Ms May-Roberti (Chair of the Nomination and Remuneration Committee), Mr Franken and Mr Plasman. Although Mr Wibaut (Chair of the Board of Directors) and Mr Gielens (CEO) are not part of this committee, both are invited to participate to some extent in certain meetings of the committee, depending on the topics being discussed. The current composition of the Nomination and Remuneration Committee and the tasks entrusted to the committee meet the conditions imposed by the Law of 6 April 2010. The Nomination and Remuneration Committee consists entirely of Independent Directors within the meaning of Article 7:87 BCCA and Article 3.5 of the CG Code 2020, and has the required expertise in terms of remuneration policy. The task of the Nomination and Remuneration Committee is to assist the Board of Directors by: • making recommendations in all matters relating to the composition of the Board of Directors and its committees and of the Executive Committee; • assisting in the selection, evaluation and appointment of the members of the Board of Directors and its committees and of the Executive Committee; • assisting the Chair of the Board of Directors in evaluating the performance of the Board of Directors, its committees and the Executive Committee; • drawing up the remuneration policy and the remuneration report; and • making recommendations on the remuneration of Directors and members of the Executive Committee, including variable remuneration and long-term incentives, whether linked or not to to shares (in the form of share options or other nancial instruments), and severance payments. During the nancial year 2021, the committee met 8 times, mainly to discuss the following points: • composition and evaluation of the Board of Directors; • composition and evaluation of the members of the Executive Committee and their remuneration, including the granting of variable remuneration for the 2021 nancial year; • preparation of the remuneration report; and • organisation of the Company. Investment Committee As at 31 December 2021, the Investment Committee consisted of three Independent Directors and one Executive Director: Mr Franken (Chair of the Investment Committee), Mr Wibaut, Mr Plasman and Mr Gielens. The Investment Committee is an advisory committee, the task of which consists of advising the Board of Directors on investments and divestments that the Executive Committee submits to the Board of Directors. The intention in setting up the Investment Committee is to speed up the Company’s decision-making process regarding investment and divestment dossiers. During the 2021 nancial year, the committee met 8 times to analyse and evaluate numerous investment opportunities. Additionally, the members of the committee regularly consulted informally (electronically or by telephone) when a formal meeting was not necessary. More information on the attendance of Directors and the remuneration of Non-Executive Directors can be found in the remuneration policy (see Aedica’s Corporate Governance Charter) and the remuneration report (see page 115). Composition The Executive Committee is composed of the following persons, who are also all Executive Managers in the meaning of the RREC Law. Name Position Start of mandate Stefaan Gielens Chief Executive Officer (CEO) 3 February 2006 Ingrid Daerden Chief Financial Officer (CFO) 1 September 2018 Raoul Thomassen Chief Operating Officer (COO) 1 March 2021 Charles-Antoine Van Aelst Chief Investment Officer (CIO) 1 October 2017 Sven Bogaerts Chief Legal Officer/Chief Mergers & Acquisitions Officer (CLO/CM&AO) 1 October 2017 STEFAAN GIELENS, MRICS Chief Executive Ocer – Executive Manager Belgian – 56 years Stefaan Gielens is CEO and chairs the Executive Committee. In that capacity, he monitors the Group’s general activities and is also the driving force behind the Group’s strategy and internationalisation. He is a Managing Director, member of the Investment Committee and is also a Director of several of Aedica’s subsidiaries. His mandate as CEO is of indenite duration. INGRID DAERDEN Chief Financial Ocer – Executive Manager Belgian – 47 years As Chief Financial Ocer, Ingrid Daerden is responsible for the nancial activities of the Group. She is a member of Aedica’s Executive Committee and risk manager. She is also a Director of Aedica and several of Aedica’s subsidiaries. Her mandate as CFO is of indenite duration. SVEN BOGAERTS Chief Mergers & Acquisitions Ocer – Chief Legal Ocer – Executive Manager Belgian – 44 years As Chief Legal and M&A Ocer, Sven Bogaerts is responsible for the Group’s Legal Department and its national and international M&A activities. He is a member of Aedica’s Executive Committee and he is also a Director of Aedica and several Aedica subsidiaries. His mandate as CLO/CM&AO is of indenite duration. – 111 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION CHARLES-ANTOINE VAN AELST Chief Investment Ocer – Executive Manager Belgian – 36 years As Chief Investment Ocer, Charles-Antoine Van Aelst is responsible for the Group’s investment activities. He is a member of Aedica’s Executive Committee and is also a Director of Aedica and several Aedica subsidiaries. His mandate as CIO is of indenite duration. RAOUL THOMASSEN Chief Operating Ocer – Executive Manager Dutch – 47 years As Chief Operational Ocer, Raoul Thomassen is responsible for the business operations and daily functioning of the Group. He is a member of the Executive Committee. His mandate as COO is of indenite duration. Other active mandates: Listo Consulting BV, Director of Pron Green Iberia NL BV, director of Pron Green Iberia NL BV in Pron Green Iberia ES SL Mandates expired during the last 5 years: Chair of ICSC Europe Retail Asset Management Committee Number of Aedica shares: 1,046 The members of the Executive Committee are appointed by the Board of Directors on the recommendation of the Nomination and Remuneration Committee. Remuneration More information on the remuneration of the members of the Executive Committee can be found in the remuneration policy (see Aedica’s Corporate Governance Charter) and the remuneration report (see page 118). Role and responsibilities of the Executive Committee The role of the Executive Committee consists primarily of overseeing the day-to-day management of Aedica, in accordance with the values, strategy and policy guidelines determined by the Board of Directors, organising and managing supporting functions, proposing strategy to the Board of Directors, examining and (within the delegated powers) deciding on investments and divestments, general management of the real estate portfolio, and preparation of the nancial statements and all operational reporting. In accordance with Article 16 of the Company’s Articles of Association, the Board of Directors delegated to the Executive Committee special limited decision-making and representation powers to allow it to full its role. For the division of powers between the Executive Committee and the Board of Directors and for the other aspects of the operation of the Executive Committee, please refer to Aedica’s Corporate Governance Charter. EXECUTIVE COMMITTEE – CHARLES-ANTOINE VAN AELST, RAOUL THOMASSEN, STEFAAN GIELENS, INGRID DAERDEN & SVEN BOGAERTS (FROM LEFT TO RIGHT) 112 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE AGE OF BOARD OF DIRECTORS 4 3 2 1 0 < 30 years 30 – 39 years 40 – 49 years 50 – 59 years > 60 years 0 1 2 4 4 AGE OF STAFF 60 50 40 30 20 10 0 < 30 years 30 – 39 years 40 – 49 years 50 – 59 years > 60 years 2424 57 8 1 DURATION OF OFFICE OF THE DIRECTORS 6 5 4 3 2 1 0 0 – 4 years years 9 – 12 years + 12 years 4 6 0 1 At Aedica, we are committed to creating an inclusive work environment and welcome diversity in all its forms: age, gender, cultural background, religion, etc. GENDER DIVERSITY OF AEDIFICA GROUP EMPLOYEES 39 women 75 men NATIONALITIES 55 Belgian 26 Finnish 8 German 8 Dutch 7 British 5 Swedish 2 French 3 Other GENDER DIVERSITY OF THE BOARD OF DIRECTORS 4 women 7 men GENDER DIVERSITY OF THE EXECUTIVE COMMITTEE 1 woman 4 men – 113 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION Aedica’s Board of Directors strongly believes that diversity (based on, among other things, gender, age, professional background, nationality, culture, etc.), equality of opportunity and respect for human capital form the basis of the proper functioning of the Group at all levels. These values enrich the Company’s vision, exchange of views and internal dynamics and thus contribute to Aedica’s growth. Aedica takes diversity into account when appointing and renewing Directors’ mandates and designating members of the specialised committees and the Executive Committee. This attention to diversity in all its aspects means that there is not so much focus on one aspect of diversity, but always on the complementarity of competences, national and international experience, personalities and proles in the composition of these bodies, in addition to the expertise and integrity required for the performance of these functions. This objective is put into practice by the Board of Directors by evaluating the existing and required competences, knowledge and experience prior to each appointment. The result of Aedica’s special attention to diversity is reected in the composition of the Board of Directors and the Executive Committee, which shows diversity in terms of both gender, cultural and academic background and nationality. Pursuant to Article 7:86 BCCA, at least one third of the members of the Board of Directors are of a dierent gender from the other members. This legal rule does not apply to the Executive Committee; nevertheless, the Company also strives for gender diversity in the composition of the Executive Committee. The precise gender make-up uctuates over time as positions become vacant and given the complementarity between dierent members and the Company’s attention to various types of diversity (of which gender is one). In addition to gender diversity and the growing focus on the international composition of the Board of Directors and the Executive Committee, the Group ensures that its diversity principles regarding age and professional background are also reected in the composition of the Board of Directors and the Executive Committee. Both governing bodies are composed of members of dierent ages with complementary backgrounds, professional experiences and competences (see sections 5.1 and 5.7 above). Aedica is convinced that diversity principles are not limited to the Board of Directors or the Executive Committee alone. In addition to the diversity criteria required by law, the Group also takes diversity in all its forms into account when selecting its country managers and employees, who form a complementary team with good variation in terms of gender, age, education, cultural background, etc. This stimulates internal creativity and ensures a good mix of experience and innovation. Under the leadership of its Chair, the Board of Directors regularly (and at least every three years) evaluates its size, composition, performance and that of its committees. This evaluation has four objectives: • to assess the functioning of the Board of Directors and its committees; • to check whether important subjects are thoroughly prepared and discussed; • to assess each Director’s actual contribution on the basis of his or her attendance at meetings of the Board of Directors and committees and his or her constructive contribution to the discussions and decision-making; • to assess whether the current composition of the Board of Directors and committees is in line with the needs of the Group. In addition, every ve years the Board of Directors evaluates whether the current monistic governance structure of the Company remains appropriate. The Board of Directors is assisted in this evaluation by the Nomination and Remuneration Committee and, if necessary, by external experts. The contribution of each Director is regularly evaluated so that the composition of the Board of Directors can, if necessary, be adapted to any changed circumstances. In the event of a reappointment, the contribution and performance of the Director are evaluated on the basis of a predetermined and transparent procedure. The Board of Directors ensures that there are appropriate plans for monitoring the Directors and ensures that the balance of competences and experience in the Board of Directors is maintained in all appointments and reappointments (of both Executive and Non-Executive Directors). Non-Executive Directors regularly evaluate their interaction with the Executive Committee. To this end, they meet at least once a year without the members of the Executive Committee. End of 2020/beginning of 2021 the Board of Directors evaluated its eectiveness and interaction with the Executive Committee in accordance with the formal procedure described in the Corporate Governance Charter (including anonymous survey and feedback sessions on the outcome of the survey). Overall, the Board of Directors was positive about its role, responsibilities, composition and functioning and of that of its committees, as well as about the interaction with the Executive Committee. Moreover, it concluded that each director individually has fullled the role of Director in a proper and constructive manner. Items for improvement included amongst others, the further diversication in terms of gender and internationalisation of the Board of Directors. Diversity and complementarity are not limited to the Board of Directors, it is the basis for the whole Aedica-team. 114 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE This Remuneration Report was drafted according to the provisions of article 3:6 §3 BCCA and complies with the principles of the 2020 CG Code. It has also been drafted taking into account the European Commission’s non-binding draft guidelines for the standardised presentation of the remuneration report 1 . The Remuneration Report provides a complete overview of the remuneration, including all benets in whatever form, granted or due, during the 2021 nancial year to each of the Non-Executive Directors and members of the Executive Committee in application of the remuneration policy, where applicable comparing the actual performance to the targets set. On 11 May 2021, the General Meeting of Aedica approved the new remuneration policy with a large majority (95.20% of the votes casted). This new policy took eect on 1 January 2021 and can be consulted on our website. The remuneration report over the extended nancial year 2019/2020 was also approved by a large majority of the shareholders (88.88% of the votes casted). The Board of Directors did not deviate in any matter from the approved remuneration policy. 1. Draft Guidelines on the standardised presentation of the remuneration report under Directive 2007/36/EC, as amended by Directive (EU) 2017/828 as regards the encour- agement of long-term shareholder engagement. 2. See decisions of the Ordinary General Meetings of 28 October 2016, 22 October 2019 and 11 May 2021. The Company’s Ordinary General Meeting has set the following remuneration for the Non-Executive Directors 2 : • Board of Directors - Chairman: annual xed fee €90,000 + €1,000 per meeting attended - Member: annual xed fee €35,000 + €1,000 per meeting attended • Audit and Risk Committee - Chairman: annual xed fee €15,000 + €900 per meeting attended - Member: annual xed fee €5,000 + €900 per meeting attended • Nomination and Remuneration Committee / Investment Committee - Chairman: annual xed fee €10,000 + €900 per meeting attended - Member: €900 per meeting attended Additionally, the Board of Directors has decided to grant a special travel allowance of €300 per (round) trip to Mr Huuskonen in application of the power granted to it under the remuneration policy to oer on a case-by-case basis to Non-Executive Directors who attend meetings of the Board of Directors in a country other than their country of residence, a special travel allowance of €300 to cover their travel time. IN 2021, AEDIFICA POSTED SOLID RESULTS +91 CARE PROPERTIES +5,100 RESIDENTS +€1.1 bn FAIR VALUE REAL ESTATE PORTFOLIO €4.35/share EPRA EARNINGS 42.6% DEBT-TO-ASSETS RATIO Improvement OF ALL SUSTAINABILITY SCORES SENIORENQUARTIER WOLFSBURG • WOLFSBURG, DE – 115 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION The table below provides an overview of the Non-Executive Directors’ attendance at Board and committee meetings and the remuneration received for the 2021 nancial year as Director of Aedica. The amounts of the remuneration correspond to the amounts approved by the Ordinary General Meetings referred to above and are, based on a comparative study of Willis Towers Watson of 2020 with the BEL20 companies as reference peer group, below the 25 th percentile of the market. The structure of the remuneration corresponds to the remuneration policy: a xed cash-based straight forward remuneration. Non-Executive Directors do not receive performance-related remuneration (such as bonuses, shares or stock options), benets in kind, or benets related to pension plans. Consequently, the ratio of xed to variable remuneration is 100% xed and 0% variable. However, in accordance with the remuneration policy and in order to comply with the spirit of principle 7.6 of the 2020 CG Code the Non- Executive Directors are obliged to annually register in the Company’s 3. After the takeover of Hoivatilat by Aedica in the beginning of 2020, the Board of Directors of Hoivatilat still counts three independent Finnish Directors. Their mandate is remunerated in line with the customary practices that already existed within Hoivatilat prior to the takeover. Mr Huuskonen is one of the three Independent Directors and also acts as vice-chairman of the Board of Directors of Hoivatilat. For this mandate he has received for the nancial year 2021 a remuneration of €45,396 (€39,996 xed; €5,400 attendance fees) which is not reected in the above table regarding the remuneration of the Aedica Board mandates. This brings Mr Huuskonen’s total remuneration received from Aedica (Group) on €93,696. share register a number of shares equivalent to 10% of their gross annual xed remuneration as member of the Board of Directors, calculated based on the average stock market price for the month December of the previous year. In application of this rules the Non-Executive Directors other than the Chairperson had to register a minimum of 37 shares in the share register, whereas the Chairperson had to register a minimum of 94 shares. All Non-Executive directors have complied with this rule. These shares must be held in registered form until at least one year after the Non- Executive Director leaves the Board of Directors and, in any case, for at least three years after the shares have been registered. The combination of a xed cash-based remuneration and the obligation for the Non-Executive Directors to invest in the Company’s capital, coupled to a long-term holding obligation of the acquired shares, allows the Company to reward the members of the Board of Directors appropriately for their work based on market-competitive fee levels, whilst also strengthening the link with the Company’s strategy, long-term interest and sustainability. Name Board of Directors Attendance Audit and Risk Committee Attendance Nomination and Remuneration Committee Attendance Investment Committee Attendance Fixed remuneration (€) Attendance fees (€) Travel allowance (€) Total remuneration (€) Jean Franken 13/13 - 8/8 6/6 45,000 25,600 70,600 Pertti Huuskonen 13/13 - - - 35,000 13,000 300 48,300 3 Katrien Kesteloot 13/13 6/6 - - 40,000 18,400 58,400 Elisabeth May-Roberti 13/13 - 8/8 - 45,000 20,200 65,200 Marleen Willekens 13/13 6/6 - - 50,000 18,400 68,400 Luc Plasman 12/13 - 8/8 6/6 35,000 24,600 59,600 Serge Wibaut 13/13 5/6 - 6/6 95,000 22,900 117,900 Total 345,000 143,100 300 488,400 RESIDENTIE KARTUIZERHOF • LIERDE, BE 116 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 8.2.1 Aedica’s remuneration philosophy The main principles underlying Aedica’s remuneration policy for the members of its Executive Committee are based on a balanced approach between market competitive standards, the ratio between xed and variable pay and the economic and social contribution of the Company linked to certain non-nancial parameters of the variable pay: • compensation at market-competitive levels (considering both xed and variable components of remuneration), achieved by benchmarking against a market peer group; • pay-for-performance that drives financial and non-financial performance and generates long-term sustainable and protable growth. The remuneration target aims for 55% of total compensation in base salary and 45% in short- and long-term variable compensation in order to maintain a strong alignment with the Company’s nancial performance goals, its long-term value creation strategy and risk tolerance. Short- and long-term variable remuneration are weighted equally (50/50); • dierentiation based on experience and responsibility, such that the compensation of individual members of the Executive Committee is aligned with their respective responsibilities, relevant experience, required competencies and performance; • balancing all stakeholders’ interests, with due consideration to shareholder and societal views, by complying with best practices in corporate governance, dening targets for the variable compensation plans based on nancial and non-nancial targets and a transparent, simple and clear remuneration policy. 8.2.2 Remuneration structure 8.2.2.1 Fixed remuneration The xed remuneration consists of a xed cash remuneration, as set out in the management agreements with individual members of the Executive Committee. Since the nancial year 2009/2010, the Company has also granted to the members of the Executive Committee, as part of their xed remuneration, an annual cash bonus from which net proceeds after taxes are to be used entirely to purchase Aedica shares at a discount. This ‘long-term incentive plan’ was rst announced in the 2008/2009 Annual Financial Report and is described further hereafter. 1. Reduced pro rata temporis for the COO to €83,333.33 taking into account the start of his management agreement per 1 March 2021. Whereas the new remuneration policy (approved by the 2021 General Meeting) provides in a new – performance based – variable long-term incentive plan, the current long-term incentive plan was in line with the remuneration policy nonetheless extended until 2022. The new performance based long-term incentive plan will deliver its rst award only in early 2024, upon completion of the rst three-year performance cycle (2021-2023) and subject to achievement of the KPIs over the performance cycle. Therefore, as explained in the remuneration policy, in order to avoid a material loss in remuneration over the years 2021 and 2022 for the members of the Executive Committee, the current xed long-term incentive plan was extended until 2022 and will cease to exist in 2023. In that respect, the Board of Directors decided on 16 March 2021 in application of Article 7:91 BCCA and the remuneration policy to grant, within the framework of the annual (current) xed long-term incentive plan, a gross remuneration of €175,000 for the CEO and €100,000 for each other member of the Executive Committee 1 for the period 1 January 2021 until 31 December 2021 under the terms and conditions as explained hereafter (the ‘2021 LTIP’). After deducting withholding taxes, the executives purchased shares at a unit price equal to the last known closing share price multiplied by a factor amounting to 100/120 th , in accordance with comment 36/16 of the Belgian Income Tax Code, i.e., at a share price of €84.25 (the closing share price on 15 April 2021 of €101.10, multiplied by 100/120). In execution of this ‘long-term incentive plan’, the CEO acquired 964 shares, the CFO 552 shares, the CLO/CM&AO and CIO 551 shares and the COO 459 shares. The 2021 LTIP provides for a vesting scheme spread over a three-year period (year 0: 0% vested; year 1: 20% vested; year 2: 50% vested; year 3: 100% vested) and for vesting conditions that are aligned with what is market practice and generally considered to be acceptable, in line with the terms and conditions of the previous long term incentive plans as adapted by decision of the Board of Directors of 17 December 2020 to accommodate shareholders concern (see remuneration report 2019/2020) (in particular the removal of the takeover and change of control clauses from the good leaver exceptions). Save for indexation, the amounts of the xed cash remuneration did not change compared to the nancial year 2019/2020 (except for the increase of the xed remuneration of the CIO to align it more closely with the remuneration of the other members of the Executive Committee – as announced in the remuneration report 2019/2020). The amounts under the long-term incentive plan 2021 are also equal to the previous plan. The members of the Executive Committee receive no additional compensation to carry out the duties related to their oce as Director of Aedica and its subsidiaries and receive no remuneration from Aedica’s subsidiaries. – 117 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION Overview of shares vested in 2021 under long-term incentive plans The table below details the number of shares acquired by the members of the Executive Committee in previous years in application of the long-term incentive plans (reported in previous annual reports) and which have vested during the calendar year 2021. Name Identification of plan Acquisition date of LTIP shares Total number of LTIP shares acquired Acquisition price of LTIP shares Number of LTIP shares vested in 2021 Number of shares not yet vested Stefaan Gielens Ad Hoc LTIP 24/07/2019 1,173 79.17 234 939 15/06/2020 171 81.33 34 137 2019/2020 LTIP 12/12/2019 1,215 89.50 243 972 2020 LTIP 17/12/2020 501 81.08 100 401 2021 LTIP 15/04/2021 964 84.25 / 964 Ingrid Daerden Ad Hoc LTIP 24/07/2019 588 79.17 118 470 2019/2020 LTIP 12/12/2019 680 107.40 136 544 2020 LTIP 17/12/2020 286 81.08 57 229 2021 LTIP 15/04/2021 552 84.25 110 442 Sven Bogaerts Ad Hoc LTIP 24/07/2019 586 79.17 117 469 2019/2020 LTIP 12/12/2019 648 107.40 130 518 2020 LTIP 17/12/2020 286 81.08 57 229 2021 LTIP 15/04/2021 551 84.25 110 441 Charles-Antoine van Aelst Ad Hoc LTIP 24/07/2019 586 79.17 117 469 2019/2020 LTIP 12/12/2019 633 107.40 127 507 2020 LTIP 17/12/2020 286 81.08 57 229 2021 LTIP 15/04/2021 551 84.25 110 441 Raoul Thomassen 2021 LTIP 15/04/2021 459 84.25 92 367 8.2.2.2 Variable remuneration Short-term variable remuneration As described in the remuneration policy, the members of the Executive Committee are entitled to an annual bonus subject to the realisation of both collective and personal objectives. The target bonus for performance is equal to 40% of xed annual remuneration. For actual performance below the dened threshold, no bonus is due. Moreover, the actual bonus is capped at a maximum of 50% of annual xed remuneration paid for performance at, or in excess of the maximum recognised performance level. The aggregate annual bonus may thus vary between 0% and 50% of the xed annual remuneration, depending on the realisation of the performance targets. The targets, thresholds and maximum performance levels are determined each year at the beginning of the annual performance cycle. The actual bonus earned is determined based on the following balanced mix of collective and personal, nancial and non-nancial key performance indicators (KPIs) and their corresponding weighting factors (% weight shown in brackets): Collective KPIs (85%) Personal KPIs (15%) EPS (70%) Operating margin (15%) Personal targets supporting the Company’s strategic imperatives On 22 February 2022, the Board of Directors concluded, based on the recommendation of the Nomination and Remuneration Committee and after validation of the nancial results per 31 December 2021 by the Audit and Risk Committee that the quantitative and qualitative criteria set out for the annual short term incentive plan 2021 in the Board’s decision of 16 March 2021 and of 30 March 2021 and determined in line with the remuneration policy were met for payment of the variable remuneration to the members of the Executive Committee for the nancial year 2021, as follows: Period 1 January 2021 – 31 December 2021 Relative weighting Achievement on 31 December 2021 Consolidated EPRA Earnings per share based on a weighted average number of shares over the period of 33,086,572 shares 70% EPRA Earnings per share of €4.35 based on a weighted average number of shares over the period of 36,308,157 shares In excess of maximum recognised performance (125% of target bonus attributed) Consolidated EBIT margin (operating result before result on portfolio divided by net rental income) 15% Consolidated EBIT margin of 83.5% In excess of maximum recognised performance (125% of target bonus attributed) Individuals qualitative and organisation-building targets 15% Individual targets levels achieved from 'in line with expectations' to 'outstanding' (between 100% and 125% of target bonus attributed 118 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE Long-term variable remuneration As described in the remuneration policy, the members of the Executive Committee are entitled to a long-term incentive award that is granted conditionally, the vesting of which is contingent on the realisation of key performance indicators (KPIs) over a period of three years (the performance cycle). The target incentive award for performance is equal to 40% of the annual xed remuneration at the time of granting. For actual performance below the retained threshold performance level dened, no award is due. Moreover, the actual award is capped at a maximum 50% of the annual xed remuneration at grant which is paid for actual performance at or in excess of the maximum recognised performance level. The aggregate long-term incentive may thus vary between 0 and 50% of the annual xed remuneration at grant, depending on the realisation of the targets. The actually earned incentive award is determined on the basis of the following mix of collective, nancial and non-nancial, KPI-types (key performance indicators) and corresponding weighting factors: Financial KPI type (70%) Non-financial KPI type (30%) Relative shareholder return Earnings per share Dividend per share Environmental, social and governance (ESG) criteria The Board of Directors determines for each three-year performance cycle the specic nancial and non-nancial KPIs (and their respective target, threshold and maximum performance levels recognised) selected within the framework of the above-mentioned KPI-types. The incentive award is paid out in cash at the beginning of the year following the performance cycle, subject to applicable tax and social security regulations. The members of the Executive Committee can opt to invest the net cash award (after deduction of withholding tax), to acquire Company shares at 100/120 th of the market share price, provided that the Company shares are made unavailable and are not transferable during a period of at least 2 years following the acquisition of the shares. 1. The mandate of Mr Thomassen started on 1 March 2021. On 30 March 2021 the Board of Directors selected the specic KPIs for the rst performance cycle of the long-term incentive plan (period 2021- 2023) within the range of categories of nancial and non-nancial KPIs set out in the Remuneration Policy. The realisation of the KPIs for this performance cycle of the long-term incentive plan will be evaluated early 2024. A rst payment under this plan (insofar as the KPIs are achieved) will take place in 2024. Period 1 January 2021 – 31 December 2023 Relative weighting Achievement on 31 December 2021 Financial KPI Average EPS growth (CAGR) 70% Performance period ongoing Non-financial KPI 30% EPC Coverage of Aedifica Group portfolio 15% Performance period ongoing Employee satisfaction 15% Performance period ongoing 8.2.2.3 Post-retirement benets The members of the Executive Committee benet from a group insurance policy consisting of a ‘dened-contribution scheme’, managed through private insurance plans with a guaranteed return. The contributions under this pension scheme are exclusively nanced by the Company and do not require personal contributions from the beneciaries. 8.2.2.4 Other components of the remuneration The members of the Executive Committee benet from hospitalisation and invalidity insurance and coverage for accidents at work. Each Executive Manager benets from a company car. In the 2021 nancial year, the cost to the Company (rental charge and petrol) was €16,665 excl. VAT for the CEO and a combined total of €60,395 excl. VAT for the other Executive Managers. Each Executive Manager also uses a company provided laptop and a smartphone. Moreover, the Company grants each executive a xed allowance for representation expenses of €300 per month. 8.2.3 Total Remuneration Fixed remuneration Variable remuneration (€) Name Annual fixed remuneration (€) Long term incentive plan 2021 (€) One-year variable Multi-year variable Pension plan contribution (€) Other benefits (€) Total remuneration (€) Ratio of fixed / variable remuneration (€) Stefaan Gielens (CEO) 506,566 175,000 253,283 / 72,618 34,925 1,042,393 76/24 Ingrid Daerden (CFO) 311,374 100,000 152,687 / 38,170 9,290 611,522 75/25 Raoul Thomassen (COO) 1 199,883 83,333 99,942 / 26,637 11,258 421,053 76/24 Charles-Antoine vanAelst (CIO) 275,000 100,000 137,500 / 30,144 13,738 556,383 75/25 Sven Bogaerts (CLO/CM&AO) 301,996 100,000 146,468 / 34,315 7,941 590,720 75/25 – 119 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION For information purposes, note that the ratio between the total remuneration of the CEO for 2021 and the average remuneration of personnel amounts to 8; the ratio between the total remuneration of the CEO for 2021 and the lowest remuneration of personnel amounts to 26. 8.2.4 Contractual provisions of the management agreements 8.2.4.1 Termination of management agreements The management agreements signed with the members of the Executive Committee may be terminated either by each party giving notice according to the applicable legal and contractual conditions, or in the following circumstances: • immediately in case of serious misconduct; • immediately in the event that the market authority (FSMA) withdraws the t and proper approval of the Executive Committee member; • immediately if the Executive Committee member does not act as Executive Committee member during a period of 3 months, except in case of illness or accident; • immediately if the Executive Committee member cannot act as Executive Committee member during a period of 6 months, in case of illness or accident. The only case in which a contractual indemnity granted to a member of the Executive Committee could exceed 12 months of remuneration is in the event that the management agreement with the CEO is terminated by Aedica within six months after a change of control (including a public takeover bid) and without serious fault on the part of the CEO; in this case, the CEO is eligible to obtain an indemnity equal to 18 months’ remuneration. The Nomination and Remuneration Committee recalls that this clause was included in the management agreement signed with the CEO in 2006. In accordance with article 12 of the Act of 6 April 2010, this indemnity payment does therefore not require approval by the General Meeting. Since then, no such contractual clauses have been included in the agreements concluded with (other) members of Aedica’s Executive Committee. In 2021 there were no departures from the Board of Directors or the Executive Committee and no severance payments have therefore been paid. 8.2.4.2 Clawback In line with the remuneration policy, the management agreements with the members of the Executive Committee provide for a clawback mechanism for both the (performance based) short- and long-term incentive plans whereby the Company has the right to reclaim from the beneciary all or part of a variable remuneration up to 1 year after payment if it appears during that period that payment has been made based on incorrect information concerning the achievement of the performance targets underlying the variable remuneration or concerning the circumstances on which the variable remuneration was dependent. There were no circumstances in 2021 which could have resulted in the use of the clawback. 8.2.5 Share ownership requirement All members of the Executive Committee possess the minimum number of shares in the Company as stipulated by the remuneration policy (see pages 104-107 for specic number of shares held), except for Mr Thomassen who only took up his position as COO and member of the Executive Committee on 1 March 2021 and has until 28 February 2026 to reach the minimum threshold. TUUSULA ISOKARHUNKIERTO • TUUSULA, FI 120 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE In an interest to increase transparency of past, current and future remuneration and in alignment with investor interests and the legislative environment, the table on the opposite page demonstrates the change of remuneration for members of the Board of Directors, the CEO and each of the other members of the Executive Committee (in oce over the past nancial year) in comparison to performance of the Group and average remuneration of Aedica employees over a 5-year period. The Non-Executive Directors have always received a xed remuneration (annual remuneration + attendance fee) in cash. Since the nancial year 2015/2016, the amounts of (elements of) the remuneration of the Non-Executive Directors have only been changed further to decisions of the General Meetings of 28 October 2016 1 , 22 October 2019 2 and 11 May 2021 3 . 1. Decision of the Ordinary General Meeting of 28 October 2016 to increase 1) the xed annual remuneration of (i) the Chair of the Board of Directors from €13,600 to €50,000, (ii) the Chairs of the Board Committees from €11,330 to €25,000 and (iii) the other Directors from €11,330 to €15,000, and 2) the attendance fees per Director per meeting for meetings of (i) the Board of Directors from €850 to €1,000 and (ii) the Board Committees from €800 to €900. 2. Decision of the Ordinary General Meeting of 22 October 2019: 1) to increase the xed annual remuneration of the Chair of the Audit and Risk Committee from €10,000 to €15,000 (resulting in a total xed annual remuneration as Director and Chair of the Audit and Risk Committee of €30,000); and 2) to grant an additional xed annual remuneration of €5,000 to each other member of the Audit and Risk Committee. 3. Decision of the Ordinary General Meeting of 11 May 2021 to increase 1) the xed annual remuneration by €40,000 from €50,000 to €90,000 for the chairperson of the Board of Directors and 2) the xed annual remuneration by €20,000 from €15,000 to €35,000 for each other Non-Executive Director. Finally, the numbers in the below table are also inuenced by: • the decision of the Board of Directors of 22 October 2019 to grant to Mr Hohl, Non-Executive Director at that time, an additional xed annual remuneration of €5,000 for his special assignment at that time as responsible for the internal audit (in accordance with Article 17 of the RREC legislation), due until the end of this director mandate (26 October 2020); • the remuneration of Mr Franken in his capacity as Director of Immobe NV/SA on behalf of the Company in accordance with article 73 of the RREC Law (according to which an Independent Director of Aedica had to sit in the Board of Immobe as (then) Institutional RREC) for the period from 31 October 2018 until 27 March 2019 (including) (total remuneration for the aforementioned period of €6,000 xed remuneration and €4,000 attendance fees); and • the expansion of the Board of Directors on 8 June 2020 with Mr Pertti Huuskonen, independent Non-Executive Director. Other than that, the changes to the remuneration of the Non-Executive Directors vary thus only from year to year in view of the number of meetings of the Board of Directors and of the Board committees and attendance rates. HOF VAN SCHOTEN • SCHOTEN, BE – 121 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION Annual change in % FY 2016/2017 vs 2015/2016 FY 2017/2018 vs 2016/2017 FY 2018/2019 vs 2017/2018 FY 2019/2020 4 vs 2018/2019 FY 2021 vs 2019/2020 Remuneration of the Non-Executive Directors 59% 2% 2% 15% 29% Remuneration of the CEO (total) Stefaan Gielens 14% 7% 23% 12% - 10% Average remuneration of the other members of the Executive Committee (total) Sven Bogaerts 33% 62% - 7% Ingrid Daerden 15% -8% Charles-Antoine van Aelst 28% 37% 8% Raoul Thomassen - - - 5 Total cost of Executive Committee (including CEO) 14% 37% 6 14% 15% 7 -10% 8 Company’s performance 9 Investment properties (including assets held for sale) 34% 13% 33% 62% 29% Investment properties (including assets held for sale) + WIP 19% 31% 25% 64% 28% Rental income 32% 16% 29% 34% 24% EPRA Earnings 40% 22% 24% 34% 30% EPRA EPS 30% 3% 15% 9% 3% Average remuneration on a full-time equivalent basis of employees of Aedifica NV/SA 10 Employees of the Company 13.8% 4.6% 17.7% 13.1% 4% 4. For comparative purposes, the remuneration paid by the Company over the extended nancial year 2019/2020 (running from 1 July 2019 until 31 December 2020) was annualised from 18 months to 12 months. 5. No comparison can be made since Mr Thomassen’s mandate only started on 1 March 2021. 6. The substantial change in remuneration can be explained by the changed composition of the Executive Committee which increased in number of members (from 4 to 6 members). 7. The change in remuneration can be explained by an increase in the remuneration of the members of the Executive Committee as from 1 July 2019 as decided by the Board of Directors during the nancial year 2018/2019 on the basis of a benchmark performed by the independent specialist consultant Willis Towers Watson in 2019. The benchmark group consisted of 32 companies from Belgium, Germany, France and the Netherlands: AG Real Estate, Ascencio, Atenor, Banimmo, Bemmo, Conimmo, Home Invest, Immobel, Leaseinvest, Montea, Warehouses De Pauw, GAGFAH M Immobilien-Management, LEG Immobilien, Altarea Cogedim, Crédit Agricole Immobilier, Icade, Orpea, Poste Immo, Société Foncière Lyonnaise, Altera Vastgoed, Redevco, Vastned Groep, Wereldhave, Alinso Group, Codic International, Deutsche Wohnen, Hochtief, Foncière des Régions, Gécina, Klépierre, Unibail Rodamco and OVG Real Estate. 8. The downwards change in total remuneration of the Executive Committee can be explained by (i) Raoul Thomassen’s mandate as COO and member of the Executive Committee which only started as from 1 March 2021 and (ii) the remuneration base for the extended FY 2019/2020 which is equal to the received remuneration over 18 months annualised on 12 months. 9. The calculation for the nancial year 2019/2020 is based on annualised gures, except for the rst two parameters (investment properties including assets held for sale/+ work in progress), which are based on the balance sheet total as at 31 December 2020. 10. The average remuneration of employees is calculated on the basis of ‘wages and direct social benets’ on an annual basis divided by the number of employees on an annual basis. 122 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 8.4.1 Non-Executive Directors The level of remuneration is regularly assessed and benchmarked against a market peer group in order to enable the Company to continue to attract and retain internationally experienced director proles for the Company, taking into account and evolving with the size, growth and internationalisation of the Company. The last benchmark was conducted in 2020. No change is foreseen in the remuneration of the Non-Executive Directors in 2022. 8.4.2 Members of the Executive Committee The Board of Directors sets the xed remuneration annually, taking into account factors such as: • position and corresponding responsibilities; • experience and competencies; • applicable (social and tax) regulations; • international growth of the Company; • performance of the Company; • benchmarks with peers provided by the Nomination and Remuner- ation Committee (ensuring that the Company can attract and retain experienced executive proles). The annual xed remuneration may be reviewed and adapted taking into account the preceding factors and within the framework of the approved remuneration policy. The Board of Directors ordered in that respect a benchmark study from the independent specialist consultant Willis Towers Watson that will be executed in the rst half of 2022 in order to assess the market conformity of the remuneration of the members of the Executive Committee. In accordance with his management agreement, Mr Thomassen is contractually entitled to a step-up in his xed remuneration after the expiry of one year in oce (i.e. as from 1 March 2022). Finally, the Board of Directors decided on 22 February 2022 in application of the Article 7:91 BCCA and within the framework of the remuneration policy to grant to the members of the Executive Committee for the nancial year 2022, within the context of the (current) annual long-term incentive plan, a gross remuneration of €175,000 (+ indexation over 2021) for the CEO and €100,000 (+ indexation over 2021) for each other member of the Executive Committee, under the same terms and conditions as in the ‘2021 LTIP’ of which the net proceeds will have to be entirely used to acquire Aedica shares (as described above). In accordance with the remuneration policy, this xed long-term incentive plan will cease to exist in 2023 and was thus awarded for the last time for 2022 by the above Board decision (see above). The Directors, the members of the Executive Committee, the persons entrusted with the day-to-day management, the Executive Managers and the mandataries of the Company cannot act as counterparty in transactions with the Company or with a company that controls it, nor can they derive any benet from transactions with the above-mentioned companies, except when the transaction is carried out in the interest of the Company, within the planned investment policy and in accordance with normal market conditions. Where appropriate, the Company must inform the FSMA of such transactions in advance. The transactions referred to in the rst paragraph, as well as the information referred to in the prior notication, are immediately made public and are explained in the annual nancial report and, where appropriate, in the half-year nancial report. The prior notication does not apply to transactions provided for in Article 38 of the Law of 12 May 2014 on regulated real estate companies. Article 7:96 BCCA and Article 7:97 BCCA remains fully applicable, as does Article 37 of the above-mentioned Law. During the 2021 nancial year, there was no conict of interest whatsoever regarding a real estate transaction. The two conicts of interest that occurred during the nancial year related to the remuneration of the members of the Executive Committee. These are explained below. Minutes of the meeting of the Board of Directors of 16 March 2021 In accordance with article 7:96 of the Belgian Code on Companies and Associations and article 37 of the Belgian Regulated Real Estate Act, Mr Stefaan Gielens, Ms Ingrid Daerden, Mr Sven Bogaerts and Mr Charles- Antoine van Aelst each declared that they have a possible interest of a patrimonial nature which conicts with the Company’s interest, about which they will inform the Statutory Auditor. Mr Raoul Thomassen, who is not a not a member of the Board of Directors (and thus has no conict of interest within the meaning of article 7:96 of the Belgian Code on Companies and Associations), also declared – in his capacity of member of the Executive Committee and eective leader – to have an interest of a patrimonial nature that conicts with the Company’s interest within the meaning of article 37 of the Belgian Regulated Real Estate Act. This conict of interest arises because the Board of Directors will deliberate and resolve on certain elements of the remuneration of the members of the Executive Committee. All members of the Executive Committee then leave the meeting. Short term variable remuneration for the ExCom members for the period Q5/Q6 of nancial year 2019/2020 The Board of Directors has set on 22 September 2020 in line with the remuneration practice at that time the key performance indicators (KPIs) and performance targets for the variable remuneration of the members of the Executive Committee for the period from 1 July 2020 until 31 December 2020 (which have been included in the addenda to the management contracts). – 123 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION As a reminder, • the variable remuneration for the period 1 July 2020 – 31 December 2020 was established as a (gross) amount capped at 50% of the total remuneration over the same period, excluding benets in kind, the pension plan and the long-term incentive plan (the ‘theoretical variable remuneration’); • the retained key performance indicators (and their weighting) for the variable remuneration were as follows: the (consolidated) EPRA Earnings per share (weighting 80%), the consolidated operating margin (operating result before result on portfolio divided by net rental result) (weighting 20%). The realisation of the performance targets and the proposed amounts to be granted to the members of the Executive Committee have been the subject of an overall evaluation by the Nomination and Remuneration Committee on 12 March 2021 on the basis of the nancial gures as approved by the Board of Directors on 23 February 2021. The Nomination and Remuneration Committee notes that the members of the Executive Committee have exceeded the performance targets and proposes consequently to the Board of Directors to grant to the CEO and the other members of the Executive Committee the maximum amount of the variable remuneration for the covered period. For the avoidance of doubt, the former COO shall be entitled to the variable remuneration only pro rata temporis for the duration of her mandate (namely, for the period 1 July 2020 – 31 October 2020); the new COO does not yet benet from this variable remuneration (as he only started his mandate as from 1 March 2021). The Board of Directors approves the proposal of the Nomination and Remuneration Committee. Remuneration policy The draft remuneration policy (applicable as from 1 January 2021 subject to approval by the General Meeting) was approved by the Board of Directors on 23 February 2021 save for the (types of) KPIs of the short- and long-term incentive plan which still had to be decided by the Board of Directors. Upon deliberation, the Nomination and Remuneration Committee now proposes the following (types of) KPIs and respective relative weighting, to be included in the remuneration policy: Short-term incentive Collective KPIs (85%) Personal KPIs (15%) EPS (70%) Operating margin (15%) Personal targets supporting the Company’s strategic imperatives The target, threshold and maximum performance levels will be determined each year by the Board of Directors at the beginning of the annual performance cycle (see agenda item 2.e). Long-term incentive Financial KPI type (70%) Non-Financial KPI type (30%) Relative shareholder return Earnings per share Dividend per share Environmental, social and governance criteria (ESG) The Board of Directors will determine for each three-year performance cycle the specic nancial and non-nancial KPIs (and their respective target, threshold and maximum recognised performance levels) selected within the framework of the above-mentioned KPI-types. The Board of Directors approves this proposal of the Nomination and Remuneration Committee and its elaboration in the remuneration policy. Long-term remuneration for the ExCom members: LTIP 2021 (transition regime) Since the newly proposed long-term incentive plan will deliver its rst award only early 2024, after the expiration of the rst three-year performance cycle (2021-2023) and subject to achievement of the KPIs over the covered performance cycle, it is proposed in the new remuneration policy to extend the current long-term incentive plan for the coming two years in 2021 and 2022, in order to avoid a material loss in remuneration for the members of the Executive Committee in 2021 and 2022. In application thereof, the Nomination and Remuneration Committee proposes to grant to the members of the Executive Committee the right to participate in a ‘long term incentive plan’ for the nancial year 2021, under the same terms and conditions as the previous long term incentive plan (i.e., the 2020 LTIP), for a gross amount equal to the gross amount of the 2020 LTIP, but annualised (recall that the 2020 LTIP only covered the last 6 months of the extended nancial year 2019/2020), namely a gross amount of €175,000 for the CEO and €100,000 for each other member of the Executive Committee. Upon recommendation of the Nomination and Remuneration Committee, the Board of Directors decides in application of article 7:91 BCCA to grant to the members of the Executive Committee the right to participate in a ‘long term incentive plan’ for the nancial year 2021 for a gross amount of €175,000 for the CEO and €100,000 for each other member of the Executive Committee, under the same terms and conditions as the 2020 LTIP. Short-term variable remuneration for the ExCom members for the nancial year 2021: KPIs + performance levels In accordance with the remuneration policy (as approved by the Board of Directors – see supra), the KPIs and their respective relative weighting for the short-term variable annual bonus of the members of the Executive Committee are as follows: Collective KPIs (85%) Personal KPIs (15%) EPS (70%) Operating margin (15%) Personal targets supporting the Company’s strategic imperatives The Nomination and Remuneration Committee has made a proposal on the performance levels (target, minimum threshold and maximum performance level) and corresponding bonus levels of the collective KPIs under the short-term variable bonus which is discussed by the Board of Directors. As described in the remuneration policy, the target bonus for target performance is 40% of the annual xed remuneration. Since no bonus is due for actual performance below the retained threshold level, and in case of performance at, or in excess of the maximum recognised performance level, the bonus is capped at a maximum of 50% of the annual xed remuneration, the variable short-term bonus will 124 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE consequently vary between 0 and 50% of the annual xed remuneration, depending on the realisation of the targets. Upon deliberation, the Board of Directors approves the Nomination and Remuneration Committee’s proposal and requests the Nomination and Remuneration Committee to prepare the addenda to the management agreements to include this decision. Minutes of the meeting of the Board of Directors of 30 March 2021 In accordance with article 7:96 of the Belgian Code on Companies and Associations and article 37 of the Belgian Regulated Real Estate Act, Mr Stefaan Gielens, Ms Ingrid Daerden, Mr Sven Bogaerts and Mr Charles- Antoine van Aelst each declared that they have a possible interest of a patrimonial nature which conicts with the Company’s interest, about which they will inform the Statutory Auditor. Mr Raoul Thomassen, who is not a not a member of the Board of Directors (and thus has no conict of interest within the meaning of article 7:96 of the Belgian Code on Companies and Associations), also declared – in his capacity of member of the Executive Committee and eective leader – to have an interest of a patrimonial nature that conicts with the Company’s interest within the meaning of article 37 of the Belgian Regulated Real Estate Act. This conict of interest arises because the Board of Directors will deliberate and resolve on certain elements of the remuneration of the members of the Executive Committee. All members of the Executive Committee then leave the meeting. Long-term variable remuneration for the ExCom members for the performance cycle 2021-2023: KPIs + performance levels In accordance with the remuneration policy (as approved by the Board of Directors), the specic KPIs and performance levels for the performance cycle 2021-2023 in the context of the long-term variable remuneration for the members of the Executive Committee should be based on the following mix of collective nancial and non-nancial types of KPIs and their respective relative weighting: Financial KPI type (70%) Non-Financial KPI type (30%) Relative shareholder return Earnings per share Dividend per share Environmental, social and governance (ESG) criteria The Nomination and Remuneration Committee has made on that basis a proposal on the specic KPIs, applicable performance levels (target, minimum threshold and maximum performance level) and corresponding bonus levels for the performance cycle 2021-2023 which is discussed by the Board of Directors. As described in the remuneration policy, the variable long-term bonus will vary between 0 and 50% of the annual xed remuneration at grant, depending on the realisation of the targets: no bonus is due for actual performance below the retained threshold level; in case of performance at, or in excess of the maximum recognised performance level, the bonus is capped at a maximum 50% of the annual xed remuneration at grant. Upon deliberation, the Board of Directors approves the Nomination and Remuneration Committee’s proposal for the performance cycle 2021-2023 and requests the Nomination and Remuneration Committee to prepare the addenda to the management agreements to include this decision. The independent compliance function is performed in accordance with Article 17 of the Law of 12 May 2014 on regulated real estate companies (see above). Mr Thomas Moerman, General Counsel, performs the function of compliance ocer. His duties include monitoring compliance with the rules of conduct and the declarations relating to transactions in shares of the Company carried out by Directors and other persons appointed by the latter on their own account in order to limit the risk of insider trading. Monitoring transactions with Aedica shares The compliance ocer draws up the list of persons who have information that they know or should know is privileged information and updates this list. He ensures that the persons concerned are informed of their inclusion on that list. In addition, he ensures that the Board of Directors determines the so-called ‘closed periods’. During these periods, transactions in Aedica’s nancial instruments or nancial derivatives are prohibited for Aedica’s Directors and for all persons on the aforementioned list, as well as for all persons with whom they are closely linked. The closed periods are as follows: • the 30 calendar days preceding the publication date of the annual and half-year results; • the 15 calendar days preceding the publication date of the quarterly results; • any period during which inside information is known; • any other period that the compliance ocer considers to be a sen- sitive period, taking into account the developments occurring within the Company at that moment; always ending one hour after publication of the annual, half-year or quarterly results respectively by means of a press release on the Company’s website. Restrictions on transactions by Directors and members of the Executive Committee Directors, members of the Executive Committee and persons closely related to them who intend to carry out transactions involving nancial instruments or nancial derivatives of Aedica must notify the compliance ocer in writing at least 48 hours before the transactions are carried out. If the compliance ocer himself intends to carry out such transactions, he must notify the chair of the Board of Directors in writing at least 48 hours before the transactions are carried out. The compliance ocer or, where applicable, the chair of the Board of Directors, shall inform the person concerned within 48 hours of receipt of the written notication whether, in his opinion, there are reasons to believe that the planned transaction constitutes a regulatory violation. The Directors, the members of the Executive Committee and the persons closely related to them must conrm the execution of the transactions to the Company within two working days. The compliance ocer must keep a – 125 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION written record of all notications regarding the planned and completed transactions and conrm receipt of such notications in writing. The Directors, the members of the Executive Committee and the persons closely related to them must report to the FSMA any transactions in shares of the Company that they carry out of their own account. The reporting obligation referred to above must be fullled no later than three working days after the transactions have been carried out. Aedica has an internal procedure for reporting potential or actual violations of the applicable legal regulations, its Corporate Governance Charter and its Code of Conduct. This procedure for reporting irregularities constitutes an appendix to the Corporate Governance Charter. Aedica does not carry out any research and development activities as referred to in Articles 3:6 and 3:32 BCCA. Pursuant to Article 7:203 BCCA, the Board of Directors gives an explanation below of the capital increases decided upon by the Board of Directors during the nancial year and, where applicable, gives an appropriate explanation regarding the conditions and actual consequences of the capital increases, whereby the Board of Directors limited or excluded the shareholders’ preferential right. Pursuant to a decision by the Board of Directors of 9 June 2021 to increase the capital within the scope of the authorised capital by contribution in cash, with cancellation of the legal preferential right and without allocation of an irreducible priority allocation right, the capital (see section 3.2 of the Financial Report) was increased on 15 June 2021 by €73,885,794.65 to bring it from €873,081,308.72 to €946,967,103.37. 2,800,000 new shares, with no nominal value, were issued. Those new shares will participate pro rata temporis in the Company’s prots for the 2021 nancial year as from 15 June 2021. Within the scope of the authorised capital (see section 3.2 of the Financial Report), and by a decision of the Board of Directors of 29 June 2021, the capital was increased by €4,868,335.01 to bring the amount of €946,967,103.37 to €951,835,438.38 via a contribution in kind. 184,492 new shares, with no nominal value, were issued. They are of the same type and enjoy the same rights and benets as existing shares. Those new shares will participate pro rata temporis in the Company’s prots for the 2021 nancial year as of 15 June 2021. Within the scope of the authorised capital (see section 3.2 of the Financial Report), and by a decision of the Board of Directors of 8 September 2021, the capital was increased by €6,256,358.83 to bring the amount of €951,835,438.38 to €958,091,797.21 via a contribution in kind. 237,093 new shares, with no nominal value, were issued. They are of the same type and enjoy the same rights and benets as existing shares. Those new shares will participate pro rata temporis in the Company’s prots for the 2021 nancial year as of 15 June 2021. An appropriate explanation regarding the conditions and the actual consequences of the capital increase of 15 June 2021, whereby the preferential right of the shareholders was cancelled without allocation of an irreducible priority allocation right, is given in the special report of the Board of Directors drawn up in application of Article 7:179, §1, rst paragraph and Article 7:191, second paragraph of the BCCA dated 15 June 2021. In the event of a capital increase via contribution in kind, the shareholders have no preferential right and no special report is drawn up in application of Article 7:191 BCCA. PRIESTY FIELDS • CONGLETON, UK 126 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE In accordance with Article 34 of the Royal Decree of 14 November 2007 on the obligations of issuers of nancial instruments admitted to trading on a regulated market, Aedica lists and, where appropriate, explains the following elements, insofar as these elements are liable to result in a public takeover bid. Capital structure Underwritten and fully paid-up capital There is only one type of share, with no indication of nominal value: all shares are subscribed and all are fully paid up. As at 31 December 2021, the capital amounts to €958,091,797.21. It is represented by 36,308,157 shares, each representing 1/36,308,157 nd of the capital. Rights and obligations attached to Aedica shares All holders of Aedica shares have equal rights and obligations. As regards these rights and obligations, reference is rst made to the regulations applicable to Aedica: the Belgian Companies and Associations Code, the Law of 12 May 2014 on regulated real estate companies, and the Royal Decree of 13 July 2014 on regulated real estate companies. Reference must also be made to the relevant provisions contained in the Articles of Association (see section 4 of the ‘Permanent documents’ chapter). Legal, statutory or conventional restrictions on the transfer of securities The transfer of Aedica’s shares is not subject to any legal or statutory restrictions. In order to guarantee sucient liquidity to investors (and potential investors) in Aedica’s shares, Article 21 of the Law of 12 May 2014 provides that Aedica’s shares are admitted to trading on a regulated market. All 36,308,157 Aedica shares are listed on Euronext Brussels and Euronext Amsterdam (regulated markets). Special controlling rights Aedica does not have holders of securities to which special controlling rights are attached. Mechanism for controlling any employee share plan when controlling rights are not directly exercised by employees Aedica has no (such) employee share plan. Legal or statutory restrictions on the exercise of voting rights As at 31 December 2021, Aedica did not own any of its own shares. Shareholder agreements known to Aedica that may restrict the transfer of securities and/or the exercise of voting rights As far as Aedica is aware, there are no shareholder agreements that may restrict the transfer of securities and/or the exercise of voting rights. Rules for the appointment and replacement of the members of the management body and for the amendment of Aedica’s Articles of Association Appointment and replacement of the members of the management body In accordance with Article 10 of the Articles of Association, the members of the Board of Directors are appointed for a maximum term of three years by the General Meeting of Shareholders, which can also remove them at any time. They may be re-elected. The mandate of the outgoing and non-re-elected directors ends immediately after the General Meeting that provides for the new appointments. If one or more mandates become vacant, the remaining Directors, meeting in council, can provisionally provide for replacement until the next General Meeting, which then decides on the nal appointment. This right becomes an obligation each time the number of Directors eectively in oce or the number of Independent Directors no longer reaches the statutory minimum. A Director appointed to replace another person shall complete the mandate of the person he or she replaces. Amendments to the Articles of Association As regards amendments to the Articles of Association, reference is made to the regulations applicable to Aedica. In particular, it should be noted that any draft amendment to Aedica’s Articles of Association must be approved in advance by the FSMA. Powers of the management body, in particular regarding the possibility of issuing or repurchasing shares In accordance with Article 6.4 of the Articles of Association, the Board of Directors is authorised to increase the capital one or more times, on the dates and according to the modalities determined by the Board of Directors, up to a maximum amount of: 1) 50% of the capital amount on the date of the Extraordinary General Meeting of 30 July 2021, rounded down to the euro cent, if applicable, for capital increases by way of contribution in cash, whereby a provision is made for the possibility of exercising the statutory preferential subscription right or the priority allocation right by the shareholders of the Company; 2) 50% of the capital amount on the date of the Extraordinary General Meeting of 30 July 2021, rounded down to the euro cent, if applicable, for capital increases within the scope of the distribution of an optional dividend; 3) 10% of the capital amount on the date of the Extraordinary General Meeting of 30 July 2021, rounded down to the euro cent, if applicable, for a) capital increases by way of contribution in kind, b) capital increases by way of contribution in cash without the possibility of exercising the preferential right or the irreducible priority allocation right, or c) any other form of capital increase; on the understanding that the capital within the scope of the authorised capital can never be increased by an amount higher than the capital on the date of the Extraordinary General Meeting that approves the authorisation. – 127 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION This permission is granted for a renewable period of 5 years, starting from the publication of the decision of the Extraordinary General Meeting of 30 July 2021 in the Appendices to the Belgian Ocial Gazette. As at 31 December 2021, the balance of the authorised capital amounts to 1) €475,917,719.19 if the capital increase to be realised provides for the possibility of the shareholders of the Company exercising the preferential right or the irreducible priority allocation right, 2) €475,917,719.19 for capital increases within the framework of the distribution of an optional dividend, and 3) €88,927,185 for a. capital increases by way of contribution in kind, b. capital increases by way of contribution in cash without the possibility of the shareholders of the Company exercising the preferential right or the irreducible priority allocation right, or c. any other form of capital increase. Taking into account the total maximum amount of the authorised capital (€951,835,438.38), the Company is able to raise its capital by €945,579,079.55. Moreover, in accordance with Article 6.2 of the Articles of Association, Aedica can acquire, pledge or dispose of its own shares, in accordance with the conditions provided for in the Belgian Companies and Associations Code, subject to notication of the transaction to the FSMA. As at 31 December 2021, Aedica had pledged none of its own shares. Important agreements to which Aedica is a party and which enter into force, are amended or expire in the event of a change of control over Aedica following a public takeover bid It is common practice that credit agreements contain so-called change of control clauses that allow the lender to demand immediate repayment of the outstanding loans, interest and other outstanding amounts in the event of a change of control over the Company. The following credit agreements contain such change of control clauses: • the credit agreements with BNP Paribas Fortis established on 15 June 2016, 24 February 2017, 14 November 2017, 31 October 2019 and 23 June 2021; • the credit agreements with KBC Bank established on 28 June 2016, 12 November 2019 and 8 June 2021; • the credit agreements with Caisse d’Epargne Hauts De France estab- lished on 4 January 2018; • the credit agreements with Banque européenne du Crédit Mutuel established on 25 May 2018 and 21 December 2018; • the credit agreements with Belus Bank established on 27 June 2016, 14 May 2018, 21 December 2018, 18 May 2020 and 12 July 2021; • the credit agreements with ING Belgium established on 19 February 2016, 20 September 2016, 14 February 2017, 15 May 2018 and 15 July 2021; • the credit agreements with BNP Paribas Niederlassung Deutschland established on 6 November 2019; • the credit agreements with Triodos Bank established on 3 February 2017 and 15 May 2018; • the credit agreements with Argenta Spaarbank and Argenta Assur- anties established on 20 December 2017; • the syndicated loan agreement with the BPCE group established on 29 June 2018; • the credit agreements with ABN Amro Bank established on 12 March 2021, 27 July 2021 and 22 November 2021; • the credit agreements with Société générale established on 13 March 2020 and 31 August 2020; • the credit agreements with Hoivatilat and OP Corporate Bank estab- lished on 5 March 2021. In addition, the treasury notes issued on 17 December 2018 under the long-term treasury notes programme contain a change of control clause triggering an increase of the interest margin in the event of change of control over the Company. The Note Purchase Agreement of 17 February 2021 and the debt instruments subsequently issued on 3 March 2021 between the Company and the holders of such debt instruments also contain provisions granting early redemption of the debt instruments in the event of a change of control over the Company. The Sustainability Notes issued by the Company on 2 September 2021 also contain provisions granting early redemption of the debt instruments in the event of a change of control over the Company. Each of these clauses relating to a change of control was approved by the General Meeting (see minutes of previous General Meetings), with the exception of the clauses included in the credit and debt agreements dating from after the last Ordinary General Meeting of 11 May 2021 and in the above-mentioned Sustainable Note, for which approval of the change of control clause will be requested at the General Meeting of 10 May 2022. Agreements established between Aedica and its Directors or employees providing for compensation if, following a public takeover bid, the Directors resign or must resign without a valid reason or the employment of the employees is terminated If the management agreement with the CEO is terminated within six months of a public takeover bid by one of the parties without serious misconduct, the CEO is entitled to a severance payment equal to eighteen months’ remuneration. No such contractual clause was included in the agreements established with the other members of the Executive Committee or with Aedica employees. 128 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE As of 31 December 2021, Aedica NV/SA holds perimeter companies in seven dierent countries: Belgium, Luxembourg, Germany, the Netherlands, the United Kingdom (including Jersey), Finland, Sweden, Ireland and Spain. All real estate located in Belgium is held by Aedica NV/SA. The real estate located in Germany is held by Aedica NV/SA, Aedica’s Luxembourg subsidiaries and by some of Aedica’s Germany subsidiaries. All real estate located in the Netherlands is held by Aedica’s Dutch subsidiaries. The assets held by AK JV NL, a Dutch joint venture with the Korian group, is 50% owned by Aedica. The assets held by Aedica Sonneborgh Real Estate BV, a Dutch joint venture with Dunavast- Sonneborgh, is 75% owned by Aedica. All real estate located in the United Kingdom is held by Aedica’s Jersey and UK subsidiaries. All real estate located in Finland is owned by Finnish subsidiaries of Hoivatilat Oyj, which in turn is controlled by Aureit Holding Oy. All real estate located in Sweden is owned by Swedish subsidiaries of Hoivatilat Oyj, which in turn is controlled by Aureit Holding Oy. All real estate located in Ireland is owned by Aedica’s Irish subsidiaries. All real estate located in Spain is owned by a Spanish subsidiary. The organisational chart on pages 129-132 shows the Group’s subsidiaries as well as its share in each subsidiary. HUIZE HOOG KERCKEBOSCH • ZEIST, NL – 129 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION Aedica Invest NV/SA Aedica NV/SA Aedica Luxemburg III SCS Aedica Asset Management GmbH Aedica Nederland 2 BV Aedica Nederland BV Aedica Nederland 3 BV Aedica Nederland 4 BV Aedica Nederland Joint Venture BV Immobe SA/NV (FIIS/GVBF) Aedica Luxemburg IV SCS Aedica Verwaltungs GmbH Aedica Luxemburg I SCS Aedica Luxemburg V SCS Aedica Luxemburg VII SCS SPVs in Finland (see page 132) Aedica Luxemburg II SCS Aedica Luxemburg VI SCS Aedica Luxemburg VIII SCS Aedica Ireland Limited Hoivatilat AB SPVs in Sweden (see page 131) Aedica Residenzen Nord GmbH & Co. KG Aedica Services BV Prudent Capital Limited JKP Nursing Home Limited AK JV NL public partnership Aedica Sonneborgh Real Estate BV Aedica UK corporate structure (see page 130) Mallowville SL Aureit Holding Oy Hoivatilat Oyj Aedica Residenzen 1 GmbH & Co. KG Aedica Residenzen 2 GmbH Aedica Residenzen 3 GmbH Aedica Residenzen West GmbH Aedica Residenzen 5 GmbH Aedica Residenzen 4 GmbH Aedica Residenzen 6 GmbH 100% AED 94 % AI 6 % 100% Aedica Nederland 100% Aedica Ireland 100% Aedica Ireland 50% ANJV 50% ** 100% Aureit Holding 94 % AI 6 % 94 % AI 6 % 94 % AI 6 % 94 % AI 6 % 94 % AI 6 % 94 % AI 6 % 94 % AI 6 % 75 % + 1 PERF 25 % -1 AED 94 % AED 6 % 94 % AED 6 % 94 % AED 6 % 94 % AED 6 % 94 % AED 6 % 94 % AED 6 % 94 % AED 6 % 94 % AED 6 % 100 % AED 100 % AED 100 % AED 100 % AED 100 % AED 100 % AED 100 % AED 100 % AED 100% AED 100% AED 100% AED 100% Hoivatilat Oyj 100% Hoivatilat Oyj 100% Hoivatilat AB 75% ANJV 25% ** Parent company Subsidiaries in Belgium Non-recurrent financial asset in Belgium Subsidiaries in Luxembourg Subsidiaries in Germany Subsidiaries in the Netherlands Subsidiaries in the United Kingdom Subsidiaries in Finland and Sweden Subsidiaries in Ireland Subsidiaries in Spain * The residual 6% is held by an investor who is unrelated to Aedica. ** The residual 50% is held by a partner who is unrelated to Aedica 130 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE Aedica NV/SA Parent company Subsidiaries in Jersey Subsidiaries in the United Kingdom Quercus Homes 2018 Limited Priesty Fields Developments Limited Maple Court Nursing Home Limited Aedica UK (Hailsham) Limited Sapphire Properties (2016) Limited Aedica UK Management Limited Aedica UK (Ampthill) Limited Marches Care Holdings Limited Patient Properties (Knights Court) Limited Aedica UK Limited Patient Properties (Ashwood) Limited Patient Properties (Eltandia) Limited Patient Properties (Chatsworth) Limited Patient Properties (Holdings) Limited AED Oak Acquisitions (Ottery) Limited Patient Properties (Clarendon) Limited Patient Properties (Fountains) Limited Patient Properties (Windmill) Limited Patient Properties (Brook House) Limited Patient Properties (Beech Court) Limited Patient Properties (Blenheim) Limited Patient Properties (Springelds) Limited CHAPP Acquisition Ltd Chapp GP Limited 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % AED Finance 1 Limited AED Finance 2 Limited – 131 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION Aedica NV/SA Hoivatilat Oyj Hoivatilat AB Hoivatilat Holding 2 AB Hoivatilat Holding 4 AB Hoivatilat Holding 3 AB Örebro Hovsta Gryt LSS boende AB Strängnäs Bivägen AB Nyköping Anderbäck LSS boende AB Enköping Hässlinge LSS boende AB Uppsala Sunnersta LSS boende AB Tierp LSS boende AB Fanna 24:19 AB (Enköping LSS) Uppsala Almungeberg 2 LSS boende AB Oskarshamn Emmekalv LSS boende AB Vallentuna Västlunda LSS boende AB Uppsala Almungeberg 1 LSS boende AB Uppsala Bäling Lövsta 2 LSS boende AB Upplands Väsby Havregatan Förskola AB Örebro Törsjö LSS boende AB Lhaolm Nyby LSS boende AB Uppsala Bäling Lövsta 1 LSS boende AB Växjö LSS boende AB Hoivatilat Holding AB Förskola Mesta 6:56 AB Älmhult kunskapsgatan AB Förskola Kalleberga AB Gråmunkehöga LSS boende AB Heby LSS boende AB Elwamar 5 A AB VERPLEEGCENTRUM SCHEEMDA • SCHEEMDA, NL 132 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE As Oy Seinäjoen Kutojankatu Hoivatilat Oyj Koy Espoon Fallåkerinrinne Koy Espoon Hirvisuontie Koy Espoon Kurttilantie Koy Espoon Kuurinkallio Koy Espoon Matinkartanontie Koy Espoon Meriviitantie Koy Espoon Oppilaantie Koy Espoon Rajamännynahde Koy Espoon Tikasmäentie Koy Espoon Vuoripirtintie Koy Euran Käräjämäentie Koy Hakalahden Majakka Koy Haminan Lepikönranta Koy Heinolan Lähteentie Koy Helsingin Ensikodintie 4 Koy Helsingin Kansantie Koy Helsingin Pakarituvantie Koy Helsingin Työnjohtajankadun Seppä 3 Koy Hollolan Sarkatie Koy Hämeenlinna Kampuskaarre Koy Hämeenlinnan Jukolanraitti Koy Hämeenlinnan Vanha Alikartanontie Koy Iisalmen Eteläinen Puistoraitti Koy Iisalmen Kangaslammintie Koy Iisalmen Petter Kumpulaisentie Koy Iisalmen Satamakatu Koy Iisalmen Vemmelkuja Koy Janakkalan Kekanahontie Koy Joutsenon Päiväkoti Koy Jyväskylän Ailakinkatu Koy Jyväskylän Haperontie Koy Jyväskylän Harjutie Koy Jyväskylän Haukankaari Koy Jyväskylän Mannisenmäentie Koy Jyväskylän Martikaisentien Koy Jyväskylän Palstatie Koy Jyväskylän Sulkulantie Koy Jyväskylän Väliharjuntie Koy Jyväskylän Vävypojanpolku Koy Järvenpään Yliopettajankatu Koy Kaarinan Nurminiitynkatu Koy Kajaanin Erätie Koy Kajaanin Hoikankatu Koy Kajaanin Menninkäisentie Koy Kajaanin Uitontie Koy Kajaanin Valonkatu Koy Kalajoen Hannilantie Koy Kangasalan Hilmanhovi Koy Kangasalan Mäntyveräjäntie Koy Kangasalan Rekiäläntie Koy Kaskisten Bladintie Koy Kempeleen Ihmemaantie Koy Keravan Lehmuskatu Koy Keravan Männiköntie Koy Keuruun Tehtaantie Koy Kirkkonummen Kotitontunkuja Majakka Kiinteistöt Oy Koy Kokkolan Ankkurikuja Koy Kokkolan Kaarlelankatu 68 Koy Kokkolan Vanha Ouluntie Koy Kontiolahden Päiväperhosenkatu Koy Kotka Särmääjänkatu 6 Koy Kotkan Loitsutie Koy Kotkan Metsäkulmankatu Koy Kouvola Vainiolankuja Koy Kouvolan Kaartokuja Koy Kouvolan Pappilantie Koy Kouvolan Rannikkotie Koy Kouvolan Ruskeasuonkatu Koy Kouvolan Vinttikaivontie Koy Kuopion Amerikanraitti Koy Kuopion Männistönkatu Koy Kuopion Opistokuja Koy Kuopion Pirtinkaari Koy Kuopion Portti A2 Koy Kuopion Rantaraitti Koy Kuopion Sipulikatu Koy Lahden Jahtikatu Koy Lahden Kurenniityntie Koy Lahden Makarantie Koy Lahden Piisamikatu Koy Lahden Vallesmanninkatu A Koy Lahden Vallesmanninkatu B Koy Laihian Jarrumiehentie Koy Lappeenrannan Orioninkatu Koy Laukaan Hytösenkuja Koy Laukaan Peurungantie Koy Laukaan Saratie Koy Limingan Kauppakaari Koy Lohjan Ansatie Koy Lohjan Porapojankuja Koy Lohjan Sahapiha Koy Loimaan Itsenäisyydenkatu Koy Loviisan Mannerheiminkatu Koy Maskun Ruskontie Koy Mikkelin Kastanjakuja Koy Mikkelin Sahalantie Koy Mikkelin Väänäsenpolku Koy Mikkelin Ylännetie 10 Koy Mikkelin Ylännetie 8 Koy Mynämäen Opintie Koy Mäntsälän Liedontie Koy Mäntyharjun Lääkärinkuja Koy Nokian Kivimiehenkatu Koy Nokian Luhtatie Koy Nokian Näsiäkatu Koy Nokian Vikkulankatu Koy Nurmijärven Laidunalue Koy Nurmijärven Ratakuja Koy Nurmijärvi Luhtavillantie Koy Orimattilan Suppulanpolku Koy Oulun Isopurjeentie Koy Oulun Jahtivoudintie Koy Oulun Juhlamarssi Koy Oulun Kehätie Koy Oulun Paulareitti Koy Oulun Raamipolku Koy Oulun Rakkakiventie Koy Oulun Ruismetsä Koy Oulun Salonpään koulu Koy Oulun Sarvisuontie Koy Oulun Siilotie Koy Oulun Soittajanlenkki Koy Oulun Ukkoherrantie A Koy Oulun Ukkoherrantie B Koy Oulun Valjastie Koy Oulun Villa Sulkakuja Koy Oulunsalon Vihannestie Koy Paimion Mäkiläntie Koy Pieksämäen Ruustinnantie Koy Pihtiputaan Nurmelanpolku Koy Pirkkalan Lehtimäentie Koy Pirkkalan Pereensaarentie Koy Porin Kerhotie Koy Porin Koekatu Koy Porin Ojantie Koy Porin Palokärjentie Koy Porvoon Fredrika Runebergin katu Koy Porvoon Haarapääskyntie Koy Porvoon Peippolankuja Koy Porvoon Vanha Kuninkaantie Koy Raahe Kirkkokatu Koy Raahen Palokunnanhovi Koy Raahen Vihastenkarinkatu Koy Raision Tenavakatu Koy Riihimäen Jyrätie Koy Rovaniemen Gardininkuja Koy Rovaniemen Matkavaarantie Koy Rovaniemen Muonakuja Koy Rovaniemen Mäkirannantie Koy Rovaniemen Ritarinne Koy Rovaniemen Santamäentie Koy Ruskon Päällistönmäentie Koy Salon Papinkuja Koy Sastamalan Tyrväänkyläntie Koy Siilinjärven Honkarannantie Koy Siilinjärven Nilsiäntie Koy Siilinjärven Risulantie Koy Siilinjärven Sinisiipi Koy Sipoon Aarrepuistonkuja Koy Sipoon Aarretie Koy Sipoon Satotalmantie Koy Sotkamon Kirkkotie Koy Tampereen Haiharansuu Koy Tampereen Lentävänniemenkatu Koy Tampereen Sisunaukio Koy Teuvan Tuokkolantie Koy Tornion Torpin Rinnakkaiskatu Koy Turun Lemmontie Koy Turun Lukkosepänkatu Koy Turun Malin Trällinkuja Koy Turun Paltankatu (care home) Koy Turun Teollisuuskatu Koy Turun Vakiniituntie Koy Turun Vähäheikkiläntie Koy Tuusulan Isokarhunkierto Koy Ulvilan Kulmalantie Koy Uudenkaupungin Merilinnuntie Koy Uudenkaupungin Merimetsopolku B Koy Uudenkaupungin Merimetsopolku C Koy Uudenkaupungin Puusepänkatu Koy Vaasan Mäkikaivontie Koy Vaasan Tehokatu Koy Vaasan Uusmetsäntie Koy Vaasan Vanhan Vaasankatu Koy Valkeakosken Kirkkotie Koy Vantaan Asolantie (care home) Koy Vantaan Koetilankatu Koy Vantaan Koivukylän Puistotie Koy Vantaan Mesikukantie Koy Vantaan Punakiventie Koy Vantaan Tuovintie Koy Vantaan Vuohirinne Koy Varkauden Kaura-ahontie Koy Varkauden Savontie Koy Vihdin Hiidenrannantie Koy Vihdin Pengerkuja Koy Vihdin Vanhan sepän tie Koy Ylivieskan Alpuumintie Koy Ylivieskan Mikontie 1 Koy Ylivieskan Ratakatu 12 Koy Ylöjärven Mustarastaantie Koy Ylöjärven Työväentalontie Koy Äänekosken Likolahdenkatu – 133 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION OULU VALJASTIE • OULU, FI 134 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 Aedica on stock market Aedifica offers investors an alternative to direct real estate investments, combining all the benefits of optimal real estate income with a limited risk profile. The Group's investment strategy offers shareholders attractive returns, a recurring dividend and opportunities for growth and capital appreciation at the same time. FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE – 135 3.0 % GROSS DIVIDEND YIELD AS OF 31 DECEMBER 2021 50 % PREMIUM TO NET ASSET VALUE AS OF 31 DECEMBER 2021 € 4.2 bn MARKET CAPITALISATION AS OF 31 DECEMBER 2021 174% SHARE PRICE INCREASE SINCE IPO AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 136 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE Aedica on the stock market Since 2020, the Aedifica share is included in the BEL 20, the leading share index of the 20 most important shares on Euronext Brussels, confirming the market’s confidence in Aedifica’s investment strategy. In addition, the share has also been traded on Euronext Amsterdam since November 2019. This secondary listing and the inclusion in the BEL 20 not only ensure a greater visibility, but also increases the liquidity of the share on the stock exchange. Aedica’s shares (AED) have been quoted on Euronext Brussels since October 2006. Since November 2019, Aedica has also been trading on Euronext Amsterdam via a second- ary listing. Aedifica is registered in the BEL 20 Index with a weighting of approx. 2.9% (31 December 2021). In addition, the Aedica share is also included in the EPRA, GPR 250, GPR 250 REIT and Stoxx Europe 600 indices. The share price uctuated between €94.30 and €127.30 over the course of the nan- cial year 2021 and closed the nancial year at €114.90, an increase of ca. 17% compared with 31 December 2020 (€98.30). Based on the stock price on 31 December 2021, Aedica share shows a premium of: • 48.5% as compared to the net asset value per share excluding changes in fair value of hedging instruments; • 50.0% as compared to the net asset value per share. This premium to the net asset value is a sign of condence in Aedica’s track record and reects Aedica’s pure play focus on healthcare real estate, the future growth of the Group, the stable nature of the generated long-term prots and the attractive dividend. The graph on the right shows the evolution of the premium of Aedica’s share price com- pared to the net asset value per share. Between Aedica’s IPO (after deduction of the coupons which represented the preferential or priority allocation rights issued as part of the abovementioned capital increases) and 31 December 2021, Aedica’s stock price increased by 174.4%, as compared to an increase of 2.99% for the BEL 20 index and a decrease of 6.92% for the EPRA Europe index over the same period. The liquidity of Aedica shares has remained stable during the nancial year. The aver- age daily volume was approx. €5,551,000 or approx. 51,000 shares, resulting in a velocity of 37.6%. Aedica continues its eorts to further broaden its investor base by regularly taking part in roadshows and events for both institu - tional and private investors. Our inclusion in the BEL 20 is a reward for the international growth achieved in recent years and conrms the market's condence in Aedica. DELPHINE NOIRHOMME INVESTOR RELATIONS MANAGER Euronext Brussels & Amsterdam ISIN code: BE0003851681 Trading: continuous – 137 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION PREMIUM AND DISCOUNT OF SHARE PRICE IN RELATION TO THE NET ASSET VALUE PER SHARE FROM 23 OCTOBER 2006 (IPO) TO 31 DECEMBER 2021 MARKET CAPITALISATION FROM 23 OCTOBER 2006 (IPO) TO 31 DECEMBER 2021 (IN € MILLION) VALUE CREATION (IN € MILLION) COMPARISON – INDICES IN TOTAL RETURN FROM 23 OCTOBER 2006 (IPO) TO 31 DECEMBER 2021 700 600 500 400 300 200 100 0 5,000 4,000 3,000 2,000 1,000 0 5,000 4,000 3,000 2,000 1,000 0 100% 80% 60% 40% 20% 0% -20% -40% Aedifica Total return EPRA Belgium Total return EPRA Europe Total return IPO market capitalisation 23 Oct. 2006 SPOs Other capital increases Value creation Cumulated dividends since IPO Market capitalisation 31 Dec. 2021 Number of shares 31/12/2021 (12 months) 31/12/2020 (12 months - restated period) 31/12/2020 (18 months) Total number of shares on the stock market ° 36,308,157 33,086,572 33,086,572 Total number of treasury shares 0 0 0 Number of shares outstanding after deduction of treasury shares 36,308,157 33,086,572 33,086,572 Weighted average number of shares outstanding (IAS 33) 34,789,526 27,472,976 26,512,206 Number of dividend rights °° 34,851,824 26,628,340 ° 2,800,000 new shares were listed on the stock market on 15 June 2021, 184,492 new shares were listed on the stock market on 29 June 2021 and 237,093 new shares on 8 September 2021. °° Based on the rights to the dividend for the shares issued during the year. 138 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE Aedifica share 31/12/2021 30/12/2020 Share price at closing (in €) 114.90 98.30 Net asset value per share excl. changes in fair value of hedging instruments (in €) 77.35 65.75 Premium (+) / Discount (-) excl. changes in fair value of hedging instruments 48.5% 49.5% Net asset value per share (in €) 76.60 64.17 Premium (+) / Discount (-) 50.0% 53.2% Market capitalisation 4,171,807,239 3,252,410,028 Free float 1 100.0% 100.0% Total number of shares listed 36,308,157 33,086,572 Denominator for the calculation of the net asset value per share 36,308,157 33,086,572 Average daily volume 50,797 52,062 Velocity 2 37.6% 74.9% Gross dividend per share (in €) 3 3.40 4.60 Dividend gross yield 4 3.0% 4.7% 1. Percentage of the capital of a company held by the market, according to the denition of Euronext. See press release of 3 July 2019 and section 3 of this chapter. 2. Total volume of share exchanged annualised divided by the total number of shares listed on the market, according to the denition of Euronext. 3. 2021: proposed dividend to the Annual General Meeting. 4. Gross dividend per share divided by the closing share price. GROSS DIVIDEND EVOLUTION (€/SHARE) 4 .40 4.20 4.00 3.80 3.60 3.40 3.20 3.00 2.80 2.60 2.40 2.20 2.00 1.80 1.60 1.40 1.20 1.00 1.48 1.71 1.80 1.82 1.82 1.86 1.86 1.90 2.00 2.10 2.25 2.50 2.80 3.07 3.40 3.70 * Pro rata of the €4.60 dividend (18 months) over 12 months. ** Outlook (see pages 58-59). – 139 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION For the nancial year 2021, Aedica’s Board of Directors proposes a gross dividend of €3.40 per share. The dividend will be split between coupon No. 28 (€1.5370 for the period 1 January 2021 to 14 June 2021) and coupon No. 29 (€1.8630 for the period covering 15 June 2021 to 31 December 2021). The dividend will be paid in May 2022, after approval of the nancial statements by the General Meeting of 10 May 2022. As a RREC investing more than 80% of its portfolio in European (residen- tial) healthcare real estate, the withholding tax on dividend for Aedica’s investors amounts to only 15% 7 . The Belgian government decided in 2021 to increase the threshold to apply the reduced withholding tax rate from 60% to 80% for dividends attributed or made payable as from 1 January 2022. Aedica is monitoring this threshold in line with the guidelines from the Belgian government. The total net dividend per share after deduction of the withholding tax of 15 % will amount to €2.89 (€1.3065 for coupon No. 28 and €1.5836 for coupon No. 29). The table below lists Aedica’s shareholders holding more than 5% of the voting rights. (as of 31 December 2021, based on the number of shares held by the shareholders concerned as of 5 July 2019; Aedica has not received any transparency notications regarding a status after 5 July 2019). Declarations of transparency and control strings are available on Aedica’s website. According to Euronext’s denition, the free oat is 100%. # of voting rights Date of the notification % of the total number of voting rights BlackRock, Inc. 1,230,883 5 July 2019 5.00% Other shareholders 95.00% Total 100% Aedica also relies on the debt capital market and issued a benchmark Sustainability bond in September 2021. Type ISIN-code Nominal amount (in € million ) Duration (years) Maturity date Coupon Sustainability bond BE6330288687 500 10 09/09/2031 0.75% Annual General Meeting 2022 10/05/2022 Interim statement 31/03/2022 11/05/2022 Payment of the dividend 6 relating to the 2021 financial year As from 17/05/2022 Coupon 28 Ex-coupon date 11/06/2021 Coupon 29 Ex-coupon date 13/05/2022 CSR Report 2021 10/06/2021 Half year results 30/06/2022 05/08/2022 Interim statement 30/09/2022 09/11/2022 Annual press release 31/12/2022 February 2023 2022 Annual Financial Report March 2023 Annual General Meeting 2023 09/05/2023 Payment dividend relating to the 2022 financial year As from 16/05/2023 Financial service responsible for the dividend payment: ING Belgium (main paying agent) or any other nancial institutions. 5. These dates are subject to change. 6. The dividend will be distributed over coupons No. 28 (pro rata temporis dividend for the period from 1 January 2021 up to and including 14 June 2021) and No. 29 (pro rata temporis dividend for the period from 15 June 2021 up to and including 31 December 2021). 7. For more information on the 80% threshold for the reduced withholding tax on dividends, see page 148 €3.40/share 15 % PROPOSED GROSS DIVIDEND FOR 2021 REDUCED WITHHOLDING TAX RATE 140 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 Risk factors Aedifica carries out its activities in a constantly changing environment, which implies certain risks. Since the materialisation of these risks could have a negative effect on the Group, they are considered as part of every investment decision. Aedifica aims to manage these risks to the best of its ability. Thus, they are monitored on a regular basis by the Board of Directors and a risk management policy has been put in place, as detailed on page 101 in the ‘Corporate Governance Statement’ chapter. FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE – 141 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 142 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE Risk factors This chapter only describes the risk factors that are specific and of material importance for Aedifica. This overview is thus not exhaustive and was prepared on the basis of the information that was available as of 18 March 2022. It is acknowledged that other risk factors may exist, which are currently unknown, remote or considered as benign for the Company, its operations and/or its financial position. Rent levels, vacancy rates and property values are highly inuenced by market supply and demand. The principal risks that may arise from this are: • a decrease in rental income due to vacancy and turnover costs; • a decrease in contractual rents and the value of the portfolio when new leases are established or existing ones renewed; • capital losses on disposals; • a drop in the rental yield due to higher acquisition prices. Aedica anticipates these risks by pursuing an investment policy that is diversied in terms of geographical spread, care operators and health- care real estate segments. Each segment of the market in which Aedica invests targets dierent types of tenants and has distinctive character- istics (with respect to regulations, lease terms, tenants’ funding, etc.). Given that rental income comes from long-term leases, the Group has a good view on future revenue streams (the weighted average unexpired lease term (WAULT) of Aedica’s contracts stands at 20 years). Aedica also intends to continue to expand its portfolio in order to reduce the weight of each individual property, improve asset manage- ment, and increase the operating margin through economies of scale. To this end, the Group maintains close relations with its main tenants and is advised by qualied local experts in each country. Nevertheless, the Group’s diversication, portfolio growth and asset management cannot fully eliminate the risks outlined above. Given the dynamism of the large care operators and the consolidation that has been going on in the private sector for a number of years, there is a risk of concentration of the tenant base, with a large proportion of the rents coming from a single tenant group. Such a concentration within the portfolio can result from acquisitions by the Group, but can also occur in a passive way through acquisitions and mergers of existing tenants. Concentration of the tenant base can inuence the Group’s degree of diversication and cause a drop in income and cash ows when a ten - ant leaves or experiences nancial diculties. Furthermore, if the 20% diversication threshold set forth in Article 30 of the Belgian Law of 12 May 2014 (RREC law) would be exceeded, the Company would not be allowed to make any investments, divestments or undertake other actions that would result in this percentage increasing further. The impact of tenant concentration on the diversication of Aedica’s tenant base has been oset by the strong growth of the portfolio. The integration of new tenants with solid business models (private as well as non-prot and public operators) provides a better spread of rental income over a larger group of tenants and this has signicantly reduced the concentration risk. On 31 December 2021, Aedica had a diversied tenant base of more than 130 operator groups. The ve largest tenant groups represent 33% of Aedica’s contractual rents and the largest ten- ant group (Korian) represents only 11% (see pages 64-66 of the Property Report for more information on tenant concentration). No tenant group exceeds the statutory limit of 20% of the Group’s consolidated assets. MARTHA FLORA HILVERSUM • HILVERSUM, NL – 143 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION All rents are subject to indexation (although the indexation mechanism diers between the countries in which the Group operates). Since Aedica’s WAULT stands at 20 years, the future like-for-like evolution of rental income and the valuation of these assets depends to a large extent on ination. The impact of ination on rental income can be sum- marised as follows: an increase in the index of 100 bps would generate approx. €2.6 million in additional rental income. In addition, in a context of increasing nominal interest rates, lower ina - tion implies higher real interest rates, which in turn implies that nancial charges are growing faster than the indexation of rental income. Aedica has taken the necessary steps to mitigate these risks (see section 3.1 – interest rate risk below). However, these measures cannot completely eliminate the ination risk and the risk of higher real interest rates which could have a negative impact on the Group’s assets, business, nancial position and prospects. In the event of negative ination, most contracts, but not all, set a oor at the level of the initial rent. The Group’s activities are impacted by the general economic climate and are subject to economic cycles, as these aect the available income of existing tenants (and hence their ability to meet their nancial com- mitments), the demand for rental properties and the valuation of real estate, as well as the availability and cost of nancing. A downturn in key macroeconomic indicators could have a negative impact on Aed - ica’s business and its development prospects. Furthermore, there is a potential risk that co-contractors (service providers, banks providing credit and hedging, contractors, etc.) default or go bankrupt. To mitigate these risks, Aedica continues to diversify its investments within the limits of its investment strategy, both geographically and in accordance with other diversication themes (including building types, tenants, healthcare real estate segments, possibilities for alternative use, public funding, etc.). Moreover, it should be noted that healthcare real estate is a resilient real estate segment with strong growth poten - tial. This is due to demographically-driven increases in the demand for healthcare properties in the countries where Aedica operates, at the same time as supply tends to stagnate or grow more slowly as a result of restrictions imposed by public authorities. Furthermore, the healthcare sector benets from the long-term support of public authorities that fund care in general, and care dependency in particular, through their social security systems. Despite the Group’s diversication eorts, a negative shift in the main macro-economic indicators or defaults by its various partners may still have a negative impact on the Group’s assets, business, nancial position and prospects. Aedica anticipates risks by pursuing a diversied investment policy in terms of geographical spread, care operators and healthcare real estate segments. REMBERTUS • MECHELEN, BE 144 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE The global COVID-19 pandemic has led to higher mortality rates in the segment of people aged 80 years and older and has created specic operating challenges and risks for the tenants that operate Aedica’s (elderly care) buildings: • sta shortages due to sickness or quarantine measures; • higher costs due to protective measures; • (temporary) lower occupancy rates due to excess mortality, a negative public perception of residential care for the elderly and temporary admission stops. These challenges and risks can lead to a decrease in the revenues of Aedica’s tenants and may in turn impact their capacity to pay rent. This can lead to a temporary or permanent reduction of Aedica’s rental income and can inuence the valuation of its investment properties. As such, the main risk to Aedica that could arise from the COVID-19 pandemic is the impact of the pandemic on other identied risks. The pandemic is evolving quickly and the consequences and risks for Aedica’s tenants are inuenced by various factors and uncertainties: tenant size and solvency, (local) governmental measures, local spread of the virus and (local) lock-down measures, availability of sta, perception of the public vis-à-vis the sector, (booster) vaccination programmes, etc. In the long term, the pandemic can also have an impact on the nancing systems of the healthcare sector. The consequences of these risks for the Group (should they occur) cannot be predicted at this stage given their uncertain nature. However, due to the (continued) ageing of the European population (see page 86), the pandemic will not have a material impact on the long-term demand for healthcare real estate. As of 31 December 2021, the pandemic had no material impact on the results of the Group (also see page 49). SENIORENQUARTIER KAEMENAS HOF • BREMEN, DE Aedica’s total turnover consists of rental income from buildings leased to professional care operators. When tenants leave on an expiry date or when the lease agreement lapses, new leases may yield lower rents than the current leases. A gloomy economic climate or other factors that can have a material impact on the rent payment capacity of tenants (for example, the COVID-19 pandemic can lead to a decrease in the occupancy rate, putting pressure on the rent payment capacity of care operators) can also lead to the renegotiation of current leases. Such renegotiations can lead to rent reductions whereby the rent levels of tenants are rebalanced with their future income potential in order to ensure the sustainability of the cash ows generated by the buildings. This could have a negative impact on the Group’s income and cash ows. The concentration of the tenant base (see page 142) could further increase this risk. Aedica is also exposed to the risk of nancial default by its tenants. Tenant default can have a negative impact on the Group’s results and therefore on earnings per share and the capacity to pay dividends. Fur- thermore, the Group is not insured in the event of such tenant defaults. To mitigate this risk, Aedica ensures that there is a thorough analysis of the business plan of the operators, that there is constant monitoring of the nancial performance of existing tenants and that there is a rigor- ous procedure for the invoicing and follow-up of tenants with payment diculties. Moreover, in most cases a rental guarantee is agreed with the operator (in the form of bank guarantees, blocked accounts or other guarantees), in line with established market practice. Due to the continued ageing of the European population, the Covid-19 pandemic will not have a material impact on the long-term demand for healthcare real estate. – 145 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION Despite these measures, the risk of loss of rental income cannot be ruled out. As of 31 December 2021, the charges on the provisions for doubt- ful debts amounted to approx. €0.7 million on approx. €232.1 million in rental income. A loss of €10 million in rental income would reduce earnings per share by approx. €0.29. A decrease in rental income can also have a negative eect on the valuation of the property concerned. The fair value of investment properties (accounted for in accordance with IAS 40) uctuates over time and depends on various factors over which Aedica does not have complete control (such as decreasing demand or occupancy rates, an increase in the transfer charges, etc.). A potential impairment loss on properties of the portfolio could have a negative impact on the results and nancial situation of the Group. Each quarter, the fair value of investment properties is assessed by independent valuation experts. As of 31 December 2021, a change of 1% in the fair value of investment properties would have an impact of approx. €48.4 million on the net income, approx. €1.39 on the net asset value per share and approx. 0.4% on the consolidated debt-to-assets ratio. Over the course of the nancial year, the fair value of marketable investment properties increased by 3.8% on a like-for-like basis. Aedica acquires buildings in development and also develops its own projects (specically in Finland and Sweden and to a limited extent in other countries), which allows the Group to supervise the development works and ensure that the delivered buildings are of high quality. These development activities entail the following potential risks: • nding the right partners to carry out the building work; • building delays can lead to a loss of potential income; • budget overruns as compared to initial investment budget; • the bankruptcy of a construction company can lead to delays and additional costs; • increased building costs; • a complex permit process can lead to delays and additional costs; • health and safety on construction sites; • other organisational problems. While the risks arising from development activities cannot be avoided, the Group does its best to negotiate contracts that minimise them: • the projects in which Aedica invests are always backed by a pre-let agreement; • investments in turnkey projects; • obtaining a building permit is always a preceding condition for the project. As of 31 December 2021, Aedica’s total investment budget for devel - opment projects amounts to approx. €767 million. To maintain the quality of Aedica’s real estate (and its independent valuation), the Group has developed an internal property management structure, under which property managers visit and inspect the build - ings on a regular basis, engage with tenants and evaluate whether the safety and maintenance of the buildings meet quality standards. On the basis of this dialogue, investments are made in renovations or extensions when necessary. Although Aedica always enters into long- term relationships with its tenants and the Group regularly monitors the quality of its portfolio and – where necessary – invests in renovations, the risk cannot be excluded that the perceived quality of its buildings may deteriorate signicantly and have an impact on the valuation of the buildings (see above). The buildings in Aedica’s portfolio are insured against re and other disasters. The insurance policies are usually taken out by the tenants and also cover rental vacancies during the reconstruction of buildings. In addition, there is also a risk that when a tenant leaves, his/her/its rental guarantee does not cover the nancial risk of renovations or changes to the building. 146 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE A substantial part of Aedica’s nancial debts are oating-rate bor- rowings. This allows Aedica to benet from low interest rates on the non-hedged part of its borrowings. To mitigate the risk of increasing interest rates, Aedica follows a policy aimed at securing for a period of several years the interest rates related to at least 60% of its current or highly probable indebtedness. It should be noted that the Company assumed certain xed-rate debts which came from pre-existing invest- ment credits tied to real estate companies which were acquired or absorbed by the Company. Aedica extended and increased its hedge ratio by closing new forward starting swaps and some caps to hedge the interest rate risk. In addition, the USPP and the benchmark bond issue have rebalanced Aedica’s mix of xed and oating rate debt. On 31 December 2021, the nancial debt is hedged against interest rate risk for 90.3%, i.e. the ratio of the sum of the xed rate debt and the notional amount of derivatives divided by the total nancial debt. The hedging’s weighted average maturity is 6.6 years. This policy is supported by the fact that an increase in nominal interest rates, when not coupled with a simultaneous increase in ination, implies an increase in real interest rates that cannot be oset by increasing rental incomes through indexation alone. Moreover, in case of acceler- ating ination, there is a delay between the timing of the increase of the nominal interest rates and the timing of the indexation of rental income. In order to manage the interest rate risk, Aedica has put in place hedges (interest rate swaps and caps). All hedges are entered into with leading banks and relate to existing or highly probable risks. An analysis of Aedica’s hedges is included in Note 33 of the Consolidated Financial Statements. Aedica’s debt-to-assets ratio is monitored and published each quarter and its evolution is projected during the approval process of each major investment project. As of 31 December 2021, the consolidated debt-to- assets ratio amounted to 42.6%. Aedica’s theoretical additional debt capacity based on the maximum debt-to-assets ratio allowed under its corporate status as a RREC (65% of total assets) and under current bank covenants (60% of total assets) is set out on page 56. In its relations with nancial counterparties, Aedica is bound to observe a number of nancial parameters, as part of certain credit facilities and/ or the legal regimes to which all or certain entities of the Aedica group are subject. Non-compliance with nancial parameters could lead to: • sanctions (e.g. the loss of the RREC status) and/or increased reg- ulatory oversight in the event of non-compliance with the statutory nancial parameters (e.g. exceeding the 65% threshold for the con - solidated debt-to-assets ratio); • a cancellation or renegotiation of credit facilities, or mandatory early repayment of outstanding amounts as well as reduced condence among investors and/or nancial institutions, in the event of non-com- pliance with contractual covenants (e.g. exceeding the 60% threshold for the consolidated debt-to-assets ratio, change of control of the Group, etc.), which in turn could lead to reduced liquidity. As Aedica does not have controlling shareholders (only one shareholder exceeds the 5% transparency notication threshold), there is a potential risk of a hostile takeover that can trigger the so-called ‘change of control’ clause; • some or all of these defaults could allow creditors to (i) seek early repayment of such debts as well as other debts subject to cross-de- fault or cross-acceleration provisions, (ii) declare all outstanding loans due and payable and/or (iii) cancel undrawn commitments; • in line with market practice, credit facilities include market disruption clauses and material adverse change (MAC) clauses which, in some extreme circumstances, can generate additional costs for the Com - pany, and in even more extreme cases can even lead to the early termination of a credit facility. Although the potential impact would be signicant, Aedica evaluates the risk as unlikely. The Group may be exposed to a liquidity risk if its existing nancing agreements are not renewed at maturity, if no additional new funding sources can be found to nance the portfolio growth or due to a lack of cash ow in the event of early termination of credit facilities. To nance its activities and investments, Aedica relies heavily on its ability to raise nancial resources. This ability can be disrupted by a variety of (external) factors, such as disruptions in international nancial debt and equity markets, a reduction in the lending capacity of banks, a deterioration in the creditworthiness of the Aedica group, a negative perception of investors with regard to real estate companies, etc. Any of these events could cause Aedica to experience diculties in accessing funding under its existing or new credit facilities or in the capital markets. As a consequence, Aedica might not be able (i) to meet its nancial obligations (including interest payments, loan repayments, operating costs or development costs), or (ii) to nance its activities. If the Company would be exposed to a liquidity issue, it could, in the worst case, be forced to dispose of assets. As of 31 December 2021, the Group has drawn €1,811 million (31 December 2020: €1,669 million) from the total amount of €2,788 million of conrmed bank nancing, medium-term notes and bonds. The remaining headroom is sucient to cover the Group’s short-term nan- cial needs as well as the existing development projects until the end of the 2022 nancial year. The 2022 nancial plan includes payments in the context of the committed pipeline of development projects amounting to approx. €350 million. In 2018, Aedica launched a programme to issue treasury notes with varying maturities. The short-term treasury notes are fully hedged by the available funds on conrmed long-term credit lines and thus they do not increase the liquidity risk. Details regarding Aedica’s credit lines are described in Note 32 of the Consolidated Financial Statements. As Aedica’s nancial model is based on a structural indebted- ness, cash balances remain relatively limited. They amounted to approx. €15.3 million as of 31 December 2021 (at consolidated level). 1. See pages 146-147 for more information about Aedica’s nancial risk management. – 147 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION Aedica has a credit rating assessed by an independent rating agency. In August 2021, S&P Global assigned the Group a BBB investment-grade rating with a stable outlook (see page 50). This rating can be adjusted at any time. A rating downgrade could lead to an increase in the Group’s nancing cost. In addition, a downgrade could also aect the appetite of credit providers to partner with Aedica, which could compromise the Group’s access to the debt market and thus its ability to nance its operations and growth. Aedica earns approx. 22% of its income and incurs part of its expenses in the United Kingdom and Sweden and is therefore exposed to an exchange rate risk. Future uctuations in the exchange rate may aect the value of Aedica’s investment properties, rental income and the net result, all of which are expressed in euros. An active hedging policy is in place to limit the £/€ exchange rate risk and its impact on Aedica’s result, if and when it is deemed necessary. A 10% change of the £/€ exchange rate has an impact of approx. €83.2 million on the fair value of the Group’s investment prop- erties located in the United Kingdom, approx. €5.0 million on the Group’s annual rental income and approx. €5.5 million on the Group’s net result. A 10% change of the SEK/€ exchange rate has an impact of approx. €7.9 million on the fair value of the Group’s investment proper- ties located in Sweden, approx. €0.2 million on the Group’s annual rental income and approx. €0.7 million on the Group’s net result. New regulations or changes to existing regulations (at European, national or local level), including those relating to healthcare, property rental, tax- ation, the environment, urban development, mobility policy, privacy and sustainable development, the renewal of licences with which Aedica or its tenants must comply, or a change in the application or interpretation of such regulations by the administration (including the tax administra- tion) or the courts, can increase the administrative costs and liabilities of the Group, and may have a major impact on the return, the fair value of the investment properties and on the tenants. In particular, it is changes in the healthcare nancing system that pose the greatest risk to the Group. Often the revenues of care operators are derived in part from subsidies (direct or indirect) granted by local social security systems. These systems depend on national and local governments and can be reformed from time to time depending on the political situation. A reform of these nancing systems in one of the regions in which Aedica operates (e.g. as a result of the pressure exerted by the COVID-19 pandemic on social security systems), could potentially have an impact on the solvency of care operators, thus creating the risk that they would not be able to meet their contractual obligations towards the Group. Although Aedica strictly monitors compliance with regulations, drawing on all necessary expertise, the risks associated with regulatory changes cannot be ruled out. TUUSULA ISOKARHUNKIERTO • TUUSULA, FI SENIORENZENTRUMWEIMAR • WEIMAR, DE As a ‘public regulated real estate company under Belgian law’ (‘public RREC’) – and in order to keep this status – Aedica is subject to the requirements of the law of 12 May 2014 on regulated real estate com - panies, as amended from time to time (the ‘RREC Act’), which contain restrictions regarding (amongst others) the activities, the debt-to-as - sets ratio, the result processing, conicts of interest and corporate governance. As a public RREC, Aedica benets from a specic tax regime. Its result (rental income and capital gains on disposals, after deduction of oper- ating costs and nancial expenses) is exempt from corporate income tax at the level of the public RREC (i.e. the public RREC is subject to corporate income tax at the normal rate, but only on a limited taxable basis, consisting of the sum of (i) the abnormal or benevolent advantages 148 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE REMBERTUS • MECHELEN, BE it receives and (ii) the expenses and costs that are not deductible as busi - ness expenses, other than write-downs and capital losses on shares), while subsidiaries that do not have the status of a RREC or a specialised real estate investment fund remain subject to corporate income tax. To the extent that Aedica directly holds real estate that is not located in Belgium, the Group may be subject to local taxes. The Company’s subsidiaries that are not registered in Belgium are also subject to the provisions of the locally applicable common corporate income tax laws. If Aedica is unable to meet the requirements of the RREC status (this would suppose major and re-iterated disregard for the provisions of the RREC Act), there is a risk that the market authority (the FSMA) will impose sanctions and that Aedica might lose its RREC status. In that case, the Group would lose the benets of its special tax regime as a public RREC and the benet of the reduced withholding tax rate of 15% on its dividends (see section 4.3 below). Furthermore, the loss of the RREC status is generally considered in credit facilities as a reason for the early repayment of all loans granted to the Company, which could in turn lead to a reduced liquidity (see section 3.3 above). Companies (other than RRECs or specialised real estate investment funds) which were, or are, absorbed by the Company, owe an exit tax payable on their unrealised capital gains and exempted reserves. The exit tax is calculated taking into account the provisions of the circular Ci. RH. 423/567.729 of 23 December 2004; the prescribed interpreta - tion or practical application of this circular is subject to change at the Government’s discretion at any time, which could, depending on the change, have a signicant negative impact on the acquisition cost of real estate and thus on the overall protability of the Group. Since the exit tax only applies to acquisitions in Belgium and, in recent years, Aedica has carried out most of its investments in other countries, the potential impact of this risk is limited. With regard to the Dutch activities, the Group has applied for its Dutch subsidiary to be recognised as a ‘Fiscale Beleggingsinstelling’ (‘FBI’), a transparent tax regime. As a matter of prudence, the Group recognised a generally applicable corporate income tax burden in the income state - ment to account for the possibility that the Company may not obtain an ‘FBI’ status. In the meantime, Aedica, assisted by external consultants, continues to work towards obtaining the FBI status, which could have a positive impact on the Group’s results. The Belgian withholding tax on dividends amounts in principle to 30%, subject to reduction or exemption under the applicable Belgian provi - sions or tax treaties. However, a reduced withholding tax rate of 15% applies to dividends distributed by RRECs that invest at least 80% of their real estate directly or indirectly in ‘healthcare real estate’ (Article 269, §1, 3° of the Belgian Income Tax Code ’92). In 2021, the Belgian government decided to increase the threshold for the application of the reduced rate of 15% from 60% to 80% for dividends attributed or made payable as of 1 January 2022. Healthcare real estate is dened as immovable property that is located in a member state of the Euro - pean Economic Area and is exclusively or mainly used or intended as residential units adapted to residential care or health care. Following the Brexit, a transition regime has been provided for the inclusion of Aedi- ca’s UK portfolio in the 80% threshold until the end of 2025. The Group monitors this threshold in accordance with the Belgian government’s guidelines. As Aedica invests more than 80% of its property portfolio in healthcare real estate, shareholders benet from this reduced rate of 15%. If the Group were no longer to comply with this 80% threshold, shareholders would have to pay the standard withholding tax rate (30% instead of 15%). In addition, there is a political risk that the reduced withholding tax rate might be abolished or its terms adjusted in such a way that Aedica’s shareholders would no longer be entitled to it. While this risk would not have a material impact on the Group’s activities, the cancellation of the reduced withholding tax rate could make the Aedica share less attractive and lead to a temporary decrease in the share price. – 149 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION Aedica’s steady growth could lead to a scarcity of available nancing (in the form of either debt or equity). To counter this risk, the Group is developing an ever-expanding network of actual and potential providers of nancial resources. It is also important that there is a positive per- ception of Aedica’s access to the capital markets. In 2021, the Group further diversied its nancial resources through the issuance of its rst Sustainability Bond amounting to €500 million. There is also an operational risk if, due to the pace of growth, the Group proves unable to integrate all its activities, acquisitions and takeovers correctly (e.g. when mistakes or operational problems occur, or when there are shortcomings in the follow-up of acquisitions). To counter these risks and to meet the challenges of its growth and internationalisation, the Group regularly updates its procedures, without compromising its exibility and agility (see page 28). In addition, the Group implemented an ERP system in 2020 and a treasury management system in 2021. The Group is also expanding its team to include individuals with specialised competencies. The internationalisation of the Group’s activities can bring new risks related to the increasing complexity in the management of daily activ- ities (specic characteristics of each foreign market, cultural barriers, language barriers, integration, property management, etc.) and the accumulation of regulatory risks in the dierent countries. These risks can have an impact on the reputation and prospects of the Group. To mitigate these risks, Aedica calls upon local experts to support its international development and implements the required structures and procedures to ensure smooth international development. By developing an operating model based on close cooperation and interaction between local teams in the countries in which Aedica operates, local proximity and agility are combined with economies of scale in terms of operational excellence and know-how. An additional benet of this operating model is that it can be easily rolled out to new markets. Reputation and visibility are key issues for a listed group in full growth. With Aedica’s growth and internationalisation, the possibility and impact of the risk of reputational damage is increasing. The Group must not only ensure its reputation and visibility in the dierent countries in which it operates, its reporting is also analysed more carefully by an ever-growing group of investors and analysts. To mitigate reputation risk, the Group communicates in a transparent way on its nancial and sustainability performance in line with sector standards (e.g. EPRA and GRI). The treatment of residents by tenants could also impact the Group’s rep- utation. As high-quality treatment and comfort of residents are of utmost importance to Aedica, all reports from local healthcare authorities are thoroughly monitored. In case of irregularities, operators are evaluated and asked to implement a plan to avoid any future infringements. Should Aedica’s reputation suer, this could aect its growth prospects and make access to capital more dicult. The Group currently has an excellent reputation thanks to its long-standing track record and it remains in close contact with its stakeholders in order to maintain this reputation. However, the Group cannot completely eliminate the risk of damage to its reputation. Since its incorporation, the Group’s portfolio has expanded at a com- pound annual growth rate (CAGR) of 24%. Aedica’s growth contributes to the premium included in the share price compared to the net asset value per share (on 31 December 2021, this premium was approx. 50%). Lack of growth hence constitutes a risk for a company like Aedica as it could aect the stock market’s expectations and could lead to a decline in the share price. Furthermore, a lack of growth could also trigger a breach of trust with the Group’s various stakeholders or make access to capital more dicult. However, Aedica is committed to maintain its sense of dynamism and entrepreneurship: the key team members are constantly expanding their networks and Aedica invests in the development of country teams, which enables the Group to stay abreast of what is happening in its (local) markets and to easily identify new opportunities. HUIZE ERESLOO • DUIZEL, NL 150 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE Aedica’s international growth has increased the Group’s visibility, which may trigger headhunters to recruit members of the Aedica team. The unexpected departure of certain key sta members could expose Aed - ica to a certain risk of disorganisation and loss of knowledge and could have adverse consequences for the Group’s development. Consequently, Aedica has developed a human resources policy aimed at retaining its employees within the company to the greatest extent possible through (amongst other things) an appropriate remuneration policy, oering a training programme and the possibility of internal career development. The Group continuously invests in a healthy, safe and pleasant work environment to keep its employees safe and motivated. In order to monitor employee engagement and satisfaction, Aedica conducts an annual employee survey, which is used to introduce new measures to improve employee satisfaction. In addition, the Group has a proactive recruitment policy which has led to the creation of several new positions in recent years. The risk of loss of knowledge due to the departure of key gures is further mitigated, on the one hand, by sta growth and, on the other, by the development of a high-performance operating model and the standardisation of busi - ness processes which ensure that Aedica’s experience and know-how remain within the company and continue to circulate eciently among its team members. Good management of the IT infrastructure is of fundamental importance for Aedica. A loss or unavailability of data could cause a disruption of management and investment activities, and a disruption of the internal and external reporting process. To mitigate these risks, Aedica has an IT team that is assisted by an external partner in managing the IT infrastructure (hardware and software) and in the security and storage of data. In addition, local and cloud backups are performed regularly. A cyber security policy has been signed as well, insuring the Group against various types of cybercrime. However, the Group cannot completely eliminate IT risks. As the Group grows, so does the risk of practices that could compromise Aedica’s integrity, such as tax fraud, corruption, bribery or conicts of interest. An erosion of the integrity could seriously damage the Group’s reputation and have a severe impact on the activities of Hoivatilat, which regularly works with local authorities and the public sector. To mitigate this risk, Aedica has implemented the necessary business processes and developed a code of conduct and an anti-bribery and corruption policy to which both its team members and its business partners must adhere. However, the risk of Aedica’s integrity being compromised cannot be completely eliminated. KLEIN VELDEKENS • GEEL, BE – 151 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION As a result of international growth, the Group’s activities are being monitored by an increasingly large group of institutional investors and nancial institutions. For them, it is important that Aedica has sound CSR scores in order to justify an investment in the Group or the granting of nancing. Aedica is therefore exposed to the risk of being insu- ciently transparent regarding its objectives and performance in the area of corporate social responsibility, which could potentially cause the Group to lose investors or nancing. A lack of ESG transparency could also lead to reputational damage. To mitigate these risks, Aedica has developed an ambitious CSR action plan (see CSR Report, published and updated on an annual basis). In addition, the Group has entered into a dialogue with its tenants to raise their awareness of CSR measures and to support them in complying with these measures. LE JARDIN INTÉRIEUR • FRASNES-LES-AVAING, BE 1. See Aedica’s CSR Report for a complete overview of CSR-related risks. Climate change can result in warmer summers across the European continent, which may require modications to buildings to keep indoor temperatures comfortable (such as air conditioning, additional insula - tion, etc.). This may lead to a complete rethink of the way buildings are designed, with more attention being paid to the (active and passive) cooling of buildings. In addition, climate change may lead to rising sea levels and extreme weather conditions that could damage buildings, such as the 2021 oods that partially impacted some of the Group’s properties in Germany. To mitigate these risks, building cooling, environ- mental aspects and ood risks are taken into account to the maximum extent when developing projects and in the due diligence process of acquisitions. 152 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 EPRA FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE – 153 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION EPRA VACANCY RATE 0 %4.35/share EPRA EARNINGS FOR 2019/2020 EPRA BPR Gold Award 1.5% WEIGHT IN THE EPRA EUROPE INDEX 154 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE EPRA 1 – Aedifica – Annual Financial Report 2021 EPRA The EPRA (‘European Public Real Estate Association’) is the voice of Europe’s publicly traded real estate sector and the most widely used global benchmark for listed real estate. The Aedifica share has been included in the ‘FTSE EPRA/NAREIT Developed Europe Index’ since March 2013. At 31 December 2021, Aedifica is included in the EPRA Europe index with a weight of approx. 1.5% and in the EPRA Belgium index with a weight of approx. 19.5%. In September 2021, Aedifica received a 7 th consecutive ‘EPRA BPR Gold Award’ for its Annual Financial Report (financial year 2019/2020), thus remaining in the leading group of European companies evaluated by EPRA. 1. EPRA key performance indicators 31/12/2021 (12 months) 31/12/2020 (18 months) EPRA Earnings Earnings from operational activities x €1,000 151,479 162,718 € / share 4.35 6.14 EPRA Net Reinstatement Value Net Asset Value adjusted in accordance with the Best Practice Recommendations (BPR) Guidelines published by EPRA in October 2019 for application as from 1st January 2020. EPRA NRV assumes that entities never sell assets and provide an estimation of the value required to rebuild the entity x €1,000 3,208,203 2,450,824 € / share 88.36 74.01 EPRA Net Tangible Assets Net Asset Value adjusted in accordance with the Best Practice Recommendations (BPR) Guidelines published by EPRA in October 2019 for application as from 1st January 2020. EPRA NTA assumes that entities buy and sell assets, thereby crystallising certain levels of unavoidable deferred tax. x €1,000 2,761,180 2,083,669 € / share 76.05 62.92 EPRA Net Disposal Value Net Asset Value adjusted in accordance with the Best Practice Recommendations (BPR) Guidelines published by EPRA in October 2019 for application as from 1st January 2020. EPRA NDV represents the value accruing to the company's shareholders under an asset disposal scenario, resulting in the settlement of deferred taxes, the liquidation of financial instruments and the recognition of other liabilities for their maximum amount, net of any resulting tax. x €1,000 2,626,745 1,944,086 € / share 72.35 58.70 EPRA Net Initial Yield (NIY) Annualised rental income based on the cash rents passing at the balance sheet date, less non-recoverable property operating expenses, divided by the market value of the property, increased with (estimated) purchaser’s costs % 4.9% 5.2% EPRA Topped-up NIY This measure incorporates an adjustment to the EPRA NIY in respect of the expiration of rent-free periods or other unexpired lease incentives such as discounted rent periods and step rents % 5.1% 5.3% EPRA Vacancy Rate Estimated Market Rental Value (ERV) of vacant space divided by ERV of the whole portfolio % 0.5% 0.2% EPRA Cost Ratio (including direct vacancy costs) Administrative & operating costs (including costs of direct vacancy) divided by gross rental income % 16.7% 18.5% EPRA Cost Ratio (excluding direct vacancy costs) Administrative & operating costs (excluding costs of direct vacancy) divided by gross rental income % 16.7% 18.5% – 155 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION Aedifica – Annual Financial Report 2021 – 2 2. EPRA Earnings EPRA Earnings 31/12/2021 31/12/2020 (12 months - restated period) 31/12/2020 (18 months) x €1,000 Earnings (owners of the parent) per IFRS income statement 281,824 103,894 173,068 Adjustments to calculate EPRA Earnings, exclude: (i) Changes in value of investment properties, development properties held for investment and other interests -160,211 -11,496 -31,476 (ii) Profits or losses on disposal of investment properties, development properties held for investment and other interests -534 1,827 559 (iii) Profits or losses on sales of trading properties including impairment charges in respect of trading properties 0 0 0 (iv) Tax on profits or losses on disposals 559 0 0 (v) Negative goodwill / goodwill impairment 3,540 0 0 (vi) Changes in fair value of financial instruments and associated close-out costs -14,813 5,587 2,169 (vii) Acquisition costs on share deals and non-controlling joint venture interests (IFRS 3) 0 6,427 6,427 (viii) Deferred taxes in respect of EPRA adjustments 46,452 11,041 14,811 (ix) Adjustments (i) to (viii) above in respect of joint ventures -6,011 -1,180 -3,007 (x) Non-controlling interests in respect of the above 673 68 167 Roundings 0 0 0 EPRA Earnings (owners of the parent) 151,479 116,168 162,718 Number of shares (Denominator IAS 33) 34,789,526 27,472,976 26,512,206 EPRA Earnings per Share (EPRA EPS - in €/share) 4.35 4.23 6.14 EPRA Earnings diluted per Share (EPRA diluted EPS - in €/share) 4.35 4.22 6.13 156 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 3 – Aedifica – Annual Financial Report 2021 3. EPRA Net Asset Value indicators Situation as per 31 December 2021 EPRA Net Reinstatement Value EPRA Net Tangible Assets EPRA Net Disposal Value x €1,000 NAV per the financial statements (owners of the parent) 2,781,171 2,781,171 2,781,171 NAV per the financial statements (in €/share) (owners of the parent) 76.60 76.60 76.60 (i) Effect of exercise of options, convertibles and other equity interests (diluted basis) 2,235 2,235 2,235 Diluted NAV, after the exercise of options, convertibles and other equity interests 2,778,936 2,778,936 2,778,936 Include: (ii.a) Revaluation of investment properties (if IAS 40 cost option is used) 0 0 0 (ii.b) Revaluation of investment properties under construction (IPUC) (if IAS 40 cost option is used) 0 0 0 (ii.c) Revaluation of other non-current investments 0 0 0 (iii) Revaluation of tenant leases held as finance leases 0 0 0 (iv) Revaluation of trading properties 0 0 0 Diluted NAV at Fair Value 2,778,936 2,778,936 2,778,936 Exclude: (v) Deferred taxes in relation to fair value gains of IP 118,586 118,586 (vi) Fair value of financial instruments 27,317 27,317 (vii) Goodwill as a result of deferred taxes 45,161 45,161 45,161 (vii.a) Goodwill as per the IFRS balance sheet -206,887 -206,887 (vii.b) Intangibles as per the IFRS balance sheet -1,934 Include: (ix) Fair value of fixed interest rate debt 9,535 (ix) Revaluation of intangibles to fait value 0 (xi) Real estate transfer tax 238,203 0 Include/exclude: Adjustments (i) to (v) in respect of joint venture interests 0 0 0 Adjusted net asset value (owners of the parent) 3,208,203 2,761,180 2,626,745 Number of shares outstanding (excl. treasury shares) 36,308,157 36,308,157 36,308,157 Adjusted net asset value (in €/share) (owners of the parent) 88.36 76.05 72.35 x €1,000 Fair value as % of total portfolio % of deferred tax excluded Portfolio that is subject to deferred tax and intention is to hold and not to sell in the long run 3,584,425 75% 100% – 157 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION Aedifica – Annual Financial Report 2021 – 4 Situation as per 31 December 2020 EPRA Net Reinstatement Value EPRA Net Tangible Assets EPRA Net Disposal Value x €1,000 NAV per the financial statements (owners of the parent) 2,123,130 2,123,130 2,123,130 NAV per the financial statements (in €/share) (owners of the parent) 64.17 64.17 64.17 (i) Effect of exercise of options, convertibles and other equity interests (diluted basis) 845 845 845 Diluted NAV, after the exercise of options, convertibles and other equity interests 2,122,285 2,122,285 2,122,285 Include: (ii.a) Revaluation of investment properties (if IAS 40 cost option is used) 0 0 0 (ii.b) Revaluation of investment properties under construction (IPUC) (if IAS 40 cost option is used) 0 0 0 (ii.c) Revaluation of other non-current investments 0 0 0 (iii) Revaluation of tenant leases held as finance leases 0 0 0 (iv) Revaluation of trading properties 0 0 0 Diluted NAV at Fair Value 2,122,285 2,122,285 2,122,285 Exclude: (v) Deferred taxes in relation to fair value gains of IP 72,687 72,687 (vi) Fair value of financial instruments 52,212 52,212 (vii) Goodwill as a result of deferred taxes 45,161 45,161 45,161 (vii.a) Goodwill as per the IFRS balance sheet -206,887 -206,887 (vii.b) Intangibles as per the IFRS balance sheet -1,790 Include: (ix) Fair value of fixed interest rate debt -16,473 (ix) Revaluation of intangibles to fait value 0 (xi) Real estate transfer tax 158,479 0 Include/exclude: Adjustments (i) to (v) in respect of joint venture interests 0 0 0 Adjusted net asset value (owners of the parent) 2,450,824 2,083,669 1,944,086 Number of shares outstanding (excl. treasury shares) 33,116,464 33,116,464 33,116,464 Adjusted net asset value (in €/share) (owners of the parent) 74.01 62.92 58.70 x €1,000 Fair value as % of total portfolio % of deferred tax excluded Portfolio that is subject to deferred tax and intention is to hold and not to sell in the long run 2,594,842 69% 100% 158 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 5 – Aedifica – Annual Financial Report 2021 4. EPRA NIY & EPRA Topped-up NIY EPRA Net Initial Yield (NIY) and EPRA Topped- up NIY 31/12/2021 x €1,000 BE DE NL UK FI SE IE ES Non- allocated Inter- segment items Total Investment properties – wholly owned 1,218,690 1,102,436 587,375 825,057 881,952 79,350 105,755 2,500 - - 4,803,115 Investment properties – share of JVs/Funds - - - - - - - - - - 0 Trading properties (including share of JVs) - - - 6,660 28,700 - - - - - 35,360 Less: developments -5,473 -44,923 -23,270 -10,051 -50,802 -1,021 -13,914 -2,500 - - -151,954 Completed property portfolio 1,213,217 1,057,513 564,105 821,666 859,850 78,329 91,841 - - - 4,686,521 Allowance for estimated purchasers' costs 30,615 75,350 45,785 54,636 21,496 1,193 9,127 - - - 238,203 Gross up completed property portfolio valuation 1,243,832 1,132,863 609,890 876,302 881,346 79,522 100,968 - - - 4,924,724 Annualised cash passing rental income 62,397 51,538 31,208 49,617 45,805 3,892 4,680 - - - 249,136 Property outgoings° -627 -1,319 -1,623 -2,949 -1,875 -141 -14 - - - -8,547 Annualised net rents 61,770 50,219 29,585 46,668 43,930 3,751 4,666 - - - 240,589 Add: notional rent expiration of rent free periods or other lease incentives 1,478 3,676 47 3,250 713 0 200 - - - 9,364 Topped-up net annualised rent 63,248 53,895 29,632 49,918 44,643 3,751 4,866 - - - 249,953 EPRA NIY (in %) 5.0% 4.4% 4.9% 5.3% 5.0% 4.7% 4.6% - - - 4.9% EPRA Topped-up NIY (in %) 5.1% 4.8% 4.9% 5.7% 5.1% 4.7% 4.8% - - - 5.1% EPRA Net Initial Yield (NIY) and EPRA Topped- up NIY 31/12/2020 x €1,000 BE DE NL UK FI SE IE ES Non- allocated Inter- segment items Total Investment properties – wholly owned 1,161,872 689,357 530,831 628,572 724,177 21,905 - - - - 3,756,714 Investment properties – share of JVs/Funds 0 0 0 0 0 0 - - - - 0 Trading properties (including share of JVs) 165 0 0 5,963 0 0 - - - - 6,128 Less: developments -10,618 -55,137 -15,063 -1,233 -56,907 -2,362 - - - - -141,320 Completed property portfolio 1,151,419 634,220 515,768 633,302 667,270 19,543 - - - - 3,621,522 Allowance for estimated purchasers' costs 29,035 45,594 24,933 41,938 16,682 298 - - - - 158,479 Gross up completed property portfolio valuation 1,180,454 679,814 540,701 675,240 683,952 19,841 - - - - 3,780,001 Annualised cash passing rental income 61,492 33,902 29,309 41,560 36,806 1,135 - - - - 204,205 Property outgoings° -53 -2,367 -1,006 -4,311 -263 -100 - - - - -8,100 Annualised net rents 61,440 31,535 28,303 37,249 36,542 1,035 - - - - 196,105 Add: notional rent expiration of rent free periods or other lease incentives 70 2,007 622 1,298 612 0 - - - - 4,610 Topped-up net annualised rent 61,509 33,542 28,925 38,548 37,155 1,035 - - - - 200,715 EPRA NIY (in %) 5.2% 4.6% 5.2% 5.5% 5.3% 5.2% - - - - 5.2% EPRA Topped-up NIY (in %) 5.2% 4.9% 5.3% 5.7% 5.4% 5.2% - - - - 5.3% ° The scope of the real-estate charges to be excluded for calculating the EPRA Net Initial Yield is defined in the EPRA Best Practices and does not correspond to ‘real-estate charges’ as presented in the consolidated IFRS accounts. – 159 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION Aedifica – Annual Financial Report 2021 – 6 5. Investment properties – rental data Investment properties – Rental data 31/12/2021 x €1,000 Gross rental income¹ Net rental income² Lettable space (in m²) Contractual rents³ Estimated rental value (ERV) on empty spaces Estimated rental value (ERV) EPRA Vacancy rate (in %) Segment Belgium 62,548 61,945 507,461 63,875 - 62,385 0.0% Germany 44,969 43,699 588,686 55,214 - 54,917 0.0% Netherlands 29,132 27,457 348,223 31,255 661 31,514 2.1% United Kingdom 48,575 45,627 289,471 52,867 - 50,771 0.0% Finland 38,276 36,384 221,756 46,518 563 44,799 1.3% Sweden 1,958 1,818 15,991 3,892 - 4,043 0.0% Ireland 2,504 2,490 43,070 4,880 - 4,759 0.0% Spain - - - - - - 0.0% Non-allocated - - - - - - 0.0% Intersegment items - - - - - - 0.0% Total marketable investment properties 227,962 219,420 2,014,658 258,500 1,223 253,188 0.5% Reconciliation to income statement Properties sold during the 2021 financial year 1,175 1,225 Properties held for sale 2,295 2,295 Other Adjustments - - Total marketable investment properties 231,432 222,940 Investment properties – Rental data 31/12/2020 (18 months) x €1,000 Gross rental income¹ Net rental income² Lettable space (in m²) Contractual rents³ Estimated rental value (ERV) on empty spaces Estimated rental value (ERV) EPRA Vacancy rate (in %) Segment Belgium 86,182 86,125 495,424 61,562 - 60,490 0.0% Germany 49,168 46,672 433,680 35,909 - 35,468 0.0% Netherlands 35,082 34,130 359,812 29,932 41 29,683 0.1% United Kingdom 56,685 52,369 261,066 42,859 - 41,739 0.0% Finland 26,624 26,162 189,161 37,418 366 37,472 1.0% Sweden 272 77 4,731 1,135 - 1,135 0.0% Ireland - - - - - - 0.0% Spain - - - - - - 0.0% Non-allocated - - - - - - 0.0% Intersegment items - - - - - - 0.0% Total marketable investment properties 254,013 245,535 1,743,873 208,814 406 205,987 0.2% Reconciliation to income statement Properties sold during the 2019/2020 financial year 1,103 1,123 Properties held for sale 1,045 1,045 Other Adjustments - - Total marketable investment properties 256,161 247,703 1. The total ‘gross rental income’ defined in EPRA Best Practices, reconciled with the consolidated IFRS income statement, corresponds to the ‘net rental income’ of the consolidated IFRS accounts. 2. The total ‘net rental income’ defined in EPRA Best Practices, reconciled with the consolidated IFRS income statement, corresponds to the ‘property operating result’ of the consolidated IFRS accounts. 3. The current rent at the closing date plus future rent on leases signed as at 31 December 2020 or 31 December 2021. 160 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 7 – Aedifica – Annual Financial Report 2021 6. Investment properties – like-for-like net rental income Investment properties - Like-for-like net rental income 31/12/2021 31/12/2020 (12 months - restated period) x €1,000 Net rental income on a like-for-like basis ° Acquisitions Disposals Transfers due to completion Net rental income of the period °° Net rental income on a like-for-like basis ° Like-for- like net rental income Segment Belgium 58,137 2,649 0 1,159 61,945 56,691 2.55% Germany 33,823 5,869 717 3,290 43,699 32,209 5.01% Netherlands 23,292 2,781 -79 2,115 28,109 22,931 1.57% United Kingdom 38,756 5,647 626 1,858 46,888 37,669 2.89% Finland 22,619 15,372 0 0 37,991 23,617 -4.23% Sweden 18 1,800 0 0 1,818 -45 -139.62% Ireland -2,504 4,994 0 0 2,490 0 - Spain 0 0 0 0 0 - - Non-allocated 0 0 0 0 0 - Intersegment items 0 0 0 0 0 - Total marketable investment properties 174,142 39,112 1,264 8,422 222,940 173,071 0.62% Reconciliation to income statement Properties sold during the 2021 financial year 0 Properties held for sale 0 Other adjustments 0 Total marketable investment properties 222,940 ° Marketable investment properties owend throughout the 2 financial years. °° The total ‘net rental income’ defined in EPRA Best Practices, reconciled with the consolidated IFRS income statement, corresponds to the “property operating result” of the consolidated IFRS accounts. – 161 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION Aedifica – Annual Financial Report 2021 – 8 7. Investment properties – valuation data Investment properties - Valuation data 31/12/2021 x €1,000 Fair value Changes in fair value EPRA NIY (in %) Reversion rate (in %) Segment Belgium 1,213,217 23,931 5.0 -2% Germany 1,057,513 31,359 4.4 -1% Netherlands 564,105 13,363 4.9 -1% United Kingdom 821,666 25,960 5.3 -4% Finland 859,850 54,636 5.0 -5% Sweden 78,329 5,542 4.7 4% Ireland 91,841 -1,272 4.6 -3% Spain 0 0 0.0 0% Total marketable investment properties including assets as held for sale 4,686,521 153,519 4.9 -3% Reconciliation to the consolidated IFRS balance sheet Development projects 151,954 6,692 Total investment properties including assets classified as held for sale, or real estate portfolio 4,838,475 160,211 Investment properties - Valuation data 31/12/2020 x €1,000 Fair value Changes in fair value EPRA NIY (in %) Reversion rate (in %) Segment Belgium 1,151,419 27,416 5.2 -2% Germany 634,220 26,827 4.6 -1% Netherlands 515,768 3,510 5.2 -1% United Kingdom 633,302 -5,339 5.5 -3% Finland 667,270 -10,375 5.3 -1% Sweden 19,543 -109 5.2 0% Ireland 0 0 0.0 0% Spain 0 0 0.0 0% Total marketable investment properties including assets as held for sale 3,621,522 41,930 5.2 -2% Reconciliation to the consolidated IFRS balance sheet Development projects 141,320 -16,881 Total investment properties including assets classified as held for sale, or real estate portfolio 3,762,842 25,049 162 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 9 – Aedifica – Annual Financial Report 2021 8. Investment properties – lease data Investment properties - Lease data 31/12/2021 x €1,000 Current rent of leases expiring (x €1.000) Average remaining maturity° (in years) Not later than one year Later than one year and not later than two years Later than two years and not later than five years Later than five years Segment Belgium 22 0 0 32 63,843 Germany 23 456 0 0 54,758 Netherlands 18 0 0 82 31,173 United Kingdom 22 0 0 0 52,867 Finland 12 708 0 422 45,387 Sweden 13 0 129 0 3,763 Ireland 24 0 0 0 4,880 Spain 0 0 0 0 0 Total marketable investment properties including assets as held for sale 20 1,164 129 536 256,671 ° Termination at following possible break. 9. Properties being constructed or developed Situation as per 31 December 2021 (in € million) Cost to date Costs to completion Future interest to be capitalised Forecast total cost Forecast completion date Lettable space (in m²) % Pre- let ERV on completion Total 140 619 8 767 2026 ± 198.000 100% 36.0 Situation as per 31 December 2020 (in € million) Cost to date Costs to completion Future interest to be capitalised Forecast total cost Forecast completion date Lettable space (in m²) % Pre- let ERV on completion Total 128 624 3 756 2023 ± 195.000 100% 39.6 The breakdown for these projects is provided in section 2.2. of the property report. – 163 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION Aedifica – Annual Financial Report 2021 – 10 10. EPRA Cost Ratios EPRA Cost ratios (x €1,000) 31/12/2021 31/12/2020 (12 months - restated period) 31/12/2020 (18 months) Administrative/operating expense line per IFRS statement -38,791 -35,981 -47,883 Rental-related charges -686 -2,752 -3,344 Recovery of property charges 0 0 0 Charges and taxes not recovered by the tenant on let properties according to the income statement 116 0 0 Other rental-related income and charges -1,013 -10 53 Technical costs -1,432 -544 -680 Commercial costs -61 -329 -358 Charges and taxes on unlet properties -2 0 0 Property management costs -5,433 -4,396 -6,246 Other property charges -667 -876 -1,227 Overheads -30,930 -27,096 -36,096 Other operating income and charges 1,317 22 15 EPRA Costs (including direct vacancy costs) (A) -38,791 -35,981 -47,883 Charges and taxes on unlet properties 2 0 0 EPRA Costs (excluding direct vacancy costs) (B) -38,789 -35,981 -47,883 Gross Rental Income (C) 232,118 187,535 259,505 EPRA Cost Ratio (including direct vacancy costs) (A/C) 16.7% 19.2% 18.5% EPRA Cost Ratio (excluding direct vacancy costs) (B/C) 16.7% 19.2% 18.5% Overhead and operating expenses capitalised (including share of joint ventures) 618 786 816 Aedifica capitalises some project management costs. 11. Capital expenditure Capital expenditure 31/12/2021 31/12/2020 Property related capex (1) Acquisitions 625,372 1,152,561 (2) Development 273,370 251,050 (3) Investment properties 11,109 35,563 Incremental lettable space 7,703 20,203 No incremental lettable space 3,406 15,360 Capex related incentives 0 0 Other 0 0 (4) Capitalised interests 3,321 2,959 Capital expenditure 913,172 1,442,133 164 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE Financial statements 166 1.CONSOLIDATEDFINANCIAL STATEMENTS 166 1. CONSOLIDATED FINANCIAL STATEMENTS 166 1.1 CONSOLIDATED FINANCIAL STATEMENTS 167 1.2 CONSOLIDATED STATEMENT OF COMPREHENSIVE FINANCIAL INCOME 167 1.3 CONSOLIDATED BALANCE SHEET 169 1.4 CONSOLIDATED CASH FLOW STATEMENT 170 1.5 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 172 1.6 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 172 Note 1 General information 172 Note 2 Acccounting policies 178 Note 3 Operating segments 182 Note 4 Net rental income 183 Note 5 Property result 183 Note 6 Property operating result 184 Note 7 Overheads 185 Note 8 Other operating income and charges 185 Note 9 Gains and losses on disposals of investment properties 186 Note 10 Gains and losses on disposals of other non-nancial assets 186 Note 11 Changes in fair value of investment properties 186 Note 12 Other result on portfolio 186 Note 13 Financial income 187 Note 14 Net interest charges 187 Note 15 Other nancial charges 188 Note 16 Changes in fair value of nancial assets and liabilities 188 Note 17 Share in the prot or loss of associates and joint ventures 189 Note 18 Tax 190 Note 19 Earnings per share 191 Note 20 Goodwill 192 Note 21 Intangible asstes 192 Note 22 Investment properties 195 Note 23 Other tangible assets 195 Note 24 Non-current nancial assets and other nancial liabilities 196 Note 25 Deferred taxes 196 Note 26 Trade receivables 197 Note 27 Tax receivables and other current assets 197 Note 28 Cash and cash equivalents 197 Note 29 Deferred charges and accrued income 198 Note 30 Equity 200 Note 31 Provision 201 Note 32 Borrowings 203 Note 33 Hedging instruments 206 Note 34 Trade payables and other current debts 206 Note 35 Accrued charges and deferred income 206 Note 36 Financial risk management 209 Note 37 Contingencies and commitments 211 Note 38 Acquisitions and disposals of investment properties 213 Note 39 Post-closing events 213 Note 40 List of subsidiaries, associates and joint ventures 219 Note 41 Belgian RECC status 219 Note 42 Fair value 220 Note 43 Put options granted to non-controlling shareholders 220 Note 44 Alternative Performance Measures (APMs) 223 Note 45 Business combinations 224 ABRIDGEDSTATUTORYFINANCIAL STATEMENTS2021 225 ABRIDGED STATUTORY INCOME STATEMENT 225 ABRIDGED STATUTORY STATEMENT OF COMPREHENSIVE INCOME 225 ABRIDGED STATUTORY BALANCE SHEET 227 ABRIDGED STATUTORY STATEMENT OF CHANGES IN EQUITY 229 ABRIDGED STATUTORY APPROPRIATION ACCOUNT 230 CORRECTED PROFIT AS DEFINED IN THE ROYAL DECREE OF 13 JULY 2014 231 ABRIDGED STATUTORY STATEMENT OF CHANGES IN EQUITY AFTER APPROPRIATION OF THE YEAR’S RESULT – 165 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 166 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 1 – Aedifica – Annual Financial Report 2021 1. Consolidated Financial Statements 1.1 Consolidated Income Statement (x €1,000) Notes 31/12/2021 31/12/2020 (12 months - restated period) 31/12/2020 (18 months) I. Rental income 4 232,118 187,535 259,505 II. Writeback of lease payments sold and discounted 0 0 0 III. Rental-related charges 4 -686 -2,752 -3,344 Net rental income 231,432 184,783 256,161 IV. Recovery of property charges 5 0 0 0 V. Recovery of rental charges and taxes normally paid by tenants on let properties 5 4,244 3,499 3,810 VI. Costs payable by the tenant and borne by the landlord on rental damage and repair at end of lease 5 0 0 0 VII. Charges and taxes not recovered by the tenant on let properties according to the income statement 5 -4,128 -3,499 -3,810 VIII. Other rental-related income and charges 5 -1,013 -10 53 Property result 230,535 184,773 256,214 IX. Technical costs 6 -1,432 -544 -680 X. Commercial costs 6 -61 -329 -358 XI. Charges and taxes on unlet properties 6 -2 0 0 XII. Property management costs 6 -5,433 -4,396 -6,246 XIII. Other property charges 6 -667 -876 -1,227 Property charges -7,595 -6,145 -8,511 Property operating result 222,940 178,628 247,703 XIV. Overheads 7 -30,930 -27,096 -36,096 XV. Other operating income and charges 8 1,317 22 15 Operating result before result on portfolio 193,327 151,554 211,622 XVI. Gains and losses on disposals of investment properties 9 534 -1,827 -559 XVII. Gains and losses on disposals of other non-financial assets 10 0 0 0 XVIII. Changes in fair value of investment properties 11 160,211 5,070 25,049 XIX. Other result on portfolio 12 -3,540 0 0 Operating result 350,532 154,797 236,112 XX. Financial income 13 843 488 478 XXI. Net interest charges 14 -27,548 -25,135 -33,688 XXII. Other financial charges 15 -5,457 -3,676 -5,545 XXIII. Changes in fair value of financial assets and liabilities 16 14,813 -5,587 -2,169 Net finance costs -17,349 -33,910 -40,924 XXIV. Share in the profit or loss of associates and joint ventures accounted for using the equity method 17 6,371 1,978 4,575 Profit before tax (loss) 339,554 122,865 199,763 XXV. Corporate tax 18 -56,473 -18,856 -26,401 XXVI. Exit tax 18 -256 112 60 Tax expense -56,729 -18,744 -26,341 Profit (loss) 282,825 104,121 173,422 Attributable to: Non-controlling interests 1,001 227 354 Owners of the parent 281,824 103,894 173,068 Basic earnings per share (€) 19 8.10 3.78 6.53 Diluted earnings per share (€) 19 8.10 3.78 6.52 In order to allow comparison with the previous period (due to the extension of the 2019/2020 financial year), the figures as of 31 December 2020 were derived on a 12-month basis (with the exception of the denominators (IAS 33) which were recalculated for each period). The periods 12/2021 (12 months) and 12/2020 (18 months) were audited. For the restated period, the auditors conducted a number of review procedures and no issues were identified. – 167 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 1 – Aedifica – Annual Financial Report 2021 1. Consolidated Financial Statements 1.1 Consolidated Income Statement (x €1,000) Notes 31/12/2021 31/12/2020 (12 months - restated period) 31/12/2020 (18 months) I. Rental income 4 232,118 187,535 259,505 II. Writeback of lease payments sold and discounted 0 0 0 III. Rental-related charges 4 -686 -2,752 -3,344 Net rental income 231,432 184,783 256,161 IV. Recovery of property charges 5 0 0 0 V. Recovery of rental charges and taxes normally paid by tenants on let properties 5 4,244 3,499 3,810 VI. Costs payable by the tenant and borne by the landlord on rental damage and repair at end of lease 5 0 0 0 VII. Charges and taxes not recovered by the tenant on let properties according to the income statement 5 -4,128 -3,499 -3,810 VIII. Other rental-related income and charges 5 -1,013 -10 53 Property result 230,535 184,773 256,214 IX. Technical costs 6 -1,432 -544 -680 X. Commercial costs 6 -61 -329 -358 XI. Charges and taxes on unlet properties 6 -2 0 0 XII. Property management costs 6 -5,433 -4,396 -6,246 XIII. Other property charges 6 -667 -876 -1,227 Property charges -7,595 -6,145 -8,511 Property operating result 222,940 178,628 247,703 XIV. Overheads 7 -30,930 -27,096 -36,096 XV. Other operating income and charges 8 1,317 22 15 Operating result before result on portfolio 193,327 151,554 211,622 XVI. Gains and losses on disposals of investment properties 9 534 -1,827 -559 XVII. Gains and losses on disposals of other non-financial assets 10 0 0 0 XVIII. Changes in fair value of investment properties 11 160,211 5,070 25,049 XIX. Other result on portfolio 12 -3,540 0 0 Operating result 350,532 154,797 236,112 XX. Financial income 13 843 488 478 XXI. Net interest charges 14 -27,548 -25,135 -33,688 XXII. Other financial charges 15 -5,457 -3,676 -5,545 XXIII. Changes in fair value of financial assets and liabilities 16 14,813 -5,587 -2,169 Net finance costs -17,349 -33,910 -40,924 XXIV. Share in the profit or loss of associates and joint ventures accounted for using the equity method 17 6,371 1,978 4,575 Profit before tax (loss) 339,554 122,865 199,763 XXV. Corporate tax 18 -56,473 -18,856 -26,401 XXVI. Exit tax 18 -256 112 60 Tax expense -56,729 -18,744 -26,341 Profit (loss) 282,825 104,121 173,422 Attributable to: Non-controlling interests 1,001 227 354 Owners of the parent 281,824 103,894 173,068 Basic earnings per share (€) 19 8.10 3.78 6.53 Diluted earnings per share (€) 19 8.10 3.78 6.52 In order to allow comparison with the previous period (due to the extension of the 2019/2020 financial year), the figures as of 31 December 2020 were derived on a 12-month basis (with the exception of the denominators (IAS 33) which were recalculated for each period). The periods 12/2021 (12 months) and 12/2020 (18 months) were audited. For the restated period, the auditors conducted a number of review procedures and no issues were identified. Aedifica – Annual Financial Report 2021 – 2 1.2 Consolidated Statement of Comprehensive Income (x €1,000) 31/12/2021 31/12/2020 I. Profit (loss) 282,825 173,422 II. Other comprehensive income recyclable under the income statement A. Impact on fair value of estimated transaction costs resulting from hypothetical disposal of investment properties 0 0 B. Changes in the effective part of the fair value of authorised cash flow hedge instruments as defined under IFRS 4,273 -3,419 D. Currency translation differences linked to conversion of foreign activities 39,626 -6,092 H. Other comprehensive income, net of taxes 3,306 5,149 Comprehensive income 330,029 169,061 Attributable to: Non-controlling interests 1,001 354 Owners of the parent 329,028 168,707 1.3 Consolidated Balance Sheet ASSETS Notes 31/12/2021 31/12/2020 (x €1,000) I. Non-current assets A. Goodwill 20 161,726 161,726 B. Intangible assets 21 1,934 1,790 C. Investment properties 22 4,861,062 3,808,539 D. Other tangible assets 23 2,369 2,813 E. Non-current financial assets 24 & 33 7,479 1,162 F. Finance lease receivables 0 0 G. Trade receivables and other non-current assets 0 0 H. Deferred tax assets 25 3,116 2,902 I. Equity-accounted investments 17 40,522 36,998 Total non-current assets 5,078,208 4,015,930 II. Current assets A. Assets classified as held for sale 22 35,360 6,128 B. Current financial assets 0 0 C. Finance lease receivables 0 0 D. Trade receivables 26 20,434 12,698 E. Tax receivables and other current assets 27 7,368 5,177 F. Cash and cash equivalents 28 15,335 23,546 G. Deferred charges and accrued income 29 5,162 3,696 Total current assets 83,659 51,245 TOTAL ASSETS 5,161,867 4,067,175 168 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 3 – Aedifica – Annual Financial Report 2021 EQUITY AND LIABILITIES Notes 31/12/2021 31/12/2020 (x €1,000) EQUITY 30 I. Issued capital and reserves attributable to owners of the parent A. Capital 917,101 836,401 B. Share premium account 1,301,002 1,054,109 C. Reserves 281,244 106,733 a. Legal reserve 0 0 b. Reserve for the balance of changes in fair value of investment properties 349,234 288,647 c. Reserve for estimated transaction costs resulting from hypothetical disposal of investment properties -125,020 -85,908 d. Reserve for the balance of changes in fair value of authorised hedging instruments qualifying for hedge accounting as defined under IFRS -12,784 -23,233 e. Reserve for the balance of changes in fair value of authorised hedging instruments not qualifying for hedge accounting as defined under IFRS -26,872 -25,901 f. Reserve of exchange differences relating to foreign currency monetary items 72 0 g. Foreign currency translation reserves 24,869 -14,757 h. Reserve for treasury shares 0 0 k. Reserve for deferred taxes on investment properties located abroad -24,696 -9,463 m. Other reserves 3,015 -1,806 n. Result brought forward from previous years 87,532 -25,241 o. Reserve- share NI & OCI of equity method invest 5,894 4,395 D. Profit (loss) of the year 281,824 173,068 Equity attributable to owners of the parent 2,781,171 2,170,311 II. Non-controlling interests 4,226 2,625 TOTAL EQUITY 2,785,397 2,172,936 LIABILITIES I. Non-current liabilities A. Provisions 31 0 0 B. Non-current financial debts 32 1,756,679 1,062,297 a. Borrowings 959,522 985,412 c. Other 797,157 76,885 C. Other non-current financial liabilities 24 96,154 108,060 a. Authorised hedges 33 33,326 51,220 b. Other 62,828 56,840 D. Trade debts and other non-current debts 500 0 E. Other non-current liabilities 0 0 F. Deferred tax liabilities 25 121,283 74,609 Non-current liabilities 1,974,616 1,244,966 II. Current liabilities A. Provisions 31 0 0 B. Current financial debts 32 324,398 604,402 a. Borrowings 48,398 313,902 c. Other 276,000 290,500 C. Other current financial liabilities 24 2,616 2,077 D. Trade debts and other current debts 34 50,109 32,067 a. Exit tax 298 2,295 b. Other 49,811 29,772 E. Other current liabilities 0 0 F. Accrued charges and deferred income 35 24,731 10,727 Total current liabilities 401,854 649,273 TOTAL LIABILITIES 2,376,470 1,894,239 TOTAL EQUITY AND LIABILITIES 5,161,867 4,067,175 – 169 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 3 – Aedifica – Annual Financial Report 2021 EQUITY AND LIABILITIES Notes 31/12/2021 31/12/2020 (x €1,000) EQUITY 30 I. Issued capital and reserves attributable to owners of the parent A. Capital 917,101 836,401 B. Share premium account 1,301,002 1,054,109 C. Reserves 281,244 106,733 a. Legal reserve 0 0 b. Reserve for the balance of changes in fair value of investment properties 349,234 288,647 c. Reserve for estimated transaction costs resulting from hypothetical disposal of investment properties -125,020 -85,908 d. Reserve for the balance of changes in fair value of authorised hedging instruments qualifying for hedge accounting as defined under IFRS -12,784 -23,233 e. Reserve for the balance of changes in fair value of authorised hedging instruments not qualifying for hedge accounting as defined under IFRS -26,872 -25,901 f. Reserve of exchange differences relating to foreign currency monetary items 72 0 g. Foreign currency translation reserves 24,869 -14,757 h. Reserve for treasury shares 0 0 k. Reserve for deferred taxes on investment properties located abroad -24,696 -9,463 m. Other reserves 3,015 -1,806 n. Result brought forward from previous years 87,532 -25,241 o. Reserve- share NI & OCI of equity method invest 5,894 4,395 D. Profit (loss) of the year 281,824 173,068 Equity attributable to owners of the parent 2,781,171 2,170,311 II. Non-controlling interests 4,226 2,625 TOTAL EQUITY 2,785,397 2,172,936 LIABILITIES I. Non-current liabilities A. Provisions 31 0 0 B. Non-current financial debts 32 1,756,679 1,062,297 a. Borrowings 959,522 985,412 c. Other 797,157 76,885 C. Other non-current financial liabilities 24 96,154 108,060 a. Authorised hedges 33 33,326 51,220 b. Other 62,828 56,840 D. Trade debts and other non-current debts 500 0 E. Other non-current liabilities 0 0 F. Deferred tax liabilities 25 121,283 74,609 Non-current liabilities 1,974,616 1,244,966 II. Current liabilities A. Provisions 31 0 0 B. Current financial debts 32 324,398 604,402 a. Borrowings 48,398 313,902 c. Other 276,000 290,500 C. Other current financial liabilities 24 2,616 2,077 D. Trade debts and other current debts 34 50,109 32,067 a. Exit tax 298 2,295 b. Other 49,811 29,772 E. Other current liabilities 0 0 F. Accrued charges and deferred income 35 24,731 10,727 Total current liabilities 401,854 649,273 TOTAL LIABILITIES 2,376,470 1,894,239 TOTAL EQUITY AND LIABILITIES 5,161,867 4,067,175 Aedifica – Annual Financial Report 2021 – 4 1.4 Consolidated Cash Flow Statement (x €1,000) Notes 31/12/2021 31/12/2020 (18 months) CASH FLOW FROM OPERATING ACTIVITIES Profit (loss) 19 281,824 173,068 Non-controlling interests 1,001 354 Tax expense 18 56,729 26,342 Amortisation and depreciation 5 & 7 1,660 2,035 Write-downs 4 685 3,353 Change in fair value of investment properties (+/-) 11 -160,211 -25,049 Gains and losses on disposals of investment properties 9 -534 559 Net finance costs 13 & 14 & 15 32,162 38,755 Changes in fair value of the derivatives 16 -14,813 2,169 Goodwill impairment 12 3,540 0 Change in fair value of investments in entities consolidated through equity method 17 -3,525 -3,067 Changes in trade receivables (+/-) -8,419 -4,360 Changes in tax receivables and other current assets (+/-) -2,132 -966 Changes in deferred charges and accrued income (+/-) -3,195 -748 Changes in trade payables and other current debts (excl. exit tax) (+/-) 20,570 -625 Changes in accrued charges and deferred income (+/-) 15,381 -459 Changes in net assets resulting from foreign exchange differences linked to the conversion of foreign operations (+/-) -6,891 -17,523 Cash generated from operations 213,832 193,838 Taxes paid -15,560 -12,736 Net cash from operating activities 198,272 181,102 CASH FLOW RESULTING FROM INVESTING ACTIVITIES Goodwill 20 -3,540 -161,726 Purchase of intangible assets -144 -1,274 Purchase of real estate companies and marketable investment properties -557,448 -707,576 Purchase of tangible assets -579 -1,559 Purchase of development projects -312,708 -360,691 Disposals of investment properties 53,668 23,348 Net changes in non-current receivables -176 -606 Net investments in other assets 0 0 Net cash from investing activities -820,927 -1,210,084 CASH FLOW FROM FINANCING ACTIVITIES Capital increase, net of costs° 281,156 654,125 Disposals of treasury shares 0 0 Dividend for previous fiscal year and interim dividend -47,748 -130,158 Net changes in borrowings 417,860 540,776 Net changes in other non-current financial liabilities 782 12,163 Net financial items received (+) / paid (-) -37,606 -39,783 Repayment of financial debts of acquired or merged companies°° 0 0 Repayment of working capital of acquired or merged companies°° 0 0 Net cash from financing activities 614,444 1,037,123 TOTAL CASH FLOW FOR THE PERIOD Total cash flow for the period -8,211 8,141 RECONCILIATION WITH BALANCE SHEET Cash and cash equivalents at beginning of period 23,546 15,405 Total cash flow for the period -8,211 8,141 Cash and cash equivalents at end of period 28 15,335 23,546 ° Some types of capital increases (contributions in kind, partial demergers) do not result in any cash flow. °° On 31 December 2020, repayments of financial debts and of working capital of acquired or merged companies are included in the cash flow resulting from investing activities under the line "Purchase of real estate companies and marketable investment properties". 170 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 5 – Aedifica – Annual Financial Report 2021 1.5 Consolidated Statement of Changes in Equity (x €1,000) 1/07/2019 Capital increase in cash Capital increase in kind Interim dividend Acquisitions / disposals of treasury shares Consolidated comprehensive income Appropriation of the previous year's result Other transfer relating to asset disposals Transfers between reserves Other and roundings 31/12/2020 Capital 624,713 198,311 13,377 0 0 0 0 0 0 1 836,401 Share premium account 565,068 455,814 33,227 0 0 0 0 0 0 0 1,054,109 Reserves 116,271 0 0 -75,309 0 -4,360 69,273 0 0 857 106,732 a. Legal reserve 0 0 0 0 0 0 0 0 0 0 0 b. Reserve for the balance of changes in fair value of investment properties 171,274 0 0 0 0 0 115,578 1,796 0 -1 288,647 c. Reserve for estimated transaction costs resulting from hypothetical disposal of investment properties -40,977 0 0 0 0 0 -44,941 10 0 0 -85,908 d. Reserve for the balance of changes in fair value of authorised hedging instruments qualifying for hedge accounting as defined under IFRS -24,960 0 0 0 0 1,731 -4 0 0 0 -23,233 e. Reserve for the balance of changes in fair value of authorised hedging instruments not qualifying for hedge accounting as defined under IFRS -18,991 0 0 0 0 0 -6,910 0 0 0 -25,901 f. Reserve of exchange differences relating to foreign currency monetary items -4,573 0 0 0 0 0 0 0 4,573 0 0 g. Foreign currency translation reserves -4,093 0 0 0 0 -6,092 0 0 -4,573 0 -14,757 h. Reserve for treasury shares 0 0 0 0 0 0 0 0 0 0 0 k. Reserve for deferred taxes on investment properties located abroad -3,824 0 0 0 0 0 -5,638 0 0 -1 -9,463 m. Other reserves 796 0 0 0 0 0 -796 -1,805 0 -1 -1,806 n. Result brought forward from previous years 41,619 0 0 -75,309 0 0 11,984 0 -4,395 860 -25,240 o. Reserve- share NI & OCI of equity method invest 0 0 0 0 0 0 0 0 4,395 0 4,395 Profit (loss) 123,497 0 0 0 0 173,068 -123,497 0 0 0 173,068 Equity attributable to owners of the parent 1,429,549 654,125 46,603 -75,309 0 168,707 -54,223 0 0 858 2,170,311 Non-controlling interests 103 0 0 0 0 354 0 0 0 2,168 2,625 TOTAL EQUITY 1,429,652 654,125 46,603 -75,309 0 169,061 -54,223 0 0 3,027 2,172,936 – 171 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 5 – Aedifica – Annual Financial Report 2021 1.5 Consolidated Statement of Changes in Equity (x €1,000) 1/07/2019 Capital increase in cash Capital increase in kind Interim dividend Acquisitions / disposals of treasury shares Consolidated comprehensive income Appropriation of the previous year's result Other transfer relating to asset disposals Transfers between reserves Other and roundings 31/12/2020 Capital 624,713 198,311 13,377 0 0 0 0 0 0 1 836,401 Share premium account 565,068 455,814 33,227 0 0 0 0 0 0 0 1,054,109 Reserves 116,271 0 0 -75,309 0 -4,360 69,273 0 0 857 106,732 a. Legal reserve 0 0 0 0 0 0 0 0 0 0 0 b. Reserve for the balance of changes in fair value of investment properties 171,274 0 0 0 0 0 115,578 1,796 0 -1 288,647 c. Reserve for estimated transaction costs resulting from hypothetical disposal of investment properties -40,977 0 0 0 0 0 -44,941 10 0 0 -85,908 d. Reserve for the balance of changes in fair value of authorised hedging instruments qualifying for hedge accounting as defined under IFRS -24,960 0 0 0 0 1,731 -4 0 0 0 -23,233 e. Reserve for the balance of changes in fair value of authorised hedging instruments not qualifying for hedge accounting as defined under IFRS -18,991 0 0 0 0 0 -6,910 0 0 0 -25,901 f. Reserve of exchange differences relating to foreign currency monetary items -4,573 0 0 0 0 0 0 0 4,573 0 0 g. Foreign currency translation reserves -4,093 0 0 0 0 -6,092 0 0 -4,573 0 -14,757 h. Reserve for treasury shares 0 0 0 0 0 0 0 0 0 0 0 k. Reserve for deferred taxes on investment properties located abroad -3,824 0 0 0 0 0 -5,638 0 0 -1 -9,463 m. Other reserves 796 0 0 0 0 0 -796 -1,805 0 -1 -1,806 n. Result brought forward from previous years 41,619 0 0 -75,309 0 0 11,984 0 -4,395 860 -25,240 o. Reserve- share NI & OCI of equity method invest 0 0 0 0 0 0 0 0 4,395 0 4,395 Profit (loss) 123,497 0 0 0 0 173,068 -123,497 0 0 0 173,068 Equity attributable to owners of the parent 1,429,549 654,125 46,603 -75,309 0 168,707 -54,223 0 0 858 2,170,311 Non-controlling interests 103 0 0 0 0 354 0 0 0 2,168 2,625 TOTAL EQUITY 1,429,652 654,125 46,603 -75,309 0 169,061 -54,223 0 0 3,027 2,172,936 Aedifica – Annual Financial Report 2021 – 6 (x €1,000) 1/01/2021 Capital increase in cash Capital increase in kind Interim dividend Acquisitions / disposals of treasury shares Consolidated comprehensive income Appropriation of the previous year's result Other transfer relating to asset disposals Transfers between reserves Other and roundings 31/12/2021 Capital 836,401 69,603 11,098 0 0 0 0 0 0 -1 917,101 Share premium account 1,054,109 211,714 35,179 0 0 0 0 0 0 0 1,301,002 Reserves 106,732 0 0 0 0 47,204 125,887 0 0 1,421 281,244 a. Legal reserve 0 0 0 0 0 0 0 0 0 0 0 b. Reserve for the balance of changes in fair value of investment properties 288,647 0 0 0 0 0 34,048 -3,886 30,424 0 349,234 c. Reserve for estimated transaction costs resulting from hypothetical disposal of investment properties -85,908 0 0 0 0 0 -39,982 871 0 -1 -125,020 d. Reserve for the balance of changes in fair value of authorised hedging instruments qualifying for hedge accounting as defined under IFRS -23,233 0 0 0 0 10,452 -3 0 0 0 -12,784 e. Reserve for the balance of changes in fair value of authorised hedging instruments not qualifying for hedge accounting as defined under IFRS -25,901 0 0 0 0 0 -970 0 0 -1 -26,872 f. Reserve of exchange differences relating to foreign currency monetary items 0 0 0 0 0 0 72 0 0 0 72 g. Foreign currency translation reserves -14,757 0 0 0 0 39,626 0 0 0 1 24,869 h. Reserve for treasury shares 0 0 0 0 0 0 0 0 0 0 0 k. Reserve for deferred taxes on investment properties located abroad -9,463 0 0 0 0 0 -15,233 0 0 0 -24,696 m. Other reserves -1,806 0 0 0 0 0 1,805 3,015 0 1 3,015 n. Result brought forward from previous years -25,240 0 0 0 0 -2,874 144,651 0 -30,424 1,421 87,533 o. Reserve- share NI & OCI of equity method invest 4,395 0 0 0 0 0 1,499 0 0 0 5,894 Profit (loss) 173,068 0 0 0 0 281,824 -173,068 0 0 0 281,824 Equity attributable to owners of the parent 2,170,311 281,317 46,277 0 0 329,028 -47,181 0 0 1,420 2,781,171 Non-controlling interests 2,625 0 0 0 0 1,001 0 0 0 600 4,226 TOTAL EQUITY 2,172,936 281,317 46,277 0 0 330,029 -47,181 0 0 2,020 2,785,397 172 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 7 – Aedifica – Annual Financial Report 2021 1.6 Notes to the Consolidated Financial Statements Note 1: General information Aedifica NV/SA (referred to in the financial statements as ‘the Company’ or ‘the Parent’) is a limited liability company having opted for public Regulated Real Estate Company (RREC) status under Belgian law. The Company is entered in the Brussels Registry of Legal Entities (R.L.E., or ‘R.P.M.’ in French / ‘R.P.R.’ in Dutch) under No. 0877.248.501. Its primary shareholders are listed in Note 30 of this annual financial report. The address of its office is the following: Rue Belliard 40, B-1040 Brussels (telephone: +32 (0)2 626 07 70). The Aedifica group (referred to in the financial statements as ‘the Group’) is composed of the parent-company and its subsidiaries. The subsidiaries of the Aedifica group are listed in Note 40. Aedifica is listed on Euronext Brussels (2006) and Euronext Amsterdam (2019). Publication of the Consolidated Financial Statements was approved by the Board of Directors on 22 February 2022. Aedifica’s shareholders have the opportunity to amend the Consolidated Financial Statements after publication at the Annual General Meeting, which will take place on 10 May 2022. Note 2: Accounting policies Note 2.1: Basis of preparation The Consolidated Financial Statements cover the 12-month period from 1 January 2021 to 31 December 2021. They have been prepared in accordance with the International Financial Reporting Standards (‘IFRS’) and the interpretations as published by the Internat ional Accounting Standards Board (‘IASB’) and the International Financial Reporting Interpretations Committee (‘IFRIC’), to the extent to which they are applicable to the Group's activities and are effective for the financial years starting on or after 31 December 2020. The Consolidated Financial Statements have also been prepared in accordance with the Royal Decree of 13 July 2014 on Regulated Real Estate Companies. The Consolidated Financial Statements are prepared in euros, and presented in thousands of euros. The Consolidated Financial Statements have been prepared with application of the historical cost convention, except for the following assets and liabilities, which are measured at fair value: investment properties, investment properties held for sale, financial assets and liabilities held for hedging purposes or not (mainly derivatives), put options granted to non-controlling shareholders and equity-accounted investments. The Consolidated Financial Statements have been prepared in accordance with accrual accounting principles on a going concern basis. The preparation of the Consolidated Financial Statements in conformity with IFRS requires significant judgment in the application of accounting policies (including the classification of lease contracts, identification of business combinations, and calculation of deferred taxes) and the use of certain accounting estimates (such as impairment tests involving goodwill). Underlying assumptions are based on prior experience, input from third parties (notably real estate experts), and on other relevant factors. Actual results may vary on the basis of these estimations. Consequently, the assumptions and estimates are regularly revisited and modified as necessary. The new and amended standards and interpretations listed below are compulsory for the Group since 1 January 2021, but had no significant impact on the current Consolidated Financial Statements: - ‘Amendments to References to the Conceptual Framework in IFRS Standards’ published in March 2018; - amendments to IAS 1 and IAS 8 ‘Definition of ‘Material’; - amendments to IFRS 7 and 9 and IAS 39 ‘Interest Rate Benchmark Reform’; - amendments to IFRS 4, 7, 9 and 16 and IAS 39 ‘Interest Rate Benchmark Reform – Phase 2’; - amendment to IFRS 3 ‘Business Combinations’; - amendment to IFRS 4 ‘Insurance contracts: deferral of IFRS 9’; - amendment to IFRS 16 ‘Leases: COVID-19-related rent concessions’ published in May 2020. Certain new standards, amendments and interpretations of existing standards have been published and will be compulsory for financial years starting on or after 1 January 2022. These amendments, which the Group did not apply early, are as follows (situation as at 3 March 2022): - new standard for IFRS 14 ‘Regulatory Deferral Accounts’ (for which no application date can be determined because the EU has decided not to start the approval process of this provisional standard, pending the publication of a final standard); - new standard for IFRS 17 ‘Insurance Contracts’ (applicable as from 1 January 2023); - ‘Annual Improvements to IFRS Standards 2018-2020’ (applicable as from 1 January 2022,); - new amendment to IFRS 3 ‘Business Combinations’ (applicable as from 1 January 2022,); - new amendment to IFRS 16 ‘Leases: COVID-19-related rent concessions’ (applicable as from 1 January 2022); – 173 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 7 – Aedifica – Annual Financial Report 2021 1.6 Notes to the Consolidated Financial Statements Note 1: General information Aedifica NV/SA (referred to in the financial statements as ‘the Company’ or ‘the Parent’) is a limited liability company having opted for public Regulated Real Estate Company (RREC) status under Belgian law. The Company is entered in the Brussels Registry of Legal Entities (R.L.E., or ‘R.P.M.’ in French / ‘R.P.R.’ in Dutch) under No. 0877.248.501. Its primary shareholders are listed in Note 30 of this annual financial report. The address of its office is the following: Rue Belliard 40, B-1040 Brussels (telephone: +32 (0)2 626 07 70). The Aedifica group (referred to in the financial statements as ‘the Group’) is composed of the parent-company and its subsidiaries. The subsidiaries of the Aedifica group are listed in Note 40. Aedifica is listed on Euronext Brussels (2006) and Euronext Amsterdam (2019). Publication of the Consolidated Financial Statements was approved by the Board of Directors on 22 February 2022. Aedifica’s shareholders have the opportunity to amend the Consolidated Financial Statements after publication at the Annual General Meeting, which will take place on 10 May 2022. Note 2: Accounting policies Note 2.1: Basis of preparation The Consolidated Financial Statements cover the 12-month period from 1 January 2021 to 31 December 2021. They have been prepared in accordance with the International Financial Reporting Standards (‘IFRS’) and the interpretations as published by the Internat ional Accounting Standards Board (‘IASB’) and the International Financial Reporting Interpretations Committee (‘IFRIC’), to the extent to which they are applicable to the Group's activities and are effective for the financial years starting on or after 31 December 2020. The Consolidated Financial Statements have also been prepared in accordance with the Royal Decree of 13 July 2014 on Regulated Real Estate Companies. The Consolidated Financial Statements are prepared in euros, and presented in thousands of euros. The Consolidated Financial Statements have been prepared with application of the historical cost convention, except for the following assets and liabilities, which are measured at fair value: investment properties, investment properties held for sale, financial assets and liabilities held for hedging purposes or not (mainly derivatives), put options granted to non-controlling shareholders and equity-accounted investments. The Consolidated Financial Statements have been prepared in accordance with accrual accounting principles on a going concern basis. The preparation of the Consolidated Financial Statements in conformity with IFRS requires significant judgment in the application of accounting policies (including the classification of lease contracts, identification of business combinations, and calculation of deferred taxes) and the use of certain accounting estimates (such as impairment tests involving goodwill). Underlying assumptions are based on prior experience, input from third parties (notably real estate experts), and on other relevant factors. Actual results may vary on the basis of these estimations. Consequently, the assumptions and estimates are regularly revisited and modified as necessary. The new and amended standards and interpretations listed below are compulsory for the Group since 1 January 2021, but had no significant impact on the current Consolidated Financial Statements: - ‘Amendments to References to the Conceptual Framework in IFRS Standards’ published in March 2018; - amendments to IAS 1 and IAS 8 ‘Definition of ‘Material’; - amendments to IFRS 7 and 9 and IAS 39 ‘Interest Rate Benchmark Reform’; - amendments to IFRS 4, 7, 9 and 16 and IAS 39 ‘Interest Rate Benchmark Reform – Phase 2’; - amendment to IFRS 3 ‘Business Combinations’; - amendment to IFRS 4 ‘Insurance contracts: deferral of IFRS 9’; - amendment to IFRS 16 ‘Leases: COVID-19-related rent concessions’ published in May 2020. Certain new standards, amendments and interpretations of existing standards have been published and will be compulsory for financial years starting on or after 1 January 2022. These amendments, which the Group did not apply early, are as follows (situation as at 3 March 2022): - new standard for IFRS 14 ‘Regulatory Deferral Accounts’ (for which no application date can be determined because the EU has decided not to start the approval process of this provisional standard, pending the publication of a final standard); - new standard for IFRS 17 ‘Insurance Contracts’ (applicable as from 1 January 2023); - ‘Annual Improvements to IFRS Standards 2018-2020’ (applicable as from 1 January 2022,); - new amendment to IFRS 3 ‘Business Combinations’ (applicable as from 1 January 2022,); - new amendment to IFRS 16 ‘Leases: COVID-19-related rent concessions’ (applicable as from 1 January 2022); Aedifica – Annual Financial Report 2021 – 8 - amendment to IAS 1 ‘Presentation of Financial Statements: Classification of Liabilities as Current or Non-current’ (applicable as from 1 January 2023, subject to EU approval); - amendment to IAS 1 ‘Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting policies’ (applicable as from 1 January 2023); - amendment to IAS 8 ‘Accounting policies, Changes in Accounting Estimates and Errors: Definition of Accounting Estimates’ (applicable as from 1 January 2023); - amendment to IAS 12 ‘Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transaction’ (applicable as from 1 January 2023, subject to EU approval); - amendment to IAS 16 ‘Property, plant and equipment’ (applicable as from 1 January 2022); - amendment to IAS 37 ‘Provisions, contingent liabilities and contingent assets’ (applicable as from 1 January 2022); - Amendments to IFRS 17 ‘Insurance contracts: Initial Application of IFRS 17 and IFRS 9 – Comparative Information’ (applicable as from 1 January 2023, subject to EU approval). Note 2.2: Summary of significant accounting policies The main significant accounting policies applied during the preparation of the Consolidated Financial Statements are presented below. These methods were applied consistently to all previous financial years. The numbering of the paragraphs below refers to the lines presented on the balance sheet and income statement. Consolidation principles – Subsidiaries All entities for which Aedifica (directly or indirectly) holds more than half of the voting rights or has the power to control operations are considered subsidiaries and included in the scope of comprehensive consolidation. The comprehensive consolidation consists of incorporating all assets and liabilities of subsidiaries, as well as income and expenses. Minority interests are included in a separate line of the balance sheet and the income statement. In accordance with IFRS 10, subsidiaries are fully consolidated as from the date on which control is transferred to the Group; they are de-consolidated as from the date that control ceases. All intercompany transactions, balances, and unrealised gains and losses on transactions between the Group’s companies are eliminated. Consolidation principles – Associates and joint-ventures All entities for which Aedifica (directly or indirectly) does not hold more than half of the voting rights or does not have the power to control operations, but over which Aedifica has joint control or significant influence, are considered associates or joint-ventures and are consolidated using the equity method. The participation is initially recognised at cost and is subsequently adjusted to take account of changes after the acquisition of the investor's share of the net assets of the concerned entity. Consolidation principles – Partnership All agreements whereby the parties that have joint control of an arrangement which give rights to the assets and obligations for the liabilities relating to the arrangement and that, following the framework of IFRS 11, are determined as joint operations, are consolidated following a proportional consolidation. Foreign currency Aedifica primarily operates in the euro zone. Euro is the functional currency of the Group and the Consolidated Financial Statements. The functional currency of the UK subsidiaries is the pound sterling and that of the Swedish subsidiaries is the Swedish krona. Foreign currency transactions are translated to the respective functional currency of the Group entities at the exchange rate prevailing at the date of the transaction. Foreign exchange gains and losses resulting from settling these, or from retranslating monetary assets and liabilities held in foreign currencies, are booked in the Income Statement. Exceptions to this rule are foreign currency loans hedging investments in foreign subsidiaries and intra- group loans meeting the definition of a net investment in a foreign operation. In such cases, exchange differences are booked in a separate component of shareholders’ equity until the disposal of the investment. Consolidation of foreign entities Assets and liabilities of the foreign entities are translated into euro at exchange rates ruling at the balance sheet date. The income statement is translated at the average rate for the period or at spot rate for significant items. Resulting exchange differences are booked in other comprehensive income and recognised in the Group income statement when the operation is sold. The principal exchange rates used to translate foreign currency denominated amounts in book year 2021 are: - balance sheet: 1 € = 0.84119 £ - income statement: 1 € = 0.85973 £ - balance sheet: 1 € = 10.2887 SEK - income statement: 1 € = 10.14555 SEK 174 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 9 – Aedifica – Annual Financial Report 2021 I.A. Goodwill Business combinations are recognised using the purchase method in accordance with IFRS 3. The excess of the acquisition cost over the fair value of the Group’s share of the net identifiable assets of the acquired business at the date of acquisition is recognised as goodwill (an asset). In the event that this value is negative, it is recognised immediately in profit. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. I.B. Intangible Assets Intangible assets are capitalised as assets at their acquisition cost and are amortised using the straight-line method at annual rates between 14.29% (7 years) and 33% (3 years). I.C. Investment Properties 1. Initial recognition 1.1. Acquisition value If the acquisition of a building takes place by cash payment, through the acquisition of shares of a real estate company, through the non-monetary contribution of a building against the issuance of new shares, by merger through takeover of a property, or by a partial de-merger, the deed costs, audit and consultancy costs, reinvestment bank fees, costs of lifting security on the financing of the absorbed company, and other costs relating to the merger are also considered part of the acquisition cost and capitalised in the asset accounts on the balance sheet. 1.2. Fair value Properties in the Group’s portfolio or which enter into its portfolio, either with payment in cash or in kind, are valued by independent experts at their fair value. The fair value of investment properties located in Belgium is calculated as follows: - buildings with an investment value greater than €2.5 million: Fair value = investment value / (1+ the average transaction cost defined by the BE-REIT Association); - buildings with an investment value less than €2.5 million: 1) where the expert considers that the building can be divided and sold in separate units (notably individual apartments), the fair value is defined as the lower of the separated investment value / (1 + % transfer tax levied in the region where the building is located) and the investment value / (1+ the average transaction cost defined by the BE-REIT Association); 2) where the expert considers that the building cannot be divided and sold in separate units, the fair value is the investment value / (1 + % transfer tax levied in the region where the building is located). The average transaction cost defined by the BE-REIT Association is revised annually and adjusted as necessary in increments of 0.5%. Experts attest to the percentage deducted and retained in regular reports to shareholders; it currently amounts to 2.5%. The fair value of investment properties located abroad take into account locally applicable legal costs. Transfer taxes on acquisitions and any change in the fair value of properties during the financial year are directly recognised in the income statement. 1.3. Treatment of differences at the time of acquisition If, for acquisitions such as those defined in section I.C.1.1 (‘Acquisition value’) above, the fair value determined by the independent expert is different than the acquisition value defined in section I.C.1.1, the difference is booked in the income statement under line ‘XVIII. Changes in fair value of investment properties’. 2. Accounting for works projects (subsequent expenditures) Costs incurred by Aedifica for works carried out on investment properties are accounted for using one of two distinct methods, depending on the nature of the costs. The cost of repairs and maintenance, which neither add new functionality nor constitute a significant enhancement or upgrade to the building, are recognised as incurred expenses and are thus deducted from the year’s profit. Subsequent expenditures related to two types of works projects are capitalised as assets on the Company’s balance sheet: a) major renovations and extensions: these usually take place every 25 to 35 years and represent an almost complete renovation of the building, often reusing parts of the original building and applying the most up-to-date building techniques. Upon completion of these major renovation projects, the buildings are considered as new and are presented as such in the real estate portfolio. b) upgrades: these consist of occasional works that add new functionality, increase capacity, or significantly enhance or upgrade the building, making it possible to raise rents, and thus increase the building’s estimated rental income. The costs relating to these works are also capitalised in the balance sheet for the reason and to the extent that the experts usually recognise a corresponding increase in the value of the building. Costs that may be capitalised include: materials, contractor fees, technical studies, and staff fees or costs. Any excess of these costs over fair value is recognised as an expense in the income statement. Borrowing costs are capitalised for all qualifying projects with a duration of more than one year. – 175 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 9 – Aedifica – Annual Financial Report 2021 I.A. Goodwill Business combinations are recognised using the purchase method in accordance with IFRS 3. The excess of the acquisition cost over the fair value of the Group’s share of the net identifiable assets of the acquired business at the date of acquisition is recognised as goodwill (an asset). In the event that this value is negative, it is recognised immediately in profit. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. I.B. Intangible Assets Intangible assets are capitalised as assets at their acquisition cost and are amortised using the straight-line method at annual rates between 14.29% (7 years) and 33% (3 years). I.C. Investment Properties 1. Initial recognition 1.1. Acquisition value If the acquisition of a building takes place by cash payment, through the acquisition of shares of a real estate company, through the non-monetary contribution of a building against the issuance of new shares, by merger through takeover of a property, or by a partial de-merger, the deed costs, audit and consultancy costs, reinvestment bank fees, costs of lifting security on the financing of the absorbed company, and other costs relating to the merger are also considered part of the acquisition cost and capitalised in the asset accounts on the balance sheet. 1.2. Fair value Properties in the Group’s portfolio or which enter into its portfolio, either with payment in cash or in kind, are valued by independent experts at their fair value. The fair value of investment properties located in Belgium is calculated as follows: - buildings with an investment value greater than €2.5 million: Fair value = investment value / (1+ the average transaction cost defined by the BE-REIT Association); - buildings with an investment value less than €2.5 million: 1) where the expert considers that the building can be divided and sold in separate units (notably individual apartments), the fair value is defined as the lower of the separated investment value / (1 + % transfer tax levied in the region where the building is located) and the investment value / (1+ the average transaction cost defined by the BE-REIT Association); 2) where the expert considers that the building cannot be divided and sold in separate units, the fair value is the investment value / (1 + % transfer tax levied in the region where the building is located). The average transaction cost defined by the BE-REIT Association is revised annually and adjusted as necessary in increments of 0.5%. Experts attest to the percentage deducted and retained in regular reports to shareholders; it currently amounts to 2.5%. The fair value of investment properties located abroad take into account locally applicable legal costs. Transfer taxes on acquisitions and any change in the fair value of properties during the financial year are directly recognised in the income statement. 1.3. Treatment of differences at the time of acquisition If, for acquisitions such as those defined in section I.C.1.1 (‘Acquisition value’) above, the fair value determined by the independent expert is different than the acquisition value defined in section I.C.1.1, the difference is booked in the income statement under line ‘XVIII. Changes in fair value of investment properties’. 2. Accounting for works projects (subsequent expenditures) Costs incurred by Aedifica for works carried out on investment properties are accounted for using one of two distinct methods, depending on the nature of the costs. The cost of repairs and maintenance, which neither add new functionality nor constitute a significant enhancement or upgrade to the building, are recognised as incurred expenses and are thus deducted from the year’s profit. Subsequent expenditures related to two types of works projects are capitalised as assets on the Company’s balance sheet: a) major renovations and extensions: these usually take place every 25 to 35 years and represent an almost complete renovation of the building, often reusing parts of the original building and applying the most up-to-date building techniques. Upon completion of these major renovation projects, the buildings are considered as new and are presented as such in the real estate portfolio. b) upgrades: these consist of occasional works that add new functionality, increase capacity, or significantly enhance or upgrade the building, making it possible to raise rents, and thus increase the building’s estimated rental income. The costs relating to these works are also capitalised in the balance sheet for the reason and to the extent that the experts usually recognise a corresponding increase in the value of the building. Costs that may be capitalised include: materials, contractor fees, technical studies, and staff fees or costs. Any excess of these costs over fair value is recognised as an expense in the income statement. Borrowing costs are capitalised for all qualifying projects with a duration of more than one year. Aedifica – Annual Financial Report 2021 – 10 3. Recurring remeasurement and remeasurement in the event of share transactions 3.1. Depreciation In accordance with IAS 40, Aedifica applies the fair value model and does not recognise depreciation on its properties, the rights in rem on properties, or on properties rented to the Company under finance leases. 3.2. Share transactions Real estate properties held by Aedifica and by the subsidiaries under its control are valued by experts each time the Company proceeds to issue new shares, list shares on the stock exchange, or repurchase shares other than through the stock exchange. While Aedifica is not bound by this valuation, any issue or repurchase price set below this level must be justified (in the form of a special report). A new valuation is not required when a share issuance falls within four months of the last valuation of the property concerned, so long as the experts confirm that neither the economic situation nor the physical state of the property make a new valuation necessary. 3.3. Quarterly revaluations Each quarter, valuation experts perform a calculation of fair value based on the conditions of the properties and on fluctuations observed in the real estate market. This valuation is carried out on a building-by-building basis and covers Aedifica’s entire real estate portfolio, including properties held by its subsidiaries. These valuations are binding for Aedifica and must be reflected in the accounts. Thus, the carrying amount of the properties in the accounts corresponds to the fair value at which they are assessed by Aedifica’s independent valuation experts. 3.4. Accounting for changes in fair value Changes in the fair value of real estate properties, as determined by independent experts, arise each time the value is assessed. They are accounted for in the income statement. 4. Asset disposals Upon disposal of an investment property, the gain or loss on disposal is recognised in the income statement, in line ‘XVI. Gains and losses on disposals of investment properties’. 5. Owner-occupied investment property Any investment property occupied by Aedifica is transferred to the line ‘other tangible assets’ of the balance sheet. Its fair value at the time of the transfer becomes its deemed acquisition cost. If the Company only occupies a small part of the building, the whole building is recognised as ‘investment property’ in the balance sheet and continues to be carried at fair value. 6. Development projects Buildings under construction, renovation, or extension, which are considered development projects are recognised on the balance sheet at historical cost, including transfer taxes, non-recoverable VAT and indirect expenses (capitalised interest, insurance, legal fees, architectural fees, consulting fees, etc.). If the historical cost deviates from the fair value appraised by the independent expert, the deviation is recognised in the income statement in order to bring the carrying amount in line with the fair value. Costs incurred in the preliminary phase of development projects are recognised at their historical value. 7. Rights of use on plots of land Rights of use recognised in the balance sheet for concession or leasehold purposes or similar leases (as a result of IFRS 16 coming into force) are also considered as investment properties. I.D. Other tangible assets Tangible assets with definite useful lives, which fall outside the scope of investment property, are initially recognised at their acquisition cost. The components approach is not applied (based on materiality criteria). Depreciation is charged on a linear basis using the pro rata temporis method. As residual values are considered marginal, accumulated depreciation is expected to cover the total acquisition cost of each item included in other tangible assets. The following depreciation rates are applied: - plant, machinery and equipment: 20%; - other furniture: 20%; - vehicles: 25% - IT: 20% to 33%. As required by IFRS 16, this balance sheet line also includes the value of the right of use of company cars and buildings used by the Group as offices. This value is depreciated on a straight-line basis over the term of the contracts. 176 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 11 – Aedifica – Annual Financial Report 2021 I.E. Non-current financial assets 1. Hedging instruments When a derivative provides cash flow hedges to cover a specific risk arising from a financial asset or a firm commitment or a highly probable transaction liability and meets the criteria for hedge accounting under IFRS 9, the effective portion of the income or expense is recognised directly in equity (line ‘I.C.d. Reserve for the balance of changes in fair value of authorised hedging instruments qualifying for hedge accounting as defined under IFRS’). The ineffective portion is recognised in the income statement. When a derivative does not meet the criteria for hedge accounting under IFRS 9, it is recognised on the balance sheet at its fair value, and changes in fair value are recognised in the income statement as they occur. 2. Other financial and non-current assets Financial assets classified as held for sale are valued at fair value (market value if available, otherwise acquisition value). Changes in fair value are recognised in equity (under ‘I.C.i. Reserve for the balance of changes in fair value of financial assets available for sale’). Receivables are valued at amortised cost. I.H. Deferred tax assets When a building is acquired outside of Belgium and the net income is consequently subject to foreign tax, a deferred tax is recognised on the balance sheet in relation to the unrealised loss (temporary difference between the fair value and the assessed value used for tax purposes of the building in question). I.I. Participations in associates and joint-ventures Participations in associates and joint-ventures are the Group’s participating interests in companies over which the Group has no or only joint control. These shares in associates and joint-ventures are recognised at fair value in the income statement and are consolidated using the equity method. They only relate to Immobe NV/SA. II.A. Assets held for sale Properties that are considered non-strategic and which are intended to be sold are included in line II.A. They are recognised at fair value, in accordance with IFRS 5. II.C/D/E. Receivables Receivables are measured at amortised cost. Impairment losses are recognised using the simplified expected credit loss (ECL) method in accordance with IFRS 9. II.G. Deferred charges and accrued income Costs incurred during the year, which relate partially or in full to the following year, are recognised on a proportional basis as deferred charges. Revenues and portions of revenues earned over the course of one or several subsequent financial years, but which are also related to the current year, are recognised in income for the amount earned in the current year. I.A. et II.A. Provisions A provision is recognised on the balance sheet when the Group has an implicit or explicit legal obligation as a result of a past event, and for which it is very probable the resources will be used to extinguish this obligation. Provisions are measured by calculating the present value of expected cash flows using a market interest rate. They are reflected as a liability on the balance sheet. I.C.b. Other non-current financial liabilities – Other The Company can commit itself to acquire the non-controlling shareholdings owned by third parties in subsidiaries, should these third parties wish to exercise their put options. The exercise price of such options granted to non-controlling interest is reflected on the balance sheet on line ‘I.C.b. Other non-current financial liabilities – Other’. As required by IFRS 16, this balance sheet line also includes the long-term portion of the lease debt for company cars, buildings used by the Group as offices and the rights of use for concession or leasehold purposes – or similar leases. This value is amortised using the 'effective interest rate method'. I.F. Deferred tax liabilities When a building is acquired outside of Belgium and the net income is consequently subject to foreign tax, a deferred tax is recognised on the balance sheet in relation to the unrealised capital gain (temporary difference between the fair value and the assessed value used for tax purposes of the building in question). – 177 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 11 – Aedifica – Annual Financial Report 2021 I.E. Non-current financial assets 1. Hedging instruments When a derivative provides cash flow hedges to cover a specific risk arising from a financial asset or a firm commitment or a highly probable transaction liability and meets the criteria for hedge accounting under IFRS 9, the effective portion of the income or expense is recognised directly in equity (line ‘I.C.d. Reserve for the balance of changes in fair value of authorised hedging instruments qualifying for hedge accounting as defined under IFRS’). The ineffective portion is recognised in the income statement. When a derivative does not meet the criteria for hedge accounting under IFRS 9, it is recognised on the balance sheet at its fair value, and changes in fair value are recognised in the income statement as they occur. 2. Other financial and non-current assets Financial assets classified as held for sale are valued at fair value (market value if available, otherwise acquisition value). Changes in fair value are recognised in equity (under ‘I.C.i. Reserve for the balance of changes in fair value of financial assets available for sale’). Receivables are valued at amortised cost. I.H. Deferred tax assets When a building is acquired outside of Belgium and the net income is consequently subject to foreign tax, a deferred tax is recognised on the balance sheet in relation to the unrealised loss (temporary difference between the fair value and the assessed value used for tax purposes of the building in question). I.I. Participations in associates and joint-ventures Participations in associates and joint-ventures are the Group’s participating interests in companies over which the Group has no or only joint control. These shares in associates and joint-ventures are recognised at fair value in the income statement and are consolidated using the equity method. They only relate to Immobe NV/SA. II.A. Assets held for sale Properties that are considered non-strategic and which are intended to be sold are included in line II.A. They are recognised at fair value, in accordance with IFRS 5. II.C/D/E. Receivables Receivables are measured at amortised cost. Impairment losses are recognised using the simplified expected credit loss (ECL) method in accordance with IFRS 9. II.G. Deferred charges and accrued income Costs incurred during the year, which relate partially or in full to the following year, are recognised on a proportional basis as deferred charges. Revenues and portions of revenues earned over the course of one or several subsequent financial years, but which are also related to the current year, are recognised in income for the amount earned in the current year. I.A. et II.A. Provisions A provision is recognised on the balance sheet when the Group has an implicit or explicit legal obligation as a result of a past event, and for which it is very probable the resources will be used to extinguish this obligation. Provisions are measured by calculating the present value of expected cash flows using a market interest rate. They are reflected as a liability on the balance sheet. I.C.b. Other non-current financial liabilities – Other The Company can commit itself to acquire the non-controlling shareholdings owned by third parties in subsidiaries, should these third parties wish to exercise their put options. The exercise price of such options granted to non-controlling interest is reflected on the balance sheet on line ‘I.C.b. Other non-current financial liabilities – Other’. As required by IFRS 16, this balance sheet line also includes the long-term portion of the lease debt for company cars, buildings used by the Group as offices and the rights of use for concession or leasehold purposes – or similar leases. This value is amortised using the 'effective interest rate method'. I.F. Deferred tax liabilities When a building is acquired outside of Belgium and the net income is consequently subject to foreign tax, a deferred tax is recognised on the balance sheet in relation to the unrealised capital gain (temporary difference between the fair value and the assessed value used for tax purposes of the building in question). Aedifica – Annual Financial Report 2021 – 12 II.B/D/E. Current debts Debts are recognised at amortised cost at the year-end date. Debts denominated in foreign currencies are converted into Euros using the spot rate on the year-end date. Foreign exchange gains or losses arising from the revaluation of foreign currency borrowings are recognised in the income statement, except for foreign exchange gains and losses relating to the hedging of a foreign net investment, which are recognised directly in other comprehensive income. II.F. Accrued charges and deferred income Damages and interests paid by a lessee for breach of contract are recognised in the income statement at the time of receipt. I. to XV. Operating result before result on portfolio The objective of lines I through XV is to reflect the operating profit generated by the Company’s rental property portfolio, including general operating costs. All of Aedifica’s leases are classified as operating leases for which Aedifica is the lessor. Lease income is recognised on a straight-line basis over the lease term, in accordance with IAS 17. XVI. to XIX. Operating result The objective of lines XVI through XIX is to reflect in the income statement all transactions and accounting adjustments related to the value of the Company’s portfolio: - realised capital gains and losses: capital gains and losses are included in the line ‘Gains and losses on disposals of investment properties’; - unrealised gains and losses (carried at fair value): changes in the portfolio’s fair value are included in the income statement under ‘changes in fair value of investment properties’; - commissions paid to real estate agents and other transaction costs: commissions related to the sale of buildings are deducted from the sale price in determining the gain or loss on disposal which is recognised in the operating result. Fees paid to real estate and technical experts are recognised as current expenses. The result on disposals of investment properties represents the difference between sales proceeds (excluding transaction costs) and the latest reported fair value of the properties sold. The result is realised at the moment of the transfer of risks and rewards. Generally, transfer taxes are to be paid by the person buying the building. However, in the case of ‘acte en main’ disposals, the transfer taxes are to be paid by the seller and are thus deducted from the sale price and the gain effectively realised. In the event of a disposal, transfer taxes do not need to be deducted from the difference between the received amount and the carrying value of the sold properties in order to calculate the capital gain or loss effectively realised, as they have already been recognised in the income statement at the moment of acquisition. XXV. to XXVI. Corporate tax and exit tax Line XXV includes current and deferred taxes. Income tax is recognised in the income statement. It is the estimated tax attributable to the taxable income of the year using the tax rate prevailing at the balance sheet date, together with any adjustment to tax liabilities relating to previous years. When a building is acquired outside of Belgium and the net income is consequently subject to foreign tax, a deferred tax is recognised on the balance sheet in relation to the unrealised capital gain and the unrealised loss (temporary difference between the fair value and the assessed value used for tax purposes of the building in question). Except for the portion relating to items directly recognised in equity, deferred tax is recognised in the income statement. Line XXVI includes the exit tax. This is the tax on the capital gain resulting from the approval of a Belgian company as a RREC or the merger of a non-RREC company with a RREC. When a company that does not have the status of a RREC but is eligible for this regime, enters in the consolidation scope of the Group for the first time, an exit tax provision is recorded, taking into account the anticipated date of the merger or approval. Any adjustment to this exit tax liability is recognised in the income statement. When the merger or approval takes place, the provision becomes a liability and any difference is also recognised in the income statement. Commitments and contingencies The Board of Directors values commitments and contingencies at the nominal value of the legal obligation as stated in the contract; in the absence of a nominal value or in exceptional cases, these values are disclosed for information purposes. Group insurance Aedifica’s insurance contracts in Belgium are considered as defined contribution plans. These contracts are analysed in Note 31. 178 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 13 – Aedifica – Annual Financial Report 2021 Hoivatilat’s ‘equity incentive plan’ The employees of Hoivatilat Oyj benefit from an equity incentive plan, This plan provides the participants with the opportunity to receive Aedifica shares or a cash equivalent as a reward for achieving the targets of the earnings criteria separately set by the Hoivatilat Board for each earning period. The Board of Directors will decide separately for each participant the amount of their maximum award for each earning period. The maximum award is expressed as Aedifica shares or equivalent. The plan foresees 2 parts: - A number of shares of Hoivatilat Oyj which are converted into Aedifica shares. - A cash contribution used to cover the applicable taxes and other charges. Aedifica has the choice between delivering new or existing Aedifica shares or a cash settlement. Following the recommendations from IFRS 2 the amounts related to the equity incentive plan are recognised in equity in the consolidated accounts. Note 3: Operating segments Note 3.1: Presented segments Pursuant to the divestments that were carried out in the course of the 2018/2019 financial year and Aedifica’s focus on healthcare real estate, it was decided to adjust the segmented information of the operational result and to classify it geographically as from the financial year that started on 1 July 2019. This segmentation reflects the geographical markets in which Aedifica operates and is consistent with the Group's organisation and internal reporting on the basis of which management makes key operational decisions, as defined by IFRS 8. The accounting policies described in Note 2 were used for the internal reporting and the segment reporting that follows. Each group of entities that fall under common control is considered as a single customer under IFRS 8. Revenues generated through transactions with a single customer representing more than 10% of the Company’s total revenues must be disclosed. This requirement applies to: - the 51 properties (in the segments ‘Belgium’, ‘Netherlands’ and ‘Germany’) rented out to legal entities controlled by the Korian group, for which rents represent 12% of the Company’s total 2021 rental income (15% in the prior financial year). Rents mentioned here represent the turnover realised by the Company over the course of the financial year, which differ from the contractual rents (representing the agreements in place at the time of the year-end closure) on which the analyses included in the Property Report of this Annual Financial Report are based. – 179 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 13 – Aedifica – Annual Financial Report 2021 Hoivatilat’s ‘equity incentive plan’ The employees of Hoivatilat Oyj benefit from an equity incentive plan, This plan provides the participants with the opportunity to receive Aedifica shares or a cash equivalent as a reward for achieving the targets of the earnings criteria separately set by the Hoivatilat Board for each earning period. The Board of Directors will decide separately for each participant the amount of their maximum award for each earning period. The maximum award is expressed as Aedifica shares or equivalent. The plan foresees 2 parts: - A number of shares of Hoivatilat Oyj which are converted into Aedifica shares. - A cash contribution used to cover the applicable taxes and other charges. Aedifica has the choice between delivering new or existing Aedifica shares or a cash settlement. Following the recommendations from IFRS 2 the amounts related to the equity incentive plan are recognised in equity in the consolidated accounts. Note 3: Operating segments Note 3.1: Presented segments Pursuant to the divestments that were carried out in the course of the 2018/2019 financial year and Aedifica’s focus on healthcare real estate, it was decided to adjust the segmented information of the operational result and to classify it geographically as from the financial year that started on 1 July 2019. This segmentation reflects the geographical markets in which Aedifica operates and is consistent with the Group's organisation and internal reporting on the basis of which management makes key operational decisions, as defined by IFRS 8. The accounting policies described in Note 2 were used for the internal reporting and the segment reporting that follows. Each group of entities that fall under common control is considered as a single customer under IFRS 8. Revenues generated through transactions with a single customer representing more than 10% of the Company’s total revenues must be disclosed. This requirement applies to: - the 51 properties (in the segments ‘Belgium’, ‘Netherlands’ and ‘Germany’) rented out to legal entities controlled by the Korian group, for which rents represent 12% of the Company’s total 2021 rental income (15% in the prior financial year). Rents mentioned here represent the turnover realised by the Company over the course of the financial year, which differ from the contractual rents (representing the agreements in place at the time of the year-end closure) on which the analyses included in the Property Report of this Annual Financial Report are based. Aedifica – Annual Financial Report 2021 – 14 Note 3.2: Segment information 31/12/2021 BE DE NL UK FI SE IE ES Non- allocated Inter- segment items TOTAL SEGMENT RESULT I. Rental income 62,548 44,971 30,429 49,911 39,797 1,958 2,504 0 - - 232,118 II. Writeback of lease payments sold and discounted - - - - - - - - - - - III. Rental-related charges - -2 -695 -75 86 - - - - - -686 Net rental income 62,548 44,969 29,734 49,836 39,883 1,958 2,504 0 - - 231,432 IV. Recovery of property charges - - - - - - - - - - - V. Recovery of rental charges and taxes normally paid by tenants on let properties 118 1,842 687 354 1,118 - 125 0 - - 4,244 VI. Costs payable by the tenant and borne by the landlord on rental damage and repair at end of lease - - - - - - - - - - - VII. Charges and taxes not recovered by the tenant on let properties according to the income statement -93 -1,794 -644 -354 -1,118 - -125 0 - - -4,128 VIII. Other rental-related income and charges -11 -151 -635 101 -270 -47 - - - - -1,013 Property result 62,562 44,866 29,142 49,937 39,613 1,911 2,504 0 - - 230,535 IX. Technical costs -97 -148 -242 -5 -833 -93 -14 - - - -1,432 X. Commercial costs - 0 -45 - -16 0 - - - - -61 XI. Charges and taxes on unlet properties -2 - - - - - - - - - -2 XII. Property management costs -518 -1,212 -659 -3,044 - - - - - - -5,433 XIII. Other property charges 0 193 -87 0 -773 - - - - - -667 Property charges -617 -1,167 -1,033 -3,049 -1,622 -93 -14 - - - -7,595 Property operating result 61,945 43,699 28,109 46,888 37,991 1,818 2,490 0 - - 222,940 XIV. Overheads - - - - - - - - -30,930 - -30,930 XV. Other operating income and charges - - - - - - - - 1,317 - 1,317 OPERATING RESULT BEFORE RESULT ON PORTFOLIO 61,945 43,699 28,109 46,888 37,991 1,818 2,490 0 -29,613 - 193,327 SEGMENT ASSETS Marketable investment properties 1,213,217 1,057,513 564,105 815,006 831,150 78,329 91,841 - - - 4,651,161 Development projects 5,473 44,923 23,270 10,051 50,802 1,021 13,914 2,500 - - 151,954 Right of use of plots of land - 3,142 - - 54,805 - - - - - 57,947 Investment properties 4,861,062 Assets classified as held for sale - - - 6,660 28,700 - - - - - 35,360 Other assets 40,522 - - - 161,726 - - - 63,197 - 265,445 Total assets 5,161,867 SEGMENT INVESTMENTS OF THE FISCAL YEAR 1 Marketable investment properties 19,381 298,428 26,975 112,588 24,996 44,846 92,898 - - - 620,112 Development projects 8,246 101,828 48,063 23,217 82,387 7,972 18,756 2,591 - - 293,060 Investment properties 27,627 400,256 75,038 135,805 107,383 52,818 111,654 2,591 - - 913,172 GROSS YIELD IN FAIR VALUE 5.3% 5.2% 5.5% 6.4% 5.4% 5.0% 5.3% 0.0% - - 5.5% 1. ‘Segment investment of the fiscal year’ includes the amount of acquisitions and capex costs, whereas the figures for the previous financial year included only the amount of acquisitions. 180 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 15 – Aedifica – Annual Financial Report 2021 31/12/2020 (18 months) BE DE NL UK FI SE IE ES Non- allocated Inter- segment items TOTAL SEGMENT RESULT I. Rental income 58,228 35,625 24,627 41,754 27,029 272 - - - - 187,535 II. Writeback of lease payments sold and discounted - - - - - - - - - - - III. Rental-related charges 23 -2 -393 -1,981 -399 - - - - - -2,752 Net rental income 58,251 35,623 24,234 39,773 26,630 272 - - - - 184,783 IV. Recovery of property charges - - - - - - - - - - - V. Recovery of rental charges and taxes normally paid by tenants on let properties 178 1,767 459 387 708 - - - - - 3,499 VI. Costs payable by the tenant and borne by the landlord on rental damage and repair at end of lease - - - - - - - - - - - VII. Charges and taxes not recovered by the tenant on let properties according to the income statement -178 -1,767 -459 -387 -708 - - - - - -3,499 VIII. Other rental-related income and charges -14 -358 61 -147 451 -3 - - - - -10 Property result 58,237 35,265 24,295 39,626 27,081 269 - - - - 184,773 IX. Technical costs -37 -101 -206 74 -177 -97 - - - - -544 X. Commercial costs - -21 -9 -5 -199 -95 - - - - -329 XI. Charges and taxes on unlet properties - - - - - - - - - - - XII. Property management costs - -1,089 -391 -2,916 - - - - - - -4,396 XIII. Other property charges -18 -215 -105 -1 -537 - - - - - -876 Property charges -56 -1,426 -710 -2,848 -913 -192 - - - - -6,145 Property operating result 58,181 33,839 23,584 36,779 26,168 77 - - - - 178,628 XIV. Overheads - - - - - - - - -27,096 - -27,096 XV. Other operating income and charges - - - - - - - - 22 - 22 OPERATING RESULT BEFORE RESULT ON PORTFOLIO 58,181 33,839 23,584 36,779 26,168 77 - - -27,074 - 151,554 – 181 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 15 – Aedifica – Annual Financial Report 2021 31/12/2020 (18 months) BE DE NL UK FI SE IE ES Non- allocated Inter- segment items TOTAL SEGMENT RESULT I. Rental income 58,228 35,625 24,627 41,754 27,029 272 - - - - 187,535 II. Writeback of lease payments sold and discounted - - - - - - - - - - - III. Rental-related charges 23 -2 -393 -1,981 -399 - - - - - -2,752 Net rental income 58,251 35,623 24,234 39,773 26,630 272 - - - - 184,783 IV. Recovery of property charges - - - - - - - - - - - V. Recovery of rental charges and taxes normally paid by tenants on let properties 178 1,767 459 387 708 - - - - - 3,499 VI. Costs payable by the tenant and borne by the landlord on rental damage and repair at end of lease - - - - - - - - - - - VII. Charges and taxes not recovered by the tenant on let properties according to the income statement -178 -1,767 -459 -387 -708 - - - - - -3,499 VIII. Other rental-related income and charges -14 -358 61 -147 451 -3 - - - - -10 Property result 58,237 35,265 24,295 39,626 27,081 269 - - - - 184,773 IX. Technical costs -37 -101 -206 74 -177 -97 - - - - -544 X. Commercial costs - -21 -9 -5 -199 -95 - - - - -329 XI. Charges and taxes on unlet properties - - - - - - - - - - - XII. Property management costs - -1,089 -391 -2,916 - - - - - - -4,396 XIII. Other property charges -18 -215 -105 -1 -537 - - - - - -876 Property charges -56 -1,426 -710 -2,848 -913 -192 - - - - -6,145 Property operating result 58,181 33,839 23,584 36,779 26,168 77 - - - - 178,628 XIV. Overheads - - - - - - - - -27,096 - -27,096 XV. Other operating income and charges - - - - - - - - 22 - 22 OPERATING RESULT BEFORE RESULT ON PORTFOLIO 58,181 33,839 23,584 36,779 26,168 77 - - -27,074 - 151,554 Aedifica – Annual Financial Report 2021 – 16 31/12/2020 (18 months) BE DE NL UK FI SE IE ES Non- allocated Inter- segment items TOTAL SEGMENT RESULT I. Rental income 86,682 49,174 35,537 60,811 27,029 272 0 0 - - 259,505 II. Writeback of lease payments sold and discounted - - - - - - - - - - - III. Rental-related charges -15 -6 -393 -2,531 -399 - - - - - -3,344 Net rental income 86,667 49,168 35,144 58,280 26,630 272 0 0 - - 256,161 IV. Recovery of property charges - - - - - - - - - - - V. Recovery of rental charges and taxes normally paid by tenants on let properties 84 2,124 507 387 708 - 0 0 - - 3,810 VI. Costs payable by the tenant and borne by the landlord on rental damage and repair at end of lease - - - - - - - - - - - VII. Charges and taxes not recovered by the tenant on let properties according to the income statement -84 -2,124 -507 -387 -708 - 0 0 - - -3,810 VIII. Other rental-related income and charges -12 -366 130 -147 451 -3 - - - - 53 Property result 86,655 48,802 35,274 58,133 27,081 269 0 0 - - 256,214 IX. Technical costs -32 -141 -250 17 -177 -97 - - - - -680 X. Commercial costs - -50 -9 -5 -199 -95 - - - - -358 XI. Charges and taxes on unlet properties 0 - - - - - - - - - 0 XII. Property management costs 0 -1,568 -498 -4,180 - - - - - - -6,246 XIII. Other property charges -9 -293 -387 -1 -537 - - - - - -1,227 Property charges -41 -2,052 -1,144 -4,169 -913 -192 - - - - -8,511 Property operating result 86,614 46,750 34,130 53,964 26,168 77 0 0 - - 247,703 XIV. Overheads - - - - - - - - -36,096 - -36,096 XV. Other operating income and charges - - - - - - - - 15 - 15 OPERATING RESULT BEFORE RESULT ON PORTFOLIO 86,614 46,750 34,130 53,964 26,168 77 0 0 -36,081 - 211,622 SEGMENT ASSETS Marketable investment properties 1,151,254 634,220 515,768 627,339 667,270 19,543 - - - - 3,615,394 Development projects 10,618 55,137 15,063 1,233 56,907 2,362 - - - - 141,320 Right of use of plots of land - - - - 51,825 - - - - - 51,825 Investment properties 3,808,539 Assets classified as held for sale 165 - - 5,963 - - - - - - 6,128 Other assets 36,998 - - - 161,726 - - - 53,784 - 252,508 Total assets 4,067,175 SEGMENT INVESTMENTS OF THE FISCAL YEAR Marketable investment properties 82,884 169,050 132,036 113,521 581,460 - - - - - 1,078,951 Development projects - 5,260 - - 67,770 580 - - - - 73,610 Investment properties 82,884 174,310 132,036 113,521 649,230 580 - - - - 1,152,561 GROSS YIELD IN FAIR VALUE 5.3% 5.7% 5.8% 6.8% 5.6% 5.8% - - - - 5.8% 182 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 17 – Aedifica – Annual Financial Report 2021 Note 4: Net rental income (x €1,000) 31/12/2021 31/12/2020 (12 months – restated period) 31/12/2020 (18 months) Rents earned 230,915 187,495 259,445 Guaranteed income 0 0 0 Cost of rent free periods 0 0 0 Indemnities for early termination of rental contracts 1,203 40 60 RENTAL INCOME 232,118 187,535 259,505 Rents payable as lessee -1 -2 -2 Write-downs on trade receivables -685 -2,750 -3,342 RENTAL-RELATED CHARGES -686 -2,752 -3,344 NET RENTAL INCOME 231,432 184,783 256,161 The Group rents its buildings exclusively under operating leases. The increase in rents earned compared to the restated period is related to the growth of the portfolio during the 2021 financial year. The schedule of future minimum lease payments to be collected under non-cancellable operating leases required by IAS 17 is based on the following assumptions, which are extremely conservative: - long-term leases: no inflation. Future minimum lease payments to be collected under non-cancellable operating leases are presented as follow: (x €1,000) 31/12/2021 31/12/2020 (18 months) Not later than one year 258,500 208,464 Later than one year and not later than five years 1,030,413 829,866 Later than five years 3,923,979 3,107,193 TOTAL 5,212,891 4,145,523 Rental income includes contingent rents amounting to €1,082 k (31 December 2021: €1,197 k). In 2019/2020, a depreciation for doubtful debts of €1.9 million was recognised for Four Seasons for the period from 1 October 2019 until the transfer of the buildings to the new tenants in April 2020. The main other depreciations have been recognised for Majesticare (€0.6 million) and Touhula (€0.4 million). In 2021, the main depreciation for doubtful debts relates to Ontzorgd Wonen (€0.7 million) in the Netherlands. – 183 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 17 – Aedifica – Annual Financial Report 2021 Note 4: Net rental income (x €1,000) 31/12/2021 31/12/2020 (12 months – restated period) 31/12/2020 (18 months) Rents earned 230,915 187,495 259,445 Guaranteed income 0 0 0 Cost of rent free periods 0 0 0 Indemnities for early termination of rental contracts 1,203 40 60 RENTAL INCOME 232,118 187,535 259,505 Rents payable as lessee -1 -2 -2 Write-downs on trade receivables -685 -2,750 -3,342 RENTAL-RELATED CHARGES -686 -2,752 -3,344 NET RENTAL INCOME 231,432 184,783 256,161 The Group rents its buildings exclusively under operating leases. The increase in rents earned compared to the restated period is related to the growth of the portfolio during the 2021 financial year. The schedule of future minimum lease payments to be collected under non-cancellable operating leases required by IAS 17 is based on the following assumptions, which are extremely conservative: - long-term leases: no inflation. Future minimum lease payments to be collected under non-cancellable operating leases are presented as follow: (x €1,000) 31/12/2021 31/12/2020 (18 months) Not later than one year 258,500 208,464 Later than one year and not later than five years 1,030,413 829,866 Later than five years 3,923,979 3,107,193 TOTAL 5,212,891 4,145,523 Rental income includes contingent rents amounting to €1,082 k (31 December 2021: €1,197 k). In 2019/2020, a depreciation for doubtful debts of €1.9 million was recognised for Four Seasons for the period from 1 October 2019 until the transfer of the buildings to the new tenants in April 2020. The main other depreciations have been recognised for Majesticare (€0.6 million) and Touhula (€0.4 million). In 2021, the main depreciation for doubtful debts relates to Ontzorgd Wonen (€0.7 million) in the Netherlands. Aedifica – Annual Financial Report 2021 – 18 Note 5: Property result (x €1,000) 31/12/2021 31/12/2020 (12 months - restated period) 31/12/2020 (18 months) NET RENTAL INCOME 231,432 184,783 256,161 Indemnities on rental damage 0 0 0 RECOVERY OF PROPERTY CHARGES 0 0 0 Rebilling of rental charges invoiced to the landlord 1,798 1,876 2,206 Rebilling of property taxes and other taxes on let properties 2,446 1,623 1,604 RECOVERY OF RENTAL CHARGES AND TAXES NORMALLY PAID BY TENANTS ON LET PROPERTIES 4,244 3,499 3,810 COSTS PAYABLE BY THE TENANT AND BORNE BY THE LANDLORD ON RENTAL DAMAGE AND REPAIR AT END OF LEASE 0 0 0 Rental charges invoiced to the landlord -1,715 -1,876 -2,206 Property taxes and other taxes on let properties -2,413 -1,623 -1,604 CHARGES AND TAXES NOT RECOVERED BY THE TENANT ON LET PROPERTIES ACCORDING TO THE INCOME STATEMENT -4,128 -3,499 -3,810 Cleaning -274 -125 -187 Energy -773 -292 -335 Depreciation of furniture 0 7 -6 Employee benefits 0 -1 -1 Other 34 401 582 OTHER RENTAL-RELATED INCOME AND CHARGES -1,013 -10 53 PROPERTY RESULT 230,535 184,773 256,214 Note 6: Property operating result (x €1,000) 31/12/2021 31/12/2020 (12 months - restated period) 31/12/2020 (18 months) PROPERTY RESULT 230,535 184,773 256,214 Repair and maintenance -1,282 -967 -1,017 Insurance -98 29 -53 Employee benefits 0 410 441 Expert fees -52 -16 -51 TECHNICAL COSTS -1,432 -544 -680 Letting fees paid to real estate brokers 0 -123 -124 Marketing 0 -205 -234 Fees paid to lawyers and other legal costs 0 0 0 Employee benefits 0 -1 0 Other -61 0 0 COMMERCIAL COSTS -61 -329 -358 Charges -2 0 0 CHARGES AND TAXES ON UNLET PROPERTIES -2 0 0 Fees paid to external property managers -2,958 -2,763 -4,061 Internal property management expenses -2,475 -1,633 -2,185 PROPERTY MANAGEMENT COSTS -5,433 -4,396 -6,246 Property taxes and other taxes -667 -876 -1,227 OTHER PROPERTY CHARGES -667 -876 -1,227 PROPERTY OPERATING RESULT 222,940 178,628 247,703 184 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 19 – Aedifica – Annual Financial Report 2021 Note 7: Overheads (x €1,000) 31/12/2021 31/12/2020 (12 months - restated period) 31/12/2020 (18 months) Lawyers/notaries -1,713 -1,293 -1,880 Auditors/accountants -439 -2,143 -2,932 Real estate experts -1,354 -1,274 -1,817 IT -632 -563 -708 Insurance -457 -180 -235 Public relations, communication, marketing, publicity -656 -382 -519 Directors and executive management -3,793 -3,751 -6,053 Employee benefits -10,862 -8,687 -11,016 Depreciation and amortisation of other assets -1,660 -1,417 -2,030 Tax expense -2,945 -2,201 -2,263 Other -6,419 -5,206 -6,644 Financial services -529 -122 -234 Fleet -241 -226 -304 HQ -953 -940 -1,277 Other professional fees -4,537 -3,217 -3,976 Other -159 -701 -853 TOTAL -30,930 -27,097 -36,097 Audit fees (x €1,000) 31/12/2021 31/12/2020 (18 months) Statutory (audit Aedifica SA) 110 72 Statutory audit (subsidiaries) 176 291 Opinion reports foreseen in the Belgian Companies and Associations Code 16 35 Other opinion reports (comfort letter, etc.) 23 39 Tax advice missions 0 0 Other missions unconnected with the statutory audit 0 125 TOTAL 325 562 Related party transactions Related party transactions (as defined under IAS 24 and the Belgian Companies and Associations Code) relate exclusively to the remuneration of the members of the Board of Directors and the Executive Committee (€3,793 k in 2021; €6,053 k in 2019/2020). (x €1,000) 31/12/2021 31/12/2020 (12 months - restated period) 31/12/2020 (18 months) Short-term benefits 3,505 3,490 5,560 Post-employment benefits 235 235 333 Other long-term benefits 0 0 0 Termination benfits 0 0 0 Share-based payments 53 26 160 Total 3,793 3,751 6,053 – 185 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 19 – Aedifica – Annual Financial Report 2021 Note 7: Overheads (x €1,000) 31/12/2021 31/12/2020 (12 months - restated period) 31/12/2020 (18 months) Lawyers/notaries -1,713 -1,293 -1,880 Auditors/accountants -439 -2,143 -2,932 Real estate experts -1,354 -1,274 -1,817 IT -632 -563 -708 Insurance -457 -180 -235 Public relations, communication, marketing, publicity -656 -382 -519 Directors and executive management -3,793 -3,751 -6,053 Employee benefits -10,862 -8,687 -11,016 Depreciation and amortisation of other assets -1,660 -1,417 -2,030 Tax expense -2,945 -2,201 -2,263 Other -6,419 -5,206 -6,644 Financial services -529 -122 -234 Fleet -241 -226 -304 HQ -953 -940 -1,277 Other professional fees -4,537 -3,217 -3,976 Other -159 -701 -853 TOTAL -30,930 -27,097 -36,097 Audit fees (x €1,000) 31/12/2021 31/12/2020 (18 months) Statutory (audit Aedifica SA) 110 72 Statutory audit (subsidiaries) 176 291 Opinion reports foreseen in the Belgian Companies and Associations Code 16 35 Other opinion reports (comfort letter, etc.) 23 39 Tax advice missions 0 0 Other missions unconnected with the statutory audit 0 125 TOTAL 325 562 Related party transactions Related party transactions (as defined under IAS 24 and the Belgian Companies and Associations Code) relate exclusively to the remuneration of the members of the Board of Directors and the Executive Committee (€3,793 k in 2021; €6,053 k in 2019/2020). (x €1,000) 31/12/2021 31/12/2020 (12 months - restated period) 31/12/2020 (18 months) Short-term benefits 3,505 3,490 5,560 Post-employment benefits 235 235 333 Other long-term benefits 0 0 0 Termination benfits 0 0 0 Share-based payments 53 26 160 Total 3,793 3,751 6,053 Aedifica – Annual Financial Report 2021 – 20 Employee benefits expense Total employee benefits (excluding Executive Managers and Directors – see ‘Related party transactions’ above) are broken down in the income statement as follows: (x €1,000) 31/12/2021 31/12/2020 (12 months - restated period) 31/12/2020 (18 months) Cleaning costs (see Note 5) 0 -1 -1 Technical costs (see Note 6) 0 410 441 Commercial costs 0 -1 0 Overheads (see Note 7) -10,862 -8,687 -11,016 Property management costs (see Note 6) -2,475 -1,633 -2,185 Capitalised costs -715 -847 -817 TOTAL -14,052 -10,759 -13,578 Headcount at the end of the financial year and full-time equivalents (excluding Directors): 31/12/2021 31/12/2020 (18 months) Headcount at the year-end 114 105 Employees 109 101 Executive management personnel 5 4 FULL-TIME EQUIVALENT (EXCL. EXECUTIVE MANAGEMENT PERSONNEL) 106.9 95.1 The number of employees has increased due to the expansion of the team and the acquisition of Layland Walker Ltd in October 2021 (renamed Aedifica UK Management after the transaction). Note 8: Other operating income and charges (x €1,000) 31/12/2021 31/12/2020 (12 months - restated period) 31/12/2020 (18 months) Recovery of damage expenses 42 13 -35 Other 1,275 9 50 TOTAL 1,317 22 15 The increase in ‘Other operating income’ is mainly related to the recovery of VAT in the UK. Note 9: Gains and losses on disposals of investment properties (x €1,000) 31/12/2021 31/12/2020 (12 months - restated period) 31/12/2020 (18 months) Net sale of properties (selling price - transaction costs) 53,487 17,044 23,432 Carrying amount of properties sold (fair value of assets sold) 52,953 18,871 23,991 TOTAL 534 -1,827 -559 The table with the main disposals of the financial year are detailed in Note 38. 186 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 21 – Aedifica – Annual Financial Report 2021 Note 10: Gains and losses on disposals of other non-financial assets Over the course of the current and previous financial years, Aedifica has not recognised any gains or losses from the sale of other non-financial assets. Note 11: Changes in fair value of investment properties (x €1,000) 31/12/2021 31/12/2020 (12 months - restated period) 31/12/2020 (18 months) Positive changes 299,935 123,208 154,205 Negative changes -139,724 -118,138 -129,156 TOTAL 160,211 5,070 25,049 of which: marketable investment properties 153,519 14,816 41,930 development projects 6,692 -9,746 -16,881 Note 12: Other result on portfolio (x €1,000) 31/12/2021 31/12/2020 (12 months - restated period) 31/12/2020 (18 months) Goodwill impairment -3,540 0 0 Other 0 0 0 TOTAL -3,540 0 0 During the financial year under review, the Group recognised a goodwill impairment related to the acquisition of Layland Walker Ltd (see Note 20 for more information). Note 13: Financial income (x €1,000) 31/12/2021 31/12/2020 (12 months - restated period) 31/12/2020 (18 months) Interests earned -6 61 75 Other 849 427 403 TOTAL 843 488 478 The financial income of 2021 includes non-recurring income of €0.2 million, which represents the fee paid to Aedifica as a result of the contributions in kind of 29 June 2021 and 8 September 2021, in compensation for the grant of full dividend rights for the 2021 financial year to the shares issued on these days. It also included €0.3 million of realised and unrealised foreign exchange differences and €0.3 million of reinvoiced interests. The financial income of 2019/2020 includes non-recurring income of €0.3 million, which represents the fee paid to Aedifica as a result of the contribution in kind of 9 July 2020, in compensation for the grant of full dividend rights for the 2019/2020 financial year to the shares issued on that day. It also included €0.1 million of realised and unrealised foreign exchange differences. – 187 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 21 – Aedifica – Annual Financial Report 2021 Note 10: Gains and losses on disposals of other non-financial assets Over the course of the current and previous financial years, Aedifica has not recognised any gains or losses from the sale of other non-financial assets. Note 11: Changes in fair value of investment properties (x €1,000) 31/12/2021 31/12/2020 (12 months - restated period) 31/12/2020 (18 months) Positive changes 299,935 123,208 154,205 Negative changes -139,724 -118,138 -129,156 TOTAL 160,211 5,070 25,049 of which: marketable investment properties 153,519 14,816 41,930 development projects 6,692 -9,746 -16,881 Note 12: Other result on portfolio (x €1,000) 31/12/2021 31/12/2020 (12 months - restated period) 31/12/2020 (18 months) Goodwill impairment -3,540 0 0 Other 0 0 0 TOTAL -3,540 0 0 During the financial year under review, the Group recognised a goodwill impairment related to the acquisition of Layland Walker Ltd (see Note 20 for more information). Note 13: Financial income (x €1,000) 31/12/2021 31/12/2020 (12 months - restated period) 31/12/2020 (18 months) Interests earned -6 61 75 Other 849 427 403 TOTAL 843 488 478 The financial income of 2021 includes non-recurring income of €0.2 million, which represents the fee paid to Aedifica as a result of the contributions in kind of 29 June 2021 and 8 September 2021, in compensation for the grant of full dividend rights for the 2021 financial year to the shares issued on these days. It also included €0.3 million of realised and unrealised foreign exchange differences and €0.3 million of reinvoiced interests. The financial income of 2019/2020 includes non-recurring income of €0.3 million, which represents the fee paid to Aedifica as a result of the contribution in kind of 9 July 2020, in compensation for the grant of full dividend rights for the 2019/2020 financial year to the shares issued on that day. It also included €0.1 million of realised and unrealised foreign exchange differences. Aedifica – Annual Financial Report 2021 – 22 Note 14: Net interest charges (x €1,000) 31/12/2021 31/12/2020 (12 months - restated period) 31/12/2020 (18 months) Nominal interest on borrowings -20,240 -18,469 -24,320 Bilateral loans - floating rate -10,892 -11,398 -14,137 Short-term treasury notes - floating rate -439 -484 -580 Investment credits - floating or fixed rate -1,814 -5,845 -8,698 Long-term treasury notes - fixed rate -1,390 -741 -905 Bond - Fixed rate -1,171 0 0 Private placement - fixed rate -4,534 0 0 Charges arising from authorised hedging instruments Authorised hedging instruments qualifying for hedge accounting as defined under IFRS -4,711 -3,540 -4,461 Authorised hedging instruments not qualifying for hedge accounting as defined under IFRS -4,245 -4,340 -6,525 Subtotal -8,956 -7,880 -10,986 Income arising from authorised hedging instruments Authorised hedging instruments qualifying for hedge accounting as defined under IFRS 0 0 0 Authorised hedging instruments not qualifying for hedge accounting as defined under IFRS 0 0 0 Subtotal 0 0 0 Capitalised interest charges 3,320 1,990 2,491 Interest cost related to leasing debts booked in accordance with IFRS 16 -984 -729 -824 Other interest charges -688 -47 -49 TOTAL -27,548 -25,135 -33,688 Charges and income arising from hedging instruments represent Aedifica’s cash interest payments or receipts related to the derivatives presented in Note 24 and detailed in Note 33. Changes in the fair value of these derivatives are recognised in the income statement and are listed in Note 16. Note 15: Other financial charges (x €1,000) 31/12/2021 31/12/2020 (12 months - restated period) 31/12/2020 (18 months) Bank charges and other commissions -4,224 -3,076 -5,246 Other -1,233 -600 -299 TOTAL -5,457 -3,676 -5,545 The item ‘Bank charges and other commissions’ includes €2,785 k of commitment fees (2019/2020: €3,416 k). The item ‘Other’ includes -€824 k of realised and unrealised foreign exchange differences (2019/2020: -€147 k). 188 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 23 – Aedifica – Annual Financial Report 2021 Note 16: Charges in fair value of financial assets and liabilities (x €1,000) 31/12/2021 31/12/2020 (12 months - restated period) 31/12/2020 (18 months) Authorised hedging instruments Authorised hedging instruments qualifying for hedge accounting as defined under IFRS -31 8 -3 Authorised hedging instruments not qualifying for hedge accounting as defined under IFRS 15,679 -4,742 -970 Subtotal 15,648 -4,734 -973 Other -835 -853 -1,196 TOTAL 14,813 -5,587 -2,169 The Line ‘Other’ represents the changes in fair value of the put options granted to non-controlling shareholders (see Notes 24 and 43). Note 17: Share in the profit or loss of associates and joint ventures On 1 July 2018, Aedifica transferred the ‘apartments’ branch of activities to a separate company (Immobe NV/SA), which was initially wholly controlled by Aedifica NV/SA. Aedifica NV/SA gradually sold its shares in Immobe NV/SA (in 2 phases) to Primonial European Residential Fund: - phase 1: sale of 50% (minus one share) during the second quarter of the 2018/2019 financial year (see press release of 31 October 2018 for more information); - phase 2: sale of an additional 25% (plus two shares) during the third quarter of the 2018/2019 financial year (see press release of 27 March 2019 for more information). Following the sale of the second phase, Immobe NV/SA is no longer a perimeter company and is consolidated using the equity method. (x €1,000) 31/12/2021 31/12/2020 Carrying amount at the beginning of the year 36,998 33,931 Acquisition of shares of associates and joint ventures accounted for using the equity method 0 0 Disposal of shares of a subsidiary resulting in their equity method accounting (formerly under full consolidation) 0 0 Share in the profit or loss of associates and joint ventures accounted for using the equity method 6,371 4,575 Impact of dividends received on equity -2,847 -1,508 Other 0 0 Carrying amount at the end of the year 40,522 36,998 Company Immobe SA Segment Apartment buildings Country Belgium % held by Aedifica SA 24.97% Partner shareholders Primonial European Residential Holdco Sarl Date of company creation June 2018 Amount of the Aedifica SA share in the result (x €1,000) 31/12/2021 Net result (100%) 25,516 Other elements of the global result 0 Global result 25,516 % held by Aedifica SA 24.97% Share in the profit or loss of associates and joint ventures accounted for using the equity method 6,371 Amount of the interest at Aedifica SA (x €1,000) Equity-accounted investments 40,522 – 189 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 23 – Aedifica – Annual Financial Report 2021 Note 16: Charges in fair value of financial assets and liabilities (x €1,000) 31/12/2021 31/12/2020 (12 months - restated period) 31/12/2020 (18 months) Authorised hedging instruments Authorised hedging instruments qualifying for hedge accounting as defined under IFRS -31 8 -3 Authorised hedging instruments not qualifying for hedge accounting as defined under IFRS 15,679 -4,742 -970 Subtotal 15,648 -4,734 -973 Other -835 -853 -1,196 TOTAL 14,813 -5,587 -2,169 The Line ‘Other’ represents the changes in fair value of the put options granted to non-controlling shareholders (see Notes 24 and 43). Note 17: Share in the profit or loss of associates and joint ventures On 1 July 2018, Aedifica transferred the ‘apartments’ branch of activities to a separate company (Immobe NV/SA), which was initially wholly controlled by Aedifica NV/SA. Aedifica NV/SA gradually sold its shares in Immobe NV/SA (in 2 phases) to Primonial European Residential Fund: - phase 1: sale of 50% (minus one share) during the second quarter of the 2018/2019 financial year (see press release of 31 October 2018 for more information); - phase 2: sale of an additional 25% (plus two shares) during the third quarter of the 2018/2019 financial year (see press release of 27 March 2019 for more information). Following the sale of the second phase, Immobe NV/SA is no longer a perimeter company and is consolidated using the equity method. (x €1,000) 31/12/2021 31/12/2020 Carrying amount at the beginning of the year 36,998 33,931 Acquisition of shares of associates and joint ventures accounted for using the equity method 0 0 Disposal of shares of a subsidiary resulting in their equity method accounting (formerly under full consolidation) 0 0 Share in the profit or loss of associates and joint ventures accounted for using the equity method 6,371 4,575 Impact of dividends received on equity -2,847 -1,508 Other 0 0 Carrying amount at the end of the year 40,522 36,998 Company Immobe SA Segment Apartment buildings Country Belgium % held by Aedifica SA 24.97% Partner shareholders Primonial European Residential Holdco Sarl Date of company creation June 2018 Amount of the Aedifica SA share in the result (x €1,000) 31/12/2021 Net result (100%) 25,516 Other elements of the global result 0 Global result 25,516 % held by Aedifica SA 24.97% Share in the profit or loss of associates and joint ventures accounted for using the equity method 6,371 Amount of the interest at Aedifica SA (x €1,000) Equity-accounted investments 40,522 Aedifica – Annual Financial Report 2021 – 24 Note 18: Tax (x €1,000) 31/12/2021 31/12/2020 (12 months - restated period) 31/12/2020 (18 months) Parent Profit before tax (loss) 202,654 116,183 193,416 Effect of the Belgian REIT tax regime -202,654 -116,183 -193,416 Taxable result in Belgium based on non-deductible costs 2,185 1,069 1,191 Belgian current tax at rate of 29,58% -646 -316 -352 Belgian current tax regularisation for the previous year -103 0 -14 Foreign current tax -2,489 -2,060 -2,639 Subtotal -3,238 -2,376 -3,005 Subsidiaries Belgian current tax -5 0 0 Foreign current tax -7,034 -5,327 -8,525 Subtotal -7,039 -5,327 -8,525 Corporate tax -10,277 -7,703 -11,530 Exit tax -256 112 60 Parent -1,121 -2,664 -3,611 Foreign deferred taxes: originations 0 878 1,300 Foreign deferred taxes: reversals -1,121 -3,542 -4,911 Subsidiaries -45,075 -8,489 -11,260 Foreign deferred taxes: originations -287 2,181 1,514 Foreign deferred taxes: reversals -44,788 -10,670 -12,774 Deferred taxes -46,196 -11,153 -14,871 TOTAL TAX -56,729 -18,744 -26,341 The corporate taxes are composed of current taxes, deferred taxes and exit tax. Current taxes consist primarily of Belgian tax on Aedifica’s non-deductible expenditures (since Belgian REITs benefit from a specific tax regime, leading to the taxation of only non-deductible costs, such as regional taxes, car costs, representation costs, social costs, donations, etc.), tax generated abroad and tax on the result of the consolidated subsidiaries. Deferred taxes generally arose from the recognition at fair value of buildings located abroad in conformity with IAS 40. This deferred tax (with no monetary impact, that is to say, non-cash) is thus excluded from the EPRA Earnings (see Note 25). 190 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 25 – Aedifica – Annual Financial Report 2021 Note 19: Earnings per share The earnings per share (‘EPS’ as defined by IAS 33) is calculated as follows: 31/12/2021 31/12/2020 (12 months - restated period) 31/12/2020 (18 months) Profit (loss) (Owners of the parent) (x €1,000) 281,824 103,894 173,068 Weighted average number of shares outstanding during the period 34,789,526 27,472,976 26,512,206 Basic EPS (in €) 8.10 3.78 6.53 Diluted EPS (in €) 8.10 3.78 6.52 Aedifica uses EPRA Earnings to comply with the EPRA’s recommendations and to measure its operational and financial performance; however, this performance measure is not defined under IFRS (see Note 44). In Aedifica’s case, it represents the profit (attributable to owners of the Parent) after removing changes in fair value of investment properties (attributable to owners of the Parent) (and the movements of deferred taxes related to these), hedging instruments and the result of the sale of investment properties. It is calculated as follows: (x €1,000) 31/12/2021 31/12/2020 (12 months - restated period) 31/12/2020 (18 months) Profit (loss) (Owners of the parent) 281,824 103,894 173,068 Less: Changes in fair value of investment properties (see Note 11) -160,211 -5,069 -25,049 Less: Gain and losses on disposal of investment properties (see Note 9) -534 1,827 559 Less: Deferred taxes in respect of EPRA adjustments (see Notes 18 and 25) 46,452 11,041 14,811 Less: Tax on profits or losses on disposals (see Notes 9 and 18) 559 0 0 Less: Changes in fair value of financial assets and liabilities (see Note 16) -14,813 5,587 2,169 Less: Negative goodwill / goodwill impairment (see Note 12) 3,540 0 0 Add : Share in the profit or loss of associates and joint ventures accounted for using the equity method in respect of EPRA corrections -6,011 -1,180 -3,007 Add: Non-controlling interests in respect of the above 673 68 167 Roundings 0 0 0 EPRA Earnings 151,479 116,168 162,718 Weighted average number of shares outstanding during the period 34,789,526 27,472,976 26,512,206 EPRA Earnings per share (in €) 4.35 4.23 6.14 EPRA Earnings diluted per Share (in €) 4.35 4.22 6.13 The calculation in accordance with the model recommended by EPRA is included in the EPRA chapter of the Annual Financial Report. – 191 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 25 – Aedifica – Annual Financial Report 2021 Note 19: Earnings per share The earnings per share (‘EPS’ as defined by IAS 33) is calculated as follows: 31/12/2021 31/12/2020 (12 months - restated period) 31/12/2020 (18 months) Profit (loss) (Owners of the parent) (x €1,000) 281,824 103,894 173,068 Weighted average number of shares outstanding during the period 34,789,526 27,472,976 26,512,206 Basic EPS (in €) 8.10 3.78 6.53 Diluted EPS (in €) 8.10 3.78 6.52 Aedifica uses EPRA Earnings to comply with the EPRA’s recommendations and to measure its operational and financial performance; however, this performance measure is not defined under IFRS (see Note 44). In Aedifica’s case, it represents the profit (attributable to owners of the Parent) after removing changes in fair value of investment properties (attributable to owners of the Parent) (and the movements of deferred taxes related to these), hedging instruments and the result of the sale of investment properties. It is calculated as follows: (x €1,000) 31/12/2021 31/12/2020 (12 months - restated period) 31/12/2020 (18 months) Profit (loss) (Owners of the parent) 281,824 103,894 173,068 Less: Changes in fair value of investment properties (see Note 11) -160,211 -5,069 -25,049 Less: Gain and losses on disposal of investment properties (see Note 9) -534 1,827 559 Less: Deferred taxes in respect of EPRA adjustments (see Notes 18 and 25) 46,452 11,041 14,811 Less: Tax on profits or losses on disposals (see Notes 9 and 18) 559 0 0 Less: Changes in fair value of financial assets and liabilities (see Note 16) -14,813 5,587 2,169 Less: Negative goodwill / goodwill impairment (see Note 12) 3,540 0 0 Add : Share in the profit or loss of associates and joint ventures accounted for using the equity method in respect of EPRA corrections -6,011 -1,180 -3,007 Add: Non-controlling interests in respect of the above 673 68 167 Roundings 0 0 0 EPRA Earnings 151,479 116,168 162,718 Weighted average number of shares outstanding during the period 34,789,526 27,472,976 26,512,206 EPRA Earnings per share (in €) 4.35 4.23 6.14 EPRA Earnings diluted per Share (in €) 4.35 4.22 6.13 The calculation in accordance with the model recommended by EPRA is included in the EPRA chapter of the Annual Financial Report. Aedifica – Annual Financial Report 2021 – 26 Note 20: Goodwill (x €1,000) 31/12/2021 31/12/2020 Gross value at the beginning of the year 162,061 335 Cumulative impairment losses at the beginning of the year -335 -335 Carrying amount at the beginning of the year 161,726 0 Additions / Transfer 3,617 161,726 Impairment losses -3,617 0 CARRYING AMOUNT AT THE END OF THE YEAR 161,726 161,726 of which: gross value 165,679 162,061 cumulative impairment losses -3,953 -335 In accordance with the requirements of IAS 36 – Impairment of Assets, the Group primarily analysed the carrying amount of goodwill. The initial goodwill (€335 k) arose from the acquisition of Schloss Bensberg Management GmbH. This goodwill was set at zero during the 2017/2018 financial year. The goodwill addition in 2020 (€161,726 k) arose from the acquisition of Hoivatilat Oyj. It results from the positive difference between the acquisition cost (the price paid for the shares of Hoivatilat Oyj) and the fair value of the net asset acquired, including deferred tax effect corresponding to the theoretical assumption required under IAS/IFRS of an immediate disposal of the assets and liabilities at the closing date. The tax rate applied for Finland is 20%. The goodwill addition in 2021 (€3,617 k, corresponding to £3,043 k in the books of Aedifica UK Ltd, the buyer) arose from the acquisition of Layland Walker Ltd (renamed Aedifica UK Management Ltd), Aedifica’s UK asset management company. It results from the positive difference between the acquisition cost (the price paid for the shares of Layland Walker Ltd) and the fair value of the net asset acquired. Impairment test On 31 December 2021, the goodwill of the Hoivatilat Oyj acquisition was subject to an impairment test by comparing the fair value of investment properties and development projects (including deferred tax effect plus the goodwill) to the value in use of these investment properties and development projects. The fair value of investment properties and development projects is established by an independent expert in accordance with the Group valuation rules as presented in Note 2. The value in use is established by the Group according to expected future net cash flows based on the rents of the underlying investment properties and development projects (as per tenants’ lease agreements), the expenses to maintain and manage the property portfolio, and the theoretical renovation costs of the properties. The value in use also consider the net future cash flows of a non-committed development pipeline of €100 million per year during the first 4 years, based on the plans of the subsidiary’s Management. The main assumptions in the establishment of the value in use are the indexation rate and the discount rate. Assumptions used in the calculation of the value in use of Hoivatilat: - the cash flow horizon is 45 years with a final value that is determined as a perpetuity of 80% of the last cash flow; - renewal costs are estimated at 20% of the cost price every 15 years; - the yield on cost that is used to determine the non-committed pipeline rents is based on the assumptions used by experts in the valuation of the existing portfolio; - the indexation considered on the cash flows stands at 2%; - the discount rate amounts to 4.25%. On 31 December 2021, the fair value of investment properties and development projects (net of deferred tax liability carried on the balance sheet) plus goodwill amounts to €1,079,560 k. The value in use, calculated on the same date according to the principles set out above, amounts to €1,104,586 k. Sensitivity analysis Change in inflation Change in discount rate +0.50% -0.50% +0.50% -0.50% Change of value in use (in %) 13% -11% -12% 14% As Aedifica UK Management Ltd will not provide asset management services outside the Group, the value in use is considered to be zero. Consequently, the goodwill has been fully amortised by 31 December 2021 (£3,043 k corresponding to €3,540 k in P&L converted at the average exchange rate for the period). 192 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 27 – Aedifica – Annual Financial Report 2021 Note 21: Intangible assets Intangible assets all have a limited useful life and consist mainly of computer software. In 2020, the Company installed an ERP system. Amortisation is recognised in income under the line ‘overheads’ (see Note 7). (x €1,000) 31/12/2021 31/12/2020 Gross value at the beginning of the year 2,698 939 Depreciation and cumulative impairment losses at the beginning of the year -909 -533 Carrying amount at the beginning of the year 1,790 407 Entries: items acquired separately 657 1,790 Disposals -3 -31 Amortisations to income statement -511 -406 Amortisations related to acquisitions and disposals 1 30 CARRYING AMOUNT AT THE END OF THE YEAR 1,934 1,790 of which: gross value 3,353 2,698 amortisations and cumulative impairment losses -1,419 -909 Note 22: Investment properties (x €1,000) Marketable investment properties Development projects TOTAL CARRYING AMOUNT AS OF 1/07/2019 2,264,504 51,205 2,315,709 Acquisitions 1,078,951 73,610 1,152,561 Disposals -23,907 0 -23,907 Capitalised interest charges 0 2,491 2,491 Capitalised employee benefits 0 468 468 Other capitalised expenses 35,563 251,050 286,613 Transfers due to completion 220,623 -220,623 0 Changes in fair value (see Note 11) 41,930 -16,881 25,049 Other expenses booked in the income statement 0 0 0 Transfers to equity -1,382 0 -1,382 Assets classified as held for sale -888 0 -888 CARRYING AMOUNT AS OF 31/12/2020 3,615,394 141,320 3,756,714 CARRYING AMOUNT AS OF 1/01/2021 3,615,394 141,320 3,756,714 Acquisitions 609,003 16,369 625,372 Disposals -53,134 0 -53,134 Capitalised interest charges 0 3,321 3,321 Capitalised employee benefits 0 1,117 1,117 Other capitalised expenses 22,851 272,253 295,104 Transfers due to completion 289,139 -289,139 0 Changes in fair value (see Note 11) 153,519 6,692 160,211 Other expenses booked in the income statement 0 0 0 Transfers to equity 43,621 21 43,642 Assets classified as held for sale -29,232 0 -29,232 CARRYING AMOUNT AS OF 31/12/2021 4,651,161 151,954 4,803,115 The fair value is supported by market evidence and is based on valuations provided by valuation experts with relevant and recognised professional qualifications and recent experience in the geographic areas and property types included in Aedifica’s portfolio. All investment properties are located in Belgium, Germany, the Netherlands, the United Kingdom, Finland, Sweden, Ireland and Spain. The fair value of the marketable investment properties as of 31 December 2021 is assessed by independent valuation experts. The average capitalisation rate applied to contractual rents is 5.52% (in accordance with the valuation methodology – presented in the first bullet of section 1.11 of the Standing Documents included in the 2021 Annual Financial Report). A positive 0.10% change in the capitalisation rate would lead to a negative change of approx. €83 million in the portfolio’s fair value. Development projects are described in detail in the Property Report included in the present Annual Financial Report. – 193 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 27 – Aedifica – Annual Financial Report 2021 Note 21: Intangible assets Intangible assets all have a limited useful life and consist mainly of computer software. In 2020, the Company installed an ERP system. Amortisation is recognised in income under the line ‘overheads’ (see Note 7). (x €1,000) 31/12/2021 31/12/2020 Gross value at the beginning of the year 2,698 939 Depreciation and cumulative impairment losses at the beginning of the year -909 -533 Carrying amount at the beginning of the year 1,790 407 Entries: items acquired separately 657 1,790 Disposals -3 -31 Amortisations to income statement -511 -406 Amortisations related to acquisitions and disposals 1 30 CARRYING AMOUNT AT THE END OF THE YEAR 1,934 1,790 of which: gross value 3,353 2,698 amortisations and cumulative impairment losses -1,419 -909 Note 22: Investment properties (x €1,000) Marketable investment properties Development projects TOTAL CARRYING AMOUNT AS OF 1/07/2019 2,264,504 51,205 2,315,709 Acquisitions 1,078,951 73,610 1,152,561 Disposals -23,907 0 -23,907 Capitalised interest charges 0 2,491 2,491 Capitalised employee benefits 0 468 468 Other capitalised expenses 35,563 251,050 286,613 Transfers due to completion 220,623 -220,623 0 Changes in fair value (see Note 11) 41,930 -16,881 25,049 Other expenses booked in the income statement 0 0 0 Transfers to equity -1,382 0 -1,382 Assets classified as held for sale -888 0 -888 CARRYING AMOUNT AS OF 31/12/2020 3,615,394 141,320 3,756,714 CARRYING AMOUNT AS OF 1/01/2021 3,615,394 141,320 3,756,714 Acquisitions 609,003 16,369 625,372 Disposals -53,134 0 -53,134 Capitalised interest charges 0 3,321 3,321 Capitalised employee benefits 0 1,117 1,117 Other capitalised expenses 22,851 272,253 295,104 Transfers due to completion 289,139 -289,139 0 Changes in fair value (see Note 11) 153,519 6,692 160,211 Other expenses booked in the income statement 0 0 0 Transfers to equity 43,621 21 43,642 Assets classified as held for sale -29,232 0 -29,232 CARRYING AMOUNT AS OF 31/12/2021 4,651,161 151,954 4,803,115 The fair value is supported by market evidence and is based on valuations provided by valuation experts with relevant and recognised professional qualifications and recent experience in the geographic areas and property types included in Aedifica’s portfolio. All investment properties are located in Belgium, Germany, the Netherlands, the United Kingdom, Finland, Sweden, Ireland and Spain. The fair value of the marketable investment properties as of 31 December 2021 is assessed by independent valuation experts. The average capitalisation rate applied to contractual rents is 5.52% (in accordance with the valuation methodology – presented in the first bullet of section 1.11 of the Standing Documents included in the 2021 Annual Financial Report). A positive 0.10% change in the capitalisation rate would lead to a negative change of approx. €83 million in the portfolio’s fair value. Development projects are described in detail in the Property Report included in the present Annual Financial Report. Aedifica – Annual Financial Report 2021 – 28 The portfolio of investment properties includes a right of use of €58 million related to plots of land held in 'leasehold' in accordance with IFRS 16. Assets classified as held for sale (line II.A. included in the assets on the balance sheet) amount to €35.4 million as of 31 December 2021. They mainly relate to nine care properties in Finland and one care property in the United Kingdom that are considered to be non-strategic assets. Acquisitions made during the financial year are described in detail in the Financial Report included in the present Annual Financial Report. All investment properties are considered to be at ‘level 3’ on the fair value scale defined under IFRS 13. This scale includes three levels: Level 1: observable listed prices in active markets; Level 2: observable data other than the listed prices included in level 1; Level 3: unobservable data. During the 2021 financial year, there were no transfers between level 1, level 2 and level 3. The valuation methodologies (approach under which a capitalisation rate is applied to the estimated rental value and another approach based on the present value of future cash flows) are described in section 1.11 of the standing documents of the present Annual Financial Report. The quantitative information presented below in relation to the determination of the fair value of investment properties based on unobservable data (level 3) is taken from various reports produced by the valuation experts: Type of asset Fair value as of 31/12/2021 (x €1,000) Assessment method Unobservable data 1 Min Max Weighted average HEALTHCARE REAL ESTATE 4,686,521 Belgium 1,213,217 DCF & Capitalisation ERV / m² 77 279 128 Inflation 1.5% 1.8% 1.6% Discount rate 4.7% 6.9% 5.4% Capitalisation rate 3.7% 7.6% 5.0% Residual maturity (year) 3 29 22 Netherlands 564,105 DCF & Capitalisation ERV / m² 39 305 135 Inflation 1.8% 2.0% 1.9% Discount rate 4.5% 8.0% 5.9% Capitalisation rate 4.0% 12.5% 5.6% Residual maturity (year) 10 26 18 Germany 1,057,514 DCF & Capitalisation ERV / m² 39 225 119 Inflation 2.0% 2.0% 2.0% Discount rate 4.1% 7.0% 5.5% Residual maturity (year) 1 30 23 United Kingdom 821,666 DCF & Capitalisation ERV / m² 63 344 174 Capitalisation rate 4.6% 12.9% 6.0% Residual maturity (year) 12 35 22 Finland 859,850 DCF & Capitalisation ERV / m² 127 295 206 Inflation 1.9% 1.9% 1.9% Discount rate 3.8% 9.5% 4.5% Residual maturity (year) 2 25 12 Sweden 78,329 DCF & Capitalisation ERV / m² 2,195 2,195 2,629 Inflation 2.0% 2.0% 2.0% Discount rate 6.1% 6.7% 6.5% Residual maturity (year) 2 19 13 Ireland 91,841 DCF & Capitalisation ERV / m² 47 276 198 Inflation 4.5% 5.1% 4.9% Residual maturity (year) 24 25 24 DEVELOPMENT PROJECTS 150,449 DCF & Capitalisation ERV / m² 58 280 165 Inflation 1.5% 2.0% 1.6% Discount rate 3.2% 6.9% 4.1% Capitalisation rate 3.6% 7.0% 4.8% Residual maturity (year) 9 35 24 Total 4,836,971 1 ERV / m² is expressed in local currency. The valuation of the buildings is based on an occupancy rate of 100% for the entire healthcare real estate portfolio. The different parameters applied in the capitalisation method can vary depending on the location of the assets, the quality of the building, quality of the operator, lease length etc., which explains the significant differences between the minimum and maximum amounts for these unobservable data. The capitalisation rate is determined by the valuation expert based on economic data and benchmarking and takes into account a risk premium. 194 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 29 – Aedifica – Annual Financial Report 2021 Type of asset Fair value as of 31/12/2020 (x €1,000) Assessment method Unobservable data 1 Min Max Weighted average HEALTHCARE REAL ESTATE 3,621,522 Belgium 1,151,419 DCF & Capitalisation ERV / m² 56 257 126 Inflation 1.5% 1.5% 1.5% Discount rate 3.6% 6.8% 4.9% Capitalisation rate 4.1% 7.2% 5.2% Residual maturity (year) 1 30 21 Netherlands 515,768 DCF & Capitalisation ERV / m² 18 302 135 Inflation 1.9% 2.0% 2.0% Discount rate 5.0% 7.0% 6.0% Capitalisation rate 3.7% 6.9% 5.5% Residual maturity (year) 11 27 18 Germany 634,220 DCF & Capitalisation ERV / m² 39 210 124 Inflation 2.0% 2.0% 2.0% Discount rate 4.6% 6.8% 5.8% Residual maturity (year) 2 30 22 United Kingdom 633,302 DCF & Capitalisation ERV / m² 63 487 166 Capitalisation rate 4.5% 13.8% 6.2% Residual maturity (year) 13 34 22 Finland 667,270 DCF & Capitalisation ERV / m² 135 391 202 Inflation 1.8% 1.8% 1.8% Discount rate 3.8% 8.0% 4.8% Residual maturity (year) 3 25 12 Sweden 19,543 DCF & Capitalisation ERV / m² 2,292 2,733 2,423 Inflation 2.0% 2.0% 2.0% Discount rate 6.7% 7.0% 6.9% Residual maturity (year) 15 20 17 DEVELOPMENT PROJECTS 134,563 DCF & Capitalisation ERV / m² 58 295 146 Inflation 1.5% 2.0% 1.9% Discount rate 3.8% 7.0% 5.0% Capitalisation rate 4.6% 7.2% 5.0% Residual maturity (year) 10 30 24 Total 3,756,085 1 ERV / m² is expressed in local currency. In accordance with legal provisions, properties are revalued four times per year based on valuation reports prepared by the ten valuation experts appointed by the Company. These valuations are based on: - information provided by the Company such as contractual rents, rental contracts, investment budgets, etc. These data are extracted from the Company’s information system and are thus subject to the Company’s internal control environment; - assumptions and valuation models used by the valuation experts, based on their professional judgment and market knowledge. Reports provided by the valuation experts are reviewed by the Company’s Senior Valuation & Asset Manager, the Group Controller and the Executive Managers. This includes a review of the changes in fair value over the period. When the Executive Managers consider that the valuation reports of the valuation experts are coherent, the valuation report is submitted to the Audit Committee. Following a favourable opinion of the Audit and Risk Committee, these reports are submitted to the Board of Directors. The sensitivity of the fair value measurement to a change of the abovementioned unobservable data is generally as follows (all else being equal): Unobservable data Effect on the fair value in case of decrease of the unobservable input value in case of increase of the unobservable input value ERV / m² negative positive Capitalisation rate positive negative Inflation negative positive Discount rate positive negative Residual maturity (year) negative positive Interrelations between unobservable data are possible, as they are determined in part by market conditions. – 195 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 29 – Aedifica – Annual Financial Report 2021 Type of asset Fair value as of 31/12/2020 (x €1,000) Assessment method Unobservable data 1 Min Max Weighted average HEALTHCARE REAL ESTATE 3,621,522 Belgium 1,151,419 DCF & Capitalisation ERV / m² 56 257 126 Inflation 1.5% 1.5% 1.5% Discount rate 3.6% 6.8% 4.9% Capitalisation rate 4.1% 7.2% 5.2% Residual maturity (year) 1 30 21 Netherlands 515,768 DCF & Capitalisation ERV / m² 18 302 135 Inflation 1.9% 2.0% 2.0% Discount rate 5.0% 7.0% 6.0% Capitalisation rate 3.7% 6.9% 5.5% Residual maturity (year) 11 27 18 Germany 634,220 DCF & Capitalisation ERV / m² 39 210 124 Inflation 2.0% 2.0% 2.0% Discount rate 4.6% 6.8% 5.8% Residual maturity (year) 2 30 22 United Kingdom 633,302 DCF & Capitalisation ERV / m² 63 487 166 Capitalisation rate 4.5% 13.8% 6.2% Residual maturity (year) 13 34 22 Finland 667,270 DCF & Capitalisation ERV / m² 135 391 202 Inflation 1.8% 1.8% 1.8% Discount rate 3.8% 8.0% 4.8% Residual maturity (year) 3 25 12 Sweden 19,543 DCF & Capitalisation ERV / m² 2,292 2,733 2,423 Inflation 2.0% 2.0% 2.0% Discount rate 6.7% 7.0% 6.9% Residual maturity (year) 15 20 17 DEVELOPMENT PROJECTS 134,563 DCF & Capitalisation ERV / m² 58 295 146 Inflation 1.5% 2.0% 1.9% Discount rate 3.8% 7.0% 5.0% Capitalisation rate 4.6% 7.2% 5.0% Residual maturity (year) 10 30 24 Total 3,756,085 1 ERV / m² is expressed in local currency. In accordance with legal provisions, properties are revalued four times per year based on valuation reports prepared by the ten valuation experts appointed by the Company. These valuations are based on: - information provided by the Company such as contractual rents, rental contracts, investment budgets, etc. These data are extracted from the Company’s information system and are thus subject to the Company’s internal control environment; - assumptions and valuation models used by the valuation experts, based on their professional judgment and market knowledge. Reports provided by the valuation experts are reviewed by the Company’s Senior Valuation & Asset Manager, the Group Controller and the Executive Managers. This includes a review of the changes in fair value over the period. When the Executive Managers consider that the valuation reports of the valuation experts are coherent, the valuation report is submitted to the Audit Committee. Following a favourable opinion of the Audit and Risk Committee, these reports are submitted to the Board of Directors. The sensitivity of the fair value measurement to a change of the abovementioned unobservable data is generally as follows (all else being equal): Unobservable data Effect on the fair value in case of decrease of the unobservable input value in case of increase of the unobservable input value ERV / m² negative positive Capitalisation rate positive negative Inflation negative positive Discount rate positive negative Residual maturity (year) negative positive Interrelations between unobservable data are possible, as they are determined in part by market conditions. Aedifica – Annual Financial Report 2021 – 30 Note 23: Other tangible assets (x €1,000) 31/12/2021 31/12/2020 Gross value at beginning of the period 4,944 2,220 Depreciation and cumulative impairment losses at beginning of period -2,131 -894 Carrying amount at beginning of period 2,813 1,326 Additions 763 3,000 Disposals -59 -275 Depreciations to income statement -1,148 -1,629 Depreciations related to acquisitions and disposals 1 392 CARRYING AMOUNT AT END OF PERIOD 2,369 2,813 of which: gross value (excl. IFRS 16) 2,332 2,272 Right of use assets (in accordance with IFRS 16) 3,180 2,672 depreciations and cumulative impairment losses -1,635 -1,267 Depreciations on right of use assets (in accordance with IFRS 16) -1,509 -864 Amortisation is recognised in income under the line ‘overheads’ (see Note 7). Note 24: Non-current financial assets and other financial liabilities (x €1,000) 31/12/2021 31/12/2020 Receivables Collateral 93 438 Other non-current receivables 666 490 Available-for-sale financial assets Investments in related entities (Note 40) 0 0 Assets at fair value through profit or loss Hedging instruments (see Note 33) 6,720 234 Other non-current financial assets Hedging instruments (see Note 33) 0 0 Other Investments in related entities (Note 40) 0 0 TOTAL NON-CURRENT FINANCIAL ASSETS 7,479 1,162 Liabilities at fair value through profit or loss Hedging instruments (see Note 33) -20,575 -30,362 Other -5,697 -5,287 Total non-current financial liabilities Hedging instruments (see Note 33) -12,751 -20,858 Non current lease liability (in accordance with IFRS 16) -57,131 -51,553 TOTAL OTHER NON-CURRENT FINANCIAL LIABILITIES -96,154 -108,060 Total current financial liabilities Current lease liability (in accordance with IFRS 16) -2,616 -2,077 TOTAL OTHER CURRENT FINANCIAL LIABILITIES -2,616 -2,077 The collateral at fair value (€93 k; 31 December 2020: €438 k) includes blocked funds in Germany. Assets and liabilities recognised at fair value through profit or loss consist primarily of hedging instruments. However, they hedge interest rate risks. The cash flows generated by all hedges, as well as the changes in fair value taken into income, are presented in Notes 14 and 16. The other liabilities recognised at fair value through profit or loss (€5,697 k; 31 December 2020: €5,287 k) include the put options granted to non- controlling shareholders (see Notes 16 and 43). 196 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 31 – Aedifica – Annual Financial Report 2021 Note 25: Deferred taxes The deferred taxes recognised in the balance sheet arise from the acquisitions of investment properties located outside of Belgium. They generally result from the temporary difference between the buildings’ fair value and the assessed value used for tax purposes. The increase in deferred taxes is mainly due to the increase in the fair value of the properties. Changes in deferred taxes are as follows (see also Note 18): (x €1,000) Assets Liabilities CARRYING AMOUNT AS OF 1/07/2019 0 -11,848 Originations 1,764 -16,653 Reversals 0 18 Scope changes 1,137 -46,126 CARRYING AMOUNT AS OF 31/12/2020 2,902 -74,609 (x €1,000) Assets Liabilities CARRYING AMOUNT AS OF 31/12/2020 2,902 -74,609 Originations 102 -388 Reversals -135 -45,774 Scope changes 246 -511 CARRYING AMOUNT AS OF 31/12/2021 3,116 -121,283 Note 26: Trade receivables (x €1,000) 31/12/2021 31/12/2020 TRADE RECEIVABLES - NET VALUE 20,434 12,698 It is anticipated that the carrying amount of trade receivables will be recovered within twelve months. This carrying amount represents an estimate of the fair value of assets that do not generate interest. The credit risk associated with trade receivables is limited thanks to the diversity of the client base and rental guarantees (€148 million; 31 December 2020: €125 million) received from tenants to cover their commitments. In the United Kingdom, collateral on the companies is used as a guarantee. The carrying amount on the balance sheet is presented net of the provision for doubtful debts. Thus, the risk of exposure to credit risk is reflected in the carrying amount of receivables recognised on the balance sheet. Trade receivables are analysed as follows: (x €1,000) 31/12/2021 31/12/2020 under 90 days 3,304 3,176 over 90 days 1,727 3,431 Subtotal 5,031 6,607 Not due 19,471 9,474 Write-downs -4,068 -3,383 CARRYING AMOUNT 20,434 12,698 Write-downs have evolved as follows: (x €1,000) 31/12/2021 31/12/2020 At beginning of period -3,383 -41 Addition -770 -3,815 Utilisation 0 0 Reversal 86 473 Mergers / Transfers 0 0 AT END OF PERIOD -4,068 -3,383 – 197 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 31 – Aedifica – Annual Financial Report 2021 Note 25: Deferred taxes The deferred taxes recognised in the balance sheet arise from the acquisitions of investment properties located outside of Belgium. They generally result from the temporary difference between the buildings’ fair value and the assessed value used for tax purposes. The increase in deferred taxes is mainly due to the increase in the fair value of the properties. Changes in deferred taxes are as follows (see also Note 18): (x €1,000) Assets Liabilities CARRYING AMOUNT AS OF 1/07/2019 0 -11,848 Originations 1,764 -16,653 Reversals 0 18 Scope changes 1,137 -46,126 CARRYING AMOUNT AS OF 31/12/2020 2,902 -74,609 (x €1,000) Assets Liabilities CARRYING AMOUNT AS OF 31/12/2020 2,902 -74,609 Originations 102 -388 Reversals -135 -45,774 Scope changes 246 -511 CARRYING AMOUNT AS OF 31/12/2021 3,116 -121,283 Note 26: Trade receivables (x €1,000) 31/12/2021 31/12/2020 TRADE RECEIVABLES - NET VALUE 20,434 12,698 It is anticipated that the carrying amount of trade receivables will be recovered within twelve months. This carrying amount represents an estimate of the fair value of assets that do not generate interest. The credit risk associated with trade receivables is limited thanks to the diversity of the client base and rental guarantees (€148 million; 31 December 2020: €125 million) received from tenants to cover their commitments. In the United Kingdom, collateral on the companies is used as a guarantee. The carrying amount on the balance sheet is presented net of the provision for doubtful debts. Thus, the risk of exposure to credit risk is reflected in the carrying amount of receivables recognised on the balance sheet. Trade receivables are analysed as follows: (x €1,000) 31/12/2021 31/12/2020 under 90 days 3,304 3,176 over 90 days 1,727 3,431 Subtotal 5,031 6,607 Not due 19,471 9,474 Write-downs -4,068 -3,383 CARRYING AMOUNT 20,434 12,698 Write-downs have evolved as follows: (x €1,000) 31/12/2021 31/12/2020 At beginning of period -3,383 -41 Addition -770 -3,815 Utilisation 0 0 Reversal 86 473 Mergers / Transfers 0 0 AT END OF PERIOD -4,068 -3,383 Aedifica – Annual Financial Report 2021 – 32 Note 27 : Tax receivables and other current assets (x €1,000) 31/12/2021 31/12/2020 Tax 5,981 3,575 Other 1,387 1,602 TOTAL 7,368 5,177 Tax receivables are composed of tax credits. Note 28: Cash and cash equivalents (x €1,000) 31/12/2021 31/12/2020 Short-term deposits 0 0 Cash at bank and in hands 15,335 23,546 TOTAL 15,335 23,546 The above amounts were available as at 31 December 2021 and 31 December 2020. Note 29: Deferred charges and accrued income (x €1,000) 31/12/2021 31/12/2020 Accrued rental income -268 -573 Deferred property charges 602 291 Accrued interests and deferred financial charges 16 0 Deferred charges on future projects 3,789 2,530 Other 1,023 1,448 TOTAL 5,162 3,696 198 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 33 – Aedifica – Annual Financial Report 2021 Note 30: Equity Aedifica has completed three capital increases during the 2021 financial year: - 9 June 2021: capital increase of approx. €286 million (including share premium) by issuing 2,800,000 new Aedifica shares in the context of an accelerated private placement (‘accelerated bookbuilding’) with institutional investors; - 29 June 2021: capital increase of approx. €20 million (including share premium) by way of the contribution in kind of the building and plot of land of the Domaine de la Rose Blanche care home in Durbuy (Belgium) in Aedifica NV/SA; - 8 September 2021: capital increase of approx. €27 million (including share premium) by way of the contribution in kind of 100% of the shares in the Swedish real estate company that (indirectly) controls14 buildings and the related plots of land in Sweden in Aedifica NV/SA. The capital has evolved in the following manner since the beginning of the financial year: Number of shares Capital (x €1,000) Situation at the beginning of the previous year 24,601,158 649,170 Capital increase of 28 April 2020 2,460,115 64,917 Capital increase of 10 July 2020 435,596 11,494 Capital increase of 27 October 2020 5,499,373 145,116 Capital increase of 17 December 2020 90,330 2,384 Situation at the end of the previous year 33,086,572 873,081 Capital increase of 15 June 2021 2,800,000 73,886 Capital increase of 29 June 2021 184,492 4,868 Capital increase of 8 September 2021 237,093 6,256 Situation at the end of the year 36,308,157 958,092 Capital is presented above before subtracting the costs of raising capital (the capital value presented on the balance sheet, is shown net of these costs, in accordance with IFRS). The table below lists Aedifica's shareholders holding more than 5% of the voting rights (as of 31 December 2021, based on the number of shares held by the shareholders concerned on 5 July 2019 – see also section 3 of the chapter ‘Aedifica on the stock market’). At the closing date of this report, Aedifica has not received any additional transparency notifications that would change the situation on 5 July 2019. The declarations of transparency (including control strings) are available on Aedifica’s website. According to the definition of Euronext, Aedifica’s free float amounts to 100%. SHAREHOLDERS Voting rights (in %) BlackRock, Inc. 5.00 Other < 5% 95.00 Total 100.00 The capital increases are disclosed in the ‘Standing Documents’ section of the present Annual Financial Report. All subscribed shares are fully paid-up, with no par value. The shares are registered or dematerialised shares and grant one vote each. All 36,308,157 shares issued as of 31 December 2021 are listed on the regulated markets of Euronext Brussels and Euronext Amsterdam. Aedifica NV/SA holds no treasury shares. The Board of Directors is authorised to increase the capital in one or more instalments, on the dates and in accordance with the terms and conditions as will be determined by the Board of Directors, by a maximum amount of: - 1) 50% of the amount of the capital on the date of the extraordinary general meeting of 30 July 2021, as the case may be, rounded down to the euro cent for capital increases by contribution in cash whereby the possibility is provided for the exercise of the preferential subscription right or the priority allocation right by the shareholders of the Company, - 2) 50% of the amount of the capital on the date of the extraordinary general meeting of 30 July 2021, as the case may be, rounded down to the euro cent for capital increases in the framework of the distribution of an optional dividend, - 3) 10% of the amount of the capital on the date of the extraordinary general meeting of 30 July 2021, rounded down to the euro cent for a. capital increases by contribution in kind, b. capital increases by contribution in cash without the possibility for the shareholders of the Company to exercise the preferential right or priority allocation right, or c. any other kind of capital increase, provided that the capital within the context of the authorised capital can never be increased by an amount higher than the capital on the date of the extraordinary general meeting that approves the authorisation. This authorisation is granted for a renewable period of five years, calculated from the publication of the minutes of the extraordinary general meeting of 30 July 2021, in the annexes to the Belgian Official Gazette. For each capital increase, the Board of Directors will determine the price, the issue premium (if any) and the terms and conditions of issue of the new securities. – 199 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 33 – Aedifica – Annual Financial Report 2021 Note 30: Equity Aedifica has completed three capital increases during the 2021 financial year: - 9 June 2021: capital increase of approx. €286 million (including share premium) by issuing 2,800,000 new Aedifica shares in the context of an accelerated private placement (‘accelerated bookbuilding’) with institutional investors; - 29 June 2021: capital increase of approx. €20 million (including share premium) by way of the contribution in kind of the building and plot of land of the Domaine de la Rose Blanche care home in Durbuy (Belgium) in Aedifica NV/SA; - 8 September 2021: capital increase of approx. €27 million (including share premium) by way of the contribution in kind of 100% of the shares in the Swedish real estate company that (indirectly) controls14 buildings and the related plots of land in Sweden in Aedifica NV/SA. The capital has evolved in the following manner since the beginning of the financial year: Number of shares Capital (x €1,000) Situation at the beginning of the previous year 24,601,158 649,170 Capital increase of 28 April 2020 2,460,115 64,917 Capital increase of 10 July 2020 435,596 11,494 Capital increase of 27 October 2020 5,499,373 145,116 Capital increase of 17 December 2020 90,330 2,384 Situation at the end of the previous year 33,086,572 873,081 Capital increase of 15 June 2021 2,800,000 73,886 Capital increase of 29 June 2021 184,492 4,868 Capital increase of 8 September 2021 237,093 6,256 Situation at the end of the year 36,308,157 958,092 Capital is presented above before subtracting the costs of raising capital (the capital value presented on the balance sheet, is shown net of these costs, in accordance with IFRS). The table below lists Aedifica's shareholders holding more than 5% of the voting rights (as of 31 December 2021, based on the number of shares held by the shareholders concerned on 5 July 2019 – see also section 3 of the chapter ‘Aedifica on the stock market’). At the closing date of this report, Aedifica has not received any additional transparency notifications that would change the situation on 5 July 2019. The declarations of transparency (including control strings) are available on Aedifica’s website. According to the definition of Euronext, Aedifica’s free float amounts to 100%. SHAREHOLDERS Voting rights (in %) BlackRock, Inc. 5.00 Other < 5% 95.00 Total 100.00 The capital increases are disclosed in the ‘Standing Documents’ section of the present Annual Financial Report. All subscribed shares are fully paid-up, with no par value. The shares are registered or dematerialised shares and grant one vote each. All 36,308,157 shares issued as of 31 December 2021 are listed on the regulated markets of Euronext Brussels and Euronext Amsterdam. Aedifica NV/SA holds no treasury shares. The Board of Directors is authorised to increase the capital in one or more instalments, on the dates and in accordance with the terms and conditions as will be determined by the Board of Directors, by a maximum amount of: - 1) 50% of the amount of the capital on the date of the extraordinary general meeting of 30 July 2021, as the case may be, rounded down to the euro cent for capital increases by contribution in cash whereby the possibility is provided for the exercise of the preferential subscription right or the priority allocation right by the shareholders of the Company, - 2) 50% of the amount of the capital on the date of the extraordinary general meeting of 30 July 2021, as the case may be, rounded down to the euro cent for capital increases in the framework of the distribution of an optional dividend, - 3) 10% of the amount of the capital on the date of the extraordinary general meeting of 30 July 2021, rounded down to the euro cent for a. capital increases by contribution in kind, b. capital increases by contribution in cash without the possibility for the shareholders of the Company to exercise the preferential right or priority allocation right, or c. any other kind of capital increase, provided that the capital within the context of the authorised capital can never be increased by an amount higher than the capital on the date of the extraordinary general meeting that approves the authorisation. This authorisation is granted for a renewable period of five years, calculated from the publication of the minutes of the extraordinary general meeting of 30 July 2021, in the annexes to the Belgian Official Gazette. For each capital increase, the Board of Directors will determine the price, the issue premium (if any) and the terms and conditions of issue of the new securities. Aedifica – Annual Financial Report 2021 – 34 The capital increases that are thus decided on by the Board of Directors may be subscribed to in cash, in kind, or by means of a mixed contribution, or by incorporation of reserves, including profits carried forward and issue premiums as well as all equity components under the Company’s statutory IFRS financial statements (drawn up in accordance with the regulations applicable to the regulated real estate companies) which are subject to conversion into capital, with or without the creation of new securities. These capital increases can also be realised through the issue of convertible bonds, subscription rights or bonds repayable in shares or other securities which may give rise to the creation of the same securities. On 31 December 2021, the balance of the authorised capital amounts to: - 1) €475,917,719.19 for capital increases by contribution in cash whereby the possibility is provided for the exercise of the preferential subscription right or the priority allocation right by the shareholders of the Company; - 2) €475,917,719.19 for capital increases in the framework of the distribution of an optional dividend; - 3) €88,927,185 for a. capital increases by contribution in kind, b. capital increases by contribution in cash without the possibility for the shareholders of the Company to exercise the preferential right or priority allocation right, or c. any other kind of capital increase; provided that the capital within the context of the authorised capital can never be increased by an amount that exceeds the legal maximum amount of the capital of €945,579,079.55, on the dates and in accordance with the terms and conditions as will be determined by the Board of Directors. The Board of Directors has proposed a dividend distribution of €3.40 gross per share, i.e. a total dividend of €118,496 k, to be divided over two coupons (coupon no. 28: €1.5370; coupon no. 29: €1.8630). Taking into account the Royal Decree of 13 July 2014, on 31 December 2021 the available (statutory) reserves calculated in accordance with Article 7:212 of the Companies and Associations Code amount to €92,001 k, after the dividend distribution proposed above (31 December 2020: €60,918 k). Detailed calculations are provided in the notes to the attached Abridged Statutory Accounts. Aedifica defines capital in accordance with IAS 1p134 as the sum of all equity accounts. The equity level is monitored using the consolidated debt-to-assets ratio (calculated in accordance with the provisions of the Royal Decree of 13 July 2014 – see Note 41), which cannot exceed 60% according to the credit agreements in place with the Company’s banks (see Notes 32 & 36). Equity is monitored with a view to the continuity of business activities and the financing of growth. 200 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 35 – Aedifica – Annual Financial Report 2021 Note 31: Provision Aedifica takes out group insurance for all of its employees and the members of its Executive Committee (Executive Managers). The purpose of these contributions is to provide the following benefits: - payment of a ‘Life’ benefit to the member if alive on the date of retirement; - payment of a ‘Death’ benefit to the member’s beneficiaries in the event of death before retirement; - payment of disability benefits in the event of a non-occupational accident or long-term illness; - exemption from premiums in the same cases. For Belgian employees, it consists of a defined contribution group insurance plan for which there are no personal contributions from the beneficiaries. In accordance with the law of 18 December 2015, Belgian workers benefit from a minimum guaranteed return on the ‘Life’ portion of the premiums. For ‘branch 21’ type insurance policies, the new guaranteed rate applies to new contributions (employer/personal) paid from 1 January 2016, but the old guarantee (3.25% on the employer’s contributions and 3.75% on the worker’s) remains applicable for the minimum reserve built up as at 31 December 2015. As from 2016, the minimum return required by the law on supplementary pensions fell to 1.75%. This may generate a liability in the employer’s accounts. This minimum return obligation is not applicable to the pension plan for the members of the Management Committee members with self-employed status. The amounts covered by way of long-term benefits granted to members of the Management Committee are included in the remuneration report in the 2021 annual financial report. In respect of these pension schemes, Aedifica held outsourced assets of €870 k as at 31 December 2021. An actuarial valuation (using the Traditional Unit Credit (TUC) method) provides that the bonds are calculated on the basis of projected minimum reserves at the minimum guaranteed rate and discounted at the discount rate as described in the IAS 19 standard. The assets are considered to correspond to the sum of the mathematical reserves per individual and the available portion of the financing fund. This valuation results in a net liability of less than €17 k as at 31 December 2021. In previous years, an additional defined contribution plan was introduced in Germany, the Netherlands and the United Kingdom. For these plans, the problem of having to recognise a provision does not arise since, according to IAS 19, this is not a ‘defined benefit’ plan. – 201 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 35 – Aedifica – Annual Financial Report 2021 Note 31: Provision Aedifica takes out group insurance for all of its employees and the members of its Executive Committee (Executive Managers). The purpose of these contributions is to provide the following benefits: - payment of a ‘Life’ benefit to the member if alive on the date of retirement; - payment of a ‘Death’ benefit to the member’s beneficiaries in the event of death before retirement; - payment of disability benefits in the event of a non-occupational accident or long-term illness; - exemption from premiums in the same cases. For Belgian employees, it consists of a defined contribution group insurance plan for which there are no personal contributions from the beneficiaries. In accordance with the law of 18 December 2015, Belgian workers benefit from a minimum guaranteed return on the ‘Life’ portion of the premiums. For ‘branch 21’ type insurance policies, the new guaranteed rate applies to new contributions (employer/personal) paid from 1 January 2016, but the old guarantee (3.25% on the employer’s contributions and 3.75% on the worker’s) remains applicable for the minimum reserve built up as at 31 December 2015. As from 2016, the minimum return required by the law on supplementary pensions fell to 1.75%. This may generate a liability in the employer’s accounts. This minimum return obligation is not applicable to the pension plan for the members of the Management Committee members with self-employed status. The amounts covered by way of long-term benefits granted to members of the Management Committee are included in the remuneration report in the 2021 annual financial report. In respect of these pension schemes, Aedifica held outsourced assets of €870 k as at 31 December 2021. An actuarial valuation (using the Traditional Unit Credit (TUC) method) provides that the bonds are calculated on the basis of projected minimum reserves at the minimum guaranteed rate and discounted at the discount rate as described in the IAS 19 standard. The assets are considered to correspond to the sum of the mathematical reserves per individual and the available portion of the financing fund. This valuation results in a net liability of less than €17 k as at 31 December 2021. In previous years, an additional defined contribution plan was introduced in Germany, the Netherlands and the United Kingdom. For these plans, the problem of having to recognise a provision does not arise since, according to IAS 19, this is not a ‘defined benefit’ plan. Aedifica – Annual Financial Report 2021 – 36 Note 32: Borrowings (x €1,000) 31/12/2021 31/12/2020 Non-current financial debts 1,756,679 1,062,297 Credit institutions 959,522 985,412 Other 797,157 76,885 Current financial debts 324,398 604,402 Credit institutions 48,398 313,902 Other 276,000 290,500 TOTAL 2,081,077 1,666,699 The classification between current and non-current financial debts is based on the maturity dates of the credit lines on which the drawings are made instead of based on the maturity dates of the drawings. On 31 December 2021, Aedifica had committed credit facilities totalling €1,987 million granted by 19 credit providers. - Aedifica can use up to €1,878 million depending on its needs, as long as the debt-to-assets ratio does not exceed 60% and other covenants are met (in line with market practice). Interests are set for periods of up to 12 months, at a fixed margin set with reference to the Euribor rate prevailing at the start of the interest period. €233 million of these credits facilities were directly contracted by Hoivatilat Oyj. - Aedifica also has amortising facilities with fixed interest rates between 0.8% and 6.0% amounting to €54 million and variable interest rates amounting to €55 million, of which €52 million are credits held directly or indirectly by Hoivatilat Oyj. Aedifica NV/SA also has a treasury notes programme (extended to €500 million in December 2021) of which €350 million (previously €250 million) is available for treasury notes with a duration of less than one year and €150 million is available for treasury notes with a duration of more than one year. ISIN code Nominal amount (in € million) Maturity (years) Issue date Maturity date Coupon (%) BE6310388531 15 10 21/12/2018 21/12/2028 2.176% BE6322837863 40 7 25/06/2020 25/06/2027 1.466% BE6323122802 12 10 15/07/2020 15/07/2030 1.850% BE6325869145 10 7 16/12/2020 16/12/2027 1.274% BE6326201553 10 7 14/01/2021 14/01/2028 1.329% - Under this programme, Aedifica has completed 5 private placements (see table above) amounting to €87 million. These amounts are presented on line ‘Other’ of the ‘Non-current financial debts’. - As of 31 December 2021, the short-term portion of the treasury notes programme (listed under the heading ‘Other’ of the ‘Current financial debts’) is used for an amount of €250 million. Hoivatilat Oyj also issues treasury notes in its own name. As of 31 December 2021, the outstanding amount was €26 million (listed under the heading ‘Other’ of the ‘Current financial debts’). The entire outstanding amount of the treasury notes programme is fully hedged by the available funds on confirmed long-term credit lines. Moreover, in early 2021, Aedifica successfully issued a bond (‘USPP’) of £180 million through a private placement with US, UK and Canadian institutional investors. The bonds have maturities of 7 and 12 years with a coupon of 2.58% and 2.79% respectively. Proceeds from this US private placement – received on 4 March 2021 – were used to repay the £150 million bridge facility. Furthermore, on 2 September 2021, Aedifica successfully issued its first benchmark Sustainability Bond for an amount of €500 million with a tenor of 10 years and a coupon of 0.75% per annum. Loans contracted under Aedifica’s Sustainable Finance Framework amount to €580 million, 28% of the drawn debt as of 31 December 2021, underlining the Group’s wish to further diversify its sources of financing and to integrate ESG criteria into its financial policy. Over the course of the financial year, the average effective interest rate (including credit margin and the effect of the hedging instruments) amounted to 1.4% after deduction of capitalised interest (1.5% in 2019/2020) or 1.6% before deduction of capitalised interest (1.6% in 2019/2020). Taking into account the duration of the drawings, the carrying amount of the financial debts with variable interest rate approximates their fair value (€1,232 million). The interest rate hedges are discussed in Note 33. The fair value of the financial debts with fixed interest rate (€855 million) is estimated at €842 million. 202 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 37 – Aedifica – Annual Financial Report 2021 As of 31 December 2021, the Group did not mortgage or pledge any Belgian, Dutch or British building to its creditors. In Germany, Finland and Sweden, however, it is common practice for real estate to be mortgaged as part of bank financing. As of 31 December 2021, the ratio between the secured financial debt and the assets was 5%. Taking into account the elements mentioned above, the maturity dates of Aedifica’s financial debts as of 31 December 2021 are as follows: Financial debt (in € million) 1 Lines Utilisation of which treasury notes 31/12/2022 389 319 276 31/12/2023 371 166 - 31/12/2024 432 256 - 31/12/2025 540 175 - 31/12/2026 351 189 - 31/12/2027 92 92 50 >31/12/2027 889 889 37 Total as of 31 December 2021 3,064 2,087 363 Weighted average maturity (in years) 2 4.7 5.7 - 1 Amounts in £ were converted into € based on the exchange rate of 31 December 2021 (1.18879 £/€). 2 Without regard to short-term treasury notes and uncommitted credit lines. Without regard to short-term financing (short-term treasury notes), the weighted average maturity of the financial debts as of 31 December 2021 is 5.7 years. – 203 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 37 – Aedifica – Annual Financial Report 2021 As of 31 December 2021, the Group did not mortgage or pledge any Belgian, Dutch or British building to its creditors. In Germany, Finland and Sweden, however, it is common practice for real estate to be mortgaged as part of bank financing. As of 31 December 2021, the ratio between the secured financial debt and the assets was 5%. Taking into account the elements mentioned above, the maturity dates of Aedifica’s financial debts as of 31 December 2021 are as follows: Financial debt (in € million) 1 Lines Utilisation of which treasury notes 31/12/2022 389 319 276 31/12/2023 371 166 - 31/12/2024 432 256 - 31/12/2025 540 175 - 31/12/2026 351 189 - 31/12/2027 92 92 50 >31/12/2027 889 889 37 Total as of 31 December 2021 3,064 2,087 363 Weighted average maturity (in years) 2 4.7 5.7 - 1 Amounts in £ were converted into € based on the exchange rate of 31 December 2021 (1.18879 £/€). 2 Without regard to short-term treasury notes and uncommitted credit lines. Without regard to short-term financing (short-term treasury notes), the weighted average maturity of the financial debts as of 31 December 2021 is 5.7 years. Aedifica – Annual Financial Report 2021 – 38 Note 33: Hedging instruments Aedifica takes on a large proportion of its financial debts at floating rates and is therefore able, where appropriate, to benefit from low interest rates on the unsecured portion of its borrowings. In order to limit the interest rate risk, Aedifica has put in place hedges that allow for the conversion of floating-rate debt to fixed-rate debt, or to capped-rate debt (‘cash flow hedges’). Furthermore, the acquisition of the healthcare real estate portfolio in the United Kingdom in February 2019 has exposed the Group to foreign exchange risk. Aedifica hedges the net cash flows resulting from the financial income from intra-group loans, other intra-group revenues and the financial charges of the external debt in pound sterling, gradually, on a tranche-by-tranche basis, with forward contracts to smooth out exchange rate fluctuations. Aedifica has also hedged some capital expenditures in the United Kingdom. 1. Management of interest rate risk 1.1 Framework All hedges (interest rate swaps or ‘IRS’ and caps) are related to existing or highly probable risks. Aedifica applies hedge accounting to previously negotiated derivatives that meet the criteria to allow hedge accounting. In accordance with market practices, Aedifica has chosen not to apply hedge accounting to recently negotiated derivatives, even if they meet those strict criteria. Nevertheless, all derivatives provide economic hedging against interest rate risk, regardless of their accounting method. All hedges are provided in the framework of the hedging policy set out in Note 36. The fair value of these instruments is assessed on the basis of the present value of the estimated expected cash flows based on market data. This fair value is adjusted in accordance with IFRS 13 to reflect the company’s own credit risk (‘debit valuation adjustment’ or ‘DVA’) and the counterparty’s credit risk (‘credit valuation adjustment’ or ‘CVA’). The tables below list the Company’s hedging instruments. INSTRUMENT Notional amount (x €1,000) Beginning Periodicity (months) Duration (years) Hedge accounting (yes/no) Interest rate (in %) Fair value (x €1,000) Analysis as at 31/12/2020 IRS 25,000 02/08/2019 3 8 Yes 0.33 -1,286 IRS 75,000 02/01/2020 3 2 Yes 0.33 -669 IRS 50,000 01/01/2021 3 3 Yes 0.80 -2,022 IRS 50,000 03/01/2022 3 2 Yes 0.73 -1,275 IRS 25,000 02/05/2019 3 6 Yes 1.10 -1,870 IRS 50,000 01/02/2022 3 2 No 0.34 -880 IRS 25,000 01/07/2019 3 6 No 1.69 -2,517 IRS°° 3,208 30/09/2019 3 12 No 1.55 -357 IRS 50,000 01/01/2021 3 2 Yes 0.64 -1,207 IRS° 9,253 01/04/2011 3 32 Yes 4.89 -6,297 IRS 25,000 03/02/2020 3 10 Yes 0.66 -2,217 IRS 15,000 01/07/2019 3 10 No 2.01 -3,097 IRS 8,000 01/07/2019 3 10 No 2.05 -1,680 IRS 12,000 01/07/2019 3 10 No 1.99 -2,461 IRS 50,000 01/02/2022 3 3 No 0.46 -1,463 IRS° 22,371 31/07/2014 3 29 No 4.39 -11,754 IRS 25,000 03/07/2019 3 10 No 1.04 -3,114 IRS 50,000 01/11/2019 3 5 Yes 0.78 -2,540 IRS 50,000 03/01/2022 3 1 Yes 0.65 -606 IRS 50,000 03/02/2025 3 4 No 0.15 -816 IRS 50,000 01/11/2019 3 3 Yes 0.39 -869 IRS 7,500 03/12/2018 1 5 No 0.46 -226 IRS 5,000 11/12/2018 1 5 No 0.66 -177 IRS 7,500 03/12/2018 3 5 No 0.47 -230 IRS 5,000 27/12/2018 6 5 No 0.7 -184 IRS 10,000 19/03/2019 6 5 No 0.83 -450 IRS 15,000 31/03/2020 1 5 No 0.46 -609 IRS 10,000 01/12/2018 1 5 No 0.63 -346 CAP 50,000 01/05/2020 3 2 No 0.00 2 CAP 50,000 01/07/2017 3 4 No 0.50 0 CAP 50,000 01/01/2019 3 2 No 0.35 0 CAP 50,000 01/11/2016 3 5 No 0.50 0 CAP 50,000 01/11/2019 3 2 No 0.50 0 CAP 50,000 01/11/2017 3 4 No 0.25 0 CAP 100,000 01/04/2019 3 2 No 0.25 0 CAP 100,000 01/01/2019 3 2 No 0.00 0 CAP 100,000 01/01/2019 3 2 No 0.00 0 CAP 50,000 04/05/2020 3 1 No 0.00 0 CAP 100,000 04/01/2021 3 4 No 0.25 120 CAP 50,000 01/07/2021 3 3 No 0.00 54 CAP 50,000 01/07/2021 3 3 No 0.00 58 TOTAL 1,629,832 -50,986 ° Notional amount depreciable over the duration of the swap. Aedifica and the bank may liquidate in advance these contracts every 10 years. °° Notional amount depreciable over the duration of the swap. 204 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 39 – Aedifica – Annual Financial Report 2021 INSTRUMENT Notional amount (x €1,000) Beginning Periodicity (months) Duration (years) Hedge accounting (yes/no) Interest rate (in %) Fair value (x €1,000) Analysis as at 31/12/2021 IRS 25,000 02/08/2019 3 8 Yes 0.33 -453 IRS 75,000 02/01/2020 3 2 No 0.33 -4 IRS 50,000 01/01/2021 3 3 Yes 0.80 -1,135 IRS 50,000 03/01/2022 3 2 Yes 0.73 -1,063 IRS 25,000 02/05/2019 3 6 Yes 1.10 -1,115 IRS 50,000 01/02/2022 3 2 No 0.34 -647 IRS 25,000 01/07/2019 3 6 No 1.69 -1,620 IRS 50,000 01/07/2024 3 4 No 0.08 353 IRS°° 2,917 30/09/2019 3 12 No 1.55 -224 IRS 50,000 01/01/2021 3 2 Yes 0.64 -584 IRS° 9,021 01/04/2011 3 32 Yes 4.89 -4,996 IRS 25,000 03/02/2020 3 10 Yes 0.66 -1,022 IRS 15,000 01/07/2019 3 10 No 2.01 -2,148 IRS 8,000 01/07/2019 3 10 No 2.05 -1,170 IRS 12,000 01/07/2019 3 10 No 1.99 -1,704 IRS 50,000 01/02/2022 3 3 No 0.46 -941 IRS° 21,388 31/07/2014 3 29 No 4.39 -9,139 IRS 25,000 03/07/2019 3 10 No 1.04 -1,781 IRS 200,000 01/07/2024 3 4 No -0.02 2,231 IRS 50,000 01/11/2019 3 5 Yes 0.78 -1,411 IRS 50,000 03/01/2022 3 1 Yes 0.65 -586 IRS 50,000 03/02/2025 3 4 No 0.15 295 IRS 100,000 01/07/2024 3 4 No 0.07 763 IRS 50,000 01/07/2024 3 4 No 0.12 276 IRS 50,000 02/01/2025 3 4 No 0.05 494 IRS 50,000 02/01/2025 3 4 No 0.06 477 IRS 50,000 01/11/2019 3 3 Yes 0.39 -387 IRS 7,500 03/12/2018 1 5 No 0.46 -123 IRS 5,000 11/12/2018 1 5 No 0.66 -98 IRS 7,500 03/12/2018 3 5 No 0.47 -124 IRS 5,000 27/12/2018 6 5 No 0.70 -101 IRS 10,000 19/03/2019 6 5 No 0.83 -269 IRS 15,000 31/03/2020 1 5 No 0.46 -288 IRS 10,000 01/12/2018 1 5 No 0.63 -192 CAP 50,000 01/05/2020 3 2 No 0.00 0 CAP 50,000 01/11/2016 3 5 No 0.50 0 CAP 50,000 01/11/2019 3 2 No 0.50 0 CAP 50,000 01/11/2017 3 4 No 0.25 0 CAP 200,000 01/01/2024 3 1 No 0.00 401 CAP 100,000 04/01/2021 3 4 No 0.25 568 CAP 100,000 01/07/2021 3 3 No 0.00 431 CAP 50,000 01/07/2021 3 3 No 0.00 216 CAP 50,000 01/07/2021 3 3 No 0.00 216 TOTAL 1,978,326 -26,606 ° Notional amount depreciable over the duration of the swap. Aedifica and the bank may liquidate in advance these contracts every 10 years. °° Notional amount depreciable over the duration of the swap. The total notional amount of €1,978 million presented in the table above is broken down as follows: - operational and active instruments: €528 million; - operational instruments which became out of the money (caps): €500 million; - instruments with forward start: €950 million. The total fair value of the hedging instruments presented in the table above (-26,606 k) can be broken down as follows: €6,720 k on line I.E. of the asset side of the consolidated balance sheet and €33,326 k on line I.C.a. of the liability side of the consolidated balance sheet. Taking into account the carrying amount of the upfront premiums paid for the caps (€711 k), the effect of the changes in fair value of interest rate hedging instruments on equity amounts to -€27,317 k. – 205 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 39 – Aedifica – Annual Financial Report 2021 INSTRUMENT Notional amount (x €1,000) Beginning Periodicity (months) Duration (years) Hedge accounting (yes/no) Interest rate (in %) Fair value (x €1,000) Analysis as at 31/12/2021 IRS 25,000 02/08/2019 3 8 Yes 0.33 -453 IRS 75,000 02/01/2020 3 2 No 0.33 -4 IRS 50,000 01/01/2021 3 3 Yes 0.80 -1,135 IRS 50,000 03/01/2022 3 2 Yes 0.73 -1,063 IRS 25,000 02/05/2019 3 6 Yes 1.10 -1,115 IRS 50,000 01/02/2022 3 2 No 0.34 -647 IRS 25,000 01/07/2019 3 6 No 1.69 -1,620 IRS 50,000 01/07/2024 3 4 No 0.08 353 IRS°° 2,917 30/09/2019 3 12 No 1.55 -224 IRS 50,000 01/01/2021 3 2 Yes 0.64 -584 IRS° 9,021 01/04/2011 3 32 Yes 4.89 -4,996 IRS 25,000 03/02/2020 3 10 Yes 0.66 -1,022 IRS 15,000 01/07/2019 3 10 No 2.01 -2,148 IRS 8,000 01/07/2019 3 10 No 2.05 -1,170 IRS 12,000 01/07/2019 3 10 No 1.99 -1,704 IRS 50,000 01/02/2022 3 3 No 0.46 -941 IRS° 21,388 31/07/2014 3 29 No 4.39 -9,139 IRS 25,000 03/07/2019 3 10 No 1.04 -1,781 IRS 200,000 01/07/2024 3 4 No -0.02 2,231 IRS 50,000 01/11/2019 3 5 Yes 0.78 -1,411 IRS 50,000 03/01/2022 3 1 Yes 0.65 -586 IRS 50,000 03/02/2025 3 4 No 0.15 295 IRS 100,000 01/07/2024 3 4 No 0.07 763 IRS 50,000 01/07/2024 3 4 No 0.12 276 IRS 50,000 02/01/2025 3 4 No 0.05 494 IRS 50,000 02/01/2025 3 4 No 0.06 477 IRS 50,000 01/11/2019 3 3 Yes 0.39 -387 IRS 7,500 03/12/2018 1 5 No 0.46 -123 IRS 5,000 11/12/2018 1 5 No 0.66 -98 IRS 7,500 03/12/2018 3 5 No 0.47 -124 IRS 5,000 27/12/2018 6 5 No 0.70 -101 IRS 10,000 19/03/2019 6 5 No 0.83 -269 IRS 15,000 31/03/2020 1 5 No 0.46 -288 IRS 10,000 01/12/2018 1 5 No 0.63 -192 CAP 50,000 01/05/2020 3 2 No 0.00 0 CAP 50,000 01/11/2016 3 5 No 0.50 0 CAP 50,000 01/11/2019 3 2 No 0.50 0 CAP 50,000 01/11/2017 3 4 No 0.25 0 CAP 200,000 01/01/2024 3 1 No 0.00 401 CAP 100,000 04/01/2021 3 4 No 0.25 568 CAP 100,000 01/07/2021 3 3 No 0.00 431 CAP 50,000 01/07/2021 3 3 No 0.00 216 CAP 50,000 01/07/2021 3 3 No 0.00 216 TOTAL 1,978,326 -26,606 ° Notional amount depreciable over the duration of the swap. Aedifica and the bank may liquidate in advance these contracts every 10 years. °° Notional amount depreciable over the duration of the swap. The total notional amount of €1,978 million presented in the table above is broken down as follows: - operational and active instruments: €528 million; - operational instruments which became out of the money (caps): €500 million; - instruments with forward start: €950 million. The total fair value of the hedging instruments presented in the table above (-26,606 k) can be broken down as follows: €6,720 k on line I.E. of the asset side of the consolidated balance sheet and €33,326 k on line I.C.a. of the liability side of the consolidated balance sheet. Taking into account the carrying amount of the upfront premiums paid for the caps (€711 k), the effect of the changes in fair value of interest rate hedging instruments on equity amounts to -€27,317 k. Aedifica – Annual Financial Report 2021 – 40 1.2 Derivatives for which hedge accounting is applied (x €1,000) 31/12/2021 31/12/2020 Changes in fair of the derivatives Beginning of the year -20,856 -20,922 Changes in the effective portion of the fair value of hedging instruments (accrued interests) 4,273 -3,419 Transfer to the income statement of interests paid on hedging instruments 3,641 3,485 Transfer to the reserve account regarding revoked designation 224 0 Transfer to the reserve account of the net gain or loss on matured hedges 1,204 0 AT YEAR-END -11,514 -20,856 The amounts recorded in equity will be transferred to net finance costs in line with the payment of interest on the hedged financial debt, between 1 January 2022 and 31 July 2043. The year-end equity value includes the effective part (as defined in IFRS 9) of the change in fair value (+€7,917 k) of the financial instruments corresponding to the derivatives for which hedge accounting may be applied, and the ineffective portion of the 2019/2020 financial year (loss of €3 k) that was appropriated in 2019/2020 by decision of the Annual General Meeting held in October 2020. These financial instruments are ‘level 2’ derivatives (according to IFRS 13p81). The ineffective part (according to IAS 39) amounts to -€31 k as of 31 December 2021. 1.3 Derivatives for which hedge accounting is not applied The financial result includes an income of €17,011 k (31 December 2020: an income of €691 k), arising from the change in the fair value of derivatives for which hedge accounting is not applied (in line with IFRS 9, as listed in the aforementioned framework) and the linear amortisation of the fair value of terminated derivatives as of their date of termination, which amounts to a loss of €1,332 k (31 December 2020: a loss of €1,661 k) (see Note 16). The latter is recognised on line ‘II. H. Other comprehensive income, net of taxes’ of the Consolidated Statement of Comprehensive Income. These financial instruments are ‘level 2’ derivatives (as defined in IFRS 13p81). The financial result also includes the amortisation of the premiums paid at the time of the subscription to the caps, which amounts to €815 k (31 December 2020: €2,081 k). 1.4 Sensitivity analysis The fair value of the hedging instruments is determined by the interest rates on the financial markets. These changes partly explain the change in the fair value of the hedging instruments between 1 January 2021 and 31 December 2021. This resulted in an income of €15,648 k, recognised in the income statement, and to an income of €9,248 k, recognised in equity. A change in the interest rate curve would impact the fair value of instruments for which hedge accounting is applied (in accordance with IFRS 9), and recognised in equity (line ‘I.C.d. Reserve for the balance of changes in fair value of authorised hedging instruments qualifying for hedge accounting as defined under IFRS’). All else being equal, a positive change of 10 bps of the interest rate curve at the balance sheet date would have a positive impact on equity in the amount of €951 k (€1,923 k as of 31 December 2020). A negative change of 10 bps would have a negative impact in the same range. The impact of a change in the interest rate on the fair value of the instruments for which hedge accounting is not applied cannot be determined as precisely, since options can be embedded within these instruments. The fair value of these options will change in a non-symmetric and non-linear pattern, and is a function of other parameters (e.g. volatility of interest rates). The sensitivity of the ‘mark-to- market’ value of these instruments to an increase of 10 bps of the interest rate is estimated to have a positive impact of €3,670 k (€1,305 k on 31 December 2020) on the income statement. A decrease of 10 bps in the interest rate would have a negative impact of €3,635 k on the income statement. 2. Management of foreign exchange risk All hedges (forward purchase contracts of foreign currencies) are related to existing or highly probable risks. The hedging instruments are derivatives for which Aedifica will not systematically apply hedge accounting and which provide economic hedging against foreign exchange risk. All hedges are provided in the framework of the hedging policy set out in Note 36. The fair value of these instruments is assessed on the basis of the present value of the estimated cash flows based on market data. These financial instruments are ‘level 2’ derivatives (according to IFRS 13p81). As of 31 December 2021, Aedifica had no hedging contracts in place. During the financial year, Aedifica partially hedged the net cash flows resulting from the financial income from intra-group loans, other intra-group revenues and the financial charges of the external debt in pound sterling or capital expenditures in the United Kingdom with forward contracts. 206 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 41 – Aedifica – Annual Financial Report 2021 Note 34: Trade payables and other current debts (x €1,000) 31/12/2021 31/12/2020 Trade debts 41,399 18,768 Exit tax 298 2,295 Taxes, social charges and salaries debts Tax 4,291 8,696 Salaries and social charges 3,928 2,285 Other Dividends of previous years 193 23 TOTAL 50,109 32,067 The majority of trade payables and other current debts (recognised as ‘financial liabilities at amortised cost’ under IFRS 9, excluding taxes covered by IAS 12 and remuneration and contributions to social security plans covered by IAS 19) should be settled within 12 months. The carrying amount constitutes an approximation of their fair value. Note 35: Accrued charges and deferred income (x €1,000) 31/12/2021 31/12/2020 Property income received in advance 10,198 3,688 Financial charges accrued 7,173 3,387 Other accrued charges 7,360 3,652 TOTAL 24,731 10,727 This increase is related to the Group’s international growth. Note 36: Financial risk management Aedifica’s financial policy aims to ensure permanent access to financing, monitor the debt-to-assets-ratio and monitor and minimise the interest rate and exchange rate risks. However, the Company remains subject to financing risks; a change in interest rates or exchange rates could have a negative impact the Group’s assets, operations, financial position and prospects. 1. Debt structure Aedifica’s debt-to-assets ratio (as defined in the Royal Decree of 13 July 2014 on Belgian RRECs) is detailed on page 56 of this Annual Financial Report. As of 31 December 2021, it amounts to 40.0% at the statutory level and to 42.6% at the consolidated level. This section also discloses the maximum ratio permitted before the Company reaches the maximum debt-to-assets ratio permitted for Belgian REITs (65% of total assets) or arising due to bank covenants (60% of total assets). The debt-to-assets ratio is monitored on a quarterly basis and its evolution is estimated during the approval process of each major investment project. When the debt-to-assets threshold of 50% is exceeded, a financial plan with an implementation schedule must be elaborated, describing the measures that will be taken to prevent the consolidated debt-to-assets ratio from exceeding the maximum permissible threshold of 65% (Article 24 of the Royal Decree of 13 July 2014). However, the Company intends to maintain an appropriate long-term debt-to-assets ratio of approx. 45% to 50%. Aedifica’s financial model relies on a structural indebtedness. As a result, cash balances are usually low, amounting to €15.3 million as of 31 December 2021. As of 31 December 2021, the Group did not mortgage or pledge any Belgian, Dutch or British building to its creditors. In Germany, Finland and Sweden, however, it is common practice for real estate to be mortgaged as part of bank financing. As of 31 December 2021, the ratio between the secured financial debt and the assets was 5%. It is possible that in the context of supplementary financing, additional mortgages will be granted. – 207 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 41 – Aedifica – Annual Financial Report 2021 Note 34: Trade payables and other current debts (x €1,000) 31/12/2021 31/12/2020 Trade debts 41,399 18,768 Exit tax 298 2,295 Taxes, social charges and salaries debts Tax 4,291 8,696 Salaries and social charges 3,928 2,285 Other Dividends of previous years 193 23 TOTAL 50,109 32,067 The majority of trade payables and other current debts (recognised as ‘financial liabilities at amortised cost’ under IFRS 9, excluding taxes covered by IAS 12 and remuneration and contributions to social security plans covered by IAS 19) should be settled within 12 months. The carrying amount constitutes an approximation of their fair value. Note 35: Accrued charges and deferred income (x €1,000) 31/12/2021 31/12/2020 Property income received in advance 10,198 3,688 Financial charges accrued 7,173 3,387 Other accrued charges 7,360 3,652 TOTAL 24,731 10,727 This increase is related to the Group’s international growth. Note 36: Financial risk management Aedifica’s financial policy aims to ensure permanent access to financing, monitor the debt-to-assets-ratio and monitor and minimise the interest rate and exchange rate risks. However, the Company remains subject to financing risks; a change in interest rates or exchange rates could have a negative impact the Group’s assets, operations, financial position and prospects. 1. Debt structure Aedifica’s debt-to-assets ratio (as defined in the Royal Decree of 13 July 2014 on Belgian RRECs) is detailed on page 56 of this Annual Financial Report. As of 31 December 2021, it amounts to 40.0% at the statutory level and to 42.6% at the consolidated level. This section also discloses the maximum ratio permitted before the Company reaches the maximum debt-to-assets ratio permitted for Belgian REITs (65% of total assets) or arising due to bank covenants (60% of total assets). The debt-to-assets ratio is monitored on a quarterly basis and its evolution is estimated during the approval process of each major investment project. When the debt-to-assets threshold of 50% is exceeded, a financial plan with an implementation schedule must be elaborated, describing the measures that will be taken to prevent the consolidated debt-to-assets ratio from exceeding the maximum permissible threshold of 65% (Article 24 of the Royal Decree of 13 July 2014). However, the Company intends to maintain an appropriate long-term debt-to-assets ratio of approx. 45% to 50%. Aedifica’s financial model relies on a structural indebtedness. As a result, cash balances are usually low, amounting to €15.3 million as of 31 December 2021. As of 31 December 2021, the Group did not mortgage or pledge any Belgian, Dutch or British building to its creditors. In Germany, Finland and Sweden, however, it is common practice for real estate to be mortgaged as part of bank financing. As of 31 December 2021, the ratio between the secured financial debt and the assets was 5%. It is possible that in the context of supplementary financing, additional mortgages will be granted. Aedifica – Annual Financial Report 2021 – 42 2. Liquidity risk Aedifica enjoys a strong and stable relationship with its financial institutions, which form a diversified pool, comprising an annually increasing number of European institutions. Details of Aedifica’s credit facilities are disclosed in Note 32. As of 31 December 2021, the Group has drawn €1,811 million (31 December 2020: €1,669 million) from the total amount of €2,788 million of confirmed bank financing, medium-term notes and bonds. The remaining headroom is sufficient to cover the Group’s short-term financial needs as well as the existing development projects until the end of the 2022 financial year. The 2022 financial plan includes payments in the context of the committed pipeline of development projects amounting to approx. €350 million. Aedifica aims to further diversify its financing sources. In this context, Aedifica launched a programme in 2018 to issue treasury notes with varying maturities. The short-term treasury notes are fully hedged by the available funds on confirmed long-term credit lines. As of 31 December 2021, medium-term notes amount to €87 million (31 December 2020: €77 million). Given the regulatory status of Belgian REITs/RRECs, and the type of property in which Aedifica invests, the risk of non-renewal of mature credit facilities is remote even in the context of a credit crunch, except in the event of unforeseen and extreme circumstances. However, there is a risk that credit margins may increase after the maturity date of these credit lines. Aedifica may be exposed to a liquidity risk which could arise due to a lack of cash flow in the event of early termination of the credit facilities. Should the Company fail to comply with the provisions (covenants), which were included in the credit facility arrangements to take into account key financial ratios, the facilities might be cancelled, renegotiated, or forced into repayment. The covenants in place are in line with market practice and notably require that the debt-to-assets ratio (as defined by the Royal Decree of 13 July 2014) does not exceed 60% and that the EBITDA should exceed twice the net financial charges. Moreover, there is a risk of early termination in the event of a change of control, in case of non-compliance with the Company’s obligations, and, more generally speaking, in the event of default as defined in these arrangements. A default situation related to one contract can lead to a default situation related to all contracts (‘cross-default clauses’). Based on the information available to date, and the prospects for the foreseeable future, there is no indication of a possible early termination of one or more of the existing credit facilities. However, this risk cannot be ignored completely. Moreover, Aedifica does not itself retain control over certain commitments which could lead to the early termination of credit facilities, such as in the event of a change of control. As of 31 December 2021, the undiscounted future cash flows related to the credit facilities include €319 million maturing within 1 year, €787 million maturing within 1 to 5 years, and €981 million maturing in more than 5 years. The credit facilities also give rise to an interest expense of €16 million that is due within 1 year (31 December 2020: €607 million capital and €9.5 million interest due within 1 year). The undiscounted contractual future cash flows related to hedging instruments are analysed as follows: As at 31/12/2021 (x €1,000) Due within the year Due between one to five years Due after more than five years TOTAL Derivatives for which hedge accounting is applied -3,519 -5,331 -4,207 -13,057 Derivatives for which hedge accounting is not applied -3,824 -10,382 -9,577 -23,783 As at 31/12/2020 (x €1,000) Due within the year Due between one to five years Due after more than five years TOTAL Derivatives for which hedge accounting is applied -3,192 -7,578 -4,847 -15,618 Derivatives for which hedge accounting is not applied -3,394 -12,110 -11,075 -26,578 3. Interest rate risk A substantial part of Aedifica’s financial debts are floating-rate borrowings. This allows Aedifica to benefit from low interest rates on the non- hedged part of its borrowings. To mitigate the risk of increasing interest rates, Aedifica follows a policy aimed at securing for a period of several years the interest rates related to at least 60% of its current or highly probable indebtedness. It should be noted that the Company assumed certain fixed-rate debts which came from pre-existing investment credits tied to real estate companies which were acquired or absorbed by the Company. Aedifica extended and increased its hedge ratio by closing new forward starting swaps and some caps to hedge the interest rate risk. In addition, the USPP and the benchmark bond issue have rebalanced Aedifica’s mix of fixed and floating rate debt. On 31 December 2021, the financial debt is hedged against interest rate risk for 90.3%, i.e. the ratio of the sum of the fixed rate debt and the notional amount of derivatives divided by the total financial debt. The hedging’s weighted average maturity is 6.6 years. This policy is supported by the fact that an increase in nominal interest rates, when not coupled with a simultaneous increase in inflation, implies an increase in real interest rates that cannot be offset by increasing rental incomes through indexation alone. Moreover, in case of accelerating inflation, there is a delay between the timing of the increase of the nominal interest rates and the timing of the indexation of rental income. For example: assuming that the structure and level of financial debts remain unchanged, and assuming that no hedges have been entered into, simulations show that a 100 bps positive deviation (increase) in the 2022 interest rates over the forecast rates would lead to an approx. additional 208 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 43 – Aedifica – Annual Financial Report 2021 €2.3 million interest expense for the year ending 31 December 2022. Taking into account the hedging instruments at present, the increase in interest expense would amount to just €1.2 million. In order to manage the interest rate risk, Aedifica has put in place hedges (interest rate swaps and caps). All hedges are entered into with leading banks and relate to existing or highly probable risks. An analysis of the Group’s hedges is provided in the Financial Report and in the Consolidated Financial Statements (Note 33). The hedges can be entered into for long periods; however, hedge agreements include provisions (in line with market practice) that could lead the issuing banks to terminate the hedges early or initiate margin calls (in cash for example) in their own favour in certain circumstances. Changes in the interest rate curve have a limited impact on the future interest expense, since at least 60% of the financial debts are hedged by IRS or caps. Each change in the interest rate curve has an impact on the fair value of hedging instruments against income statement and/or equity (balance line ‘I.C.d. Reserve for the balance of changes in fair value of authorised hedging instruments qualifying for hedge accounting as defined under IFRS’). A sensitivity analysis is provided in Note 33. Certain external developments could cause an increase of the credit spreads at the Group’s expense, in accordance with the ‘increased cost’ clauses included in the banking agreements. Such clauses allow the lending banks to increase the cost price of the granted credit, among other things, in case these banks are subjected by their supervisory authority to more severe solvability, liquidity or other capital requirements. However, it should be noted that during the crises which have hit the financial markets since 2007, no bank has ever invoked one of these clauses towards the Group. However, this cannot be seen as a safeguard for the future. 4. Banking counterparty risk Signing a credit facility or hedging instrument with a bank generates a counterparty risk in the event of counterparty default. In order to mitigate this risk, Aedifica trades with several leading national and European banks to diversify its funding and hedging sources, while remaining cautious about the balance between cost and quality of the services provided, it being understood that the counterparty risk cannot be excluded and the failure by one or more of Aedifica’s financing or hedging counterparties could have a negative impact on the Group’s assets, operations, financial position and prospects. In line with market practice, the agreements signed with banks include market shock clauses and material adverse change clauses (‘MAC’ clauses) which could lead to, in extreme circumstances, additional costs for the Group or possibly the early termination of the credit facility. However, it should be noted that during the crises which have hit the financial markets since 2007, no bank has ever invoked one of these clauses towards the Group. 5. Exchange rate risk Aedifica generates its revenue and costs in the euro area and also in British pounds (since the acquisition of the UK portfolio in February 2019) and Swedish krona (since the acquisition of Hoivatilat in January 2021, through the Swedish subsidiary). Future fluctuations in the exchange rate may affect the value of Aedifica’s investment properties, rental income and the net result, all of which are expressed in euros. A 10% change of the GBP/EUR exchange rate has an impact of approx. €83.2 million on the fair value of the Group’s investment properties located in the United Kingdom, approx. €5.0 million on the Group’s annual rental income and approx. €5.5 million on the Group’s net result. A 10% change of the SEK/EUR exchange rate has an impact of approx. €7.9 million on the fair value of the Group’s investment properties located in Sweden, approx. €0.2 million on the Group’s annual rental income and approx. €0.7 million on the Group’s net result. Aedifica partly financed its UK portfolio by a bond issue in British pounds. The £180 million bond was issued in early 2021 through a private placement (£170 million with a maturity of 7 years and £10 million with a maturity of 12 years). This bond provides a partial natural hedge against exchange rate fluctuations on the balance sheet and limits the impact on the debt-to-assets ratio. The Company applies an active hedging policy covering the GBP/EUR exchange risk impacting Aedifica’s results, as deemed necessary, which takes into account, among other things, the volatility of the exchange rate observed from time to time and the cost of hedging (which itself is dependent on various elements). However, an active hedging policy cannot completely eliminate the currency exchange risk and the Company remains exposed to this risk. A change in the exchange rate that would not be covered by the Company’s hedging policy may expose the Company to lower rental income and increased costs and can have a negative impact on the Company’s assets, operations, financial position and prospects. – 209 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 43 – Aedifica – Annual Financial Report 2021 €2.3 million interest expense for the year ending 31 December 2022. Taking into account the hedging instruments at present, the increase in interest expense would amount to just €1.2 million. In order to manage the interest rate risk, Aedifica has put in place hedges (interest rate swaps and caps). All hedges are entered into with leading banks and relate to existing or highly probable risks. An analysis of the Group’s hedges is provided in the Financial Report and in the Consolidated Financial Statements (Note 33). The hedges can be entered into for long periods; however, hedge agreements include provisions (in line with market practice) that could lead the issuing banks to terminate the hedges early or initiate margin calls (in cash for example) in their own favour in certain circumstances. Changes in the interest rate curve have a limited impact on the future interest expense, since at least 60% of the financial debts are hedged by IRS or caps. Each change in the interest rate curve has an impact on the fair value of hedging instruments against income statement and/or equity (balance line ‘I.C.d. Reserve for the balance of changes in fair value of authorised hedging instruments qualifying for hedge accounting as defined under IFRS’). A sensitivity analysis is provided in Note 33. Certain external developments could cause an increase of the credit spreads at the Group’s expense, in accordance with the ‘increased cost’ clauses included in the banking agreements. Such clauses allow the lending banks to increase the cost price of the granted credit, among other things, in case these banks are subjected by their supervisory authority to more severe solvability, liquidity or other capital requirements. However, it should be noted that during the crises which have hit the financial markets since 2007, no bank has ever invoked one of these clauses towards the Group. However, this cannot be seen as a safeguard for the future. 4. Banking counterparty risk Signing a credit facility or hedging instrument with a bank generates a counterparty risk in the event of counterparty default. In order to mitigate this risk, Aedifica trades with several leading national and European banks to diversify its funding and hedging sources, while remaining cautious about the balance between cost and quality of the services provided, it being understood that the counterparty risk cannot be excluded and the failure by one or more of Aedifica’s financing or hedging counterparties could have a negative impact on the Group’s assets, operations, financial position and prospects. In line with market practice, the agreements signed with banks include market shock clauses and material adverse change clauses (‘MAC’ clauses) which could lead to, in extreme circumstances, additional costs for the Group or possibly the early termination of the credit facility. However, it should be noted that during the crises which have hit the financial markets since 2007, no bank has ever invoked one of these clauses towards the Group. 5. Exchange rate risk Aedifica generates its revenue and costs in the euro area and also in British pounds (since the acquisition of the UK portfolio in February 2019) and Swedish krona (since the acquisition of Hoivatilat in January 2021, through the Swedish subsidiary). Future fluctuations in the exchange rate may affect the value of Aedifica’s investment properties, rental income and the net result, all of which are expressed in euros. A 10% change of the GBP/EUR exchange rate has an impact of approx. €83.2 million on the fair value of the Group’s investment properties located in the United Kingdom, approx. €5.0 million on the Group’s annual rental income and approx. €5.5 million on the Group’s net result. A 10% change of the SEK/EUR exchange rate has an impact of approx. €7.9 million on the fair value of the Group’s investment properties located in Sweden, approx. €0.2 million on the Group’s annual rental income and approx. €0.7 million on the Group’s net result. Aedifica partly financed its UK portfolio by a bond issue in British pounds. The £180 million bond was issued in early 2021 through a private placement (£170 million with a maturity of 7 years and £10 million with a maturity of 12 years). This bond provides a partial natural hedge against exchange rate fluctuations on the balance sheet and limits the impact on the debt-to-assets ratio. The Company applies an active hedging policy covering the GBP/EUR exchange risk impacting Aedifica’s results, as deemed necessary, which takes into account, among other things, the volatility of the exchange rate observed from time to time and the cost of hedging (which itself is dependent on various elements). However, an active hedging policy cannot completely eliminate the currency exchange risk and the Company remains exposed to this risk. A change in the exchange rate that would not be covered by the Company’s hedging policy may expose the Company to lower rental income and increased costs and can have a negative impact on the Company’s assets, operations, financial position and prospects. Aedifica – Annual Financial Report 2021 – 44 Note 37: Contingencies and commitments 1. Commitments The acquisition values mentioned below respect the requirements laid down in Article 49 § 1 of the Belgian Act of 12 May 2014 on Regulated Real Estate Companies (at the time of the signing of the agreements which generated the commitment). NAME Country Type Progress Budget (in € million) Alphen Raadhuisstraat NL Construction Ongoing (forward funding) 4 Am Marktplatz DE Renovation Ongoing (forward funding) 2 Am Parnassturm DE Renovation Ongoing (forward funding) 3 Am Schäfersee DE Renovation Ongoing (forward funding) 10 Am Stadtpark DE Renovation Ongoing (forward funding) 5 Am Tierpark DE Renovation Ongoing (forward funding) 1 Bavaria Senioren- und Pflegeheim DE Renovation Ongoing (forward funding) 1 Blenheim MMCG UK Renovation & extension Ongoing (forward funding) 7 Burlington projects UK Renovation & extension Ongoing (forward funding) 2 Chard MMCG UK Construction Project/forward purchase subject to outstanding conditions 15 Dublin Stepaside IE Construction Ongoing (forward funding) 25 Finland – pipeline ‘child day-care centres’ FI Construction Ongoing (forward funding) 7 Finland – pipeline ‘elderly care homes’ FI Construction Ongoing (forward funding) 39 Finland – pipeline ‘other’ FI Construction Ongoing (forward funding) 55 Fredenbeck DE Construction Ongoing (forward funding) 13 Waarder Molendijk NL Construction Ongoing (forward funding) 5 Guysfield UK Renovation & extension Project/forward purchase subject to outstanding conditions 12 Hamburg-Rissen DE Construction Ongoing (forward funding) 14 HGH Lelystad 1,2 NL Construction Ongoing (forward funding) 4 Het Gouden Hart Soest 1,2 NL Construction Ongoing (forward funding) 3 LLT Almere Buiten 1 NL Construction Ongoing (forward funding) 7 Wellingborough Glenvale Park UK Construction Ongoing (forward funding) 12 Bois de la Pierre BE Construction Ongoing (forward funding) 2 Martha Flora Breda NL Construction Ongoing (forward funding) 5 Martha Flora Goes 1 NL Construction Ongoing (forward funding) 5 Martha Flora Oegstgeest NL Construction Ongoing (forward funding) 5 Millbrook Manor IE Renovation & extension Ongoing (forward funding) 4 Aylesbury Martin Dalby UK Construction Ongoing (forward funding) 10 Kilkenny Nursing Home IE Construction Ongoing (forward funding) 15 Tramore Nursing Home IE Construction Ongoing (forward funding) 15 Kilbarry Nursing Home IE Construction Ongoing (forward funding) 15 Natatorium NL Construction Ongoing (forward funding) 3 Land reserve EU Landreserve Land reserve 4 Haus Marxloh DE Renovation & extension Ongoing (forward funding) 4 Renovation project Orpea Brussels BE Renovation Project/forward purchase subject to outstanding conditions 47 Quartier am Rathausmarkt DE Construction Ongoing (forward funding) 16 Residentie Boldershof NL Renovation & extension Ongoing (forward funding) 1 Rosengarten DE Renovation Ongoing (forward funding) 8 Tiel Bladergroenstraat NL Construction Ongoing (forward funding) 7 Seniorenhaus Lessingstrasse 1 DE Acquisition Acquisition subject to outstanding conditions 7 Seniorenheim Haus Wellengrund DE Construction Ongoing (forward funding) 8 Seniorenquartier Gera DE Construction Ongoing (forward funding) 16 Seniorenquartier Gummersbach DE Construction Ongoing (forward funding) 20 Seniorenquartier Langwedel DE Construction Ongoing (forward funding) 16 Seniorenquartier Schwerin DE Construction Ongoing (forward funding) 11 Seniorenquartier Sehnde DE Construction Ongoing (forward funding) 12 Shipley Canal Works UK Construction Ongoing (forward funding) 8 Specht Gruppe pipeline 2 (2024) DE Construction Ongoing (forward funding) 130 St. Doolagh's IE Construction Ongoing (forward funding) 17 Stadtlohn DE Construction Ongoing (forward funding) 15 Singö 10:2 & Bergshammar Ekeby 6:66 SE Acquisition Project/forward purchase subject to outstanding conditions 6 210 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 45 – Aedifica – Annual Financial Report 2021 NAME Country Type Progress Budget (in € million) Stepping Stones Blaricum 1,2 NL Construction Ongoing (forward funding) 4 Sweden - pipeline 2022 SE Construction Ongoing (forward funding) 2 Seniorenzentrum Berghof DE Renovation & extension Ongoing (forward funding) 2 Seniorenzentrum Talblick DE Renovation & extension Ongoing (forward funding) 1 ‘t Spelthof BE Extension Ongoing (forward funding) 6 Twistringen DE Construction Ongoing (forward funding) 13 Uetze DE Construction Ongoing (forward funding) 15 Vinea Domini NL Renovation Ongoing (forward funding) 4 De Volder Staete NL Construction Ongoing (forward funding) 10 Résidence le Douaire BE Construction Project/forward purchase subject to outstanding conditions 17 Wohnstift am Weinberg DE Renovation Ongoing (forward funding) 10 Het Gouden Hart Woudenberg 2 NL Construction Ongoing (forward funding) 4 Zwolle Koestraat NL Construction Project/forward purchase subject to outstanding conditions 5 TOTAL 767 1 This project has already been completed after 31 December 2021 (see Note 39). 2 These projects are developed within the joint venture with the Korian group. Aedifica and Korian will each finance 50% of the total budget. This table only considers the part of the budget that will be financed by Aedifica. Earn-outs For some acquisition deals, a portion of the acquisition price has been set based on future contingent events, such as the payment of an earn- out, upon completion of a care residence within the limits of the maximum budget committed by Aedifica. 2. Contingent liabilities 2.1 Credit facilities Under its credit agreements, Aedifica has granted securities on certain real estate assets within the legally authorised limits. In total, this concerns approx. 5% of total assets. 2.2 Acquisition of shares in property companies, mergers and de-mergers Aedifica benefits from warranties provided by the sellers of shares in property companies acquired. 3. Contingent assets 3.1 Securities received on rental agreements Aedifica benefits from rental guarantees (in line with market practice and applicable regulations), in the form of bank guarantees, restricted bank deposits or guarantor backings. 3.2 Securities received following acquisitions In case of acquisitions, contributions in kind, mergers and de-mergers, Aedifica benefits from the declarations and securities in line with market practices. 4. Other 4.1 Sundry options - Long leases on healthcare sites: in some cases, Aedifica has granted preferential rights, renewal rights or purchase options to the lessees/tenants. Aedifica also benefits from a number of preferential rights granted by rest homes lessees/tenants. - Sale or purchase options (related to some development projects): in some cases, Aedifica has granted options to third parties, and/or benefits from options allowing it to sell buildings (e.g. when it appears that pieces of buildings will not be used for the development projects). – 211 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 45 – Aedifica – Annual Financial Report 2021 NAME Country Type Progress Budget (in € million) Stepping Stones Blaricum 1,2 NL Construction Ongoing (forward funding) 4 Sweden - pipeline 2022 SE Construction Ongoing (forward funding) 2 Seniorenzentrum Berghof DE Renovation & extension Ongoing (forward funding) 2 Seniorenzentrum Talblick DE Renovation & extension Ongoing (forward funding) 1 ‘t Spelthof BE Extension Ongoing (forward funding) 6 Twistringen DE Construction Ongoing (forward funding) 13 Uetze DE Construction Ongoing (forward funding) 15 Vinea Domini NL Renovation Ongoing (forward funding) 4 De Volder Staete NL Construction Ongoing (forward funding) 10 Résidence le Douaire BE Construction Project/forward purchase subject to outstanding conditions 17 Wohnstift am Weinberg DE Renovation Ongoing (forward funding) 10 Het Gouden Hart Woudenberg 2 NL Construction Ongoing (forward funding) 4 Zwolle Koestraat NL Construction Project/forward purchase subject to outstanding conditions 5 TOTAL 767 1 This project has already been completed after 31 December 2021 (see Note 39). 2 These projects are developed within the joint venture with the Korian group. Aedifica and Korian will each finance 50% of the total budget. This table only considers the part of the budget that will be financed by Aedifica. Earn-outs For some acquisition deals, a portion of the acquisition price has been set based on future contingent events, such as the payment of an earn- out, upon completion of a care residence within the limits of the maximum budget committed by Aedifica. 2. Contingent liabilities 2.1 Credit facilities Under its credit agreements, Aedifica has granted securities on certain real estate assets within the legally authorised limits. In total, this concerns approx. 5% of total assets. 2.2 Acquisition of shares in property companies, mergers and de-mergers Aedifica benefits from warranties provided by the sellers of shares in property companies acquired. 3. Contingent assets 3.1 Securities received on rental agreements Aedifica benefits from rental guarantees (in line with market practice and applicable regulations), in the form of bank guarantees, restricted bank deposits or guarantor backings. 3.2 Securities received following acquisitions In case of acquisitions, contributions in kind, mergers and de-mergers, Aedifica benefits from the declarations and securities in line with market practices. 4. Other 4.1 Sundry options - Long leases on healthcare sites: in some cases, Aedifica has granted preferential rights, renewal rights or purchase options to the lessees/tenants. Aedifica also benefits from a number of preferential rights granted by rest homes lessees/tenants. - Sale or purchase options (related to some development projects): in some cases, Aedifica has granted options to third parties, and/or benefits from options allowing it to sell buildings (e.g. when it appears that pieces of buildings will not be used for the development projects). Aedifica – Annual Financial Report 2021 – 46 Note 38 : Acquisitions and disposals of investment properties The main investment property acquisitions of the financial year are the following: ACQUISITIONS Country Properties valuation° Register of corporations Acquisition date°° Acquisition method (in million €) Hamberley Hailsham UK 17 - 28/01/2021 Acquisition of a building Abbot Care Home UK 19 - 14/01/2021 Acquisition of a building Stanley Wilson Lodge UK 14 - 14/01/2021 Acquisition of a building St Fillans Care Home UK 15 - 14/01/2021 Acquisition of a building Stepping Stones Blaricum NL 1 - 26/01/2021 Acquisition of a land and project via Aedifica Nederland Join Venture BV Brídhaven IE 26 - 12/02/2021 Acquisition of a building Espoo Rajamännynahde FI 5 - 22/02/2021 Acquisition of a building Laukaa Peurungantie FI 4 - 22/02/2021 Acquisition of a building Martha Flora Oegstgeest NL 3 - 25/02/2021 Acquisition of a land and project via Aedifica Nederland 3 BV Shipley Canal Works UK 2 - 05/03/2021 Acquisition of a land and project via Sapphire Properties (2016) Limited Zuyder Haven Oss NL 5 - 30/03/2021 Acquisition of a building Buyten Haven Dordrecht NL 4 - 30/03/2021 Acquisition of a building Aylesbury Martin Dalby UK 3 - 17/05/2021 Acquisition of a land and project via Sapphire Properties (2016) Limited Martha Flora Breda NL 3 - 28/05/2021 Acquisition of a land and project via Aedifica Nederland 4 BV SARA Seniorenresidenz Haus III DE 10 - 31/05/2021 Acquisition of a building Waterford care home IE 9 - 17/06/2021 Acquisition of a building New Ross care home IE 7 - 17/06/2021 Acquisition of a building Bunclody care home IE 6 - 17/06/2021 Acquisition of a building Killerig care home IE 3 - 17/06/2021 Acquisition of a building Sz Alte Zwirnerei DE 12 - 18/06/2021 Acquisition of a building Sz Bad Köstritz DE 22 - 18/06/2021 Acquisition of a building Sz Gensingen DE 17 - 18/06/2021 Acquisition of a building Sz Grünstadt DE 15 - 18/06/2021 Acquisition of a building Sz Sörgenloch DE 17 - 18/06/2021 Acquisition of a building Sz Haus Asam DE 18 - 23/06/2021 Acquisition of a building Sz Berghof DE 7 - 23/06/2021 Acquisition of a building Sz Abundus DE 18 - 23/06/2021 Acquisition of a building Sz Bad Höhenstadt DE 10 - 23/06/2021 Acquisition of a building Sz Hutthurm DE 12 - 23/06/2021 Acquisition of a building Sz Hildegardis DE 23 - 23/06/2021 Acquisition of a building Pz Wiesengrund DE 6 - 23/06/2021 Acquisition of a building Sz Großalmerode DE 11 - 23/06/2021 Acquisition of a building Sz Talblick DE 8 - 23/06/2021 Acquisition of a building Sz Birken DE 9 - 23/06/2021 Acquisition of a building Kokkola Ilkantie FI 9 - 28/06/2021 Acquisition of a building Kokkola Metsämäentie FI 3 - 28/06/2021 Acquisition of a building Kokkola Kärrytie FI 2 - 28/06/2021 Acquisition of a building Domaine de la Rose Blanche BE 20 - 29/06/2021 Acquisition of a building Stadtlohn DE 2 - 29/06/2021 Acquisition of a land and project via Aedifica Residenzen 5 GmbH Twistringen DE 2 - 29/06/2021 Acquisition of a land and project via Aedifica Residenzen 5 GmbH Uetze DE 4 - 29/06/2021 Acquisition of a land and project via Aedifica Residenzen 6 GmbH Fredenbeck DE 1 - 29/06/2021 Acquisition of a land and project via Aedifica Residenzen 5 GmbH Hamburg-Rissen DE 4 - 29/06/2021 Acquisition of a land and project via Aedifica Residenzen 6 GmbH Wellingborough Glenvale Park UK 3 - 02/07/2021 Acquisition of a land and project via Sapphire Properties (2016) Limited De Volder Staete NL 2 - 06/07/2021 Acquisition of a building Sr Lemförde DE 9 - 13/07/2021 Acquisition of a building Milbrook Manor IE 13 - 26/07/2021 Acquisition of a land and project via Aedifica IE Ltd 212 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 47 – Aedifica – Annual Financial Report 2021 St.Doolagh’s IE 3 - 26/07/2021 Acquisition of a land and project via Aedifica IE Ltd Sz St. Benedikt DE 15 - 11/08/2021 Acquisition of a building Sz Laaberg DE 12 - 18/08/2021 Acquisition of a building Dublin Stepaside IE 5 - 23/08/2021 Acquisition of a land and project via Aedifica IE Ltd Bälinge Lövsta 9:19 SE 3 - 08/09/2021 Acquisition of a building Sunnersta 120:2 & 120:4 SE 3 - 08/09/2021 Acquisition of a building Bälinge Lövsta 10:140 SE 2 - 08/09/2021 Acquisition of a building Almungeberg 1:21 SE 3 - 08/09/2021 Acquisition of a building Hässlinge 2:3 (Part 1) SE 3 - 08/09/2021 Acquisition of a building Hässlinge 2:3 (Part 2) SE 3 - 08/09/2021 Acquisition of a building Nyby 3:68 SE 3 - 08/09/2021 Acquisition of a building Emmekalv 4:325 SE 3 - 08/09/2021 Acquisition of a building Hovsta Gryt 7:2 SE 3 - 08/09/2021 Acquisition of a building Steglitsan 2 SE 5 - 08/09/2021 Acquisition of a building Västlunda 2:12 SE 3 - 08/09/2021 Acquisition of a building Anderbäck 1:60 SE 3 - 08/09/2021 Acquisition of a building Törsjö 3:204 SE 3 - 08/09/2021 Acquisition of a building Saga 2 SE 5 - 08/09/2021 Acquisition of a building Almungeberg 1:22 SE 3 - 08/09/2021 Acquisition of a building Sz Altes Kloster DE 9 - 06/10/2021 Acquisition of a building Altadore Nursing Home IE 18 - 08/10/2021 Acquisition of a land and project via JKP Nursing Home Ltd. Priesty Fields UK 19 - 20/10/2021 Acquisition of a building Haus Wedau DE 9 - 25/10/2021 Acquisition of a building Haus Marxloh DE 6 - 25/10/2021 Acquisition of a building The Uplands UK 14 - 25/10/2021 Acquisition of a building Corby Priors Hall Park UK 4 - 26/11/2021 Acquisition of a land and project via Sapphire Properties (2016) Limited Seniorenzentrum Borna DE 15 - 01/12/2021 Acquisition of a building Alphen Raadhuisstraat NL 3 - 16/12/2021 Acquisition of a land and project via Aedifica Sonneborgh Real Estate BV Waarder Molendijk NL 3 - 16/12/2021 Acquisition of a building Tiel Bladergroenstraat NL 2 - 16/12/2021 Acquisition of a building TOTAL 613 ° in order to determine the number of shares issued, the exchange ratio and/or the value of the acquired shares. °° and consolidation date in the financial statements. All these operations are detailed in section 1 of the Financial Report. The main disposals of the financial year are the following: DISPOSALS Country Selling price Disposal date (in million €) Randolph House United Kingdom 1.3 08/02/2021 De Notelaer Olen (plot of land) Belgium 0.3 22/03/2021 Service-Residenz Schloss Bensberg Germany 17.5 30/06/2021 Martha Flora Lochem Netherlands 2.0 02/08/2021 The Elms United Kingdom 0.9 26/08/2021 Bois de la Pierre (plot of land) Belgium 0.2 20/09/2021 Residentie La Tour Netherlands 9.7 06/10/2021 Vinea Domini (plot of land) Netherlands 0.0 19/11/2021 Devonshire House & Lodge Elburton Heights United Kingdom 7.7 23/11/2021 De Notelaer Olen (plot of land) Belgium 0.2 14/12/2021 Residentie Sibelius Netherlands 14.2 22/12/2021 TOTAL 54.0 – 213 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 47 – Aedifica – Annual Financial Report 2021 St.Doolagh’s IE 3 - 26/07/2021 Acquisition of a land and project via Aedifica IE Ltd Sz St. Benedikt DE 15 - 11/08/2021 Acquisition of a building Sz Laaberg DE 12 - 18/08/2021 Acquisition of a building Dublin Stepaside IE 5 - 23/08/2021 Acquisition of a land and project via Aedifica IE Ltd Bälinge Lövsta 9:19 SE 3 - 08/09/2021 Acquisition of a building Sunnersta 120:2 & 120:4 SE 3 - 08/09/2021 Acquisition of a building Bälinge Lövsta 10:140 SE 2 - 08/09/2021 Acquisition of a building Almungeberg 1:21 SE 3 - 08/09/2021 Acquisition of a building Hässlinge 2:3 (Part 1) SE 3 - 08/09/2021 Acquisition of a building Hässlinge 2:3 (Part 2) SE 3 - 08/09/2021 Acquisition of a building Nyby 3:68 SE 3 - 08/09/2021 Acquisition of a building Emmekalv 4:325 SE 3 - 08/09/2021 Acquisition of a building Hovsta Gryt 7:2 SE 3 - 08/09/2021 Acquisition of a building Steglitsan 2 SE 5 - 08/09/2021 Acquisition of a building Västlunda 2:12 SE 3 - 08/09/2021 Acquisition of a building Anderbäck 1:60 SE 3 - 08/09/2021 Acquisition of a building Törsjö 3:204 SE 3 - 08/09/2021 Acquisition of a building Saga 2 SE 5 - 08/09/2021 Acquisition of a building Almungeberg 1:22 SE 3 - 08/09/2021 Acquisition of a building Sz Altes Kloster DE 9 - 06/10/2021 Acquisition of a building Altadore Nursing Home IE 18 - 08/10/2021 Acquisition of a land and project via JKP Nursing Home Ltd. Priesty Fields UK 19 - 20/10/2021 Acquisition of a building Haus Wedau DE 9 - 25/10/2021 Acquisition of a building Haus Marxloh DE 6 - 25/10/2021 Acquisition of a building The Uplands UK 14 - 25/10/2021 Acquisition of a building Corby Priors Hall Park UK 4 - 26/11/2021 Acquisition of a land and project via Sapphire Properties (2016) Limited Seniorenzentrum Borna DE 15 - 01/12/2021 Acquisition of a building Alphen Raadhuisstraat NL 3 - 16/12/2021 Acquisition of a land and project via Aedifica Sonneborgh Real Estate BV Waarder Molendijk NL 3 - 16/12/2021 Acquisition of a building Tiel Bladergroenstraat NL 2 - 16/12/2021 Acquisition of a building TOTAL 613 ° in order to determine the number of shares issued, the exchange ratio and/or the value of the acquired shares. °° and consolidation date in the financial statements. All these operations are detailed in section 1 of the Financial Report. The main disposals of the financial year are the following: DISPOSALS Country Selling price Disposal date (in million €) Randolph House United Kingdom 1.3 08/02/2021 De Notelaer Olen (plot of land) Belgium 0.3 22/03/2021 Service-Residenz Schloss Bensberg Germany 17.5 30/06/2021 Martha Flora Lochem Netherlands 2.0 02/08/2021 The Elms United Kingdom 0.9 26/08/2021 Bois de la Pierre (plot of land) Belgium 0.2 20/09/2021 Residentie La Tour Netherlands 9.7 06/10/2021 Vinea Domini (plot of land) Netherlands 0.0 19/11/2021 Devonshire House & Lodge Elburton Heights United Kingdom 7.7 23/11/2021 De Notelaer Olen (plot of land) Belgium 0.2 14/12/2021 Residentie Sibelius Netherlands 14.2 22/12/2021 TOTAL 54.0 Aedifica – Annual Financial Report 2021 – 48 Note 39: Post-closing events The table below lists all post-balance sheet events up to and including 18 March 2022, the closing date of this report. NAME Date Transaction Country Location Portfolio of 9 Finnish care properties 28/01/2022 Disposal of a portfolio of 9 care properties in order to optimise the real estate portfolio FI Finland Jyväskylä Haukankaari 31/01/2022 Completion of a development project FI Jyväskylä Seniorenhaus Lessingstrasse 01/02/2022 Acquisition of a care home following the fulfilment of outstanding conditions DE Wurzen LLT Almere Buiten 01/02/2022 Completion of a development project NL Almere Het Gouden Hart Soest 04/02/2022 Completion of a development project NL Soest Market Drayton Great Hales 17/02/2022 Announcement of a new development project UK Market Drayton Het Gouden Hart Lelystad 25/02/2022 Completion of a development project NL Lelystad Martha Flora Goes 28/02/2022 Completion of a development project NL Goes Stepping Stones Blaricum 28/02/2022 Completion of a development project NL Blaricum Dublin Crumlin 16/03/2022 Announcement of a new development project IE Dublin Liminka Saunarannantie 16/03/2022 Announcement of a new development project FI Liminka Kerava Lehmuskatu 16/03/2022 Announcement of a new development project FI Kerava Note 40: List of subsidiaries, associates and joint ventures The table below presents a full list of the companies covered by Articles 3:104 and 3:156 of the Royal Decree of 29 April 2019 pertaining to the execution of the Belgian Companies and Associations Code. For the 2021 financial year, the Dutch subsidiaries of Aedifica NV will make use of the exemption provided for in Article 2:403 of the Dut ch Civil Code. Consequently, the Dutch companies are exempted from filing individual financial statements with the trade register in the Netherlands. NAME Country Category Register of corporations Capital held (in %) Aedifica Invest NV Belgium¹ Subsidiary 0879.109.317 100 Immobe NV Belgium Associate 0697.566.095 25¹¹ Aedifica Asset Management GmbH Germany² Subsidiary HRB100562 100 Aedifica Verwaltungs GmbH Germany Subsidiary HRB111389 100 Aedifica Residenzen Nord GmbH & Co. KG Germany Subsidiary HRB110850 94¹² Aedifica Residenzen 1 GmbH & Co. KG Germany Subsidiary HRB112641 94¹² Aedifica Residenzen 2 GmbH Germany Subsidiary HRB115795 94¹² Aedifica Residenzen 3 GmbH Germany Subsidiary HRB118227 94¹² Aedifica Residenzen West GmbH Germany Subsidiary HRB117957 94¹² Aedifica Residenzen 4 GmbH Germany Subsidiary HRB121918 94¹² Aedifica Residenzen 5 GmbH Germany Subsidiary HRB36193 94¹² Aedifica Residenzen 6 GmbH Germany Subsidiary HRB33909 94¹² Aedifica Luxemburg I SCS Luxembourg³ Subsidiary B128048 94¹² Aedifica Luxemburg II SCS Luxembourg Subsidiary B139725 94¹² Aedifica Luxemburg III SCS Luxembourg Subsidiary B143704 94¹² Aedifica Luxemburg IV SCS Luxembourg Subsidiary B117441 94¹² Aedifica Luxemburg V SCS Luxembourg Subsidiary B117445 94¹² Aedifica Luxemburg VI SCS Luxembourg Subsidiary B132154 94¹² Aedifica Luxemburg VII SCS Luxembourg Subsidiary B117438 94¹² Aedifica Luxemburg VIII SCS Luxembourg Subsidiary B117437 94¹² Aedifica Nederland BV Netherlands⁴ Subsidiary 65422082 100 Aedifica Nederland 2 BV Netherlands Subsidiary 75102099 100 Aedifica Nederland Services BV Netherlands Subsidiary 75,667,800 100 Aedifica Nederland 3 BV Netherlands Subsidiary 77,636,309 100 Aedifica Nederland 4 BV Netherlands Subsidiary 81,056,664 100 Aedifica Nederland Joint Venture BV Netherlands Subsidiary 80,885,551 100 AK JV NL public partnership Netherlands Joint-venture 81,197,470 50¹³ Aedifica Sonneborgh Real Estate BV Netherlands Subsidiary 84,354,267 75¹⁴ CHAPP Holdings Limited Jersey⁵ Subsidiary 109,055 100 CHAPP GP Limited Jersey Subsidiary 109,054 100 214 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 49 – Aedifica – Annual Financial Report 2021 NAME Country Category Register of corporations Capital held (in %) Patient Properties (Holdings) Limited Jersey Subsidiary 122,972 100 Patient Properties (Beech Court) Limited Jersey Subsidiary 123,678 100 Patient Properties (Springfields) Limited Jersey Subsidiary 123,687 100 Patient Properties (Ashwood) Limited Jersey Subsidiary 123,701 100 Patient Properties (Fountains) Limited Jersey Subsidiary 123,683 100 Patient Properties (Blenheim) Limited Jersey Subsidiary 123,679 100 Patient Properties (Chatsworth) Limited Jersey Subsidiary 123,697 100 Patient Properties (Knights Court) Limited Jersey Subsidiary 123,685 100 Patient Properties (Clarendon) Limited Jersey Subsidiary 123,703 100 Patient Properties (Eltandia) Limited Jersey Subsidiary 123,682 100 Patient Properties (Windmill) Limited Jersey Subsidiary 123,699 100 Patient Properties (Brook House) Limited Jersey Subsidiary 123,680 100 AED Oak Acquisitions (Ottery) Limited Jersey Subsidiary 125,192 100 Aedifica UK Limited United Kingdom⁶ Subsidiary 12,351,073 100 Aedifica Finance 1 Limited United Kingdom Subsidiary 12,352,308 100 Aedifica Finance 2 Limited United Kingdom Subsidiary 12,352,800 100 Maple Court Nursing Home Limited United Kingdom Subsidiary 07295828 100 Quercus Homes 2018 Limited United Kingdom Subsidiary 11278772 100 Sapphire Properties (2016) Limited United Kingdom Subsidiary '09461514 100 Aedifica UK (Ampthill) Limited United Kingdom Subsidiary 11159774 100 Aedifica UK (Hailsham) Limited United Kingdom Subsidiary 11159930 100 Marches Care Holdings Limited United Kingdom Subsidiary 7097091 100 Priesty Fields Developments Limited United Kingdom Subsidiary 10806474 100 Aedifica Management Limited United Kingdom Subsidiary 4797971 100 Aureit Holding Oy Finland⁷ Subsidiary 3092783-5 100 Hoivatilat Oyj Finland Subsidiary 2241238-0 100 As Oy Seinäjoen Kutojankatu Finland Subsidiary 2779544-8 100 Koy Espoon Fallåkerinrinne Finland Subsidiary 2241238-0 100 Koy Espoon Hirvisuontie Finland Subsidiary 2620688‐3 100 Koy Espoon Kurttilantie Finland Subsidiary 2755334‐2 100 Koy Espoon Kuurinkallio Finland Subsidiary 3134900-2 100 Koy Espoon Matinkartanontie Finland Subsidiary 3201659-2 100 Koy Espoon Meriviitantie Finland Subsidiary 3117665-8 100 Koy Espoon Oppilaantie Finland Subsidiary 2720369‐2 100 Koy Espoon Rajamännynahde Finland Subsidiary 2787263‐4 100 Koy Espoon Tikasmäentie Finland Subsidiary 3194972-9 100 Koy Espoon Vuoripirtintie Finland Subsidiary 2669018‐5 100 Koy Euran Käräjämäentie Finland Subsidiary 2748087‐6 100 Koy Hakalahden Majakka Finland Subsidiary 2842931‐9 100 Koy Haminan Lepikönranta Finland Subsidiary 2668724-2 100 Koy Heinolan Lähteentie Finland Subsidiary 2988685‐3 100 Koy Helsingin Ensikodintie 4 Finland Subsidiary 2752188‐5 100 Koy Helsingin Kansantie Finland Subsidiary 3220641-7 100 Koy Helsingin Pakarituvantie Finland Subsidiary 3214270-8 100 Koy Helsingin Työnjohtajankadun Seppä 3 Finland Subsidiary 3131782-8 100 Koy Hollolan Sarkatie Finland Subsidiary 3009977-7 100 Koy Hämeenlinna Kampuskaarre Finland Subsidiary 2749865‐4 100 Koy Hämeenlinnan Jukolanraitti Finland Subsidiary 3175924-7 100 Koy Hämeenlinnan Vanha Alikartanontie Finland Subsidiary 2826099‐8 100 Koy Iisalmen Eteläinen Puistoraitti Finland Subsidiary 2669024‐9 100 Koy Iisalmen Kangaslammintie Finland Subsidiary 2840090‐3 100 Koy Iisalmen Petter Kumpulaisentie Finland Subsidiary 2826102‐6 100 Koy Iisalmen Satamakatu Finland Subsidiary 2882785‐1 100 Koy Iisalmen Vemmelkuja Finland Subsidiary 3005776-1 100 Koy Janakkalan Kekanahontie Finland Subsidiary 2917923‐5 100 Koy Joutsenon Päiväkoti Finland Subsidiary 2911674‐4 100 Koy Jyväskylän Ailakinkatu Finland Subsidiary 2907399‐1 100 Koy Jyväskylän Haperontie Finland Subsidiary 2932895‐8 100 Koy Jyväskylän Harjutie Finland Subsidiary 2763296‐4 100 – 215 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 49 – Aedifica – Annual Financial Report 2021 NAME Country Category Register of corporations Capital held (in %) Patient Properties (Holdings) Limited Jersey Subsidiary 122,972 100 Patient Properties (Beech Court) Limited Jersey Subsidiary 123,678 100 Patient Properties (Springfields) Limited Jersey Subsidiary 123,687 100 Patient Properties (Ashwood) Limited Jersey Subsidiary 123,701 100 Patient Properties (Fountains) Limited Jersey Subsidiary 123,683 100 Patient Properties (Blenheim) Limited Jersey Subsidiary 123,679 100 Patient Properties (Chatsworth) Limited Jersey Subsidiary 123,697 100 Patient Properties (Knights Court) Limited Jersey Subsidiary 123,685 100 Patient Properties (Clarendon) Limited Jersey Subsidiary 123,703 100 Patient Properties (Eltandia) Limited Jersey Subsidiary 123,682 100 Patient Properties (Windmill) Limited Jersey Subsidiary 123,699 100 Patient Properties (Brook House) Limited Jersey Subsidiary 123,680 100 AED Oak Acquisitions (Ottery) Limited Jersey Subsidiary 125,192 100 Aedifica UK Limited United Kingdom⁶ Subsidiary 12,351,073 100 Aedifica Finance 1 Limited United Kingdom Subsidiary 12,352,308 100 Aedifica Finance 2 Limited United Kingdom Subsidiary 12,352,800 100 Maple Court Nursing Home Limited United Kingdom Subsidiary 07295828 100 Quercus Homes 2018 Limited United Kingdom Subsidiary 11278772 100 Sapphire Properties (2016) Limited United Kingdom Subsidiary '09461514 100 Aedifica UK (Ampthill) Limited United Kingdom Subsidiary 11159774 100 Aedifica UK (Hailsham) Limited United Kingdom Subsidiary 11159930 100 Marches Care Holdings Limited United Kingdom Subsidiary 7097091 100 Priesty Fields Developments Limited United Kingdom Subsidiary 10806474 100 Aedifica Management Limited United Kingdom Subsidiary 4797971 100 Aureit Holding Oy Finland⁷ Subsidiary 3092783-5 100 Hoivatilat Oyj Finland Subsidiary 2241238-0 100 As Oy Seinäjoen Kutojankatu Finland Subsidiary 2779544-8 100 Koy Espoon Fallåkerinrinne Finland Subsidiary 2241238-0 100 Koy Espoon Hirvisuontie Finland Subsidiary 2620688‐3 100 Koy Espoon Kurttilantie Finland Subsidiary 2755334‐2 100 Koy Espoon Kuurinkallio Finland Subsidiary 3134900-2 100 Koy Espoon Matinkartanontie Finland Subsidiary 3201659-2 100 Koy Espoon Meriviitantie Finland Subsidiary 3117665-8 100 Koy Espoon Oppilaantie Finland Subsidiary 2720369‐2 100 Koy Espoon Rajamännynahde Finland Subsidiary 2787263‐4 100 Koy Espoon Tikasmäentie Finland Subsidiary 3194972-9 100 Koy Espoon Vuoripirtintie Finland Subsidiary 2669018‐5 100 Koy Euran Käräjämäentie Finland Subsidiary 2748087‐6 100 Koy Hakalahden Majakka Finland Subsidiary 2842931‐9 100 Koy Haminan Lepikönranta Finland Subsidiary 2668724-2 100 Koy Heinolan Lähteentie Finland Subsidiary 2988685‐3 100 Koy Helsingin Ensikodintie 4 Finland Subsidiary 2752188‐5 100 Koy Helsingin Kansantie Finland Subsidiary 3220641-7 100 Koy Helsingin Pakarituvantie Finland Subsidiary 3214270-8 100 Koy Helsingin Työnjohtajankadun Seppä 3 Finland Subsidiary 3131782-8 100 Koy Hollolan Sarkatie Finland Subsidiary 3009977-7 100 Koy Hämeenlinna Kampuskaarre Finland Subsidiary 2749865‐4 100 Koy Hämeenlinnan Jukolanraitti Finland Subsidiary 3175924-7 100 Koy Hämeenlinnan Vanha Alikartanontie Finland Subsidiary 2826099‐8 100 Koy Iisalmen Eteläinen Puistoraitti Finland Subsidiary 2669024‐9 100 Koy Iisalmen Kangaslammintie Finland Subsidiary 2840090‐3 100 Koy Iisalmen Petter Kumpulaisentie Finland Subsidiary 2826102‐6 100 Koy Iisalmen Satamakatu Finland Subsidiary 2882785‐1 100 Koy Iisalmen Vemmelkuja Finland Subsidiary 3005776-1 100 Koy Janakkalan Kekanahontie Finland Subsidiary 2917923‐5 100 Koy Joutsenon Päiväkoti Finland Subsidiary 2911674‐4 100 Koy Jyväskylän Ailakinkatu Finland Subsidiary 2907399‐1 100 Koy Jyväskylän Haperontie Finland Subsidiary 2932895‐8 100 Koy Jyväskylän Harjutie Finland Subsidiary 2763296‐4 100 Aedifica – Annual Financial Report 2021 – 50 NAME Country Category Register of corporations Capital held (in %) Koy Jyväskylän Haukankaari Finland Subsidiary 3172893-4 100 Koy Jyväskylän Mannisenmäentie Finland Subsidiary 3174128-2 100 Koy Jyväskylän Martikaisentien Finland Subsidiary 2816983‐6 100 Koy Jyväskylän Palstatie Finland Subsidiary 2575556-5 100 Koy Jyväskylän Sulkulantie Finland Subsidiary 2923254‐2 100 Koy Jyväskylän Väliharjuntie Finland Subsidiary 2850306-4 100 Koy Jyväskylän Vävypojanpolku Finland Subsidiary 2639227‐6 100 Koy Järvenpään Yliopettajankatu Finland Subsidiary 2960547‐6 100 Koy Kaarinan Nurminiitynkatu Finland Subsidiary 2774063-1 100 Koy Kajaanin Erätie Finland Subsidiary 2838030‐8 100 Koy Kajaanin Hoikankatu Finland Subsidiary 2749663‐2 100 Koy Kajaanin Menninkäisentie Finland Subsidiary 2951667‐6 100 Koy Kajaanin Uitontie Finland Subsidiary 2681416‐8 100 Koy Kajaanin Valonkatu Finland Subsidiary 3164208-1 100 Koy Kalajoen Hannilantie Finland Subsidiary 2870293‐6 100 Koy Kangasalan Hilmanhovi Finland Subsidiary 2768549‐2 100 Koy Kangasalan Mäntyveräjäntie Finland Subsidiary 2262908‐8 100 Koy Kangasalan Rekiäläntie Finland Subsidiary 2688361‐4 100 Koy Kaskisten Bladintie Finland Subsidiary 2940754-1 100 Koy Kempeleen Ihmemaantie Finland Subsidiary 2224949-9 100 Koy Keravan Lehmuskatu Finland Subsidiary 3112115-5 100 Koy Keravan Männiköntie Finland Subsidiary 3256470-8 100 Koy Keuruun Tehtaantie Finland Subsidiary 2774061‐5 100 Koy Kirkkonummen Kotitontunkuja Finland Subsidiary 2877302‐1 100 Majakka Kiinteistöt Oy Finland Subsidiary 2692080‐9 100 Koy Kokkolan Ankkurikuja Finland Subsidiary 2760856-9 100 Koy Kokkolan Kaarlelankatu 68 Finland Subsidiary 2955766‐2 100 Koy Kokkolan Vanha Ouluntie Finland Subsidiary 2668743-7 100 Koy Kontiolahden Päiväperhosenkatu Finland Subsidiary 2771913‐8 100 Koy Kotka Särmääjänkatu 6 Finland Subsidiary 3115519-5 100 Koy Kotkan Loitsutie Finland Subsidiary 3169793-9 100 Koy Kotkan Metsäkulmankatu Finland Subsidiary 2795792‐9 100 Koy Kouvola Vainiolankuja Finland Subsidiary 2225111-8 100 Koy Kouvolan Kaartokuja Finland Subsidiary 3134903-7 100 Koy Kouvolan Pappilantie Finland Subsidiary 2697590‐6 100 Koy Kouvolan Rannikkotie Finland Subsidiary 2792313‐9 100 Koy Kouvolan Ruskeasuonkatu Finland Subsidiary 2941695-8 100 Koy Kouvolan Vinttikaivontie Finland Subsidiary 2955751-5 100 Koy Kuopion Amerikanraitti Finland Subsidiary 2543325‐9 100 Koy Kuopion Männistönkatu Finland Subsidiary 2837113‐7 100 Koy Kuopion Opistokuja Finland Subsidiary 3127190-3 100 Koy Kuopion Pirtinkaari Finland Subsidiary 3176660-7 100 Koy Kuopion Portti A2 Finland Subsidiary 2873993-1 100 Koy Kuopion Rantaraitti Finland Subsidiary 2874104-6 100 Koy Kuopion Sipulikatu Finland Subsidiary 2770280‐3 100 Koy Lahden Jahtikatu Finland Subsidiary 2509836‐6 100 Koy Lahden Kurenniityntie Finland Subsidiary 2861249‐8 100 Koy Lahden Makarantie Finland Subsidiary 3008794-4 100 Koy Lahden Piisamikatu Finland Subsidiary 2988683-7 100 Koy Lahden Vallesmanninkatu A Finland Subsidiary 2861251‐9 100 Koy Lahden Vallesmanninkatu B Finland Subsidiary 2675831‐1 100 Koy Laihian Jarrumiehentie Finland Subsidiary 2675827‐4 100 Koy Lappeenrannan Orioninkatu Finland Subsidiary 2798400‐3 100 Koy Laukaan Hytösenkuja Finland Subsidiary 2877591‐6 100 Koy Laukaan Peurungantie Finland Subsidiary 2681456‐3 100 Koy Laukaan Saratie Finland Subsidiary 2821700-9 100 Koy Limingan Kauppakaari Finland Subsidiary 2896187‐4 100 Koy Lohjan Ansatie Finland Subsidiary 2553773‐6 100 Koy Lohjan Porapojankuja Finland Subsidiary 2768296‐1 100 216 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 51 – Aedifica – Annual Financial Report 2021 NAME Country Category Register of corporations Capital held (in %) Koy Lohjan Sahapiha Finland Subsidiary 3130512-2 100 Koy Loimaan Itsenäisyydenkatu Finland Subsidiary 3132701-4 100 Koy Loviisan Mannerheiminkatu Finland Subsidiary 2887703-1 100 Koy Maskun Ruskontie Finland Subsidiary 2648698‐5 100 Koy Mikkelin Kastanjakuja Finland Subsidiary 2610017‐3 100 Koy Mikkelin Sahalantie Finland Subsidiary 2915481-2 100 Koy Mikkelin Väänäsenpolku Finland Subsidiary 3004499-5 100 Koy Mikkelin Ylännetie 10 Finland Subsidiary 2864738‐3 100 Koy Mikkelin Ylännetie 8 Finland Subsidiary 2751792‐3 100 Koy Mynämäen Opintie Finland Subsidiary 2839320‐5 100 Koy Mäntsälän Liedontie Finland Subsidiary 2957425‐1 100 Koy Mäntyharjun Lääkärinkuja Finland Subsidiary 2505670‐5 100 Koy Nokian Kivimiehenkatu Finland Subsidiary 2761813‐4 100 Koy Nokian Luhtatie Finland Subsidiary 1056103-9 100 Koy Nokian Näsiäkatu Finland Subsidiary 2882228-4 100 Koy Nokian Vikkulankatu Finland Subsidiary 2772561‐8 100 Koy Nurmijärven Laidunalue Finland Subsidiary 2720339‐3 100 Koy Nurmijärven Ratakuja Finland Subsidiary 2415548‐8 100 Koy Nurmijärvi Luhtavillantie Finland Subsidiary 2807462‐6 100 Koy Orimattilan Suppulanpolku Finland Subsidiary 3202629-9 100 Koy Oulun Isopurjeentie Finland Subsidiary 2750819‐7 100 Koy Oulun Jahtivoudintie Finland Subsidiary 2255743-2 100 Koy Oulun Juhlamarssi Finland Subsidiary 2759228-8 100 Koy Oulun Kehätie Finland Subsidiary 3217953-5 100 Koy Oulun Paulareitti Finland Subsidiary 2613681‐1 100 Koy Oulun Raamipolku Finland Subsidiary 2512290‐1 100 Koy Oulun Rakkakiventie Finland Subsidiary 2798361-7 100 Koy Oulun Ruismetsä Finland Subsidiary 2577582‐2 100 Koy Oulun Salonpään koulu Finland Subsidiary 3008792-8 100 Koy Oulun Sarvisuontie Finland Subsidiary 3100847-8 100 Koy Oulun Siilotie Finland Subsidiary 2899591‐9 100 Koy Oulun Soittajanlenkki Finland Subsidiary 3006511-2 100 Koy Oulun Ukkoherrantie A Finland Subsidiary 2920514-9 100 Koy Oulun Ukkoherrantie B Finland Subsidiary 3141465-2 100 Koy Oulun Valjastie Finland Subsidiary 2781801‐3 100 Koy Oulun Villa Sulkakuja Finland Subsidiary 3139840-2 100 Koy Oulunsalon Vihannestie Finland Subsidiary 2695880-7 100 Koy Paimion Mäkiläntie Finland Subsidiary 3127183-1 100 Koy Pieksämäen Ruustinnantie Finland Subsidiary 2853714‐1 100 Koy Pihtiputaan Nurmelanpolku Finland Subsidiary 2903250-8 100 Koy Pirkkalan Lehtimäentie Finland Subsidiary 2860057‐7 100 Koy Pirkkalan Pereensaarentie Finland Subsidiary 2593596‐1 100 Koy Porin Kerhotie Finland Subsidiary 2808085‐8 100 Koy Porin Koekatu Finland Subsidiary 3145625-4 100 Koy Porin Ojantie Finland Subsidiary 2835076‐6 100 Koy Porin Palokärjentie Finland Subsidiary 2625961‐9 100 Koy Porvoon Fredrika Runebergin katu Finland Subsidiary 2735199‐4 100 Koy Porvoon Haarapääskyntie Finland Subsidiary 2760328‐2 100 Koy Porvoon Peippolankuja Finland Subsidiary 2951666‐8 100 Koy Porvoon Vanha Kuninkaantie Finland Subsidiary 2588814‐9 100 Koy Raahe Kirkkokatu Finland Subsidiary 2746305‐6 100 Koy Raahen Palokunnanhovi Finland Subsidiary 3143874-2 100 Koy Raahen Vihastenkarinkatu Finland Subsidiary 2326426‐0 100 Koy Raision Tenavakatu Finland Subsidiary 2917887‐3 100 Koy Riihimäen Jyrätie Finland Subsidiary 2553772‐8 100 Koy Rovaniemen Gardininkuja Finland Subsidiary 2956737-7 100 Koy Rovaniemen Matkavaarantie Finland Subsidiary 3100848-6 100 Koy Rovaniemen Muonakuja Finland Subsidiary 2838821‐1 100 Koy Rovaniemen Mäkirannantie Finland Subsidiary 3110312-5 100 – 217 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 51 – Aedifica – Annual Financial Report 2021 NAME Country Category Register of corporations Capital held (in %) Koy Lohjan Sahapiha Finland Subsidiary 3130512-2 100 Koy Loimaan Itsenäisyydenkatu Finland Subsidiary 3132701-4 100 Koy Loviisan Mannerheiminkatu Finland Subsidiary 2887703-1 100 Koy Maskun Ruskontie Finland Subsidiary 2648698‐5 100 Koy Mikkelin Kastanjakuja Finland Subsidiary 2610017‐3 100 Koy Mikkelin Sahalantie Finland Subsidiary 2915481-2 100 Koy Mikkelin Väänäsenpolku Finland Subsidiary 3004499-5 100 Koy Mikkelin Ylännetie 10 Finland Subsidiary 2864738‐3 100 Koy Mikkelin Ylännetie 8 Finland Subsidiary 2751792‐3 100 Koy Mynämäen Opintie Finland Subsidiary 2839320‐5 100 Koy Mäntsälän Liedontie Finland Subsidiary 2957425‐1 100 Koy Mäntyharjun Lääkärinkuja Finland Subsidiary 2505670‐5 100 Koy Nokian Kivimiehenkatu Finland Subsidiary 2761813‐4 100 Koy Nokian Luhtatie Finland Subsidiary 1056103-9 100 Koy Nokian Näsiäkatu Finland Subsidiary 2882228-4 100 Koy Nokian Vikkulankatu Finland Subsidiary 2772561‐8 100 Koy Nurmijärven Laidunalue Finland Subsidiary 2720339‐3 100 Koy Nurmijärven Ratakuja Finland Subsidiary 2415548‐8 100 Koy Nurmijärvi Luhtavillantie Finland Subsidiary 2807462‐6 100 Koy Orimattilan Suppulanpolku Finland Subsidiary 3202629-9 100 Koy Oulun Isopurjeentie Finland Subsidiary 2750819‐7 100 Koy Oulun Jahtivoudintie Finland Subsidiary 2255743-2 100 Koy Oulun Juhlamarssi Finland Subsidiary 2759228-8 100 Koy Oulun Kehätie Finland Subsidiary 3217953-5 100 Koy Oulun Paulareitti Finland Subsidiary 2613681‐1 100 Koy Oulun Raamipolku Finland Subsidiary 2512290‐1 100 Koy Oulun Rakkakiventie Finland Subsidiary 2798361-7 100 Koy Oulun Ruismetsä Finland Subsidiary 2577582‐2 100 Koy Oulun Salonpään koulu Finland Subsidiary 3008792-8 100 Koy Oulun Sarvisuontie Finland Subsidiary 3100847-8 100 Koy Oulun Siilotie Finland Subsidiary 2899591‐9 100 Koy Oulun Soittajanlenkki Finland Subsidiary 3006511-2 100 Koy Oulun Ukkoherrantie A Finland Subsidiary 2920514-9 100 Koy Oulun Ukkoherrantie B Finland Subsidiary 3141465-2 100 Koy Oulun Valjastie Finland Subsidiary 2781801‐3 100 Koy Oulun Villa Sulkakuja Finland Subsidiary 3139840-2 100 Koy Oulunsalon Vihannestie Finland Subsidiary 2695880-7 100 Koy Paimion Mäkiläntie Finland Subsidiary 3127183-1 100 Koy Pieksämäen Ruustinnantie Finland Subsidiary 2853714‐1 100 Koy Pihtiputaan Nurmelanpolku Finland Subsidiary 2903250-8 100 Koy Pirkkalan Lehtimäentie Finland Subsidiary 2860057‐7 100 Koy Pirkkalan Pereensaarentie Finland Subsidiary 2593596‐1 100 Koy Porin Kerhotie Finland Subsidiary 2808085‐8 100 Koy Porin Koekatu Finland Subsidiary 3145625-4 100 Koy Porin Ojantie Finland Subsidiary 2835076‐6 100 Koy Porin Palokärjentie Finland Subsidiary 2625961‐9 100 Koy Porvoon Fredrika Runebergin katu Finland Subsidiary 2735199‐4 100 Koy Porvoon Haarapääskyntie Finland Subsidiary 2760328‐2 100 Koy Porvoon Peippolankuja Finland Subsidiary 2951666‐8 100 Koy Porvoon Vanha Kuninkaantie Finland Subsidiary 2588814‐9 100 Koy Raahe Kirkkokatu Finland Subsidiary 2746305‐6 100 Koy Raahen Palokunnanhovi Finland Subsidiary 3143874-2 100 Koy Raahen Vihastenkarinkatu Finland Subsidiary 2326426‐0 100 Koy Raision Tenavakatu Finland Subsidiary 2917887‐3 100 Koy Riihimäen Jyrätie Finland Subsidiary 2553772‐8 100 Koy Rovaniemen Gardininkuja Finland Subsidiary 2956737-7 100 Koy Rovaniemen Matkavaarantie Finland Subsidiary 3100848-6 100 Koy Rovaniemen Muonakuja Finland Subsidiary 2838821‐1 100 Koy Rovaniemen Mäkirannantie Finland Subsidiary 3110312-5 100 Aedifica – Annual Financial Report 2021 – 52 NAME Country Category Register of corporations Capital held (in %) Koy Rovaniemen Ritarinne Finland Subsidiary 2994385-4 100 Koy Rovaniemen Santamäentie Finland Subsidiary 2754616‐9 100 Koy Ruskon Päällistönmäentie Finland Subsidiary 3008789-9 100 Koy Salon Papinkuja Finland Subsidiary 2789540‐6 100 Koy Sastamalan Tyrväänkyläntie Finland Subsidiary 3155224-6 100 Koy Siilinjärven Honkarannantie Finland Subsidiary 2872995‐2 100 Koy Siilinjärven Nilsiäntie Finland Subsidiary 2947087-4 100 Koy Siilinjärven Risulantie Finland Subsidiary 2934834‐2 100 Koy Siilinjärven Sinisiipi Finland Subsidiary 2854061‐5 100 Koy Sipoon Aarrepuistonkuja Finland Subsidiary 2479104‐6 100 Koy Sipoon Aarretie Finland Subsidiary 2878144‐3 100 Koy Sipoon Satotalmantie Finland Subsidiary 2870619‐5 100 Koy Sotkamon Kirkkotie Finland Subsidiary 2743701‐8 100 Koy Tampereen Haiharansuu Finland Subsidiary 2917890‐2 100 Koy Tampereen Lentävänniemenkatu Finland Subsidiary 3192647-1 100 Koy Tampereen Sisunaukio Finland Subsidiary 2648697‐7 100 Koy Teuvan Tuokkolantie Finland Subsidiary 2355346-8 100 Koy Tornion Torpin Rinnakkaiskatu Finland Subsidiary 2225109-7 100 Koy Turun Lemmontie Finland Subsidiary 2816984‐4 100 Koy Turun Lukkosepänkatu Finland Subsidiary 2551472-9 100 Koy Turun Malin Trällinkuja Finland Subsidiary 2842686‐3 100 Koy Turun Paltankatu (care home) Finland Subsidiary 3171440-1 100 Koy Turun Teollisuuskatu Finland Subsidiary 2845199‐7 100 Koy Turun Vakiniituntie Finland Subsidiary 2729980‐7 100 Koy Turun Vähäheikkiläntie Finland Subsidiary 2648689‐7 100 Koy Tuusulan Isokarhunkierto Finland Subsidiary 2660277‐1 100 Koy Ulvilan Kulmalantie Finland Subsidiary 3005414-9 100 Koy Uudenkaupungin Merilinnuntie Finland Subsidiary 2966954-1 100 Koy Uudenkaupungin Merimetsopolku B Finland Subsidiary 2878831‐1 100 Koy Uudenkaupungin Merimetsopolku C Finland Subsidiary 2798800‐4 100 Koy Uudenkaupungin Puusepänkatu Finland Subsidiary 2797654‐8 100 Koy Vaasan Mäkikaivontie Finland Subsidiary 2766340‐2 100 Koy Vaasan Tehokatu Finland Subsidiary 1743075-2 100 Koy Vaasan Uusmetsäntie Finland Subsidiary 2246849-9 100 Koy Vaasan Vanhan Vaasankatu Finland Subsidiary 3000725-4 100 Koy Valkeakosken Kirkkotie Finland Subsidiary 2882784‐3 100 Koy Vantaan Asolantie (care home) Finland Subsidiary 3244769-1 100 Koy Vantaan Koetilankatu Finland Subsidiary 2319120-9 100 Koy Vantaan Koivukylän Puistotie Finland Subsidiary 2656382‐1 100 Koy Vantaan Mesikukantie Finland Subsidiary 2933844‐3 100 Koy Vantaan Punakiventie Finland Subsidiary 2755333‐4 100 Koy Vantaan Tuovintie Finland Subsidiary 2675834‐6 100 Koy Vantaan Vuohirinne Finland Subsidiary 2711240‐8 100 Koy Varkauden Kaura-ahontie Finland Subsidiary 2691248‐9 100 Koy Varkauden Savontie Finland Subsidiary 2798803‐9 100 Koy Vihdin Hiidenrannantie Finland Subsidiary 2796607‐5 100 Koy Vihdin Pengerkuja Finland Subsidiary 2616455‐6 100 Koy Vihdin Vanhan sepän tie Finland Subsidiary 2855519‐8 100 Koy Ylivieskan Alpuumintie Finland Subsidiary 2625959‐8 100 Koy Ylivieskan Mikontie 1 Finland Subsidiary 3004201-7 100 Koy Ylivieskan Ratakatu 12 Finland Subsidiary 2850860‐7 100 Koy Ylöjärven Mustarastaantie Finland Subsidiary 2850859‐4 100 Koy Ylöjärven Työväentalontie Finland Subsidiary 2620686‐7 100 Koy Äänekosken Likolahdenkatu Finland Subsidiary 2690219‐2 100 Hoivatilat AB Sweden⁸ Subsidiary 559169-2461 100 Hoivatilat Holding AB Sweden Subsidiary 559192-8311 100 Hoivatilat Holding 2 AB Sweden Subsidiary 559204-7426 100 Älmhult Kungskapsgatan AB Sweden Subsidiary 559149-1732 100 Norrtälje Östhamra Förskola AB Sweden Subsidiary 559180-2078 100 218 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 53 – Aedifica – Annual Financial Report 2021 NAME Country Category Register of corporations Capital held (in %) Gråmunkehöga LSS Boende AB Sweden Subsidiary 559131-8877 100 Heby LSS boende AB Sweden Subsidiary 559073-5634 100 Förskola Mesta 6:56 AB Sweden Subsidiary 559195-0570 100 Förskola Kalleberga AB Sweden Subsidiary 559204-7392 100 Strängnäs Bivägen AB Sweden Subsidiary 559232-8685 100 Tierp LSS Boende AB Sweden Subsidiary 559218-2876 100 Upplands Väsby Havregatan Förskola AB Sweden Subsidiary 559234-9079 100 Hoivatilat Holding 3 AB Sweden Subsidiary 559296-1519 100 Fanna 24:19 AB (Enköping LSS) Sweden Subsidiary 559252-4788 100 Hoivatilat Holding 4 AB Sweden Subsidiary 559301-4979 100 Hoivatilat Holding 5 AB Sweden Subsidiary 559318-8286 100 Uppsala Almungeberg 2 LSS boende AB Sweden Subsidiary 559150-0938 100 Örebro Törsjö LSS boende AB Sweden Subsidiary 559163-1931 100 Nyköping Anderbäck LSS boende AB Sweden Subsidiary 559150-0979 100 Vallentuna Västlunda LSS boende AB Sweden Subsidiary 559152-7139 100 Växjö LSS boende AB Sweden Subsidiary 559190-6267 100 Örebro Hovsta Gryt LSS boende AB Sweden Subsidiary 559152-7147 100 Oskarshamn Emmekalv LSS boende AB Sweden Subsidiary 559163-3788 100 Lhaolm Nyby LSS boende AB Sweden Subsidiary 559149-6335 100 Enköping Hässlinge LSS boende AB Sweden Subsidiary 559152-2247 100 Uppsala Almungeberg 1 LSS boende AB Sweden Subsidiary 559131-1468 100 Uppsala Bäling Lövsta 1 LSS boende AB Sweden Subsidiary 556908-5391 100 Uppsala Sunnersta LSS boende AB Sweden Subsidiary 556900-2024 100 Uppsala Bäling Lövsta 2 LSS boende AB Sweden Subsidiary 556864-9460 100 Aedifica Ireland Limited Ireland⁹ Subsidiary 683,400 100 Prudent Capital Limited Ireland Subsidiary 562,309 100 JKP Nursing Home Limited Ireland Subsidiary 483,964 100 Mallowville SL Spain¹⁰ Subsidiary B16839649 100 ¹ With the exception of Immobe NV (located Avenue Louise 331 in 1050 Brussels (Belgium)), all Belgian companies are located Rue Belliard 40 box 11 in 1040 Brussels (Belgium). ² All German companies are located Gervinusstraße 15-17 in 60322 Frankfurt am Main (Germany). ³ All Luxembourg companies are located rue Guillaume J. Kroll 12 C in 1882 Luxembourg (Luxembourg). ⁴ All Dutch companies are located Amstelplein 54, 1096 BC Amsterdam (Netherlands). ⁵ All Jersey companies are located 47 Esplanade in St. Helier JE1 0BD (Jersey). ⁶ All companies in the UK are located 8 Sackville Street in London W1S 3DG (United Kingdom). ⁷ All Finnish companies are located Kasarmintie 21, 90130 Oulu (Finland). ⁸ All Swedish companies are located Svärdvägen 21, 18233 Danderyd (Sweden). ⁹ All Irish companies are located 29 Earlsfort Terrace, Dublin 2, Ireland D02 AY28 (Ireland). ¹⁰ Travessera de Gràcia 11, 5ª pl., 08021 Barcelona (Spain). ¹¹ The residual 75% is held by an investor who is unrelated to Aedifica. ¹² The residual 6% is held by an investor who is unrelated to Aedifica. ¹³ The residual 50% is held by a partner who is unrelated to Aedifica. ¹⁴ The residual 25% is held by a partner who is unrelated to Aedifica. – 219 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 53 – Aedifica – Annual Financial Report 2021 NAME Country Category Register of corporations Capital held (in %) Gråmunkehöga LSS Boende AB Sweden Subsidiary 559131-8877 100 Heby LSS boende AB Sweden Subsidiary 559073-5634 100 Förskola Mesta 6:56 AB Sweden Subsidiary 559195-0570 100 Förskola Kalleberga AB Sweden Subsidiary 559204-7392 100 Strängnäs Bivägen AB Sweden Subsidiary 559232-8685 100 Tierp LSS Boende AB Sweden Subsidiary 559218-2876 100 Upplands Väsby Havregatan Förskola AB Sweden Subsidiary 559234-9079 100 Hoivatilat Holding 3 AB Sweden Subsidiary 559296-1519 100 Fanna 24:19 AB (Enköping LSS) Sweden Subsidiary 559252-4788 100 Hoivatilat Holding 4 AB Sweden Subsidiary 559301-4979 100 Hoivatilat Holding 5 AB Sweden Subsidiary 559318-8286 100 Uppsala Almungeberg 2 LSS boende AB Sweden Subsidiary 559150-0938 100 Örebro Törsjö LSS boende AB Sweden Subsidiary 559163-1931 100 Nyköping Anderbäck LSS boende AB Sweden Subsidiary 559150-0979 100 Vallentuna Västlunda LSS boende AB Sweden Subsidiary 559152-7139 100 Växjö LSS boende AB Sweden Subsidiary 559190-6267 100 Örebro Hovsta Gryt LSS boende AB Sweden Subsidiary 559152-7147 100 Oskarshamn Emmekalv LSS boende AB Sweden Subsidiary 559163-3788 100 Lhaolm Nyby LSS boende AB Sweden Subsidiary 559149-6335 100 Enköping Hässlinge LSS boende AB Sweden Subsidiary 559152-2247 100 Uppsala Almungeberg 1 LSS boende AB Sweden Subsidiary 559131-1468 100 Uppsala Bäling Lövsta 1 LSS boende AB Sweden Subsidiary 556908-5391 100 Uppsala Sunnersta LSS boende AB Sweden Subsidiary 556900-2024 100 Uppsala Bäling Lövsta 2 LSS boende AB Sweden Subsidiary 556864-9460 100 Aedifica Ireland Limited Ireland⁹ Subsidiary 683,400 100 Prudent Capital Limited Ireland Subsidiary 562,309 100 JKP Nursing Home Limited Ireland Subsidiary 483,964 100 Mallowville SL Spain¹⁰ Subsidiary B16839649 100 ¹ With the exception of Immobe NV (located Avenue Louise 331 in 1050 Brussels (Belgium)), all Belgian companies are located Rue Belliard 40 box 11 in 1040 Brussels (Belgium). ² All German companies are located Gervinusstraße 15-17 in 60322 Frankfurt am Main (Germany). ³ All Luxembourg companies are located rue Guillaume J. Kroll 12 C in 1882 Luxembourg (Luxembourg). ⁴ All Dutch companies are located Amstelplein 54, 1096 BC Amsterdam (Netherlands). ⁵ All Jersey companies are located 47 Esplanade in St. Helier JE1 0BD (Jersey). ⁶ All companies in the UK are located 8 Sackville Street in London W1S 3DG (United Kingdom). ⁷ All Finnish companies are located Kasarmintie 21, 90130 Oulu (Finland). ⁸ All Swedish companies are located Svärdvägen 21, 18233 Danderyd (Sweden). ⁹ All Irish companies are located 29 Earlsfort Terrace, Dublin 2, Ireland D02 AY28 (Ireland). ¹⁰ Travessera de Gràcia 11, 5ª pl., 08021 Barcelona (Spain). ¹¹ The residual 75% is held by an investor who is unrelated to Aedifica. ¹² The residual 6% is held by an investor who is unrelated to Aedifica. ¹³ The residual 50% is held by a partner who is unrelated to Aedifica. ¹⁴ The residual 25% is held by a partner who is unrelated to Aedifica. Aedifica – Annual Financial Report 2021 – 54 Note 41: Belgian RREC status (x €1,000) 31/12/2021 31/12/2020 Consolidated debt-to-assets ratio (max. 65%) Non-current financial debts 1,756,679 1,062,297 Other non-current financial liabilities (except for hedging instruments) + 62,828 56,840 Trade debts and other non-current debts + 500 0 Current financial debts + 324,398 604,402 Other current financial liabilities (except for hedging instruments) + 2,616 2,077 Trade debts and other current debts + 50,109 32,067 Total liabilities according to the Royal Decree of 13 July 2014 = 2,197,130 1,757,683 Total assets 5,161,867 4,067,175 Hedging instruments - -6,720 -234 Total assets according to the Royal Decree of 13 July 2014 = 5,155,147 4,066,941 Debt-to-assets ratio (in %) / 42.62% 43.22% Additional debt capacity - debt ratio at 60% 895,958 682,482 Additional debt capacity - debt ratio at 65% 1,153,716 885,829 Prohibition to invest more than 20% of assets in real estate assets that form a single property See section 1.2 of the ‘Risk Factors’ chapter of the 2021 Annual Financial Report. Valuation of investment properties by a valuation expert Aedifica’s properties are valued quarterly by the following independent valuation experts: Cushman & Wakefield NV/SA, Stadim BV/SRL, CBRE GmbH, Jones Lang LaSalle SE, Cushman & Wakefield VOF, CBRE Valuation & Advisory Services BV, Cushman & Wakefield Debenham Tie Leung Ltd, Jones Lang LaSalle Finland Oy, JLL Valuation AB and CBRE Unlimited Company. Note 42: Fair value In accordance with IFRS 13, balance sheet elements for which the fair value can be computed are presented below and broken down according to the levels defined by IFRS 13: (x €1,000) 31/12/2021 31/12/2020 Category Level Book value Fair value Book value Fair value Non-current assets Non-current financial assets 7,479 7,479 1,162 1,162 a. Hedges C 2 6,720 6,720 234 234 b. Other A 2 759 759 928 928 Equity-accounted investments C 2 40,522 40,522 36,998 36,998 Current assets Trade receivables A 2 20,434 20,434 12,698 12,698 Tax receivables and other current assets A 2 7,368 7,368 5,177 5,177 Cash and cash equivalents A 1 15,335 15,335 23,546 23,546 Non-current liabilities Non-current financial debts A 2 -1,756,679 -1,747,144 -1,062,297 -1,078,770 Other non-current financial liabilities a. Authorised hedges C 2 -33,326 -33,326 -51,220 -51,220 b. Other A 2 -62,828 -62,828 -56,840 -56,840 Current liabilities Current financial debts A 2 -324,398 -324,398 -604,402 -604,402 Trade debts and other current debts A 2 -49,811 -49,811 -29,772 -29,772 Other current financial liabilities A 2 -2,616 -2,616 -2,077 -2,077 220 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 55 – Aedifica – Annual Financial Report 2021 These categories follow the classification specified by IFRS 9: - category A: financial assets or liabilities (including accounts receivable and loans) carried at amortised cost; - category B: assets or liabilities recognised at fair value through net income; - category C: assets or liabilities that must be measured at fair value through the net income. Authorised hedging instruments belong to category C, except for hedging instruments that meet the requirements of hedge accounting (see IFRS 9), where changes in fair value are recognised in equity. Note 43: Put options granted to non-controlling shareholders The Company has committed to acquire the non-controlling shareholdings (6% of the share capital) owned by third parties in Aedifica Luxemburg I SCS, Aedifica Luxemburg II SCS, Aedifica Luxemburg III SCS, Aedifica Luxemburg IV SCS, Aedifica Luxemburg V SCS, Aedifica Luxemburg VI SCS and Aedifica Residenzen Nord GmbH, should these third parties wish to exercise their put options. The exercise price of such options granted to non-controlling interest is reflected on the liability side of balance sheet on line ‘I.C.b. Other non-current financial liabilities – Other’ (see Notes 16 and 24). Note 44: Alternative Performance Measures (APMs) For many years, Aedifica has been using Alternative Performance Measures in its financial communications based on ESMA (European Securities and Market Authority) guidelines published on 5 October 2015. Some of these APMs are recommended by the European Public Real Estate Association (EPRA) while others have been defined by the industry or by Aedifica; the aim is to provide readers with a better understanding of the Company’s results and performance. The APMs used in this annual financial report are identified with an asterisk (). The performance measures which are defined by IFRS standards or by Law are not considered as APMs, nor are those which are not based on the consolidated income statement or the balance sheet. The APMs are defined, annotated and connected with the most relevant line, total or subtotal of the financial statements. The definition of the APMs, as applied to Aedifica’s financial statements, may differ from those used in the financial statements of other companies Note 44.1: Investment properties Aedifica uses the performance measures presented below to determine the value of its investment properties; however, these measures are not defined under IFRS. They reflect alternate clustering of investment properties with the aim of providing the reader with the most relevant information. (x €1,000) 31/12/2021 31/12/2020 Marketable investment properties 4,651,161 3,615,394 + Right of use of plots of land 57,947 51,825 + Development projects 151,954 141,320 Investment properties 4,861,062 3,808,539 + Assets classified as held for sale 35,360 6,128 Investment properties including assets classified as held for sale, or real estate portfolio 4,896,422 3,814,667 - Development projects -151,954 -141,320 Marketable investment properties including assets classified as held for sale, or investment properties portfolio 4,744,468 3,673,347 Note 44.2: Rental income on a like-for-like basis Aedifica uses the net rental income on a like-for-like basis to reflect the performance of investment properties excluding the effect of scope changes. Due to the extension of the financial year by six months up to and including 31 December 2020 and in order to allow comparison with the previous period, the rental income on a like-for-like basis was calculated on a period of twelve months. (x €1,000) 01/01/2021 - 31/12/2021 01/01/2020 - 31/12/2020 Rental income 232,118 187,535 - Scope changes -51,537 -10,240 = Rental income on a like-for-like basis 180,581 177,295 – 221 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 55 – Aedifica – Annual Financial Report 2021 These categories follow the classification specified by IFRS 9: - category A: financial assets or liabilities (including accounts receivable and loans) carried at amortised cost; - category B: assets or liabilities recognised at fair value through net income; - category C: assets or liabilities that must be measured at fair value through the net income. Authorised hedging instruments belong to category C, except for hedging instruments that meet the requirements of hedge accounting (see IFRS 9), where changes in fair value are recognised in equity. Note 43: Put options granted to non-controlling shareholders The Company has committed to acquire the non-controlling shareholdings (6% of the share capital) owned by third parties in Aedifica Luxemburg I SCS, Aedifica Luxemburg II SCS, Aedifica Luxemburg III SCS, Aedifica Luxemburg IV SCS, Aedifica Luxemburg V SCS, Aedifica Luxemburg VI SCS and Aedifica Residenzen Nord GmbH, should these third parties wish to exercise their put options. The exercise price of such options granted to non-controlling interest is reflected on the liability side of balance sheet on line ‘I.C.b. Other non-current financial liabilities – Other’ (see Notes 16 and 24). Note 44: Alternative Performance Measures (APMs) For many years, Aedifica has been using Alternative Performance Measures in its financial communications based on ESMA (European Securities and Market Authority) guidelines published on 5 October 2015. Some of these APMs are recommended by the European Public Real Estate Association (EPRA) while others have been defined by the industry or by Aedifica; the aim is to provide readers with a better understanding of the Company’s results and performance. The APMs used in this annual financial report are identified with an asterisk (). The performance measures which are defined by IFRS standards or by Law are not considered as APMs, nor are those which are not based on the consolidated income statement or the balance sheet. The APMs are defined, annotated and connected with the most relevant line, total or subtotal of the financial statements. The definition of the APMs, as applied to Aedifica’s financial statements, may differ from those used in the financial statements of other companies Note 44.1: Investment properties Aedifica uses the performance measures presented below to determine the value of its investment properties; however, these measures are not defined under IFRS. They reflect alternate clustering of investment properties with the aim of providing the reader with the most relevant information. (x €1,000) 31/12/2021 31/12/2020 Marketable investment properties 4,651,161 3,615,394 + Right of use of plots of land 57,947 51,825 + Development projects 151,954 141,320 Investment properties 4,861,062 3,808,539 + Assets classified as held for sale 35,360 6,128 Investment properties including assets classified as held for sale, or real estate portfolio 4,896,422 3,814,667 - Development projects -151,954 -141,320 Marketable investment properties including assets classified as held for sale, or investment properties portfolio 4,744,468 3,673,347 Note 44.2: Rental income on a like-for-like basis Aedifica uses the net rental income on a like-for-like basis to reflect the performance of investment properties excluding the effect of scope changes. Due to the extension of the financial year by six months up to and including 31 December 2020 and in order to allow comparison with the previous period, the rental income on a like-for-like basis was calculated on a period of twelve months. (x €1,000) 01/01/2021 - 31/12/2021 01/01/2020 - 31/12/2020 Rental income 232,118 187,535 - Scope changes -51,537 -10,240 = Rental income on a like-for-like basis 180,581 177,295 Aedifica – Annual Financial Report 2021 – 56 Note 44.3: Operating charges, operating margin and EBIT margin Aedifica uses operating charges to aggregate the operating charges. It represents items IV. to XV. of the income statement. Aedifica uses the operating margin and the EBIT margin to reflect the profitability of its rental activities. They represent the property operating result divided by net rental income and the operating result before result on portfolio divided by net rental income, respectively. 31/12/2021 (x €1,000) BE DE NL UK FI SE IE ES Non- allocated Inter- segment items TOTAL SEGMENT RESULT Rental income (a) 62,548 44,971 30,429 49,911 39,797 1,958 2,504 - - - 232,118 Net rental income (b) 62,548 44,969 29,734 49,836 39,883 1,958 2,504 - - - 231,432 Property result (c) 62,562 44,866 29,142 49,937 39,613 1,911 2,504 - - - 230,535 Property operating result (d) 61,945 43,699 28,109 46,888 37,991 1,818 2,490 - - - 222,940 OPERATING RESULT BEFORE RESULT ON PORTFOLIO (e) 61,945 43,699 28,109 46,888 37,991 1,818 2,490 - -29,613 - 193,327 Operating margin (d)/(b) 96.3% EBIT margin (e)/(b) 83.5% Operating charges (e)-(b) 38,105 31/12/2020 (12 months - restated period) (x €1,000) BE DE NL UK FI SE IE ES Non- allocated Inter- segment items TOTAL SEGMENT RESULT Rental income (a) 58,228 35,625 24,627 41,754 27,029 272 - - - - 187,535 Net rental income (b) 58,251 35,623 24,234 39,773 26,630 272 - - - - 184,783 Property result (c) 58,237 35,265 24,295 39,626 27,081 269 - - - - 184,773 Property operating result (d) 58,181 33,839 23,584 36,779 26,168 77 - - - - 178,628 OPERATING RESULT BEFORE RESULT ON PORTFOLIO (e) 58,181 33,839 23,584 36,779 26,168 77 - - -27,074 - 151,554 Operating margin (d)/(b) 96.7% EBIT margin (e)/(b) 82.0% Operating charges (e)-(b) 33,229 31/12/2020 (18 months) (x €1,000) BE DE NL UK FI SE IE ES Non- allocated Inter- segment items TOTAL SEGMENT RESULT Rental income (a) 86,682 49,174 35,537 60,811 27,029 272 - - - - 259,505 Net rental income (b) 86,667 49,168 35,144 58,280 26,630 272 - - - - 256,161 Property result (c) 86,655 48,802 35,274 58,133 27,081 269 - - - - 256,214 Property operating result (d) 86,614 46,750 34,130 53,964 26,168 77 - - - - 247,703 OPERATING RESULT BEFORE RESULT ON PORTFOLIO (e) 86,614 46,750 34,130 53,964 26,168 77 - - -36,081 - 211,622 Operating margin (d)/(b) 96.7% EBIT margin (e)/(b) 82.6% Operating charges (e)-(b) 44,539 222 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 57 – Aedifica – Annual Financial Report 2021 Note 44.4: Financial result excl. changes in fair value of financial instruments Aedifica uses the financial result excl. changes in fair value of financial instruments to reflect its financial result before the non-cash effect of financial instruments; however, this performance measure is not defined under IFRS. It represents the total of items XX., XXI. and XXII. of the income statement. (x €1,000) 31/12/2021 31/12/2020 (12 months - restated period) 31/12/2020 (18 months) XX. Financial income 843 488 478 XXI. Net interest charges -27,548 -25,135 -33,688 XXII. Other financial charges -5,457 -3,676 -5,545 Financial result excl. changes in fair value of financial instruments -32,162 -28,323 -38,755 Note 44.5: Interest rate Aedifica uses average effective interest rate and average effective interest rate before deduction of capitalised or reinvoiced interests and IFRS 16 to reflect the costs of its financial debts; however, these performance measures are not defined under IFRS. They represent annualised net interest charges (after or before capitalised or reinvoiced interests and IFRS 16) divided by weighted average financial debts. (x €1,000) 31/12/2021 31/12/2020 XXI. Net interest charges -27,548 -33,688 Capitalised or reinvoiced interests 3,647 2,491 Interest cost related to leasing debts booked in accordance with IFRS 16 -984 -824 Annualised net interest charges (a) -27,171 -22,050 Annualised net interest charges before capitalised or reinvoiced interests and IFRS 16 (b) -29,798 -23,141 Weighted average financial debts (c) 1,906,683 1,457,466 Average effective interest rate (a)/(c) 1.4% 1.5% Average effective interest rate before capitalised or reinvoiced interests and IFRS 16 (b)/(c) 1.6% 1.6% On 31 December 2021, the average effective interest rate (a)/(c) including commitment fees (see Note 15) would be 1.6% (31 December 2020: 1.7%). Note 44.6: Equity Aedifica uses equity excl. changes in fair value of hedging instruments to reflect equity before non-cash effects of the revaluation of hedging instruments; however, this performance measure is not defined under IFRS. It represents the line ‘equity attributable to owners of the parent’ without cumulated non-cash effects of the revaluation of hedging instruments. (x €1,000) 31/12/2021 31/12/2020 Equity attributable to owners of the parent 2,781,171 2,170,311 - Effect of the distribution of the final dividend 2019/2020 0 -47,181 Sub-total excl. effect of the distribution of the dividend 2019/2020 2,781,171 2,123,130 - Effect of the changes in fair value of hedging instruments 27,317 52,212 Equity excl. changes in fair value of hedging instruments 2,808,488 2,175,342 – 223 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 57 – Aedifica – Annual Financial Report 2021 Note 44.4: Financial result excl. changes in fair value of financial instruments Aedifica uses the financial result excl. changes in fair value of financial instruments to reflect its financial result before the non-cash effect of financial instruments; however, this performance measure is not defined under IFRS. It represents the total of items XX., XXI. and XXII. of the income statement. (x €1,000) 31/12/2021 31/12/2020 (12 months - restated period) 31/12/2020 (18 months) XX. Financial income 843 488 478 XXI. Net interest charges -27,548 -25,135 -33,688 XXII. Other financial charges -5,457 -3,676 -5,545 Financial result excl. changes in fair value of financial instruments -32,162 -28,323 -38,755 Note 44.5: Interest rate Aedifica uses average effective interest rate and average effective interest rate before deduction of capitalised or reinvoiced interests and IFRS 16 to reflect the costs of its financial debts; however, these performance measures are not defined under IFRS. They represent annualised net interest charges (after or before capitalised or reinvoiced interests and IFRS 16) divided by weighted average financial debts. (x €1,000) 31/12/2021 31/12/2020 XXI. Net interest charges -27,548 -33,688 Capitalised or reinvoiced interests 3,647 2,491 Interest cost related to leasing debts booked in accordance with IFRS 16 -984 -824 Annualised net interest charges (a) -27,171 -22,050 Annualised net interest charges before capitalised or reinvoiced interests and IFRS 16 (b) -29,798 -23,141 Weighted average financial debts (c) 1,906,683 1,457,466 Average effective interest rate (a)/(c) 1.4% 1.5% Average effective interest rate before capitalised or reinvoiced interests and IFRS 16 (b)/(c) 1.6% 1.6% On 31 December 2021, the average effective interest rate (a)/(c) including commitment fees (see Note 15) would be 1.6% (31 December 2020: 1.7%). Note 44.6: Equity Aedifica uses equity excl. changes in fair value of hedging instruments to reflect equity before non-cash effects of the revaluation of hedging instruments; however, this performance measure is not defined under IFRS. It represents the line ‘equity attributable to owners of the parent’ without cumulated non-cash effects of the revaluation of hedging instruments. (x €1,000) 31/12/2021 31/12/2020 Equity attributable to owners of the parent 2,781,171 2,170,311 - Effect of the distribution of the final dividend 2019/2020 0 -47,181 Sub-total excl. effect of the distribution of the dividend 2019/2020 2,781,171 2,123,130 - Effect of the changes in fair value of hedging instruments 27,317 52,212 Equity excl. changes in fair value of hedging instruments 2,808,488 2,175,342 Aedifica – Annual Financial Report 2021 – 58 Note 44.7: Key performance indicators according to the EPRA principles Aedifica supports reporting standardisation, which has been designed to improve the quality and comparability of information. The Company supplies its investors with most of the information recommended by EPRA (see pages 152-163). The following indicators are considered as APMs: - EPRA Earnings represents the profit (attributable to owners of the Parent) after corrections recommended by the EPRA. In Aedifica’s case, the EPRA Earnings corresponds perfectly to the result excl. changes in fair value, which has previously been used in Aedifica’s financial communication. The EPRA Earnings is calculated in Note 19 (in accordance with the Aedifica model) and in the EPRA chapter of the Annual Financial Report (in accordance with the model recommended by EPRA). - EPRA Net Reinstatement Value represents the line ‘equity attributable to owners of the parent’ after corrections recommended by the EPRA. The EPRA Net Reinstatement Value assumes that entities never sell assets and provide an estimation of the value required to rebuild the entity. It is calculated in the EPRA chapter of the Annual Financial Report. - EPRA Net Tangible Assets represents the line ‘equity attributable to owners of the parent’ after corrections recommended by the EPRA. The EPRA Net Tangible Assets assumes that entities buy and sell assets, thereby crystallising certain levels of unavoidable deferred tax. It is calculated in the EPRA chapter of the Annual Financial Report. - EPRA Net Disposal Value represents the line ‘equity attributable to owners of the parent’ after corrections recommended by the EPRA. The EPRA Net Disposal Value represents the value accruing to the company's shareholders under an asset disposal scenario, resulting in the settlement of deferred taxes, the liquidation of financial instruments and the recognition of other liabilities for their maximum amount, net of any resulting tax. It is calculated in the EPRA chapter of the Annual Financial Report. - EPRA Cost Ratio (including direct vacancy costs) and EPRA Cost Ratio (excluding direct vacancy costs) represent aggregate operational costs as recommended by the EPRA. The EPRA Cost Ratios are calculated in the EPRA chapter of the Annual Financial Report. Note 45: Business combinations During the 2021 financial year, the Group completed the following business combination: - 26 October 2021: Aedifica UK Ltd, a British subsidiary of the Group, acquired 100% of the shares in Layland Walker Ltd (renamed Aedifica UK Management Ltd), the company that for the past eight years has been providing asset management services for the UK portfolio that Aedifica acquired in 2019. Information regarding the net asset acquired, goodwill and their consideration are given in the table below. (x £ 1.000) Fair value Tax receivables and other current assets 218 Deferred charges and accrued income 17 Cash and cash equivalents 115 Trade debts and other non-current debts -34 Accrued charges and deferred income -10 Net asset acquired 306 Goodwill 3,043 Consideration 3,349 of which cash consideration 3,349 224 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 59 – Aedifica – Annual Financial Report 2021 2. Abridged Statutory Financial Statements 2021 The Abridged Statutory Financial Statements of Aedifica NV/SA, prepared under IFRS, are summarised below in accordance with Article 3:17 of Belgian Companies and Associations Code. The unabridged Statutory Financial Statements of Aedifica NV/SA, its Management Report and its Auditors’ Report will be registered at the National Bank of Belgium within the legal deadlines. These documents will also be available for free on the Company’s website (www.aedifica.eu) or on request at the Company’s headquarters. The statutory auditor released an unqualified opinion on the Statutory Financial Statements of Aedifica NV/SA. Abridged Statutory Income Statement Year ending on 31 December (x €1,000) 31/12/2021 31/12/2020 (12 months - restated period) 31/12/2020 (18 months) I. Rental income 85,482 74,744 110,255 II. Writeback of lease payments sold and discounted 0 0 0 III. Rental-related charges -1 23 -67 Net rental income 85,481 74,767 110,188 IV. Recovery of property charges 0 0 0 V. Recovery of rental charges and taxes normally paid by tenants on let properties 1,158 1,377 1,608 VI. Costs payable by the tenant and borne by the landlord on rental damage and repair at end of lease 0 0 0 VII. Charges and taxes not recovered by the tenant on let properties according to the income statement -1,111 -1,377 -1,608 VIII. Other rental-related income and charges -47 -79 -107 Property result 85,481 74,688 110,081 IX. Technical costs -163 -181 -264 X. Commercial costs 0 0 0 XI. Charges and taxes on unlet properties -2 0 0 XII. Property management costs -95 -601 -822 XIII. Other property charges 0 65 201 Property charges -260 -717 -885 Property operating result 85,221 73,971 109,196 XIV. Overheads -17,175 -14,848 -21,950 XV. Other operating income and charges 673 1,929 3,995 Operating result before result on portfolio 68,719 61,051 91,241 XVI. Gains and losses on disposals of investment properties 199 0 0 XVII. Gains and losses on disposals of other non-financial assets 0 0 0 XVIII. Changes in fair value of investment properties 32,487 19,308 38,635 XIX. Other result on portfolio -2,239 462 -781 Operating result 99,166 80,822 129,095 XX. Financial income 116,143 64,521 98,693 XXI. Net interest charges -25,505 -22,556 -31,362 XXII. Other financial charges -5,296 -3,128 -5,218 XXIII. Changes in fair value of financial assets and liabilities 14,621 -4,620 -858 Net finance costs 99,963 34,218 61,255 XXIV. Share in the profit or loss of associates and joint ventures accounted for using the equity method 3,525 1,144 3,066 Profit before tax (loss) 202,654 116,183 193,416 XXV. Corporate tax -4,359 -5,040 -6,615 XXVI. Exit tax -121 0 0 Tax expense -4,480 -5,040 -6,615 Profit (loss) 198,174 111,143 186,801 Basic earnings per share (€) 5.70 4.05 7.05 Diluted earnings per share (€) 5.70 4.05 7.05 – 225 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 59 – Aedifica – Annual Financial Report 2021 2. Abridged Statutory Financial Statements 2021 The Abridged Statutory Financial Statements of Aedifica NV/SA, prepared under IFRS, are summarised below in accordance with Article 3:17 of Belgian Companies and Associations Code. The unabridged Statutory Financial Statements of Aedifica NV/SA, its Management Report and its Auditors’ Report will be registered at the National Bank of Belgium within the legal deadlines. These documents will also be available for free on the Company’s website (www.aedifica.eu) or on request at the Company’s headquarters. The statutory auditor released an unqualified opinion on the Statutory Financial Statements of Aedifica NV/SA. Abridged Statutory Income Statement Year ending on 31 December (x €1,000) 31/12/2021 31/12/2020 (12 months - restated period) 31/12/2020 (18 months) I. Rental income 85,482 74,744 110,255 II. Writeback of lease payments sold and discounted 0 0 0 III. Rental-related charges -1 23 -67 Net rental income 85,481 74,767 110,188 IV. Recovery of property charges 0 0 0 V. Recovery of rental charges and taxes normally paid by tenants on let properties 1,158 1,377 1,608 VI. Costs payable by the tenant and borne by the landlord on rental damage and repair at end of lease 0 0 0 VII. Charges and taxes not recovered by the tenant on let properties according to the income statement -1,111 -1,377 -1,608 VIII. Other rental-related income and charges -47 -79 -107 Property result 85,481 74,688 110,081 IX. Technical costs -163 -181 -264 X. Commercial costs 0 0 0 XI. Charges and taxes on unlet properties -2 0 0 XII. Property management costs -95 -601 -822 XIII. Other property charges 0 65 201 Property charges -260 -717 -885 Property operating result 85,221 73,971 109,196 XIV. Overheads -17,175 -14,848 -21,950 XV. Other operating income and charges 673 1,929 3,995 Operating result before result on portfolio 68,719 61,051 91,241 XVI. Gains and losses on disposals of investment properties 199 0 0 XVII. Gains and losses on disposals of other non-financial assets 0 0 0 XVIII. Changes in fair value of investment properties 32,487 19,308 38,635 XIX. Other result on portfolio -2,239 462 -781 Operating result 99,166 80,822 129,095 XX. Financial income 116,143 64,521 98,693 XXI. Net interest charges -25,505 -22,556 -31,362 XXII. Other financial charges -5,296 -3,128 -5,218 XXIII. Changes in fair value of financial assets and liabilities 14,621 -4,620 -858 Net finance costs 99,963 34,218 61,255 XXIV. Share in the profit or loss of associates and joint ventures accounted for using the equity method 3,525 1,144 3,066 Profit before tax (loss) 202,654 116,183 193,416 XXV. Corporate tax -4,359 -5,040 -6,615 XXVI. Exit tax -121 0 0 Tax expense -4,480 -5,040 -6,615 Profit (loss) 198,174 111,143 186,801 Basic earnings per share (€) 5.70 4.05 7.05 Diluted earnings per share (€) 5.70 4.05 7.05 Aedifica – Annual Financial Report 2021 – 60 Abridged Statutory Statement of Comprehensive Income Year ending on 31 December (x €1,000) 31/12/2021 31/12/2020 I. Profit (loss) 198,174 186,801 II. Other comprehensive income recyclable under the income statement A. Impact on fair value of estimated transaction costs resulting from hypothetical disposal of investment properties 0 0 B. Changes in the effective part of the fair value of authorised cash flow hedge instruments as defined under IFRS 4,273 -3,419 D. Currency translation differences linked to conversion of foreign activities 0 0 H. Other comprehensive income, net of taxes 6,179 5,150 Comprehensive income 208,626 188,532 Abridged Statutory Balance Sheet ASSETS 31/12/2021 31/12/2020 Year ending on 31 December (x €1,000) I. Non-current assets A. Goodwill 0 0 B. Intangible assets 1,772 1,716 C. Investment properties 1,819,073 1,421,696 D. Other tangible assets 1,873 2,519 E. Non-current financial assets 2,166,278 2,121,515 F. Finance lease receivables 0 0 G. Trade receivables and other non-current assets 0 0 H. Deferred tax assets 1,071 0 Total non-current assets 3,990,067 3,547,446 II. Current assets A. Assets classified as held for sale 0 165 B. Current financial assets 0 0 C. Finance lease receivables 0 0 D. Trade receivables 11,024 8,310 E. Tax receivables and other current assets 466,381 6,049 F. Cash and cash equivalents 5,352 3,815 G. Deferred charges and accrued income 2,239 780 Total current assets 484,996 19,119 TOTAL ASSETS 4,475,063 3,566,565 226 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 61 – Aedifica – Annual Financial Report 2021 EQUITY AND LIABILITIES 31/12/2021 31/12/2020 Year ending on 31 December (x €1,000) EQUITY A. Capital 917,101 836,401 B. Share premium account 1,301,002 1,054,109 C. Reserves 219,634 69,562 a. Legal reserve 0 0 b. Reserve for the balance of changes in fair value of investment properties 221,638 181,026 c. Reserve for estimated transaction costs resulting from hypothetical disposal of investment properties -31,761 -26,769 d. Reserve for the balance of changes in fair value of authorised hedging instruments qualifying for hedge accounting as defined under IFRS -12,784 -23,233 e. Reserve for the balance of changes in fair value of authorised hedging instruments not qualifying for hedge accounting as defined under IFRS -23,820 -22,964 f. Reserve of exchange differences relating to foreign currency monetary items 70 -4,746 g. Foreign currency translation reserves 0 0 h. Reserve for treasury shares 0 0 k. Reserve for deferred taxes on investment properties located abroad -6,240 -2,630 m. Other reserves 3,015 -1,805 n. Result brought forward from previous years 63,622 -33,712 o. Reserve- share NI & OCI of equity method invest 5,894 4,395 D. Profit (loss) of the year 198,174 186,801 TOTAL EQUITY 2,635,911 2,146,873 LIABILITIES I. Non-current liabilities A. Provisions 0 0 B. Non-current financial debts 1,480,304 828,953 a. Borrowings 683,147 752,068 c. Other 797,157 76,885 C. Other non-current financial liabilities 36,028 50,193 a. Authorised hedges 32,130 48,998 b. Other 3,898 1,195 D. Trade debts and other non-current debts 0 0 E. Other non-current liabilities 0 0 F. Deferred tax liabilities 9,929 7,736 Non-current liabilities 1,526,261 886,882 II. Current liabilities A. Provisions 0 0 B. Current financial debts 290,033 516,210 a. Borrowings 40,033 266,210 c. Other 250,000 250,000 C. Other current financial liabilities 606 441 D. Trade debts and other current debts 12,150 12,245 a. Exit tax 298 315 b. Other 11,852 11,930 E. Other current liabilities 0 0 F. Accrued charges and deferred income 10,102 3,914 Total current liabilities 312,891 532,810 TOTAL LIABILITIES 1,839,152 1,419,692 TOTAL EQUITY AND LIABILITIES 4,475,063 3,566,565 – 227 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 61 – Aedifica – Annual Financial Report 2021 EQUITY AND LIABILITIES 31/12/2021 31/12/2020 Year ending on 31 December (x €1,000) EQUITY A. Capital 917,101 836,401 B. Share premium account 1,301,002 1,054,109 C. Reserves 219,634 69,562 a. Legal reserve 0 0 b. Reserve for the balance of changes in fair value of investment properties 221,638 181,026 c. Reserve for estimated transaction costs resulting from hypothetical disposal of investment properties -31,761 -26,769 d. Reserve for the balance of changes in fair value of authorised hedging instruments qualifying for hedge accounting as defined under IFRS -12,784 -23,233 e. Reserve for the balance of changes in fair value of authorised hedging instruments not qualifying for hedge accounting as defined under IFRS -23,820 -22,964 f. Reserve of exchange differences relating to foreign currency monetary items 70 -4,746 g. Foreign currency translation reserves 0 0 h. Reserve for treasury shares 0 0 k. Reserve for deferred taxes on investment properties located abroad -6,240 -2,630 m. Other reserves 3,015 -1,805 n. Result brought forward from previous years 63,622 -33,712 o. Reserve- share NI & OCI of equity method invest 5,894 4,395 D. Profit (loss) of the year 198,174 186,801 TOTAL EQUITY 2,635,911 2,146,873 LIABILITIES I. Non-current liabilities A. Provisions 0 0 B. Non-current financial debts 1,480,304 828,953 a. Borrowings 683,147 752,068 c. Other 797,157 76,885 C. Other non-current financial liabilities 36,028 50,193 a. Authorised hedges 32,130 48,998 b. Other 3,898 1,195 D. Trade debts and other non-current debts 0 0 E. Other non-current liabilities 0 0 F. Deferred tax liabilities 9,929 7,736 Non-current liabilities 1,526,261 886,882 II. Current liabilities A. Provisions 0 0 B. Current financial debts 290,033 516,210 a. Borrowings 40,033 266,210 c. Other 250,000 250,000 C. Other current financial liabilities 606 441 D. Trade debts and other current debts 12,150 12,245 a. Exit tax 298 315 b. Other 11,852 11,930 E. Other current liabilities 0 0 F. Accrued charges and deferred income 10,102 3,914 Total current liabilities 312,891 532,810 TOTAL LIABILITIES 1,839,152 1,419,692 TOTAL EQUITY AND LIABILITIES 4,475,063 3,566,565 Aedifica – Annual Financial Report 2021 – 62 Abridged Statutory Statement of Changes in Equity (x €1,000) 01/07/2019 Capital increase in cash Capital increase in kind Interim dividend Acquisitions / disposals of treasury shares Consolidated comprehensive income Appropriation of the previous year's result Other transfer relating to asset disposals Transfers between reserves Other and roundings 31/12/2020 Capital 624,713 198,311 13,377 0 0 0 0 0 0 0 836,401 Share premium account 565,068 455,814 33,227 0 0 0 0 0 0 0 1,054,109 Reserves 106,674 0 0 -75,309 0 1,731 36,466 0 0 0 69,562 a. Legal reserve 0 0 0 0 0 0 0 0 0 0 0 b. Reserve for the balance of changes in fair value of investment properties 147,528 0 0 0 0 0 31,702 1,796 0 0 181,027 c. Reserve for estimated transaction costs resulting from hypothetical disposal of investment properties -21,925 0 0 0 0 0 -4,854 10 0 0 -26,769 d. Reserve for the balance of changes in fair value of authorised hedging instruments qualifying for hedge accounting as defined under IFRS -24,960 0 0 0 0 1,731 -4 0 0 0 -23,233 e. Reserve for the balance of changes in fair value of authorised hedging instruments not qualifying for hedge accounting as defined under IFRS -18,991 0 0 0 0 0 -3,973 0 0 0 -22,964 f. Reserve of exchange differences relating to foreign currency monetary items 0 0 0 0 0 0 -4,746 0 0 0 -4,746 g. Foreign currency translation reserves 0 0 0 0 0 0 0 0 0 0 0 h. Reserve for treasury shares 0 0 0 0 0 0 0 0 0 0 0 k. Reserve for deferred taxes on investment properties located abroad -1,694 0 0 0 0 0 -936 0 0 0 -2,630 m. Other reserves 798 0 0 0 0 0 -796 -1,805 0 0 -1,806 n. Result brought forward from previous years 25,919 0 0 -75,309 0 0 20,072 0 -4,395 0 -33,712 o. Reserve- share NI & OCI of equity method invest 0 0 0 0 0 0 0 0 4,395 0 4,395 Profit (loss) 90,689 0 0 0 0 186,802 -90,689 0 0 0 186,801 TOTAL EQUITY 1,387,144 654,125 46,604 -75,309 0 188,533 -54,223 0 0 0 2,146,873 228 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 63 – Aedifica – Annual Financial Report 2021 (x €1,000) 01/01/2021 Capital increase in cash Capital increase in kind Interim dividend Acquisitions / disposals of treasury shares Consolidated comprehensive income Appropriation of the previous year's result Other transfer relating to asset disposals Transfers between reserves Other and roundings 31/12/2021 Capital 836,401 69,603 11,098 0 0 0 0 0 0 -1 917,101 Share premium account 1,054,109 211,714 35,179 0 0 0 0 0 0 0 1,301,002 Reserves 69,562 0 0 0 0 10,452 139,620 0 0 0 219,634 a. Legal reserve 0 0 0 0 0 0 0 0 0 0 0 b. Reserve for the balance of changes in fair value of investment properties 181,027 0 0 0 0 0 44,498 -3,886 0 0 221,639 c. Reserve for estimated transaction costs resulting from hypothetical disposal of investment properties -26,769 0 0 0 0 0 -5,863 871 0 0 -31,761 d. Reserve for the balance of changes in fair value of authorised hedging instruments qualifying for hedge accounting as defined under IFRS -23,233 0 0 0 0 10,452 -3 0 0 0 -12,784 e. Reserve for the balance of changes in fair value of authorised hedging instruments not qualifying for hedge accounting as defined under IFRS -22,964 0 0 0 0 0 -856 0 0 0 -23,820 f. Reserve of exchange differences relating to foreign currency monetary items -4,746 0 0 0 0 0 4,816 0 0 0 70 g. Foreign currency translation reserves 0 0 0 0 0 0 0 0 0 0 0 h. Reserve for treasury shares 0 0 0 0 0 0 0 0 0 0 0 k. Reserve for deferred taxes on investment properties located abroad -2,630 0 0 0 0 0 -3,611 0 0 1 -6,240 m. Other reserves -1,806 0 0 0 0 0 1,806 3,015 0 -1 3,014 n. Result brought forward from previous years -33,712 0 0 0 0 0 97,334 0 0 0 63,622 o. Reserve- share NI & OCI of equity method invest 4,395 0 0 0 0 0 1,499 0 0 0 5,894 Profit (loss) 186,801 0 0 0 0 198,174 -186,801 0 0 0 198,174 TOTAL EQUITY 2,146,873 281,317 46,277 0 0 208,626 -47,181 0 0 -1 2,635,911 – 229 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 63 – Aedifica – Annual Financial Report 2021 (x €1,000) 01/01/2021 Capital increase in cash Capital increase in kind Interim dividend Acquisitions / disposals of treasury shares Consolidated comprehensive income Appropriation of the previous year's result Other transfer relating to asset disposals Transfers between reserves Other and roundings 31/12/2021 Capital 836,401 69,603 11,098 0 0 0 0 0 0 -1 917,101 Share premium account 1,054,109 211,714 35,179 0 0 0 0 0 0 0 1,301,002 Reserves 69,562 0 0 0 0 10,452 139,620 0 0 0 219,634 a. Legal reserve 0 0 0 0 0 0 0 0 0 0 0 b. Reserve for the balance of changes in fair value of investment properties 181,027 0 0 0 0 0 44,498 -3,886 0 0 221,639 c. Reserve for estimated transaction costs resulting from hypothetical disposal of investment properties -26,769 0 0 0 0 0 -5,863 871 0 0 -31,761 d. Reserve for the balance of changes in fair value of authorised hedging instruments qualifying for hedge accounting as defined under IFRS -23,233 0 0 0 0 10,452 -3 0 0 0 -12,784 e. Reserve for the balance of changes in fair value of authorised hedging instruments not qualifying for hedge accounting as defined under IFRS -22,964 0 0 0 0 0 -856 0 0 0 -23,820 f. Reserve of exchange differences relating to foreign currency monetary items -4,746 0 0 0 0 0 4,816 0 0 0 70 g. Foreign currency translation reserves 0 0 0 0 0 0 0 0 0 0 0 h. Reserve for treasury shares 0 0 0 0 0 0 0 0 0 0 0 k. Reserve for deferred taxes on investment properties located abroad -2,630 0 0 0 0 0 -3,611 0 0 1 -6,240 m. Other reserves -1,806 0 0 0 0 0 1,806 3,015 0 -1 3,014 n. Result brought forward from previous years -33,712 0 0 0 0 0 97,334 0 0 0 63,622 o. Reserve- share NI & OCI of equity method invest 4,395 0 0 0 0 0 1,499 0 0 0 5,894 Profit (loss) 186,801 0 0 0 0 198,174 -186,801 0 0 0 198,174 TOTAL EQUITY 2,146,873 281,317 46,277 0 0 208,626 -47,181 0 0 -1 2,635,911 Aedifica – Annual Financial Report 2021 – 64 Abridged Statutory Appropriation Account PROPOSED APPROPRIATION 31/12/2021 31/12/2020 Year ending on 31 December (x €1,000) A. Profit (loss) 198,174 186,801 B. Transfer to/from the reserves 43,494 42,286 1. Transfer to/from the reserve of the (positive or negative) balance of changes in fair value of investment properties (-/+) 51,484 44,498 2. Transfer to/from the reserve of the estimated transaction costs resulting from hypothetical disposal of investment properties (-/+) -22,458 -5,863 3. Transfer to the reserve of the balance of the changes in fair value of authorised cash flow hedging instruments qualifying for hedge accounting (-) -31 -3 4. Transfer to the reserve of the balance of the changes in fair value of authorised cash flow hedging instruments qualifying for hedge accounting (+) 0 0 5. Transfer to the reserve of the balance of the changes in fair value of authorised cash flow hedging instruments not qualifying for hedge accounting (-) 0 -856 6. Transfer to the reserve of the balance of the changes in fair value of authorised cash flow hedging instruments not qualifying for hedge accounting (+) 15,984 0 7. Transfer to/from the reserve of the balance of currency translation differences on monetary assets and liabilities (- /+) -514 4,816 8. Transfer to the reserve of the fiscal latencies related to investment properties abroad (-/+) -1,121 -3,611 9. Transfer to the reserve of the received dividends aimed at the reimbursement of financial debts (-/+) 0 0 10. Transfer to/from other reserves (-/+) -3,015 1,806 11. Transfer to/from the result carried forward of the previous years (-/+) 0 0 12. Transfer to the reserve- share NI & OCI of equity method invest 3,165 1,499 C. Remuneration of the capital provided in article 13, § 1, para. 1 111,079 111,723 D. Remuneration of the capital - other than C 7,417 10,767 Proposed remuneration of the capital (C + D) 118,496 122,490 Result to be carried forward 36,184 22,025 SHAREHOLDERS' EQUITY THAT CAN NOT BE DISTRIBUTED ACCORDING TO ARTICLE 7:212 OF THE BELGIAN COMPANIES AND ASSOCIATIONS CODE 31/12/2021 31/12/2020 (x €1,000) Paid-up capital or, if greater, subscribed capital (+) 917,101 836,401 Share premium account unavailable for distribution according to the Articles of Association (+) 1,301,002 1,054,109 Reserve for positive balance of changes in fair value of investment properties (+) 218,903 191,087 Reserve for the balance of changes in fair value of authorised hedging instruments qualifying for hedge accounting as defined under IFRS (+/-) -12,815 -24,967 Reserve for the balance of changes in fair value of authorised hedging instruments not qualifying for hedge accounting as defined under IFRS (+/-) -7,836 -23,820 Reserve of the balance of currency translation differences on monetary assets and liabilities (+) 0 70 Reserve for foreign exchange differences linked to conversion of foreign operations (+/-) 0 0 Reserve for the balance of changes in fair value of financial assets available for sale (+/-) 0 0 Reserve for actuarial differences of defined benefits pension plans (+) 0 0 Reserve of the fiscal latencies related to investment properties abroad (+) 0 0 Reserve of the received dividends aimed at the reimbursement of financial debts (+) 0 0 Other reserves declared as non-distributable by the general meeting (+) 0 0 Reserve- share NI & OCI of equity method invest 9,059 5,894 Legal reserve (+) 0 0 Shareholders' equity that cannot be distributed according to Article 7:212 of the Belgian Companies and Associations Code 2,425,414 2,038,774 Net asset 2,635,911 2,222,182 Interim dividend 0 -75,309 Final dividend -118,496 -47,181 Net asset after distribution 2,517,415 2,099,692 Headroom after distribution 92,001 60,918 230 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 65 – Aedifica – Annual Financial Report 2021 Corrected profit as defined in the Royal Decree of 13 July 2014 The corrected profit as defined in the Royal Decree of 13 July 2014 is calculated as follows, based on the Statutory Accounts: (x €1,000) 31/12/2021 31/12/2020 Profit (loss) 198,174 186,801 Depreciation 789 1,780 Write-downs 0 15 Other non-cash items -27,427 -10,308 Gains and losses on disposals of investment properties -199 0 Changes in fair value of investment properties -32,487 -38,635 Roundings 0 0 Corrected profit 138,850 139,653 Denominator° (in shares) 34,851,824 26,628,340 CORRECTED PROFIT PER SHARE° (in € per share) 3.98 5.24 Interim dividend 0 75,309 Final dividend 118,496 47,181 Total proposed dividend 118,496 122,490 PAY-OUT RATIO (MIN. 80%) 85% 88% ° Based on the rights to the dividend for the shares issued during the year. – 231 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 65 – Aedifica – Annual Financial Report 2021 Corrected profit as defined in the Royal Decree of 13 July 2014 The corrected profit as defined in the Royal Decree of 13 July 2014 is calculated as follows, based on the Statutory Accounts: (x €1,000) 31/12/2021 31/12/2020 Profit (loss) 198,174 186,801 Depreciation 789 1,780 Write-downs 0 15 Other non-cash items -27,427 -10,308 Gains and losses on disposals of investment properties -199 0 Changes in fair value of investment properties -32,487 -38,635 Roundings 0 0 Corrected profit 138,850 139,653 Denominator° (in shares) 34,851,824 26,628,340 CORRECTED PROFIT PER SHARE° (in € per share) 3.98 5.24 Interim dividend 0 75,309 Final dividend 118,496 47,181 Total proposed dividend 118,496 122,490 PAY-OUT RATIO (MIN. 80%) 85% 88% ° Based on the rights to the dividend for the shares issued during the year. Aedifica – Annual Financial Report 2021 – 66 Abridged statutory statement of changes in equity after appropriation of the year’s result (x €1,000) Equity as per 31/12/2021 Proposed result's appropriation Equity as per 31/12/2021 after proposed result's appropriation Capital 917,101 0 917,101 Share premium account 1,301,002 0 1,301,002 Reserves 219,634 198,174 417,808 a. Legal reserve 0 0 0 b. Reserve for the balance of changes in fair value of investment properties 221,639 51,484 273,123 c. Reserve for estimated transaction costs resulting from hypothetical disposal of investment properties -31,761 -22,458 -54,219 d. Reserve for the balance of changes in fair value of authorised hedging instruments qualifying for hedge accounting as defined under IFRS -12,784 -31 -12,815 e. Reserve for the balance of changes in fair value of authorised hedging instruments not qualifying for hedge accounting as defined under IFRS -23,820 15,984 -7,836 f. Reserve of exchange differences relating to foreign currency monetary items 70 -514 -444 g. Foreign currency translation reserves 0 0 0 h. Reserve for treasury shares 0 0 0 k. Reserve for deferred taxes on investment properties located abroad -6,240 -1,121 -7,361 m. Other reserves 3,014 -3,015 -1 n. Result brought forward from previous years 63,622 154,680 218,302 o. Reserve- share NI & OCI of equity method invest 5,894 3,165 9,059 Profit (loss) 198,174 -198,174 0 TOTAL EQUITY 2,635,911 0 2,635,911 232 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 Additional information FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE – 233 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 234 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 65 – Aedifica – Annual Financial Report 2021 1. External verification 1. Valuation experts’ report 1 Gentlemen, We are pleased to send you our estimate of the fair value of investment properties held by the Aedifica group as of 31 December 2021. Aedifica assigned to each of the ten valuation experts the task of determining the fair value (from which the investment value is derived 2 ) of one part of its portfolio of investment properties. Assessments are established taking into account the remarks and definitions contained in the reports and following the guidelines of the International Valuation Standards issued by the ‘IVSC’. We have acted individually as valuation experts and have a relevant and recognised qualification, as well as an ongoing experience for the location and the type of buildings assessed. The valuation expert’s opinion of fair value was primarily derived using comparable recent market transactions on arm’s length terms. Properties are considered in the context of current leases and of all rights and obligations that these commitments entail. We have evaluated each entity individually. Assessments do not take into account a potential value that can be generated by offering the whole portfolio on the market. Assessments do not take into account selling costs applicable to a specific transaction, such as brokerage fees or advertising. Assessments are based on the inspection of real estate properties and information provided by Aedifica (i.e. rental status and surface area, sketches or plans, rental charges and property taxes related to the property, and compliance and pollution matters). The information provided was assumed to be accurate and complete. Assessments are made under the assumption that no non-communicated piece of information is likely to affect the value of the property. Based on the ten assessments, the consolidated fair value of the portfolio amounted to €4,854,160,580 3 as of 31 December 2021 including 100% of the fair value of the assets held by the partners of the partnership AK JV NL or €4,836,970,580 after deduction of the 50% share in the partnership AK JV NL held by the other partner company. The marketable investment properties 4 held by Aedifica group amounted to €4,686,521,296 (excluding 50% of the value of the assets held by the other partner company in AK JV NL). Contractual rents amounted to €258,499,967 which corresponds to an initial rental yield of 5.52% compared to the fair value of marketable investment properties. The current occupancy rate amounts to 99.52%. Assuming that the marketable investment properties are 100% rented and that the current vacancy is let at market rent, contractual rent would amount to €259,723,163, i.e. an initial yield of 5.54% compared to the fair value of the marketable investment properties. The above-mentioned amounts include the fair values and contractual rents of the UK based assets in pound sterling and converted into euro as well as the assets located in Sweden in Swedish Krona converted into euro taking the exchange rates as per 31/12/2021 (1.18879€/£ and 10.2887SEK/€; rates of the last business day of the quarter) into account. As of 31 December 2021: - the consolidated fair value of the assets located in Belgium amounted to €1,218,690,277; including €1,213,217,395 for marketable investment properties. Contractual rents amounted to €63,874,708 which corresponds to an initial yield of 5.3% to the fair value of the marketable investment properties. - the consolidated fair value of the assets located in Germany amounted to €1,102,437,000; including €1,057,513,553 for marketable investment properties. Contractual rents amounted to €55,213,734 which corresponds to an initial yield of 5.2% to the fair value of the marketable investment properties. - the consolidated fair value of the assets located in The Netherlands amounted to €604,565,000 including 100% of the fair value of the assets held by the partners of the partnership AK JV NL. The marketable investment properties after deduction of the 50% share held by the partner company amounted to €564,105,000. Contractual rents amounted to €31,255,429 which corresponds to an initial yield of 5.5% to the fair value of the marketable investment properties. - the consolidated fair value of the assets located in the United Kingdom amounted to £699,633,000; including £691,178,123 for marketable investment properties. Contractual rents amounted to £44,471,056 which corresponds to an initial yield of 6.4% to the fair value of the marketable investment properties. 1. The expert report was reproduced with the agreement of Cushman & Wakefield Belgium NV/SA, Stadim BV/SRL, CBRE GmbH, Jones Lang LaSalle SE, Cushman & Wakefield VOF, CBRE Valuation & Advisory Services BV, Cushman & Wakefield Debenham Tie Leung Limited, Jones Lang LaSalle Finland Oy, JLL Val uation AB and CBRE Unlimited Company. The sum of all elements of the portfolio individually assessed by the abovementioned valuation experts constitutes Aedifica’s whole consolidated portfolio. 2. ‘Investment value’ is defined by Aedifica as the value assessed by a valuation expert, of which transfer costs are not deducted (also known as ‘gross capital value’). 3. The abovementioned portfolio is broken down in two lines on the balance sheet (lines ‘I.C. Investment properties’ and ‘II.A. Assets classified as held for sale’). 4. ‘Marketable investment properties’ are defined by Aedifica as investment properties including assets classified as held for sale and excluding development projects. Marketable investment properties are hence completed properties that are let or lettable. – 235 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 65 – Aedifica – Annual Financial Report 2021 1. External verification 1. Valuation experts’ report 1 Gentlemen, We are pleased to send you our estimate of the fair value of investment properties held by the Aedifica group as of 31 December 2021. Aedifica assigned to each of the ten valuation experts the task of determining the fair value (from which the investment value is derived 2 ) of one part of its portfolio of investment properties. Assessments are established taking into account the remarks and definitions contained in the reports and following the guidelines of the International Valuation Standards issued by the ‘IVSC’. We have acted individually as valuation experts and have a relevant and recognised qualification, as well as an ongoing experience for the location and the type of buildings assessed. The valuation expert’s opinion of fair value was primarily derived using comparable recent market transactions on arm’s length terms. Properties are considered in the context of current leases and of all rights and obligations that these commitments entail. We have evaluated each entity individually. Assessments do not take into account a potential value that can be generated by offering the whole portfolio on the market. Assessments do not take into account selling costs applicable to a specific transaction, such as brokerage fees or advertising. Assessments are based on the inspection of real estate properties and information provided by Aedifica (i.e. rental status and surface area, sketches or plans, rental charges and property taxes related to the property, and compliance and pollution matters). The information provided was assumed to be accurate and complete. Assessments are made under the assumption that no non-communicated piece of information is likely to affect the value of the property. Based on the ten assessments, the consolidated fair value of the portfolio amounted to €4,854,160,580 3 as of 31 December 2021 including 100% of the fair value of the assets held by the partners of the partnership AK JV NL or €4,836,970,580 after deduction of the 50% share in the partnership AK JV NL held by the other partner company. The marketable investment properties 4 held by Aedifica group amounted to €4,686,521,296 (excluding 50% of the value of the assets held by the other partner company in AK JV NL). Contractual rents amounted to €258,499,967 which corresponds to an initial rental yield of 5.52% compared to the fair value of marketable investment properties. The current occupancy rate amounts to 99.52%. Assuming that the marketable investment properties are 100% rented and that the current vacancy is let at market rent, contractual rent would amount to €259,723,163, i.e. an initial yield of 5.54% compared to the fair value of the marketable investment properties. The above-mentioned amounts include the fair values and contractual rents of the UK based assets in pound sterling and converted into euro as well as the assets located in Sweden in Swedish Krona converted into euro taking the exchange rates as per 31/12/2021 (1.18879€/£ and 10.2887SEK/€; rates of the last business day of the quarter) into account. As of 31 December 2021: - the consolidated fair value of the assets located in Belgium amounted to €1,218,690,277; including €1,213,217,395 for marketable investment properties. Contractual rents amounted to €63,874,708 which corresponds to an initial yield of 5.3% to the fair value of the marketable investment properties. - the consolidated fair value of the assets located in Germany amounted to €1,102,437,000; including €1,057,513,553 for marketable investment properties. Contractual rents amounted to €55,213,734 which corresponds to an initial yield of 5.2% to the fair value of the marketable investment properties. - the consolidated fair value of the assets located in The Netherlands amounted to €604,565,000 including 100% of the fair value of the assets held by the partners of the partnership AK JV NL. The marketable investment properties after deduction of the 50% share held by the partner company amounted to €564,105,000. Contractual rents amounted to €31,255,429 which corresponds to an initial yield of 5.5% to the fair value of the marketable investment properties. - the consolidated fair value of the assets located in the United Kingdom amounted to £699,633,000; including £691,178,123 for marketable investment properties. Contractual rents amounted to £44,471,056 which corresponds to an initial yield of 6.4% to the fair value of the marketable investment properties. 1. The expert report was reproduced with the agreement of Cushman & Wakefield Belgium NV/SA, Stadim BV/SRL, CBRE GmbH, Jones Lang LaSalle SE, Cushman & Wakefield VOF, CBRE Valuation & Advisory Services BV, Cushman & Wakefield Debenham Tie Leung Limited, Jones Lang LaSalle Finland Oy, JLL Val uation AB and CBRE Unlimited Company. The sum of all elements of the portfolio individually assessed by the abovementioned valuation experts constitutes Aedifica’s whole consolidated portfolio. 2. ‘Investment value’ is defined by Aedifica as the value assessed by a valuation expert, of which transfer costs are not deducted (also known as ‘gross capital value’). 3. The abovementioned portfolio is broken down in two lines on the balance sheet (lines ‘I.C. Investment properties’ and ‘II.A. Assets classified as held for sale’). 4. ‘Marketable investment properties’ are defined by Aedifica as investment properties including assets classified as held for sale and excluding development projects. Marketable investment properties are hence completed properties that are let or lettable. Aedifica – Annual Financial Report 2021 – 66 - the consolidated fair value of the assets located in Finland amounted to €909,147,400; including €859,850,000 for marketable investment properties. Contractual rents amounted to €46,517,597 which corresponds to an initial yield of 5.4% to the fair value of the marketable investment properties. - the consolidated fair value of the assets located in Sweden amounted to SEK816,400,000; including SEK805,900,000 for marketable investment properties. Contractual rents amounted to SEK40,043,640 which corresponds to an initial yield of 5.0% to the fair value of the marketable investment properties. - the consolidated fair value of the assets located in Ireland amounted to €105,755,000 ; including €91,841,054 for marketable investment properties Contractual rents amounted to €4,879,750 which corresponds to an initial yield of 5.3% to the fair value of the marketable investment properties. - the fair value of the plot of land in Spain amounted to €2,500,000. In the context of a reporting in compliance with the International Financial Reporting Standards, our evaluations reflect the fair value. The fair value is defined by IAS 40 and IFRS 13 as ‘the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date’. The IVSC considers that the definition of fair value under IAS 40 and IFRS 13 is generally consistent with market value. Opinions of the valuation experts 1 Valuation expert Fair value of valued assets of portfolio as of 31 December 2021 Investment value (before deduction of transfer costs 2 ) Cushman & Wakefield Belgium SA Emeric Inghels €608,131,000 €623,714,000 Stadim BV Céline Janssens & Tim Leysen €610,559,277 €625,823,680 CBRE GmbH Danilo Tietz & Karina Melskens €643,150,000 €686,493,928 Jones Lang LaSalle SE Gregor Claasen €459,287,000 €494,960,000 Cushman & Wakefield VOF Jan Vriend & Niek Drent €510,880,000 3 €551,450,000 3 CBRE Valuation & Advisory Services B.V. Roderick Smorenburg & Annette Postma €93,685,000 3 €102,046,884 3 Cushman & Wakefield Debenham Tie Leung Limited Tom Robinson £669,633,000 (€831,716,714 4 ) £746,143,981 (€887,008,503 4 ) Jones Lang LaSalle Finland Oy Tero Lehtonen & Mikko Kuusela €909,147,400 €931,876,085 Jones Lang LaSalle Finland Oy Tero Lehtonen & Mikko Kuusela €2,500,000 €2,550,000 JLL Valuation AB Patrik Lofvenberg SEK816,400,000 (€79,349,189 5 ) SEK828,832,487 (€80,557,552 5 ) CBRE Unlimited Company Maureen Bayley €105,755,000 €116,273,348. 1. The valuation expert values only a part of Aedifica’s portfolio and does not take responsibility for the valuation of the portfolio as a whole. The valuation expert therefore sign s only for the accuracy of the figures of the assets he values. No further liability for any other valuation expert will be accepted. 2. In this context, the transfer costs require adaptation to the market conditions. Based on the analysis of a large number of transactions in Belgium, the Belgian experts acting at the request of publicly traded real estate companies, reunited in a working group, came to the following conclusion: given the various ways to transfer property in Belgium, the weighted average o f the transfer costs was estimated at 2.5%, for investment properties with a value in excess of €2.5 million. The investment va lue corresponds therefore to the fair value plus 2.5% of transfer costs. The fair value is also calculated by dividing the investment value by 1.025. Properties in Belgium below the threshold of €2.5 million remain subject to usual transfer costs (10.0% or 12.5% depending on their location). Their fair value corresponds thus to the value excluding transfer costs. Assets located in G ermany, the Netherlands, the United Kingdom, Finland, Sweden and Ireland are not concerned by this footnote. In the assessment of their investment value, the usual local transfer costs and professional fees are taken into account. 3. Including 100% of the value of the assets held by the partners of the partnership AK JV NL. 4. Based on the exchange rate of 1.18879€/£ as per 31/12/2021; rate of the last business day of the quarter. 5. Based on the exchange rate of 10.2887SEK/€ as per 31/12/2021; rate of the last business day of the quarter. 236 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE Besloten Vennootschap Société à responsabilité limitée RPR Brussel - RPM Bruxelles – BTW–TVA BE 0446.334.711 – IBAN N° BE71 2100 9059 0069 * handelend in naam van een vennootschap/agissant au nom d’une société A member firm of Ernst & Young Global Limited EY Bedrijfsrevisoren EY Réviseurs d’Entreprises De Kleetlaan 2 B -1831 Diegem Tel: +32 (0)2 774 91 11 ey.com Independent auditor’s report to the general meeting of Aedifica SA for the year ended 31 December 2021 As required by law and the Company’s articles of association, we report to you as statutory auditor of Aedifica SA (the “Company”) and its subsidiaries (together the “Group”). This report includes our opinion on the consolidated balance sheet as at 31 December 2021, the consolidated income statement, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated cash flow statement for the year ended 31 December 2021 and the disclosures (all elements together the “Consolidated Financial Statements”) as well as our report on other legal and regulatory requirements. These two reports are considered one report and are inseparable. We have been appointed as statutory auditor by the shareholders’ meeting of 11 May 2021, in accordance with the proposition by the Board of Directors following recommendation of the Audit Committee. Our mandate expires at the shareholders’ meeting that will deliberate on the Consolidated Financial Statements for the year ending 31 December 2023. We performed the audit of the Consolidated Financial Statements of the Group during 10 consecutive years. Report on the audit of the Consolidated Financial Statements Unqualified opinion We have audited the Consolidated Financial Statements of Aedifica SA, that comprise of the consolidated balance sheet on 31 December 2021, the consolidated income statement, the consolidated statement of comprehensive income, the consolidated Statement of changes in equity and the consolidated cash flow statement of the year and the disclosures, which show a consolidated balance sheet total of € 5.161.867 thousand and of which the consolidated income statement shows a profit for the year of € 282.825 thousand. In our opinion, the Consolidated Financial Statements give a true and fair view of the consolidated net equity and financial position as at 31 December 2021, and of its consolidated results for the year then ended, prepared in accordance with the International Financial Reporting Standards as adopted by the European Union (“IFRS”) and with applicable legal and regulatory requirements in Belgium. Basis for the unqualified opinion We conducted our audit in accordance with International Standards on Auditing (“ISAs”). Our responsibilities under those standards are further described in the “Our responsibilities for the audit of the Consolidated Financial Statements” section of our report. We have complied with all ethical requirements that are relevant to our audit of the Consolidated Financial Statements in Belgium, including those with respect to independence. We have obtained from the Board of Directors and the officials of the Company the explanations and information necessary for the performance of our audit and we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Consolidated Financial Statements of the current reporting period. – 237 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION Besloten Vennootschap Société à responsabilité limitée RPR Brussel - RPM Bruxelles – BTW–TVA BE 0446.334.711 – IBAN N° BE71 2100 9059 0069 * handelend in naam van een vennootschap/agissant au nom d’une société A member firm of Ernst & Young Global Limited EY Bedrijfsrevisoren EY Réviseurs d’Entreprises De Kleetlaan 2 B-1831 Diegem Tel: +32 (0)2 774 91 11 ey.com Independent auditor’s report to the general meeting of Aedifica SA for the year ended 31 December 2021 As required by law and the Company’s articles of association, we report to you as statutory auditor of Aedifica SA (the “Company”) and its subsidiaries (together the “Group”). This report includes our opinion on the consolidated balance sheet as at 31 December 2021, the consolidated income statement, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated cash flow statement for the year ended 31 December 2021 and the disclosures (all elements together the “Consolidated Financial Statements”) as well as our report on other legal and regulatory requirements. These two reports are considered one report and are inseparable. We have been appointed as statutory auditor by the shareholders’ meeting of 11 May 2021, in accordance with the proposition by the Board of Directors following recommendation of the Audit Committee. Our mandate expires at the shareholders’ meeting that will deliberate on the Consolidated Financial Statements for the year ending 31 December 2023. We performed the audit of the Consolidated Financial Statements of the Group during 10 consecutive years. Report on the audit of the Consolidated Financial Statements Unqualified opinion We have audited the Consolidated Financial Statements of Aedifica SA, that comprise of the consolidated balance sheet on 31 December 2021, the consolidated income statement, the consolidated statement of comprehensive income, the consolidated Statement of changes in equity and the consolidated cash flow statement of the year and the disclosures, which show a consolidated balance sheet total of € 5.161.867 thousand and of which the consolidated income statement shows a profit for the year of € 282.825 thousand. In our opinion, the Consolidated Financial Statements give a true and fair view of the consolidated net equity and financial position as at 31 December 2021, and of its consolidated results for the year then ended, prepared in accordance with the International Financial Reporting Standards as adopted by the European Union (“IFRS”) and with applicable legal and regulatory requirements in Belgium. Basis for the unqualified opinion We conducted our audit in accordance with International Standards on Auditing (“ISAs”). Our responsibilities under those standards are further described in the “Our responsibilities for the audit of the Consolidated Financial Statements” section of our report. We have complied with all ethical requirements that are relevant to our audit of the Consolidated Financial Statements in Belgium, including those with respect to independence. We have obtained from the Board of Directors and the officials of the Company the explanations and information necessary for the performance of our audit and we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Consolidated Financial Statements of the current reporting period. Audit report dated 30 March 2022 on the Consolidated Financial Statements of Aedifica SA as of and for the year ended 31 December 2021 (continued) 2 These matters were addressed in the context of our audit of the Consolidated Financial Statements as a whole and in forming our opinion thereon, and consequently we do not provide a separate opinion on these matters. Valuation Investment Properties Description of the key audit matter Investment property amounts to a significant part (94%) of the assets of the Group. In accordance with the accounting policies and IAS 40 standard “Investment property”, investment property is measured at fair value, and the changes in the fair value of investment property are recognized in the income statement. The fair value of investment properties belongs to the level 3 in the fair value hierarchy as defined within the IFRS 13 standard “Fair Value Measurement”. Some assumptions used for valuation purposes are based on data that can be observed only to a limited extent (discount rate, future occupancy rate, …) and therefore require judgement from management. The audit risk appears in the valuation of these investment properties and is therefore considered a Key Audit Matter. Summary of the procedures performed The Group uses external experts to make an estimate of the fair value of its buildings. We have assessed the valuation reports of the external experts (with the support of our internal valuation experts). More precisely, we have: • assessed the objectivity, the independence and the competence of the external experts, • tested the integrity of source data (contractual rentals, maturities of the rental contracts, …) used in their calculations and reconciled with underlying contracts, • assessed the models and assumptions used in their reports (discount rates, future occupancy rates, …). Finally, we have assessed the appropriateness of the information on the fair value of the investment properties disclosed in note 22 of the Consolidated Financial Statements. Valuation Financial Instruments Description of the key audit matter/ The Group uses interest rate swaps (IRS) and options (CAPs) to hedge its interest rate risk on its variable rate debts and has concluded forward exchange rate contracts during the financial year to hedge the risk of exchange rate fluctuations. The measurement of the derivatives at fair value is an important source of volatility of the result and/or the shareholders’ equity. In accordance with IFRS 9 “Financial Instruments: Recognition and Measurement”, these derivatives are valued at fair value (considered to belong to the level 2 in the fair value hierarchy defined by IFRS 13 “Fair Value Measurement”). The changes in fair value are recognized in the income statements except for some IRS for which the Group applies hedge accounting (“cash-flow hedging”), which allows to classify most of the changes in fair value in the caption of the shareholders’ equity (“Reserve for the balance of changes in fair value of authorized hedging instruments qualifying for hedge accounting as defined under IFRS”). The audit risk appears on the one hand in the complexities involved in determining the fair value of these derivatives and on the other hand in the correct application of hedge accounting for the IRS contracts that were classified by the Group as cash flow hedges and are therefore a key audit matter. Summary of the procedures performed • We have compared the fair values of the derivatives with the values communicated by the counterparties and the credit risk adjustments calculated by an external specialist. We have assessed the most important assumptions and the calculations performed by this external specialist. • Regarding the correct application of hedge accounting, we have evaluated the effectiveness tests performed by the external specialist involved by the Group and we have compared the volume of derivatives subject to hedge accounting with the volume of the variable rate debts projected on the future accounting years in order to identify any potential over-hedging which could potentially jeopardize the application of hedge accounting. • Finally, we have assessed the appropriateness of the information on the financial instruments disclosed in note 33 of the Consolidated Financial Statements. 238 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE Audit report dated 30 March 2022 on the Consolidated Financial Statements of Aedifica SA as of and for the year ended 31 December 2021 (continued) 3 Goodwill impairment Description of the key audit matter In January 2020, Aedifica acquired its Finnish subsidiary Hoivatilat resulting in a goodwill in Aedifica NV's Consolidated Financial Statements amounting to EUR 161,7 million. In conformity with IAS 36 “Impairment of Assets”, the Group carries out impairment tests at least once a year. Management's assessment of potential impairments on this goodwill is based on a discounted cash flow method (DCF) of the underlying participation in Hoivatilat, which is based on budgets approved by the Board of Directors of the subsidiary. This analysis requires judgments and assessments by management of the assumptions used, including the determination of Hoivatilat's future cash flows as well as the determination of the discount rate, which are complex and subjective. Changes in these assumptions could lead to material changes in the estimated value, which may have a potential effect on potential impairments that need to be recorded at the level of goodwill, and is therefore considered a Key Audit Matter. Summary of the procedures performed • We have evaluated management’s process to identify the impairment indicators; • We have assessed the valuation methods used by management to determine Hoivatilat’s recoverable value as well as the reasonableness of the key assumptions (discount rate and future cash flows) used in management's assessment of the recoverable values (with the help of our internal valuation specialists); • We have assessed the reasonableness of future cash flows included in the goodwill valuation test based on historical results and the available business plan and have verified that those future cash flows are based on business plans approved by the Board of Directors; • We have tested the mathematical accuracy of valuation models; • We have assessed the accuracy of management's sensitivity analysis; • We have evaluated the adequacy and completeness of the information included in note 20 of the Consolidated Financial Statements. Responsibilities of the Board of Directors for the preparation of the Consolidated Financial Statements The Board of Directors is responsible for the preparation of the Consolidated Financial Statements that give a true and fair view in accordance with IFRS and with applicable legal and regulatory requirements in Belgium and for such internal controls relevant to the preparation of the Consolidated Financial Statements that are free from material misstatement, whether due to fraud or error. As part of the preparation of Consolidated Financial Statements, the Board of Directors is responsible for assessing the Company’s ability to continue as a going concern, and provide, if applicable, information on matters impacting going concern, The Board of Directors should prepare the financial statements using the going concern basis of accounting, unless the Board of Directors either intends to liquidate the Company or to cease business operations, or has no realistic alternative but to do so. – 239 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION Audit report dated 30 March 2022 on the Consolidated Financial Statements of Aedifica SA as of and for the year ended 31 December 2021 (continued) 3 Goodwill impairment Description of the key audit matter In January 2020, Aedifica acquired its Finnish subsidiary Hoivatilat resulting in a goodwill in Aedifica NV's Consolidated Financial Statements amounting to EUR 161,7 million. In conformity with IAS 36 “Impairment of Assets”, the Group carries out impairment tests at least once a year. Management's assessment of potential impairments on this goodwill is based on a discounted cash flow method (DCF) of the underlying participation in Hoivatilat, which is based on budgets approved by the Board of Directors of the subsidiary. This analysis requires judgments and assessments by management of the assumptions used, including the determination of Hoivatilat's future cash flows as well as the determination of the discount rate, which are complex and subjective. Changes in these assumptions could lead to material changes in the estimated value, which may have a potential effect on potential impairments that need to be recorded at the level of goodwill, and is therefore considered a Key Audit Matter. Summary of the procedures performed • We have evaluated management’s process to identify the impairment indicators; • We have assessed the valuation methods used by management to determine Hoivatilat’s recoverable value as well as the reasonableness of the key assumptions (discount rate and future cash flows) used in management's assessment of the recoverable values (with the help of our internal valuation specialists); • We have assessed the reasonableness of future cash flows included in the goodwill valuation test based on historical results and the available business plan and have verified that those future cash flows are based on business plans approved by the Board of Directors; • We have tested the mathematical accuracy of valuation models; • We have assessed the accuracy of management's sensitivity analysis; • We have evaluated the adequacy and completeness of the information included in note 20 of the Consolidated Financial Statements. Responsibilities of the Board of Directors for the preparation of the Consolidated Financial Statements The Board of Directors is responsible for the preparation of the Consolidated Financial Statements that give a true and fair view in accordance with IFRS and with applicable legal and regulatory requirements in Belgium and for such internal controls relevant to the preparation of the Consolidated Financial Statements that are free from material misstatement, whether due to fraud or error. As part of the preparation of Consolidated Financial Statements, the Board of Directors is responsible for assessing the Company’s ability to continue as a going concern, and provide, if applicable, information on matters impacting going concern, The Board of Directors should prepare the financial statements using the going concern basis of accounting, unless the Board of Directors either intends to liquidate the Company or to cease business operations, or has no realistic alternative but to do so. Audit report dated 30 March 2022 on the Consolidated Financial Statements of Aedifica SA as of and for the year ended 31 December 2021 (continued) 4 Our responsibilities for the audit of the Consolidated Financial Statements Our objectives are to obtain reasonable assurance whether the Consolidated Financial Statements are free from material misstatement, whether due to fraud or error, and to express an opinion on these Consolidated Financial Statements based on our audit. Reasonable assurance is a high level of assurance, but not a guarantee that an audit conducted in accordance with the ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Consolidated Financial Statements. In performing our audit, we comply with the legal, regulatory and normative framework that applies to the audit of the Consolidated Financial Statements in Belgium. However, a statutory audit does not provide assurance about the future viability of the Company and the Group, nor about the efficiency or effectiveness with which the board of directors has taken or will undertake the Company's and the Group’s business operations. Our responsibilities with regards to the going concern assumption used by the board of directors are described below. As part of an audit in accordance with ISAs, we exercise professional judgment and we maintain professional skepticism throughout the audit. We also perform the following tasks: • identification and assessment of the risks of material misstatement of the Consolidated Financial Statements, whether due to fraud or error, the planning and execution of audit procedures to respond to these risks and obtain audit evidence which is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting material misstatements resulting from fraud is higher than when such misstatements result from errors, since fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control; • obtaining insight in the system of internal controls that are relevant for the audit and with the objective to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control; • evaluating the selected and applied accounting policies, and evaluating the reasonability of the accounting estimates and related disclosures made by the Board of Directors as well as the underlying information given by the Board of Directors; • conclude on the appropriateness of the Board of Directors’ use of the going-concern basis of accounting, and based on the audit evidence obtained, whether or not a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s or Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the Consolidated Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on audit evidence obtained up to the date of the auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going-concern; • evaluating the overall presentation, structure and content of the Consolidated Financial Statements, and evaluating whether the Consolidated Financial Statements reflect a true and fair view of the underlying transactions and events. We communicate with the Audit Committee within the Board of Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Because we are ultimately responsible for the opinion, we are also responsible for directing, supervising and performing the audits of the subsidiaries. In this respect we have determined the nature and extent of the audit procedures to be carried out for group entities. We provide the Audit Committee within the Board of Directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. 240 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE Audit report dated 30 March 2022 on the Consolidated Financial Statements of Aedifica SA as of and for the year ended 31 December 2021 (continued) 5 From the matters communicated with the Audit Committee within the Board of Directors, we determine those matters that were of most significance in the audit of the Consolidated Financial Statements of the current period and are therefore the key audit matters. We describe these matters in our report, unless the law or regulations prohibit this. Report on other legal and regulatory requirements Responsibilities of the Board of Directors The Board of Directors is responsible for the preparation and the content of the Board of Directors’ report on the Consolidated Financial Statements, and other information included in the annual report. Responsibilities of the auditor In the context of our mandate and in accordance with the additional standard to the ISAs applicable in Belgium, it is our responsibility to verify, in all material respects, the Board of Directors’ report on the Consolidated Financial Statements, and other information included in the annual report, as well as to report on these matters. Aspects relating to Board of Directors’ report and other information included in the annual report In our opinion, after carrying out specific procedures on the Board of Directors’ report, the Board of Directors’ report is consistent with the Consolidated Financial Statements and has been prepared in accordance with article 3:32 of the Code of companies and associations. In the context of our audit of the Consolidated Financial Statements, we are also responsible to consider whether, based on the information that we became aware of during the performance of our audit, the Board of Directors’ report and other information included in the annual report, being: • Summary of the consolidated financial statements of 31 December 2021 p.52-57 • EPRA p.154-163 contain any material inconsistencies or contains information that is inaccurate or otherwise misleading. In light of the work performed, there are no material inconsistencies to be reported. Independence matters Our audit firm and our network have not performed any services that are not compatible with the audit of the Consolidated Financial Statements and have remained independent of the Company during the course of our mandate. The fees related to additional services which are compatible with the audit of the Consolidated Financial Statements as referred to in article 3:65 of the Code of companies and associations were duly itemized and valued in the notes to the Consolidated Financial Statements. European single electronic format (“ESEF”) In accordance with the standard on the audit of the conformity of the financial statements with the European single electronic format (hereinafter "ESEF"), we have carried out the audit of the compliance of the ESEF format with the regulatory technical standards set by the European Delegated Regulation No 2019/815 of 17 December 2018 (hereinafter: "Delegated Regulation"). The board of directors is responsible for the preparation, in accordance with the ESEF requirements, of the consolidated financial statements in the form of an electronic file in ESEF format (hereinafter 'the digital consolidated financial statements') included in the annual financial report available on the portal of the FSMA (https://www.fsma.be/en/data-portal). It is our responsibility to obtain sufficient and appropriate supporting evidence to conclude that the format and markup language of the digital consolidated financial statements comply in all material respects with the ESEF requirements under the Delegated Regulation. Based on the work performed by us, we conclude that the format and tagging of information in the digital consolidated financial statements included in the annual financial report available on the portal of the – 241 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION Audit report dated 30 March 2022 on the Consolidated Financial Statements of Aedifica SA as of and for the year ended 31 December 2021 (continued) 5 From the matters communicated with the Audit Committee within the Board of Directors, we determine those matters that were of most significance in the audit of the Consolidated Financial Statements of the current period and are therefore the key audit matters. We describe these matters in our report, unless the law or regulations prohibit this. Report on other legal and regulatory requirements Responsibilities of the Board of Directors The Board of Directors is responsible for the preparation and the content of the Board of Directors’ report on the Consolidated Financial Statements, and other information included in the annual report. Responsibilities of the auditor In the context of our mandate and in accordance with the additional standard to the ISAs applicable in Belgium, it is our responsibility to verify, in all material respects, the Board of Directors’ report on the Consolidated Financial Statements, and other information included in the annual report, as well as to report on these matters. Aspects relating to Board of Directors’ report and other information included in the annual report In our opinion, after carrying out specific procedures on the Board of Directors’ report, the Board of Directors’ report is consistent with the Consolidated Financial Statements and has been prepared in accordance with article 3:32 of the Code of companies and associations. In the context of our audit of the Consolidated Financial Statements, we are also responsible to consider whether, based on the information that we became aware of during the performance of our audit, the Board of Directors’ report and other information included in the annual report, being: • Summary of the consolidated financial statements of 31 December 2021 p.52-57 • EPRA p.154-163 contain any material inconsistencies or contains information that is inaccurate or otherwise misleading. In light of the work performed, there are no material inconsistencies to be reported. Independence matters Our audit firm and our network have not performed any services that are not compatible with the audit of the Consolidated Financial Statements and have remained independent of the Company during the course of our mandate. The fees related to additional services which are compatible with the audit of the Consolidated Financial Statements as referred to in article 3:65 of the Code of companies and associations were duly itemized and valued in the notes to the Consolidated Financial Statements. European single electronic format (“ESEF”) In accordance with the standard on the audit of the conformity of the financial statements with the European single electronic format (hereinafter "ESEF"), we have carried out the audit of the compliance of the ESEF format with the regulatory technical standards set by the European Delegated Regulation No 2019/815 of 17 December 2018 (hereinafter: "Delegated Regulation"). The board of directors is responsible for the preparation, in accordance with the ESEF requirements, of the consolidated financial statements in the form of an electronic file in ESEF format (hereinafter 'the digital consolidated financial statements') included in the annual financial report available on the portal of the FSMA (https://www.fsma.be/en/data-portal). It is our responsibility to obtain sufficient and appropriate supporting evidence to conclude that the format and markup language of the digital consolidated financial statements comply in all material respects with the ESEF requirements under the Delegated Regulation. Based on the work performed by us, we conclude that the format and tagging of information in the digital consolidated financial statements included in the annual financial report available on the portal of the Audit report dated 30 March 2022 on the Consolidated Financial Statements of Aedifica SA as of and for the year ended 31 December 2021 (continued) 6 FSMA (https://www.fsma.be/en/data-portal) of Aedifica SA per 31 December 2021 are, in all material respects, in accordance with the ESEF requirements under the Delegated Regulation. Other communications. • This report is consistent with our supplementary declaration to the Audit Committee as specified in article 11 of the regulation (EU) nr. 537/2014. Brussels, 30 March 2022 EY Bedrijfsrevisoren BV Statutory auditor Represented by Joeri Klaykens * Partner Acting on behalf of a BV/SRL 242 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE Statutory auditor’s report of 30 March 2022 on the consolidated financial forecasts of Aedifica nv/sa 1 Statutory auditor’s report on the consolidated financial forecasts of Aedifica nv/sa As a statutory auditor of the company, we have, upon request by the Board of Directors, prepared the present report on the forecasts of the EPRA earnings (as defined in August 2011 and amended in October 2019 in the report “Best Practices Recommendations” of the European Public Real Estate Association) per share for the 12 months periods ending 31 December 2022 (the “Forecast”) of Aedifica nv/sa, included in Chapter 5 “Outlook for 2022” of the Caption “Financial report” of Aedifica’s Annual Financial Report as approved by the Board of Directors of the company on 22 February 2022. The assumptions included in Chapter 5 “Outlook for 2022” of the Caption “Financial report” of Aedifica’s Annual Financial Report result in the following forecasts of the EPRA earnings for the accounting year ending 2022: EPRA Earnings, per share, in EUR: 4,77 EUR Board of Director’s responsibility It is the Company’s board of directors’ responsibility to prepare the consolidated financial forecasts and the main assumptions upon which the Forecast is based. Auditor’s responsibility It is our responsibility to provide an opinion on the consolidated financial forecasts, prepared appropriately on the basis of the above assumptions. We are not required nor do we express an opinion on the possibility to achieve that result or on the assumptions underlying this Forecast. We performed our work in accordance with the auditing standards applicable in Belgium, as issued by the Institute of Registered Auditors (Institut des Réviseurs d’Entreprises/Instituut van de Bedrijfsrevisoren), including the related guidance of its research institute and the standard “International Standard on Assurance Engagements 3400” related to the examination of forecast information. Our work included an evaluation of the procedures undertaken by the Board of Directors in compiling the forecasts and procedures aimed at verifying the consistency of the methods used for the Forecast with the accounting policies normally adopted by Aedifica nv/sa. We planned and performed our work so as to obtain all the information and explanations that we considered necessary in order to provide us with reasonable assurance that the forecasts have been properly compiled on the basis stated. – 243 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION Statutory auditor’s report of 30 March 2022 on the consolidated financial forecasts of Aedifica nv/sa 1 Statutory auditor’s report on the consolidated financial forecasts of Aedifica nv/sa As a statutory auditor of the company, we have, upon request by the Board of Directors, prepared the present report on the forecasts of the EPRA earnings (as defined in August 2011 and amended in October 2019 in the report “Best Practices Recommendations” of the European Public Real Estate Association) per share for the 12 months periods ending 31 December 2022 (the “Forecast”) of Aedifica nv/sa, included in Chapter 5 “Outlook for 2022” of the Caption “Financial report” of Aedifica’s Annual Financial Report as approved by the Board of Directors of the company on 22 February 2022. The assumptions included in Chapter 5 “Outlook for 2022” of the Caption “Financial report” of Aedifica’s Annual Financial Report result in the following forecasts of the EPRA earnings for the accounting year ending 2022: EPRA Earnings, per share, in EUR: 4,77 EUR Board of Director’s responsibility It is the Company’s board of directors’ responsibility to prepare the consolidated financial forecasts and the main assumptions upon which the Forecast is based. Auditor’s responsibility It is our responsibility to provide an opinion on the consolidated financial forecasts, prepared appropriately on the basis of the above assumptions. We are not required nor do we express an opinion on the possibility to achieve that result or on the assumptions underlying this Forecast. We performed our work in accordance with the auditing standards applicable in Belgium, as issued by the Institute of Registered Auditors (Institut des Réviseurs d’Entreprises/Instituut van de Bedrijfsrevisoren), including the related guidance of its research institute and the standard “International Standard on Assurance Engagements 3400” related to the examination of forecast information. Our work included an evaluation of the procedures undertaken by the Board of Directors in compiling the forecasts and procedures aimed at verifying the consistency of the methods used for the Forecast with the accounting policies normally adopted by Aedifica nv/sa. We planned and performed our work so as to obtain all the information and explanations that we considered necessary in order to provide us with reasonable assurance that the forecasts have been properly compiled on the basis stated. Statutory auditor’s report of 30 March 2022 on the consolidated financial forecasts of Aedifica nv/sa 2 Opinion We have examined the EPRA earnings per share of Aedifica nv/sa for the 12 months periods ending 31 December 2022 in accordance with the International Standard on Assurance Engagements applicable to the examination of prospective financial information. Board of Director’s is responsible for the forecast including the assumptions referenced above. In our opinion the forecast is properly prepared on the basis of the assumptions and is presented in accordance with the accounting policies applied by Aedifica nv/sa for the consolidated financial statements of 2021. Since the Forecast and the assumptions on which they are based relate to the future and may therefore be affected by unforeseen events, we can express no opinion as to whether the actual results reported will correspond to those shown in the forecasts. Any differences may be material. Brussels, 30 March 2022 EY Réviseurs d’Entreprises SRL Statutory auditor represented by Joeri Klaykens Partner * Acting on behalf of a SRL 244 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 75 – Aedifica – Annual Financial Report 2021 2. Standing Documents 1. General information 1.1 Company name (Article 1 of the Articles of Association) The legal form of the Company is that of a public limited liability company with the name ‘AEDIFICA’. The Company is a public regulated real estate company (‘PRREC’), subject to the Belgian Act of 12 May 2014 on regulated real estate companies, as amended from time to time (the ‘RREC Act’), whose shares are admitted to trading on a regulated market. The company name and all of the documents which it produces, contain the words ‘public regulated real estate company under Belgian law’, or ‘public RREC under Belgian law’ or ‘PRREC under Belgian law’, or are immediately followed by these words. The Company is subject to the RREC Act and to the Royal Decree of 13 July 2014 regulating real estate companies, as amended from time to time (the ‘RREC Royal Decree’) (the ‘RREC Act’ and the ‘RREC Royal Decree’ are hereafter together referred to as the ‘RREC Legislation’). 1.2 Registered office, e-mail address and website (Article 2 of the Articles of Association) The registered office is located at 1040 Brussels, Rue Belliard / Belliardstraat 40 (box 11). The Board of Directors is authorised to transfer the registered office within Belgium to the extent that such transfer does not require a change in the language of the Articles of Association to comply with the applicable language legislation. Such a decision does not require an amendment of the Articles of Association, unless the registered office of the Company is transferred to another Region. In the latter case the Board of Directors is authorised to decide on the amendment of the Articles of Association. If, as a result of the transfer of the registered office, the language of the Articles of Association has to be changed, only the general meeting can take this decision, taking into account the requirements for an amendment of the Articles of Association. The Company may establish administrative offices, branches or agencies, both in Belgium and abroad by means of a simple resolution of the Board of Directors. The Company can, in application of and within the limits of Article 2:31 of the Code of companies and associations, be contacted at the following e-mail address: [email protected]. The Board of Directors may change the Company’s e-mail address in accordance with the Code of companies and associations. The Company’s website is: www.aedifica.eu. 1.3 Constitution, legal form and publication Aedifica was set up as a limited liability company incorporated under Belgian law (Société Anonyme/Naamloze Vennootschap) by Degroof Bank SA and GVA Finance SCA, by deed enacted on 7 November 2005 by Notary Bertrand Nerincx, Notary in Brussels, published in the annexes to the Belgian State Gazette (Moniteur belge/Belgisch Staatsblad) of 23 November 2005, under number 20051123/05168061. Aedifica was recognised as a Belgian REIT by the Commission Bancaire, Financière et des Assurances (CBFA), which became the FSMA, on 8 December 2005. Aedifica was recognised as a RREC by the FSMA on 17 October 2014. 1.4 Registry of Legal Entities The Company is entered in the Brussels Registry of Legal Entities (R.L.E., or ‘R.P.M.’ in French / ‘R.P.R.’ in Dutch) under No. 0877.248.501. 1.5 Duration (Article 5 of the Articles of Association) The Company is incorporated for an indefinite duration. 1.6 Purpose (Article 3 of the Articles of Association) The sole object of the Company is: - (a) to make immovable property available to users, directly or through a company in which it holds a participation in accordance with the provisions of the RREC Legislation; and - (b) within the limits set out in the RREC Legislation, to possess real estate as specified in the RREC Act. The notion real estate is to be understood as ‘real estate’ within the meaning of the RREC Legislation; – 245 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 75 – Aedifica – Annual Financial Report 2021 2. Standing Documents 1. General information 1.1 Company name (Article 1 of the Articles of Association) The legal form of the Company is that of a public limited liability company with the name ‘AEDIFICA’. The Company is a public regulated real estate company (‘PRREC’), subject to the Belgian Act of 12 May 2014 on regulated real estate companies, as amended from time to time (the ‘RREC Act’), whose shares are admitted to trading on a regulated market. The company name and all of the documents which it produces, contain the words ‘public regulated real estate company under Belgian law’, or ‘public RREC under Belgian law’ or ‘PRREC under Belgian law’, or are immediately followed by these words. The Company is subject to the RREC Act and to the Royal Decree of 13 July 2014 regulating real estate companies, as amended from time to time (the ‘RREC Royal Decree’) (the ‘RREC Act’ and the ‘RREC Royal Decree’ are hereafter together referred to as the ‘RREC Legislation’). 1.2 Registered office, e-mail address and website (Article 2 of the Articles of Association) The registered office is located at 1040 Brussels, Rue Belliard / Belliardstraat 40 (box 11). The Board of Directors is authorised to transfer the registered office within Belgium to the extent that such transfer does not require a change in the language of the Articles of Association to comply with the applicable language legislation. Such a decision does not require an amendment of the Articles of Association, unless the registered office of the Company is transferred to another Region. In the latter case the Board of Directors is authorised to decide on the amendment of the Articles of Association. If, as a result of the transfer of the registered office, the language of the Articles of Association has to be changed, only the general meeting can take this decision, taking into account the requirements for an amendment of the Articles of Association. The Company may establish administrative offices, branches or agencies, both in Belgium and abroad by means of a simple resolution of the Board of Directors. The Company can, in application of and within the limits of Article 2:31 of the Code of companies and associations, be contacted at the following e-mail address: [email protected]. The Board of Directors may change the Company’s e-mail address in accordance with the Code of companies and associations. The Company’s website is: www.aedifica.eu. 1.3 Constitution, legal form and publication Aedifica was set up as a limited liability company incorporated under Belgian law (Société Anonyme/Naamloze Vennootschap) by Degroof Bank SA and GVA Finance SCA, by deed enacted on 7 November 2005 by Notary Bertrand Nerincx, Notary in Brussels, published in the annexes to the Belgian State Gazette (Moniteur belge/Belgisch Staatsblad) of 23 November 2005, under number 20051123/05168061. Aedifica was recognised as a Belgian REIT by the Commission Bancaire, Financière et des Assurances (CBFA), which became the FSMA, on 8 December 2005. Aedifica was recognised as a RREC by the FSMA on 17 October 2014. 1.4 Registry of Legal Entities The Company is entered in the Brussels Registry of Legal Entities (R.L.E., or ‘R.P.M.’ in French / ‘R.P.R.’ in Dutch) under No. 0877.248.501. 1.5 Duration (Article 5 of the Articles of Association) The Company is incorporated for an indefinite duration. 1.6 Purpose (Article 3 of the Articles of Association) The sole object of the Company is: - (a) to make immovable property available to users, directly or through a company in which it holds a participation in accordance with the provisions of the RREC Legislation; and - (b) within the limits set out in the RREC Legislation, to possess real estate as specified in the RREC Act. The notion real estate is to be understood as ‘real estate’ within the meaning of the RREC Legislation; Aedifica – Annual Financial Report 2021 – 76 - (c) to conclude with a public client or to accede to, in the long term directly or through a company in which it holds a participation in accordance with the provisions of the RREC Legislation, where applicable in cooperation with third parties, one or more: - (i) DBF-agreements, the so-called ‘Design, Build, Finance’ agreements; - (ii) DB(F)M-agreements, the so-called ‘Design, Build, (Finance) and Maintain’ agreements; - (iii) DBF(M)O-agreements, the so-called ‘Design, Build, Finance, (Maintain) and Operate’ agreements; and/or - (iv) public works concession agreements with respect to buildings and/or other infrastructure of an immovable nature and related services, and on the basis of which: - (i) it is responsible for ensuring the availability, maintenance and/or exploitation for a public entity and/or the citizen as end user, in order to fulfil a social need and/or to enable the provision of a public service; and - (ii) it may bear, in whole or in part, the related financing, availability, demand and/or operational risk, in addition to any potential building risk, without therefore necessarily having any rights in rem; and - (d) to develop, cause to develop, establish, cause to establish, manage, allow to manage, operate, allow to operate or make available, in the long term directly or through a company in which it holds a participation in accordance with the provisions of the RREC legislation, where applicable in cooperation with third parties: - (i) public utilities and warehouses for transport, distribution or storage of electricity, gas, fossil or non-fossil fuel and energy in general and associated goods; - (ii) utilities for transport, distribution, storage or purification of water and associated goods; - (iii) installations for the generation, storage and transport of renewable or non-renewable energy and associated goods; or - (iv) waste and incineration plants and associated goods. In the context of making available immovable property, the Company can carry out all activities relating to the construction, conversion, renovation, development, acquisition, disposal, administration and exploitation of immovable property. As an additional or temporary activity, the Company may invest in securities that are not real estate within the meaning of the RREC Legislation, insofar as these securities may be traded on a regulated market. These investments will be made in accordance with the risk management policy adopted by the Company and will be diversified so as to ensure an appropriate risk diversification. It may also hold non-allocated liquid assets in all currencies, in the form of a call or term deposit or in the form of any monetary instrument that can be traded easily. The Company may moreover carry out hedging transactions, insofar as the latter’s exclusive object is to cover interest rate and exchange rate risks within the context of the financing and administration of the activities of the Company as referred to in the RREC Act, to the exclusion of any speculative transactions. The Company may lease out or take a lease on (under finance leases) one or more immovable properties. Leasing out (under finance leases) immovable property with an option to purchase may only be carried out as an additional activity, unless the immovable properties are intended for purposes of public interest, including social housing and education (in this case, the activity may be carried out as main activity). The Company may carry out all transactions and studies relating to all real estate as described above, and may perform all acts relating to real estate, such as purchase, refurbishment, laying out, letting, furnished letting, subletting, management, exchange, sale, parcelling, placing under a system of co-ownership, and have dealings with all enterprises with a corporate object that is similar to or complements its own by way of merger or otherwise, insofar as these acts are permitted under the RREC Legislation and, generally, perform all acts that are directly or indirectly related to its object. 1.7 Prohibitions (Article 4 of the Articles of Association) The Company may not: - act as a real estate promotor within the meaning of the RREC Legislation, with the exception of occasional transactions; - participate in a firm underwriting or guarantee syndicate; - lend stock, with the exception of loans which are carried out in accordance with the provisions and under the conditions of the royal decree of 7 March 2006; - acquire stock which is issued by a company or a private law association which has been declared bankrupt, has entered into an amicable settlement with its creditors, is the subject of a corporate reorganisation, has received a suspension of payment or which has been the subject of similar measures in another country; - provide contractual arrangements or provisions in the Articles of Association with respect to the perimeter companies that would affect its voting power pursuant to the applicable law in function of a participation of 25% plus one share. 246 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 77 – Aedifica – Annual Financial Report 2021 1.8 Financial year (Article 28 of the Articles of Association) The financial year begins on the first of January of each year and ends on the thirty-first of December each year. The Board of Directors draws up an inventory and the annual accounts at the end of each financial year. The annual and semi-annual financial reports of the company, which contain its consolidated accounts and the statutory auditor's report, are made available to the shareholders, in accordance with the provisions that apply to issuers of financial instruments that are admitted to trading on a regulated market and the RREC Legislation. The annual and semi-annual financial reports of the Company and the annual accounts are published on the Company's website. The shareholders are entitled to obtain a free copy of the annual and semi-annual financial reports at the registered office. 1.9 General meetings (Article 19 and 20 of the Articles of Association) The ordinary general meeting will be held on the second Tuesday of May at 3 pm at the venue specified in the convocation. If this day is a public holiday, the meeting will be held at the same time on the next business day. Special or extraordinary general meetings are held at the venue specified in the convocation. The general meeting is convened by the Board of Directors. The threshold from which one or more shareholders may require a convocation of a general meeting in order to submit one or more proposals, is set at 10% of the capital, in accordance with the Code of companies and associations. One or more shareholders who jointly hold at least 3% of the capital may, under the conditions laid down in the Code of companies and associations, also ask to add items to the agenda of general meetings and submit proposals for resolutions relating to items to include or to be included on the agenda. Convocations are drawn up and distributed in accordance with the applicable provisions of the Code of companies and associations. 1.10 Accredited statutory auditor The statutory auditor of the Company, accredited by the Financial Services and Markets Authority (FSMA), is EY Bedrijfsrevisoren BV, represented by Joeri Klaykens, Partner, located at De Kleetlaan 2 in 1831 Diegem. The statutory auditor has an unlimited right of supervision over the operations of the Company. The accredited statutory auditor was appointed for a 3-year period by the Ordinary General Meeting on 11 May 2021, and receives an indexed audit fee of €55,000 excluding VAT per year for auditing the consolidated and statutory annual accounts (see Note 7 for more information regarding the remuneration of the statutory auditor). 1.11 Valuation experts To avoid conflicts of interest, Aedifica’s real estate portfolio is assessed by ten independent valuation experts, namely: - Cushman & Wakefield SA, represented (within the meaning of Article 24 of the RREC Act) by Mr Emeric Inghels, with registered offices at avenue marnix 23 (5 th floor), 1000 Brussels; - Stadim SRL, represented (within the meaning of Article 24 of the RREC Act) by Ms Céline Janssens and Mr Tim Leysen, with registered offices at Mechelsesteenweg 180, 2018 Antwerp; - CBRE GmbH, represented (within the meaning of Article 24 of the RREC Act) by Mr Danilo Tietz and Ms Karina Melskens, with registered offices at Bockenheimer Landstrasse 24 (WestendDuo), 60323 Frankfurt; - Jones Lang LaSalle SE, represented (within the meaning of Article 24 of the RREC Act) by Mr Gregor Claasen, with registered offices at Bockenheimer Landstrasse 55, 60325 Frankfurt; - Cushman & Wakefield VOF, represented (within the meaning of Article 24 of the RREC Act) by Mr Jan Vriend and Mr Niek Drent, with registered offices at Gustav Mahlerlaan 362-364, 1082 ME Amsterdam; - CBRE Valuation & Advisory Services BV, represented (within the meaning of Article 24 of the RREC Act) by Mr Roderick Smorenburg and Mr Annette Postma, with registered offices at Anthony Fokkerweg 15, 1059 CM Amsterdam; - Cushman & Wakefield Debenham Tie Leung Ltd, represented (within the meaning of Article 24 of the RREC Act) by Mr Tom Robinson, with registered offices at 125 Old Broad Street, London EC2N 1AR; - Jones Lang LaSalle Finland Oy, represented (within the meaning of Article 24 of the RREC Act) by Mr Tero Lehtonen and Mr Mikko Kuusela, with registered offices at Keskuskatu 5 B in 00100 Helsinki; - JLL Valuation AB, represented (within the meaning of Article 24 of the RREC Act) by Mr Patrik Lofvenberg, with registered offices at Birger Jarlsgatan 25, 111 45 Stockholm; - CBRE Unlimited Company, represented (within the meaning of Article 24 of the RREC Act) by Ms Maureen Bayley, with registered offices at 1 Burlington Road (3 rd floor Connaught House), Dublin 4. According to the RREC legislation, the valuation experts assess the entire portfolio every quarter and their assessment is recognised as the carrying amount (‘fair value’) of the buildings on the balance sheet. – 247 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 77 – Aedifica – Annual Financial Report 2021 1.8 Financial year (Article 28 of the Articles of Association) The financial year begins on the first of January of each year and ends on the thirty-first of December each year. The Board of Directors draws up an inventory and the annual accounts at the end of each financial year. The annual and semi-annual financial reports of the company, which contain its consolidated accounts and the statutory auditor's report, are made available to the shareholders, in accordance with the provisions that apply to issuers of financial instruments that are admitted to trading on a regulated market and the RREC Legislation. The annual and semi-annual financial reports of the Company and the annual accounts are published on the Company's website. The shareholders are entitled to obtain a free copy of the annual and semi-annual financial reports at the registered office. 1.9 General meetings (Article 19 and 20 of the Articles of Association) The ordinary general meeting will be held on the second Tuesday of May at 3 pm at the venue specified in the convocation. If this day is a public holiday, the meeting will be held at the same time on the next business day. Special or extraordinary general meetings are held at the venue specified in the convocation. The general meeting is convened by the Board of Directors. The threshold from which one or more shareholders may require a convocation of a general meeting in order to submit one or more proposals, is set at 10% of the capital, in accordance with the Code of companies and associations. One or more shareholders who jointly hold at least 3% of the capital may, under the conditions laid down in the Code of companies and associations, also ask to add items to the agenda of general meetings and submit proposals for resolutions relating to items to include or to be included on the agenda. Convocations are drawn up and distributed in accordance with the applicable provisions of the Code of companies and associations. 1.10 Accredited statutory auditor The statutory auditor of the Company, accredited by the Financial Services and Markets Authority (FSMA), is EY Bedrijfsrevisoren BV, represented by Joeri Klaykens, Partner, located at De Kleetlaan 2 in 1831 Diegem. The statutory auditor has an unlimited right of supervision over the operations of the Company. The accredited statutory auditor was appointed for a 3-year period by the Ordinary General Meeting on 11 May 2021, and receives an indexed audit fee of €55,000 excluding VAT per year for auditing the consolidated and statutory annual accounts (see Note 7 for more information regarding the remuneration of the statutory auditor). 1.11 Valuation experts To avoid conflicts of interest, Aedifica’s real estate portfolio is assessed by ten independent valuation experts, namely: - Cushman & Wakefield SA, represented (within the meaning of Article 24 of the RREC Act) by Mr Emeric Inghels, with registered offices at avenue marnix 23 (5 th floor), 1000 Brussels; - Stadim SRL, represented (within the meaning of Article 24 of the RREC Act) by Ms Céline Janssens and Mr Tim Leysen, with registered offices at Mechelsesteenweg 180, 2018 Antwerp; - CBRE GmbH, represented (within the meaning of Article 24 of the RREC Act) by Mr Danilo Tietz and Ms Karina Melskens, with registered offices at Bockenheimer Landstrasse 24 (WestendDuo), 60323 Frankfurt; - Jones Lang LaSalle SE, represented (within the meaning of Article 24 of the RREC Act) by Mr Gregor Claasen, with registered offices at Bockenheimer Landstrasse 55, 60325 Frankfurt; - Cushman & Wakefield VOF, represented (within the meaning of Article 24 of the RREC Act) by Mr Jan Vriend and Mr Niek Drent, with registered offices at Gustav Mahlerlaan 362-364, 1082 ME Amsterdam; - CBRE Valuation & Advisory Services BV, represented (within the meaning of Article 24 of the RREC Act) by Mr Roderick Smorenburg and Mr Annette Postma, with registered offices at Anthony Fokkerweg 15, 1059 CM Amsterdam; - Cushman & Wakefield Debenham Tie Leung Ltd, represented (within the meaning of Article 24 of the RREC Act) by Mr Tom Robinson, with registered offices at 125 Old Broad Street, London EC2N 1AR; - Jones Lang LaSalle Finland Oy, represented (within the meaning of Article 24 of the RREC Act) by Mr Tero Lehtonen and Mr Mikko Kuusela, with registered offices at Keskuskatu 5 B in 00100 Helsinki; - JLL Valuation AB, represented (within the meaning of Article 24 of the RREC Act) by Mr Patrik Lofvenberg, with registered offices at Birger Jarlsgatan 25, 111 45 Stockholm; - CBRE Unlimited Company, represented (within the meaning of Article 24 of the RREC Act) by Ms Maureen Bayley, with registered offices at 1 Burlington Road (3 rd floor Connaught House), Dublin 4. According to the RREC legislation, the valuation experts assess the entire portfolio every quarter and their assessment is recognised as the carrying amount (‘fair value’) of the buildings on the balance sheet. Aedifica – Annual Financial Report 2021 – 78 Since 1 January 2011, the expert fee excluding VAT is determined as a fixed amount per type of property appraised. Valuation methodology The valuations are established on the basis of several widely used methodologies: - Application of a capitalisation rate to the estimated rental value adapted for actual deviations as regards rental income and operating expenses on a going concern basis. - Computation of the present value of future cash flows based on assumptions regarding future income (DCF method) and the exit value. The discount factor takes into account the interest rate on financial market as well as a risk premium specific to real estate investments. The impact of expected changes in inflation and interest rates is hence embedded in a conservative way in this evaluation. - These assessments are also tested by reference to unit prices recorded when similar properties are sold, taking into account deviations arising from differences in the characteristics of the property. - Development projects (constructions, renovations, extensions) are valued by deducting the costs upon completion of the projects from the anticipated value determined by applying the abovementioned methodologies. Costs incurred in the preliminary phase of construction, renovation or extension projects are considered at their historical value. 1.12 Financial services Aedifica has established financial service conventions with the following banks: - ING Belgium NV/SA, located avenue Marnix 24 in 1000 Brussels (main paying agent); - ABN AMRO, located Gustav Mahlerlaan 10 (P.O. Box 283) in 1000 Amsterdam (share depository for the general meetings); - Bank Degroof NV/SA, located rue Guimard 18 in 1040 Brussels (liquidity agent); - KBC Bank NV/SA, located avenue du Port 2 in 1080 Brussels (liquidity agent). In 2021, the remuneration for financial services amounted to €244 k (€183 k for the 2019/2020 financial year). 1.13 Places at which documents are available to the public The Company’s Articles of Association are available at the Commercial Court of Brussels and on the Company’s website (www.aedifica.eu). The statutory and consolidated accounts of the Group are registered at the National Bank of Belgium, in accordance with the related legal provisions. The decisions regarding the nomination and the dismissal of the members of the Board of Directors are published in the annexes to the Belgian State Gazette (Moniteur belge/Belgisch Staatsblad). The convening of general meetings is published in the annexes to the Belgian State Gazette (Moniteur belge/Belgisch Staatsblad) and in two financial newspapers.These meeting notices and all documents related to the general meetings are simultaneously available on the Company’s website (www.aedifica.eu). All press releases, annual and semi-annual reports, as well as all financial information published by the Aedifica Group are available on the Company’s website (www.aedifica.eu). The Auditor’s Report and the valuation experts’ report are available in the Annual Financial Reports provided on the Company’s website (www.aedifica.eu). During the period of validity of the registration document, the following documents are available in print at the Company’s headquarters, or electronically at www.aedifica.eu: - Aedifica’s Articles of Association; - all reports, letters and other documents, historical financial information, valuation and declarations established by an expert at the request of Aedifica, for which a part is included or referred in the registration document; - historical financial information of Aedifica and its subsidiaries for the two years preceding the publication of the registration document. 1.14 Investors’ profile Given the specific legal regime of RRECs, and in particular residential RRECs, the Aedifica shares can present an interesting investment for both private investors and institutional investors. 1.15 Historical financial information referred by reference The Annual Financial Reports (which include the Consolidated Financial Statements – with an abridged version of the Statutory Accounts –, the Management Report, the Auditor’s Report and the Property Report), the interim statements, the semi-annual reports, the description of the financial situation, the information regarding the related-parties, and the historical information regarding Aedifica’s subsidiaries, for the 2017/2018, 2018/2019 and 2019/2020 financial years are included by reference in this Annual Financial Report and are available at Aedifica’s headquarters and the Company’s website (www.aedifica.eu). 248 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 79 – Aedifica – Annual Financial Report 2021 1.16 Significant change of the financial or trading situation No significant change in the Group’s financial or trading situation has occurred since the end of last financial year for which audited financial statements or half-year statements have been published. 1.17 Actions necessary to change the rights of the shareholders The modification of shareholders’ rights can only be done within the framework of an extraordinary general meeting, in accordance with Articles 7:153 and 7:155 of the Belgian Companies and Associations Code. The document containing the information on the rights of the shareholders referred to in Articles 7:130 and 7:139 of the Belgian Companies and Associations Code can be downloaded from the Company’s website (www.aedifica.eu). 1.18 Strategy or factors of governmental, economical, budgetary, monetary or political nature which have substantially influenced, directly or indirectly, Aedifica’s operations See the ‘Risks factors’ chapter within this Annual Financial Report. 1.19 History and evolution of the Company – important events in the development of Aedifica’s activities In addition to paragraph 1.3 above, Aedifica’s history was marked by its IPO on 23 October 2006 (see the chapter ‘Aedifica in the stock market’), and by numerous acquisitions of real estate assets that have occurred since its creation (detailed in the occasional press releases, periodic press releases and annual and half-year financial reports available on the Company’s website) and that led to a real estate portfolio of approx. €3.8 billion. 1.20 Rights to vote of the main shareholders Voting rights for Aedifica’s main shareholders are no different from those that arise from their share in the share capital. – 249 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 79 – Aedifica – Annual Financial Report 2021 1.16 Significant change of the financial or trading situation No significant change in the Group’s financial or trading situation has occurred since the end of last financial year for which audited financial statements or half-year statements have been published. 1.17 Actions necessary to change the rights of the shareholders The modification of shareholders’ rights can only be done within the framework of an extraordinary general meeting, in accordance with Articles 7:153 and 7:155 of the Belgian Companies and Associations Code. The document containing the information on the rights of the shareholders referred to in Articles 7:130 and 7:139 of the Belgian Companies and Associations Code can be downloaded from the Company’s website (www.aedifica.eu). 1.18 Strategy or factors of governmental, economical, budgetary, monetary or political nature which have substantially influenced, directly or indirectly, Aedifica’s operations See the ‘Risks factors’ chapter within this Annual Financial Report. 1.19 History and evolution of the Company – important events in the development of Aedifica’s activities In addition to paragraph 1.3 above, Aedifica’s history was marked by its IPO on 23 October 2006 (see the chapter ‘Aedifica in the stock market’), and by numerous acquisitions of real estate assets that have occurred since its creation (detailed in the occasional press releases, periodic press releases and annual and half-year financial reports available on the Company’s website) and that led to a real estate portfolio of approx. €3.8 billion. 1.20 Rights to vote of the main shareholders Voting rights for Aedifica’s main shareholders are no different from those that arise from their share in the share capital. Aedifica – Annual Financial Report 2021 – 80 2. Capital Date Description Amount of capital (€) Number of shares 1 7 November 2005 Initial capital paid up by Degroof Bank and GVA Finance 2,500,000.00 2,500 2,500,000.00 2,500 29 December 2005 Contribution in cash 4,750,000.00 4,750 Merger of "Jacobs Hotel Company SA" 100,000.00 278 Merger of "Oude Burg Company SA" 3,599,587.51 4,473 Transfer of reserves to capital 4,119,260.93 Capital decrease -4,891,134.08 10,177,714.36 12,001 23 March 2006 Merger of "Sablon-Résidence de l’Europe SA" 1,487,361.15 11,491 Merger of "Bertimo SA" 1,415,000.00 3,694 Merger of "Le Manoir SA" 1,630,000.00 3,474 Merger of "Olphi SA" 800,000.00 2,314 Merger of "Services et Promotion de la Vallée (SPV) SA" 65,000.00 1,028 Merger of "Emmane SA" 2,035,000.00 5,105 Merger of "Ixelinvest SA" 219.06 72 Merger of "Imfina SA" 1,860.95 8 Contribution in kind of the business of "Immobe SA" 908,000.00 908 Contribution in kind (Lombard 32) 2,500,000.00 2,500 Contribution in kind (Laeken complex - Pont Neuf and Lebon 24-28) 10,915,000.00 10,915 31,935,155.52 53,510 24 May 2006 Contribution in kind (Louise 331-333 complex) 8,500,000.00 8,500 40,435,155.52 62,010 17 August 2006 Contribution in kind (Laeken 119 and 123-125) 1,285,000.00 1,285 Partial demerger of "Financière Wavrienne SA" 5,400,000.00 5,400 Mixed demerger of "Château Chenois SA" 123,743.15 14,377 Merger of "Medimmo SA" 1,000,000.00 2,301 Merger of "Cledixa SA" 74,417.64 199 Merger of "Société de Transport et du Commerce en Afrique SA" 62,000.00 1,247 Mixed merger of "Hôtel Central & Café Central SA" 175,825.75 6,294 48,556,142.06 93,113 26 September 2006 Split by 25 of the number of shares 48,556,142.06 2,327,825 Contribution in kind (Rue Haute and Klooster Hotel) 11,350,000.00 283,750 59,906,142.06 2,611,575 3 October 2006 Contribution in cash 23,962,454.18 1,044,630 83,868,596.24 3,656,205 27 March 2007 Contribution in kind (Auderghem 237, 239-241, 266 et 272, Platanes 6 and Winston Churchill 157) 4,911,972.00 105,248 88,780,568.24 3,761,453 17 April 2007 Merger of "Legrand CPI SA" 337,092.73 57,879 Contribution in kind (Livourne 14, 20-24) 2,100,000.00 44,996 91,217,660.97 3,846,328 28 June 2007 Partial demerger of "Alcasena SA" 2,704,128.00 342,832 Contribution in kind (Plantin Moretus) 3,000,000.00 68,566 96,921,788.97 4,275,726 30 November 2007 Partial demerger of "Feninvest SA" 1,862,497.95 44,229 Partial demerger of "Résidence du Golf SA" 5,009,531.00 118,963 103,793,817.92 4,438,918 30 July 2008 Partial demerger of "Famifamenne SA" 2,215,000.00 50,387 Partial demerger of "Rouimmo SA" 1,185,000.00 26,956 107,193,817.92 4,516,261 30 June 2009 Contribution in kind (Gaerveld service flats) 2,200,000.00 62,786 109,393,817.92 4,579,047 30 December 2009 Contribution in kind (Freesias) 4,950,000.00 129,110 114,343,817.92 4,708,157 30 June 2010 Partial demerger of "Carbon SA", "Eburon SA", "Hotel Ecu SA" and "Eurotel SA" 11,239,125.00 273,831 Partial demerger of "Carlinvest SA" 2,200,000.00 51,350 127,782,942.92 5,033,338 15 October 2010 Contribution in cash 51,113,114.26 2,013,334 178,896,057.18 7,046,672 8 April 2011 Contribution in kind (Project Group Hermibouw) 1,827,014.06 43,651 180,723,071.24 7,090,323 29 June 2011 Merger of "IDM A SA" 24,383.89 592 180,747,455.13 7,090,915 5 October 2011 Contribution in kind of the shares of "SIRACAM SA" 3,382,709.00 86,293 184,130,164.13 7,177,208 12 July 2012 Mixed demerger of "S.I.F.I. LOUISE SA" 800,000.00 16,868 184,930,164.13 7,194,076 7 December 2012 Capital increase through contribution in cash 69,348,785.78 2,697,777 254,278,949.91 9,891,853 24 June 2013 Merger of limited liability company "Terinvest" 10,398.81 8,622 250 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 81 – Aedifica – Annual Financial Report 2021 Merger of limited partnership "Kasteelhof-Futuro" 3,182.80 3,215 254,292,531.52 9,903,690 12 June 2014 Contribution in kind (Binkom) 12,158,952.00 258,475 266,451,483.52 10,162,165 30 June 2014 Contribution in kind (plot of land in Tienen) 4,000,000.00 86,952 270,451,483.52 10,249,117 24 November 2014 Optional dividend 5,763,329.48 218,409 276,214,813.00 10,467,526 4 December 2014 Partial demerger of "La Réserve Invest SA" 12,061,512.94 457,087 288,276,325.94 10,924,613 29 June 2015 Capital increase through contribution in cash 82,364,664.56 3,121,318 370,640,990.50 14,045,931 2 October 2015 Contribution in kind (plot of land in Opwijk) 523,955.84 19,856 371,164,946.34 14,065,787 17 December 2015 Contribution in kind (Prinsenhof) 2,748,340.46 104,152 373,913,286.80 14,169,939 24 March 2016 Contribution in kind (plot of land in Aarschot Poortvelden) 582,985.31 22,093 374,496,272.11 14,192,032 2 December 2016 Optional dividend 3,237,042.22 122,672 377,733,314.33 14,314,704 8 December 2016 Contribution in kind (Jardins de la Mémoire) 1,740,327.12 65,952 379,473,641.45 14,380,656 28 March 2017 Capital increase through contribution in cash 94,868,410.37 3,595,164 474,342,051.82 17,975,820 7 June 2018 Contribution in kind (Smakt and Velp) 5,937,488.85 225,009 480,279,540.67 18,200,829 20 November 2018 Optional dividend 6,348,821.62 240,597 486,628,362.29 18,441,426 7 May 2019 Capital increase through contribution in cash 162,209,454.10 6,147,142 648,837,816.39 24,588,568 20 June 2019 Contribution in kind (surface rights of Bremdael) 332,222.20 12,590 649,170,038.59 24,601,158 28 April 2020 Capital increase through contribution in cash 64,916,982.75 2,460,115 714,087,021.34 27,061,273 10 July 2020 Contribution in kind (Kleine Veldekens) 11,494,413.08 435,596 725,581,434.42 27,496,869 27 October 2020 Capital increase through contribution in cash 145,116,265.78 5,499,373 870,697,700.20 32,996,242 17 December 2020 Contribution in kind (De Gouden Jaren) 2,383,608.51 90,330 873,081,308.71 33,086,572 15 June 2021 Capital increase through contribution in cash 73,885,794.65 2,800,000 2 946,967,103.36 35,886,572 29 June 2021 Contribution in kind (Domaine de la Rose Blanche) 4,868,335.01 184,492 3 951,835,438.37 36,071,064 8 September 2021 Contribution in kind (Portfolio of specialist residential care centers in Sweden) 6,256,358.84 237,093 4 958,091,797.21 36,308,157 1 Shares without par value. 2 These shares are quoted on the stock market as from 15 June 2021 and give pro rata temporis dividend rights for the 2021 financial year. For the surplus, they enjoy the same rights and benefits as the other listed shares. 3 These shares are quoted on the stock market as from 29 June 2021 and give pro rata temporis dividend rights for the 2021 financial year. For the surplus, they enjoy the same rights and benefits as the other listed shares. 4 These shares are quoted on the stock market as from 8 September 2021 and give pro rata temporis dividend rights for the 2021 financial year. For the surplus, they enjoy the same rights and benefits as the other listed shares. – 251 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 81 – Aedifica – Annual Financial Report 2021 Merger of limited partnership "Kasteelhof-Futuro" 3,182.80 3,215 254,292,531.52 9,903,690 12 June 2014 Contribution in kind (Binkom) 12,158,952.00 258,475 266,451,483.52 10,162,165 30 June 2014 Contribution in kind (plot of land in Tienen) 4,000,000.00 86,952 270,451,483.52 10,249,117 24 November 2014 Optional dividend 5,763,329.48 218,409 276,214,813.00 10,467,526 4 December 2014 Partial demerger of "La Réserve Invest SA" 12,061,512.94 457,087 288,276,325.94 10,924,613 29 June 2015 Capital increase through contribution in cash 82,364,664.56 3,121,318 370,640,990.50 14,045,931 2 October 2015 Contribution in kind (plot of land in Opwijk) 523,955.84 19,856 371,164,946.34 14,065,787 17 December 2015 Contribution in kind (Prinsenhof) 2,748,340.46 104,152 373,913,286.80 14,169,939 24 March 2016 Contribution in kind (plot of land in Aarschot Poortvelden) 582,985.31 22,093 374,496,272.11 14,192,032 2 December 2016 Optional dividend 3,237,042.22 122,672 377,733,314.33 14,314,704 8 December 2016 Contribution in kind (Jardins de la Mémoire) 1,740,327.12 65,952 379,473,641.45 14,380,656 28 March 2017 Capital increase through contribution in cash 94,868,410.37 3,595,164 474,342,051.82 17,975,820 7 June 2018 Contribution in kind (Smakt and Velp) 5,937,488.85 225,009 480,279,540.67 18,200,829 20 November 2018 Optional dividend 6,348,821.62 240,597 486,628,362.29 18,441,426 7 May 2019 Capital increase through contribution in cash 162,209,454.10 6,147,142 648,837,816.39 24,588,568 20 June 2019 Contribution in kind (surface rights of Bremdael) 332,222.20 12,590 649,170,038.59 24,601,158 28 April 2020 Capital increase through contribution in cash 64,916,982.75 2,460,115 714,087,021.34 27,061,273 10 July 2020 Contribution in kind (Kleine Veldekens) 11,494,413.08 435,596 725,581,434.42 27,496,869 27 October 2020 Capital increase through contribution in cash 145,116,265.78 5,499,373 870,697,700.20 32,996,242 17 December 2020 Contribution in kind (De Gouden Jaren) 2,383,608.51 90,330 873,081,308.71 33,086,572 15 June 2021 Capital increase through contribution in cash 73,885,794.65 2,800,000 2 946,967,103.36 35,886,572 29 June 2021 Contribution in kind (Domaine de la Rose Blanche) 4,868,335.01 184,492 3 951,835,438.37 36,071,064 8 September 2021 Contribution in kind (Portfolio of specialist residential care centers in Sweden) 6,256,358.84 237,093 4 958,091,797.21 36,308,157 1 Shares without par value. 2 These shares are quoted on the stock market as from 15 June 2021 and give pro rata temporis dividend rights for the 2021 financial year. For the surplus, they enjoy the same rights and benefits as the other listed shares. 3 These shares are quoted on the stock market as from 29 June 2021 and give pro rata temporis dividend rights for the 2021 financial year. For the surplus, they enjoy the same rights and benefits as the other listed shares. 4 These shares are quoted on the stock market as from 8 September 2021 and give pro rata temporis dividend rights for the 2021 financial year. For the surplus, they enjoy the same rights and benefits as the other listed shares. Aedifica – Annual Financial Report 2021 – 82 3. Extracts from the Articles of Association 3.1 Subscribed and fully paid-up capital (Article 6.1 of the Articles of Association) The capital amounts to €958,091,797.21 (nine hundred fifty-eight million ninety-one thousand seven hundred ninety-seven euro and thirty-eight cents). It is represented by 36,308,157 (thirty-six million three hundred and eight thousand hundred fifty-seven) shares without nominal value, which each represent 1/36,308,157 th of the capital. These shares are fully subscribed and paid up. 3.2 Acquisition, acceptance as pledge and alienation of own shares (Article 6.2 of the Articles of Association) The Company may under the conditions set out in the law, acquire, accept as pledge or alienate its own shares and certificates relating thereto. The Board of Directors is authorised, for a period of five years from the publication of the decision of the extraordinary general meeting of 8 June 2020 to approve this authorisation in the annexes to the Belgian Official Gazette, to acquire and accept as pledge shares of the Company and certificates relating thereto, at a unit price which may not be lower than 75% of the average price of the share during the last thirty days of its listing prior to the date of the transaction, nor higher than 125% of the average price of the share during the last thirty days of its listing prior to the date of the transaction, without the Company being authorised, by virtue of this authorisation, to hold or hold in pledge shares of the Company or certificates relating thereto representing more than 10% of the total number of shares. To the extent necessary, the Board of Directors is also explicitly authorised to alienate the Company's own shares and certificates relating thereto to its personnel. In addition, the Board of Directors is explicitly authorised to alienate the Company's own shares and certificates relating thereto to one or more specific persons other than members of the personnel of the Company or its subsidiaries. The authorisations under paragraph 2. and paragraph 3. apply to the Board of Directors of the Company, to the direct and indirect subsidiaries of the Company, and to any third party acting in its own name but on behalf of these companies. 3.3 Capital increase (Article 6.3 of the Articles of Association) Every capital increase must take place in accordance with the Code of companies and associations and the RREC Legislation. (a) Cash contribution In case of a capital increase by means of a cash contribution pursuant to a resolution of the shareholders’ meeting or in the context of the authorised capital as provided for in Article 6.4 of the Articles of Association, and without prejudice to the application of the mandatory provisions of the applicable company law, the preferential subscription right of the shareholders may be restricted or cancelled to the extent that the existing shareholders are granted a priority allocation right when new securities are allocated. When applicable, this priority allocation right must comply with the following conditions as set out in the RREC Legislation: - 1) it must relate to all newly issued securities; - 2) it must be granted to shareholders pro rata to the portion of the capital that is represented by their shares at the time of the transaction; - 3) a maximum price for each share must be announced no later than the eve of the opening of the public subscription period; - 4) the public subscription period must last for at least three trading days. Without prejudice to the application of the mandatory provisions of the applicable company law, the priority allocation right, in any case, does not have to be granted, in case of contribution in cash subject to the following conditions: - 1) the capital increase is executed within the limits of the authorised capital; - 2) the cumulative amount of the capital increases, executed in accordance with this paragraph, over a period of 12 months, do not exceed 10% of the capital amount at the moment of the decision to increase the capital. Without prejudice to the mandatory provisions of the applicable company law, the priority allocation right does not have to be granted in case of a cash contribution with restriction or cancellation of the preferential subscription right, in addition to a contribution in kind in the framework of the distribution of an optional dividend, provided that this is actually made payable to all shareholders. (b) Contribution in kind Without prejudice to the provisions of the Code of companies and associations, the following conditions must be complied with, in accordance with the RREC Legislation, in case of a contribution in kind: - 1) the identity of the contributor must be mentioned in the report regarding the contribution in kind, as well as, if applicable, in the convocation of the general meeting that is convened for the capital increase; - 2) the issue price may not be less than the lowest amount of (a) a net value per share that dates from no more than four months before the date of the contribution agreement, or, at the Company's discretion, before the date of the deed effecting the capital increase and (b) the average closing price during the thirty-day period prior to that same day. It is permitted to deduct an amount from the amount referred to in item 2(b) that corresponds to the portion of the undistributed gross dividend to which the new shares would potentially not confer any right, provided that the Board of Directors specifically accounts for the 252 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 83 – Aedifica – Annual Financial Report 2021 amount of the accumulated dividend to be deducted in its special report and the financial conditions of the transaction are explained in its annual financial report. - 3) unless no later than the working day after the execution of the contribution agreement the issue price or, in the case referred to in Article 6.5 of the Articles of Association, the exchange ratio, as well as the relevant terms and conditions are determined and publicly disclosed, including the term within which the capital increase will actually be implemented, the deed effecting the capital increase must be executed within a maximum term of four months; and - 4) the report referred to above under item 1) must also explain the impact of the proposed contribution on the position of the existing shareholders, in particular as regards their share in the profit, in the net value per share and in the capital, as well as the impact in terms of voting rights. In accordance with the RREC Legislation, these additional conditions will not apply to the contribution of the right to a dividend for the purpose of distributing an optional dividend, insofar as this will actually be made payable to all shareholders. 3.4 Authorised capital (Article 6.4 of the Articles of Association) The Board of Directors is authorised to increase the capital in one or more instalments, on the dates and in accordance with the terms and conditions as will be determined by the Board of Directors, by a maximum amount of: - 1 ) 50% of the amount of the capital on the date of the extraordinary general meeting of 30 July 2021, as the case may be, rounded down to the euro cent for capital increases by contribution in cash whereby the possibility is provided for the exercise of the preferential subscription right or the priority allocation right by the shareholders of the Company, - 2 ) 50% of the amount of the capital on the date of the extraordinary general meeting of 30 July 2021, as the case may be, rounded down to the euro cent for capital increases in the framework of the distribution of an optional dividend, - 3 ) 10% of the amount of the capital on the date of the extraordinary general meeting of 30 July 2021, as the case may be, rounded down to the euro cent for a. capital increases by contribution in kind, b. capital increases by contribution in cash without the possibility for the shareholders of the Company to exercise the preferential right or priority allocation right, or c. any other kind of capital increase, provided that the capital within the context of the authorised capital can never be increased by an amount higher than the capital on the date of the extraordinary general meeting that has approved the authorisation (in other words, the sum of the capital increases in application of the proposed authorisations cannot exceed the amount of the capital on the date of the Extraordinary General Meeting that has approved the authorisation). This authorisation is granted for a renewable period of five years, calculated from the publication of the minutes of the Extraordinary General Meeting of 30 July 2021, in the annexes to the Belgian Official Gazette. For each capital increase, the Board of Directors will determine the price, the issue premium (if any) and the terms and conditions of issue of the new securities. The capital increases that are thus decided on by the Board of Directors may be subscribed to in cash, in kind, or by means of a mixed contribution, or by incorporation of reserves, including profits carried forward and issue premiums as well as all equity components under the Company’s statutory IFRS financial statements (drawn up in accordance with the regulations applicable to the regulated real estate companies) which are subject to conversion into capital, with or without the creation of new securities. These capital increases can also be realised through the issue of convertible bonds, subscription rights or bonds repayable in shares or other securities which may give rise to the creation of the same securities. Any issue premiums will be shown in one or more separate accounts under equity in the liabilities on the balance sheet. The Board of Directors is free to decide to place any issue premiums, possibly after deduction of an amount at most equal to the costs of the capital increase in the meaning of the applicable IFRS-rules, on an unavailable account, which will provide a guarantee for third parties in the same manner as the capital and which can only be reduced or abolished by means of a resolution of the general meeting deciding in accordance with the quorum and majority requirements for an amendment of the Articles of Association, except in the case of the conversion into capital. If the capital increase is accompanied by an issue premium, only the amount of the capital increase will be deducted from the remaining available amount of the authorised capital. The Board of Directors is authorised to restrict or cancel the preferential subscription right of shareholders, even in favour of one or more specific persons other than employees of the Company or of one of its subsidiaries, provided that, to the extent required by the RREC Legislation, a priority allocation right is granted to the existing shareholders when the new securities are allocated. Where applicable, this priority allocation right must comply with the conditions that are laid down in the RREC Legislation and Article 6.3(a) of the Articles of Association. In any event, it does not have to be granted in those cases of contribution in cash described in Article 6.3(a) paragraph 2 and paragraph 3 of the Articles of Association. Capital increases by means of contributions in kind are carried out in accordance with the conditions of the RREC Legislation and the conditions provided for in Article 6.3(b) of the Articles of Association. These contributions may also be based on the dividend right in the context of the distribution of an optional dividend. The Board of Directors is authorised to record the ensuing amendments to the Articles of Association in an officially certified deed. – 253 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 83 – Aedifica – Annual Financial Report 2021 amount of the accumulated dividend to be deducted in its special report and the financial conditions of the transaction are explained in its annual financial report. - 3) unless no later than the working day after the execution of the contribution agreement the issue price or, in the case referred to in Article 6.5 of the Articles of Association, the exchange ratio, as well as the relevant terms and conditions are determined and publicly disclosed, including the term within which the capital increase will actually be implemented, the deed effecting the capital increase must be executed within a maximum term of four months; and - 4) the report referred to above under item 1) must also explain the impact of the proposed contribution on the position of the existing shareholders, in particular as regards their share in the profit, in the net value per share and in the capital, as well as the impact in terms of voting rights. In accordance with the RREC Legislation, these additional conditions will not apply to the contribution of the right to a dividend for the purpose of distributing an optional dividend, insofar as this will actually be made payable to all shareholders. 3.4 Authorised capital (Article 6.4 of the Articles of Association) The Board of Directors is authorised to increase the capital in one or more instalments, on the dates and in accordance with the terms and conditions as will be determined by the Board of Directors, by a maximum amount of: - 1 ) 50% of the amount of the capital on the date of the extraordinary general meeting of 30 July 2021, as the case may be, rounded down to the euro cent for capital increases by contribution in cash whereby the possibility is provided for the exercise of the preferential subscription right or the priority allocation right by the shareholders of the Company, - 2 ) 50% of the amount of the capital on the date of the extraordinary general meeting of 30 July 2021, as the case may be, rounded down to the euro cent for capital increases in the framework of the distribution of an optional dividend, - 3 ) 10% of the amount of the capital on the date of the extraordinary general meeting of 30 July 2021, as the case may be, rounded down to the euro cent for a. capital increases by contribution in kind, b. capital increases by contribution in cash without the possibility for the shareholders of the Company to exercise the preferential right or priority allocation right, or c. any other kind of capital increase, provided that the capital within the context of the authorised capital can never be increased by an amount higher than the capital on the date of the extraordinary general meeting that has approved the authorisation (in other words, the sum of the capital increases in application of the proposed authorisations cannot exceed the amount of the capital on the date of the Extraordinary General Meeting that has approved the authorisation). This authorisation is granted for a renewable period of five years, calculated from the publication of the minutes of the Extraordinary General Meeting of 30 July 2021, in the annexes to the Belgian Official Gazette. For each capital increase, the Board of Directors will determine the price, the issue premium (if any) and the terms and conditions of issue of the new securities. The capital increases that are thus decided on by the Board of Directors may be subscribed to in cash, in kind, or by means of a mixed contribution, or by incorporation of reserves, including profits carried forward and issue premiums as well as all equity components under the Company’s statutory IFRS financial statements (drawn up in accordance with the regulations applicable to the regulated real estate companies) which are subject to conversion into capital, with or without the creation of new securities. These capital increases can also be realised through the issue of convertible bonds, subscription rights or bonds repayable in shares or other securities which may give rise to the creation of the same securities. Any issue premiums will be shown in one or more separate accounts under equity in the liabilities on the balance sheet. The Board of Directors is free to decide to place any issue premiums, possibly after deduction of an amount at most equal to the costs of the capital increase in the meaning of the applicable IFRS-rules, on an unavailable account, which will provide a guarantee for third parties in the same manner as the capital and which can only be reduced or abolished by means of a resolution of the general meeting deciding in accordance with the quorum and majority requirements for an amendment of the Articles of Association, except in the case of the conversion into capital. If the capital increase is accompanied by an issue premium, only the amount of the capital increase will be deducted from the remaining available amount of the authorised capital. The Board of Directors is authorised to restrict or cancel the preferential subscription right of shareholders, even in favour of one or more specific persons other than employees of the Company or of one of its subsidiaries, provided that, to the extent required by the RREC Legislation, a priority allocation right is granted to the existing shareholders when the new securities are allocated. Where applicable, this priority allocation right must comply with the conditions that are laid down in the RREC Legislation and Article 6.3(a) of the Articles of Association. In any event, it does not have to be granted in those cases of contribution in cash described in Article 6.3(a) paragraph 2 and paragraph 3 of the Articles of Association. Capital increases by means of contributions in kind are carried out in accordance with the conditions of the RREC Legislation and the conditions provided for in Article 6.3(b) of the Articles of Association. These contributions may also be based on the dividend right in the context of the distribution of an optional dividend. The Board of Directors is authorised to record the ensuing amendments to the Articles of Association in an officially certified deed. Aedifica – Annual Financial Report 2021 – 84 3.5 Mergers, de-mergers and equivalent transactions (Article 6.5 of the Articles of Association) Pursuant to the RREC Legislation, the special provisions of Article 6.3(b) of the Articles of Association regarding a contribution in kind apply mutatis mutandis to mergers, de-mergers and equivalent transactions as referred to in the RREC Legislation. 3.6 Capital reduction (Article 6.6 of the Articles of Association) The Company may reduce its capital subject to compliance with the relevant statutory provisions. 3.7 Nature of the shares (Article 7 of the Articles of Association) The shares are registered or dematerialised shares, at the option of the shareholder. Shareholders may at any time request in writing the conversion of registered shares into dematerialised shares or vice versa. Each dematerialised share is represented by an accounting entry in the name of the owner or holder at a recognised account holder or settlement institution. A register of registered shares, if applicable in electronic form, is held at the Company's registered office. 3.8 Other securities (Article 8 of the Articles of Association) The Company may issue all securities that are not prohibited by or under the law, with the exception of profit sharing certificates and similar securities, in accordance with the RREC Legislation. 3.9 Notification and disclosure of major shareholdings (Article 9 of the Articles of Association) The shares of the Company must be admitted to trading on a Belgian regulated market, in accordance with the RREC Legislation. According to article 18 of the law of 2 may 2007 on disclosure of major shareholdings in issuers whose shares are admitted to trading on a regulated market and laying down miscellaneous provisions and the thresholds provided for by law apply. Without prejudice to the exceptions provided by law, no one may participate in voting at the general meeting of the Company with more voting rights than those associated with the securities that he has given notice at least twenty (20) days prior to the date of the general meeting. The voting rights attached to the unreported securities are suspended. 3.10 Convening of general meetings (Article 19 of the Articles of Association) The general meeting is convened by the Board of Directors. The threshold from which one or more shareholders may require a convocation of a general meeting in order to submit one or more proposals, is set at 10% of the capital, in accordance with the Code of companies and associations. One or more shareholders who jointly hold at least 3% of the capital may, under the conditions laid down in the Code of companies and associations, also ask to add items to the agenda of general meetings and submit proposals for resolutions relating to items to include or to be included on the agenda. Convocations are drawn up and distributed in accordance with the applicable provisions of the Code of companies and associations. 3.11 Participation in the General Meeting (Article 20 of the Articles of Association) The right to participate in and vote at a general meeting is only granted on the basis of the accounting registration of the shares in the shareholder’s name by midnight (Belgian time) on the fourteenth day prior to the general meeting (hereinafter: the ‘registration date’), either by their entry in the company's share register, their entry in the accounts of a recognised account holder or settlement institution, regardless of the number of shares that the shareholder holds on the day of the general meeting. Owners of registered shares who wish to participate in the meeting must communicate their intention to the Company, or the person designated by the Company for this purpose, by means of the Company’s e-mail address or in the manner specified in the convocation, or, as the case may be, by sending a power of attorney, no later than the sixth day prior to the date of the meeting. Owners of dematerialised shares who wish to participate in the meeting must submit a certificate issued by a financial intermediary or a recognised account holder which indicates the number of dematerialised shares, registered in their accounts in the name of the shareholder on the registration date and for which the shareholder has indicated that he wishes to participate in the general meeting. They communicate the certificate to the Company or to the person designated by the Company for this purpose, as well as their wish to participate in the general meeting, via the e-mail address of the Company or in the manner specifically mentioned in the convocation, or, as the case may be, by sending a power of attorney, no later than the sixth day prior to the date of the general meeting. In cases where the convocation expressly so provides, the shareholders have the right to participate in a general meeting remotely by means of an electronic means of communication made available by the Company. This electronic means of communication must enable the shareholder 254 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 85 – Aedifica – Annual Financial Report 2021 to directly, simultaneously and continuously take note of the discussions during the meeting and to exercise the voting right on all matters on which the meeting is required to take a decision. If the convocation expressly so provides, this electronic means of communication will also enable the shareholder to participate in the deliberations and to exercise his or her right to ask questions. If the right to remotely participate in a general meeting is granted, either the convocation or a document consultable by the shareholder to which the convocation refers (such as the company's website) will also determine the manner(s) in which the company will verify and guarantee the capacity of shareholder and the identity of the person who wishes to participate in the meeting, as well as the manner(s) in which it will determine that a shareholder participates in the general meeting and will be considered present. In order to guarantee the security of the electronic means of communication, the convocation (or the document to which the convocation refers) may also set additional conditions. 3.12 Voting by proxy (Article 21 of the Articles of Association) Each owner of securities entitling him to participate in the meeting may be represented at the general meeting by a proxy holder who may or may not be a shareholder. The shareholder may only appoint one person as proxy holder for any specific general meeting, except for the derogations provided for in the Code of companies and associations. The Board of Directors draws up a proxy form. The proxy must be signed by the shareholder and must be communicated to the Company no later than the sixth day prior to the date of the meeting, by means of the Company’s e-mail address or via the e-mail address or in the manner specified in the convocation. If several persons hold rights in rem on the same share, the Company may suspend the exercise of the voting right attached to this share until a single person has been appointed to exercise the voting right. If a security has been given in usufruct, all rights attached to it, including the right to vote, the right to participate in capital increases and the right to request the conversion of shares (into registered/dematerialised shares), are exercised by the usufructuary(s) and the bare owner(s) jointly, unless otherwise stipulated in a will, deed of gift or other agreement. In the latter case, the bare owner(s) and/or the usufructuary(s) must inform the Company in writing of this arrangement. 3.13 Remote voting before the general meeting (Article 22 of the Articles of Association) To the extent that the Board of Directors has given permission to do so in the convocation letter, the shareholders are authorised to vote remotely prior to the general meeting by letter, via the Company’s website or in the manner specified in the convocation, by means of a form made available by the Company. The form must state the date and place of the meeting, the name or denomination of the shareholder and his/her place of residence or registered office, the number of votes with which the shareholder wishes to vote at the general meeting, the nature of the shares he owns, the items on the agenda of the meeting (including proposals for resolutions), a space allowing to vote in favour of or against any decision or to abstain, as well as the term within which the voting form must reach the Company. The form must explicitly state that it must be signed and it must reach the Company no later than the sixth day prior to the date of the meeting. The Board of Directors shall determine, where appropriate, the terms and conditions under which the capacity and identity of the shareholder shall be verified. 3.14 Bureau (Article 23 of the Articles of Association) All general meetings are chaired by the Chairman of the Board of Directors or, in his absence, by the director designated by the Directors present. The Chairman designates the Secretary. The meeting elects two vote tellers. The other Directors present complete the bureau. 3.15 Number of votes (Article 24 of the Articles of Association) Each share confers the right to one vote, subject to the suspension of the right to vote provided for by law. 3.16 Deliberation (Article 25 of the Articles of Association) No meeting can validly deliberate on items that do not appear on the agenda. The general meeting can validly deliberate and vote, regardless of the share of the capital that is present or represented, except in those cases for which the Code of companies and associations requires an attendance quorum. The general meeting can only validly deliberate on amendments to the Articles of Association if at least half of the capital is present or represented. If this condition is not met, a new meeting must be convened. The second meeting will validly deliberate and decide regardless of the share of the capital that is represented by the shareholders who are present or represented. Unless a statutory provision requires otherwise, all resolutions of the general meeting will be adopted by a simple majority of votes. Any amendment of the Articles of Association may only be approved with by at least three quarters of the votes cast or, in the case of an amendment of the object or aims of the Company, by four fifths of the votes cast, with abstentions neither in the numerator nor in the denominator being taken into account. – 255 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 85 – Aedifica – Annual Financial Report 2021 to directly, simultaneously and continuously take note of the discussions during the meeting and to exercise the voting right on all matters on which the meeting is required to take a decision. If the convocation expressly so provides, this electronic means of communication will also enable the shareholder to participate in the deliberations and to exercise his or her right to ask questions. If the right to remotely participate in a general meeting is granted, either the convocation or a document consultable by the shareholder to which the convocation refers (such as the company's website) will also determine the manner(s) in which the company will verify and guarantee the capacity of shareholder and the identity of the person who wishes to participate in the meeting, as well as the manner(s) in which it will determine that a shareholder participates in the general meeting and will be considered present. In order to guarantee the security of the electronic means of communication, the convocation (or the document to which the convocation refers) may also set additional conditions. 3.12 Voting by proxy (Article 21 of the Articles of Association) Each owner of securities entitling him to participate in the meeting may be represented at the general meeting by a proxy holder who may or may not be a shareholder. The shareholder may only appoint one person as proxy holder for any specific general meeting, except for the derogations provided for in the Code of companies and associations. The Board of Directors draws up a proxy form. The proxy must be signed by the shareholder and must be communicated to the Company no later than the sixth day prior to the date of the meeting, by means of the Company’s e-mail address or via the e-mail address or in the manner specified in the convocation. If several persons hold rights in rem on the same share, the Company may suspend the exercise of the voting right attached to this share until a single person has been appointed to exercise the voting right. If a security has been given in usufruct, all rights attached to it, including the right to vote, the right to participate in capital increases and the right to request the conversion of shares (into registered/dematerialised shares), are exercised by the usufructuary(s) and the bare owner(s) jointly, unless otherwise stipulated in a will, deed of gift or other agreement. In the latter case, the bare owner(s) and/or the usufructuary(s) must inform the Company in writing of this arrangement. 3.13 Remote voting before the general meeting (Article 22 of the Articles of Association) To the extent that the Board of Directors has given permission to do so in the convocation letter, the shareholders are authorised to vote remotely prior to the general meeting by letter, via the Company’s website or in the manner specified in the convocation, by means of a form made available by the Company. The form must state the date and place of the meeting, the name or denomination of the shareholder and his/her place of residence or registered office, the number of votes with which the shareholder wishes to vote at the general meeting, the nature of the shares he owns, the items on the agenda of the meeting (including proposals for resolutions), a space allowing to vote in favour of or against any decision or to abstain, as well as the term within which the voting form must reach the Company. The form must explicitly state that it must be signed and it must reach the Company no later than the sixth day prior to the date of the meeting. The Board of Directors shall determine, where appropriate, the terms and conditions under which the capacity and identity of the shareholder shall be verified. 3.14 Bureau (Article 23 of the Articles of Association) All general meetings are chaired by the Chairman of the Board of Directors or, in his absence, by the director designated by the Directors present. The Chairman designates the Secretary. The meeting elects two vote tellers. The other Directors present complete the bureau. 3.15 Number of votes (Article 24 of the Articles of Association) Each share confers the right to one vote, subject to the suspension of the right to vote provided for by law. 3.16 Deliberation (Article 25 of the Articles of Association) No meeting can validly deliberate on items that do not appear on the agenda. The general meeting can validly deliberate and vote, regardless of the share of the capital that is present or represented, except in those cases for which the Code of companies and associations requires an attendance quorum. The general meeting can only validly deliberate on amendments to the Articles of Association if at least half of the capital is present or represented. If this condition is not met, a new meeting must be convened. The second meeting will validly deliberate and decide regardless of the share of the capital that is represented by the shareholders who are present or represented. Unless a statutory provision requires otherwise, all resolutions of the general meeting will be adopted by a simple majority of votes. Any amendment of the Articles of Association may only be approved with by at least three quarters of the votes cast or, in the case of an amendment of the object or aims of the Company, by four fifths of the votes cast, with abstentions neither in the numerator nor in the denominator being taken into account. Aedifica – Annual Financial Report 2021 – 86 Voting takes place by a show of hands or roll call, unless the general meeting decides otherwise by means of a simple majority of the votes cast. Any draft of the amendment of the Articles of Association must be submitted in advance to the Financial Services and Markets Authority.An attendance list containing the names of the shareholders and the number of shares is signed by each or on behalf of them. 3.17 Minutes (Article 26 of the Articles of Association) The minutes of the general meeting are signed by the members of the bureau and by the shareholders who request it. Copies of the minutes of the general meeting intended for third parties are signed by one or more Directors. 3.18 General meeting of bondholders (Article 27 of the Articles of Association) The provisions of this article apply only to bonds in so far as the conditions of issue of the bonds do not deviate therefrom. The Board of Directors and the statutory auditor(s) of the Company may convene the bond holders at the general meeting of the bond holders. They must also convene the general meeting at the request of bondholders representing one-fifth of the amount of the bonds in circulation. The convocation contains the agenda and is drawn up in accordance with the provisions of the Code of companies and associations. In order to be admitted to the general meeting of bondholders, bondholders must comply with the formalities laid down in the Code of companies and associations, as well as any formalities laid down in the conditions of issue of the bonds or in the convocations. 3.19 Distribution (Article 29 of the Articles of Association) Within the limits set out by the Code of companies and associations and the RECC legislation, the company distributes a dividend to its shareholders, the minimum amount of which is determined in accordance with the RREC Legislation. 3.20 Interim dividends (Article 30 of the Articles of Association) The Board of Directors may adopt a resolution, under its responsibility, to distribute interim dividends, in such cases and within such periods as permitted by the Code of companies and associations. 3.21 Dissolution - Liquidation ARTICLE 31 - LOSS OF CAPITAL When as a result of losses sustained, the net assets have fallen below one-half or below one-quarter of the capital, the management body must convene a general meeting within two months of the date on which the losses are identified or should have been identified according to legal or statutory provisions to decide on the dissolution of the Company or on recovery measures included in the agenda to safeguard the continuity of the Company. ARTICLE 32 - APPOINTMENT OF LIQUIDATORS The Company may at any time be dissolved by a resolution of the general meeting, which deliberates in the manner required by law, or it may be dissolved in the cases provided for by law. In case of dissolution with liquidation, one or more liquidators are appointed by the general meeting. ARTICLE 33 – DISTRIBUTION UPON LIQUIDATION Upon liquidation, the distribution to the shareholders will only take place after the meeting to close the liquidation. The Company’s net assets, after settlement of all debts or consignment of the sums required for this purpose, are first used to refund the paid- up capital, and any balance will be distributed equally among all shareholders in proportion to their shareholding. 256 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 87 – Aedifica – Annual Financial Report 2021 3.22 Statutory provisions on the members of administrative, management and supervisory bodies The provisions on the members of administrative, management and supervisory bodies contained in the Articles of Association are presented below. For further information, please refer to the Corporate Governance charter (available at www.aedifica.eu) and the ‘Corporate Governance Statement’, included in this Annual Financial Report. ARTICLE 10 - COMPOSITION OF THE BOARD OF DIRECTORS The Board of Directors consists of at least five members who are appointed for a maximum term of three years by the general meeting of shareholders. The general meeting may terminate the term of any member of the Board of Directors with immediate effect and without giving reasons. The Directors are eligible for re-election. The Board of Directors shall have at least three independent members in accordance with applicable legal provisions. Unless the appointment decisions of the general meeting provide otherwise, the Directors’ term shall run from the general meeting at which they are appointed until the ordinary general meeting in the financial year in which the term of their mandate expires according to the appointment decision, even if this would exceed the maximum term of three years provided in the Articles of Association. The general meeting may not, at the time of the revocation of the mandate, set a date as the end date of the mandate other than the date on which the decision was taken, nor grant severance pay. If one or more mandates become vacant, the remaining Directors, convening as a board, may provide for temporary replacement(s) until the next general meeting. The next general meeting has to confirm or not the mandate of the co-opted member of the Board of Directors. The Directors shall be natural persons only. They must possess the professional reliability and the appropriate competence which is required for the performance of their duties and they should not fall within the scope of the prohibitions laid down in the RREC Legislation. Their appointment is subject to the prior approval of the Financial Services and Markets Authority. The possible remuneration of the Directors may not be determined on the basis of the activities and transactions carried out by the Company or its perimeter companies. The Board of Directors may appoint one or more observers to attend all or part of its meetings, according to the modalities to be determined by the Board of Directors. ARTICLE 11 - CHAIRMANSHIP – DELIBERATIONS OF THE BOARD OF DIRECTORS The Board of Directors meets after convocation at the place indicated in this convocation or, as the case may be, by video conference, telephone or internet conference, as often as the interests of the Company so require. The Board of Directors must also be convened when two members make a request to that effect. The Board of Directors chooses a Chairman from among its members. Meetings shall be chaired by the Chairman or, in his/her absence, by the longest serving member, and in the event of equal seniority, by the member with the highest age. The Board of Directors can only validly deliberate and pass resolutions if the majority of its members are present or represented. Convocations are sent out by electronic mail or, in the absence of an e-mail address communicated to the Company, by ordinary letter or by any other means of communication, in accordance with the applicable legal provisions. Any Director who is unable to attend or absent may, by letter, e-mail or any other means of communication, delegate another director to represent him/her at a particular meeting of the Board of Directors and to vote in his/her place. However, a member of the Board of Directors may not represent more than one of his/her colleagues. Resolutions of the Board of Directors are adopted by a majority of votes. The resolutions of the Board of Directors are recorded in the minutes and the minutes are kept in a special register for that purpose at the Company’s registered office and signed by the Chairman of Board of Directors and by the Directors who request it. The proxies are attached to the minutes. Copies of these minutes intended for third parties shall be signed by one or more Directors. The resolutions of the Board of Directors may be adopted by means of unanimous written consent of the Directors. ARTICLE 12 - POWERS OF THE BOARD OF DIRECTORS The Board of Directors has the most extensive powers to carry out all acts that are necessary or useful for the realisation of the object of the Company, with the exception of the acts for which, according to the law or the Articles of Association, the general meeting is competent. The Board of Directors may delegate the daily management of the Company and the representation of the Company with regard to such management to one or more persons who do not necessarily have to be directors and, as the case may be, each act alone, jointly or as a collegiate body. The Board of Directors may delegate to each proxyholder all special powers, within the limits set by the applicable legal provisions. The Board may, in accordance with the RREC Legislation, determine the remuneration of those to whom special powers have been delegated. ARTICLE 13 - INTERNAL RULES The Board of Directors may issue internal rules. – 257 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 87 – Aedifica – Annual Financial Report 2021 3.22 Statutory provisions on the members of administrative, management and supervisory bodies The provisions on the members of administrative, management and supervisory bodies contained in the Articles of Association are presented below. For further information, please refer to the Corporate Governance charter (available at www.aedifica.eu) and the ‘Corporate Governance Statement’, included in this Annual Financial Report. ARTICLE 10 - COMPOSITION OF THE BOARD OF DIRECTORS The Board of Directors consists of at least five members who are appointed for a maximum term of three years by the general meeting of shareholders. The general meeting may terminate the term of any member of the Board of Directors with immediate effect and without giving reasons. The Directors are eligible for re-election. The Board of Directors shall have at least three independent members in accordance with applicable legal provisions. Unless the appointment decisions of the general meeting provide otherwise, the Directors’ term shall run from the general meeting at which they are appointed until the ordinary general meeting in the financial year in which the term of their mandate expires according to the appointment decision, even if this would exceed the maximum term of three years provided in the Articles of Association. The general meeting may not, at the time of the revocation of the mandate, set a date as the end date of the mandate other than the date on which the decision was taken, nor grant severance pay. If one or more mandates become vacant, the remaining Directors, convening as a board, may provide for temporary replacement(s) until the next general meeting. The next general meeting has to confirm or not the mandate of the co-opted member of the Board of Directors. The Directors shall be natural persons only. They must possess the professional reliability and the appropriate competence which is required for the performance of their duties and they should not fall within the scope of the prohibitions laid down in the RREC Legislation. Their appointment is subject to the prior approval of the Financial Services and Markets Authority. The possible remuneration of the Directors may not be determined on the basis of the activities and transactions carried out by the Company or its perimeter companies. The Board of Directors may appoint one or more observers to attend all or part of its meetings, according to the modalities to be determined by the Board of Directors. ARTICLE 11 - CHAIRMANSHIP – DELIBERATIONS OF THE BOARD OF DIRECTORS The Board of Directors meets after convocation at the place indicated in this convocation or, as the case may be, by video conference, telephone or internet conference, as often as the interests of the Company so require. The Board of Directors must also be convened when two members make a request to that effect. The Board of Directors chooses a Chairman from among its members. Meetings shall be chaired by the Chairman or, in his/her absence, by the longest serving member, and in the event of equal seniority, by the member with the highest age. The Board of Directors can only validly deliberate and pass resolutions if the majority of its members are present or represented. Convocations are sent out by electronic mail or, in the absence of an e-mail address communicated to the Company, by ordinary letter or by any other means of communication, in accordance with the applicable legal provisions. Any Director who is unable to attend or absent may, by letter, e-mail or any other means of communication, delegate another director to represent him/her at a particular meeting of the Board of Directors and to vote in his/her place. However, a member of the Board of Directors may not represent more than one of his/her colleagues. Resolutions of the Board of Directors are adopted by a majority of votes. The resolutions of the Board of Directors are recorded in the minutes and the minutes are kept in a special register for that purpose at the Company’s registered office and signed by the Chairman of Board of Directors and by the Directors who request it. The proxies are attached to the minutes. Copies of these minutes intended for third parties shall be signed by one or more Directors. The resolutions of the Board of Directors may be adopted by means of unanimous written consent of the Directors. ARTICLE 12 - POWERS OF THE BOARD OF DIRECTORS The Board of Directors has the most extensive powers to carry out all acts that are necessary or useful for the realisation of the object of the Company, with the exception of the acts for which, according to the law or the Articles of Association, the general meeting is competent. The Board of Directors may delegate the daily management of the Company and the representation of the Company with regard to such management to one or more persons who do not necessarily have to be directors and, as the case may be, each act alone, jointly or as a collegiate body. The Board of Directors may delegate to each proxyholder all special powers, within the limits set by the applicable legal provisions. The Board may, in accordance with the RREC Legislation, determine the remuneration of those to whom special powers have been delegated. ARTICLE 13 - INTERNAL RULES The Board of Directors may issue internal rules. Aedifica – Annual Financial Report 2021 – 88 ARTICLE 14 - EFFECTIVE MANAGEMENT The effective management of the Company is entrusted to at least two natural persons. They must possess the professional reliability and the appropriate competence which is required for the performance of their duties and they should not fall within the scope of the prohibitions laid down in the RREC Legislation. Their appointment is subject to the prior approval of the Financial Services and Markets Authority. ARTICLE 15 – ADVISORY COMMITTEES The Board of Directors may establish an audit committee, a nomination and remuneration committee, and determines the composition, their duties and powers, taking into account the applicable regulations. In addition, the Board of Directors may, under its responsibility, establish one or more advising committees, of which it determines the composition and the duties. ARTICLE 16 - REPRESENTATION OF THE COMPANY - SIGNATURE OF INSTRUMENTS The Company is validly represented in all its acts, including those to which a public or ministry official cooperates, as well as in legal proceedings, as plaintiff, as defendant or otherwise, by two directors acting jointly or within the limits of the daily management, either by the person to whom the daily management is entrusted, acting alone within the limits of this daily management, either by two of the persons to whom the daily management is entrusted, acting jointly within the limits of this daily management. The Company is also validly represented by special representatives of the Company within the limits of the power of attorney. ARTICLE 17 - AUDIT The audit of the company is entrusted to one or more statutory auditors who are accredited by the Financial Services and Markets Authority. They perform the duties that are assigned to them under the Code for companies and associations and the RREC Legislation. 3.23 General provisions ARTICLE 34 - ELECTION OF DOMICILE For the implementation of the Articles of Association, each shareholder, holder of subscription rights and bondholder who is domiciled abroad, and each director, each delegate to the daily management, each statutory auditor and liquidator must elect domicile in Belgium. If no election is made, he/she will be deemed to have chosen his/her domicile at the registered office of the Company, where all communications, demands, summonses and notifications can be validly served. The holders of registered shares, subscription rights or bonds must notify the Company of any change of residence or e-mail address. Failing to do so, all communications, convocations or official notifications shall be validly served at the last known place of residence or e-mail address. ARTICLE 35 - JURISDICTION OF COURTS For all disputes among the Company, its shareholders, holders of subscription rights, bondholders, directors, delegates to the daily management, statutory auditors and liquidators relating to the Company’s affairs and the implementation of these Articles of Association, exclusive jurisdiction is granted to the courts of the Company’s registered office unless expressly waived by the Company. ARTICLE 36 - ORDINARY LAW The Company is moreover governed by the Code of companies and associations, the RREC Legislation, as well as all other regulatory provisions that apply to it. Provisions that are inconsistent with the mandatory legal provisions will be regarded as null and void. The invalidity of one article, or part of an article, of these Articles of Association will not affect the validity of any of the other (parts of) articles. 258 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 89 – Aedifica – Annual Financial Report 2021 4. RREC 4.1 General definition Aedifica is a limited liability Company (‘NV/SA’) having opted for a public Regulated Real Estate Company (RREC) status. A Regulated Real Estate Company (RREC) is: - set up in the form of a limited liability Company (‘NV/SA’) or limited partnership by shares (‘CommVA/ SCA’); - set up on the basis of the RREC legislation (Law of 12 May 2014 and Royal Decree of 13 July 2014); - quoted on the stock exchange, where at least 30% of shares are traded on the market; - a Company of which the sole purpose is: (a) to make immovable property available to users, directly or through a company in which it holds a participation in accordance with the provisions of the RREC Legislation; and (b) within the limits set out in the RREC Legislation, to possess real estate as specified in the RREC Act. The notion real estate is to be understood as ‘real estate’ within the meaning of the RREC Legislation; (c) to conclude with a public client or to accede to, in the long term directly or through a company in which it holds a participation in accordance with the provisions of the RREC Legislation, where applicable in cooperation with third parties, one or more: - (i) DBF-agreements, the so-called ‘Design, Build, Finance’ agreements; - (ii) DB(F)M-agreements, the so-called ‘Design, Build, (Finance) and Maintain’ agreements; - (iii) DBF(M)O-agreements, the so-called ‘Design, Build, Finance, (Maintain) and Operate’ agreements; and/or - (iv) public works concession agreements with respect to buildings and/or other infrastructure of an immovable nature and related services, and on the basis of which: - (i) it is responsible for ensuring the availability, maintenance and/or exploitation for a public entity and/or the citizen as end user, in order to fulfil a social need and/or to enable the provision of a public service; and - (ii) it may bear, in whole or in part, the related financing, availability, demand and/or operational risk, in addition to any potential building risk, without therefore necessarily having any rights in rem; and (d) to develop, cause to develop, establish, cause to establish, manage, allow to manage, operate, allow to operate or make available, in the long term directly or through a company in which it holds a participation in accordance with the provisions of the RREC legislation, where applicable in cooperation with third parties: - (i) public utilities and warehouses for transport, distribution or storage of electricity, gas, fossil or non-fossil fuel and energy in general and associated goods; - (ii) utilities for transport, distribution, storage or purification of water and associated goods; - (iii) installations for the generation, storage and transport of renewable or non-renewable energy and associated goods; or - (iv) waste and incineration plants and associated goods. RRECs are regulated by the Financial Services and Markets Authority (FSMA) and have to follow extremely strict rules governing conflicts of interest. Until 17 October 2014, ‘REIT’ or ‘Belgian REIT’ referred to the status legally known in Belgium as ‘sicafi’ (French) or ‘vastgoedbevak’ (Dutch). As from 17 October 2014, ‘REIT’, ‘Belgian REIT’ or ‘RREC’ refers to ‘société immobilière réglementée’ (SIR, in French) or ‘gereglementeerde vastgoedvennootschap’ (GVV, in Dutch), also translated as ‘regulated real estate Company’ (RREC). 4.2 Particular regulations Real estate property A public RREC may invest a maximum of 20% of its consolidated assets in real estate properties which form a single real estate complex. The FSMA can give an exemption under certain circumstances. Accounting European legislation specifies that RRECs, along with all listed companies, must prepare their consolidated annual accounts in accordance with the IAS/IFRS international standards. This also applies to the statutory accounts (under IFRS). Given that investment properties constitute their main assets, RRECs must pay particular attention to appraising the fair value of their properties (i.e., applying IAS 40). Valuation Real estate properties are assessed at their fair value on a quarterly basis by independent valuation experts and recorded in the balance sheet at this value. Depreciation is not recognised on investment properties. – 259 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 89 – Aedifica – Annual Financial Report 2021 4. RREC 4.1 General definition Aedifica is a limited liability Company (‘NV/SA’) having opted for a public Regulated Real Estate Company (RREC) status. A Regulated Real Estate Company (RREC) is: - set up in the form of a limited liability Company (‘NV/SA’) or limited partnership by shares (‘CommVA/ SCA’); - set up on the basis of the RREC legislation (Law of 12 May 2014 and Royal Decree of 13 July 2014); - quoted on the stock exchange, where at least 30% of shares are traded on the market; - a Company of which the sole purpose is: (a) to make immovable property available to users, directly or through a company in which it holds a participation in accordance with the provisions of the RREC Legislation; and (b) within the limits set out in the RREC Legislation, to possess real estate as specified in the RREC Act. The notion real estate is to be understood as ‘real estate’ within the meaning of the RREC Legislation; (c) to conclude with a public client or to accede to, in the long term directly or through a company in which it holds a participation in accordance with the provisions of the RREC Legislation, where applicable in cooperation with third parties, one or more: - (i) DBF-agreements, the so-called ‘Design, Build, Finance’ agreements; - (ii) DB(F)M-agreements, the so-called ‘Design, Build, (Finance) and Maintain’ agreements; - (iii) DBF(M)O-agreements, the so-called ‘Design, Build, Finance, (Maintain) and Operate’ agreements; and/or - (iv) public works concession agreements with respect to buildings and/or other infrastructure of an immovable nature and related services, and on the basis of which: - (i) it is responsible for ensuring the availability, maintenance and/or exploitation for a public entity and/or the citizen as end user, in order to fulfil a social need and/or to enable the provision of a public service; and - (ii) it may bear, in whole or in part, the related financing, availability, demand and/or operational risk, in addition to any potential building risk, without therefore necessarily having any rights in rem; and (d) to develop, cause to develop, establish, cause to establish, manage, allow to manage, operate, allow to operate or make available, in the long term directly or through a company in which it holds a participation in accordance with the provisions of the RREC legislation, where applicable in cooperation with third parties: - (i) public utilities and warehouses for transport, distribution or storage of electricity, gas, fossil or non-fossil fuel and energy in general and associated goods; - (ii) utilities for transport, distribution, storage or purification of water and associated goods; - (iii) installations for the generation, storage and transport of renewable or non-renewable energy and associated goods; or - (iv) waste and incineration plants and associated goods. RRECs are regulated by the Financial Services and Markets Authority (FSMA) and have to follow extremely strict rules governing conflicts of interest. Until 17 October 2014, ‘REIT’ or ‘Belgian REIT’ referred to the status legally known in Belgium as ‘sicafi’ (French) or ‘vastgoedbevak’ (Dutch). As from 17 October 2014, ‘REIT’, ‘Belgian REIT’ or ‘RREC’ refers to ‘société immobilière réglementée’ (SIR, in French) or ‘gereglementeerde vastgoedvennootschap’ (GVV, in Dutch), also translated as ‘regulated real estate Company’ (RREC). 4.2 Particular regulations Real estate property A public RREC may invest a maximum of 20% of its consolidated assets in real estate properties which form a single real estate complex. The FSMA can give an exemption under certain circumstances. Accounting European legislation specifies that RRECs, along with all listed companies, must prepare their consolidated annual accounts in accordance with the IAS/IFRS international standards. This also applies to the statutory accounts (under IFRS). Given that investment properties constitute their main assets, RRECs must pay particular attention to appraising the fair value of their properties (i.e., applying IAS 40). Valuation Real estate properties are assessed at their fair value on a quarterly basis by independent valuation experts and recorded in the balance sheet at this value. Depreciation is not recognised on investment properties. Aedifica – Annual Financial Report 2021 – 90 Profit or loss As return on capital, the Company is required to distribute a sum corresponding to at least the positive difference between the following amounts: - 80% minimum of the amount equal to the sum of the adjusted result and of the net capital gains on the realisation of properties that are not exempt from mandatory distribution; and - and the net decrease in the debt of the public RREC during the financial year. Debt The debt-to-assets ratio of the public RREC and its subsidiaries, and the statutory debt-to-assets ratio of public RRECs, may not exceed 65% (other than by the change in the fair value of assets) of total consolidated or statutory assets, after deduction of authorised hedging instruments. When exceeding the threshold of 50%, a financial plan with an implementation schedule must be elaborated, describing the measures taken to prevent the consolidated debt-to-assets ratio from exceeding the threshold of 65%. Financing A RREC may not provide financing, except to its subsidiaries. Fiscal status A RREC is not subject to corporate tax (except on non-recoverable expenses and abnormal or benevolent benefits), provided that at least 80% of corrected profit is distributed in the form of dividends. Refer to section 4 of chapter ‘Risks factors’ of this Annual Financial Report. Companies – other than RRECs or specialised real estate investment funds – which were, or are, absorbed by the Company, owe an exit tax on their unrealised capital gains and exempted reserves. When real estate is acquired through a merger in which the Company acquires a normally taxed real estate company, an exit tax is owed on the deferred capital gains and tax-exempt reserves of the real estate company (taxable merger). For transactions as from 1 January 2020, the exit tax rate amounts to 15%. The additional crisis contribution is eliminated as from the 2021 tax year. For corporate restructurings, the tax year is equal to the calendar year in which the transaction takes place. Tax year Exit tax 2018 12.875% (12.5% + 3% of additional crisis contribution) 2019 12.75% (12.5% + 2% of additional crisis contribution) 2020 15.3% (15% + 2% of additional crisis contribution) 2021 15% (without additional crisis contribution) The withholding tax on dividends distributed by Aedifica amounts to 15%. Pursuant to Articles 89, 90 and 91 of the Act of 18 December 2016, RRECs benefit from a reduced withholding tax rate of 15% (instead of 30%), provided that at least 80% of the Company’s real estate portfolio is (directly or indirectly) invested in real estate properties which are situated in a member state of the European Economic Area and which are exclusively or primarily destined for care and housing units suited for healthcare. Aedifica's shareholders benefit from this reduced rate as more than 80% of the Company's portfolio is invested in senior housing. Belgian RRECs (SIR/GVV) are investment instruments which can be compared to the Dutch FBI (Fiscale BeleggingsInstellingen), the French SIIC (Société d’Investissement Cotée en Immobilier) and the REIT (Real Estate Investment Trust) which exist in a number of countries, including the United States. 260 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 91 – Aedifica – Annual Financial Report 2021 3. Statements Persons responsible (Royal Decree 14 November 2007) Mr Serge Wibaut, Chair of the Board of Directors of Aedifica NV/SA, and Mr Stefaan Gielens, CEO of Aedifica NV/SA, declare for and on behalf of Aedifica NV/SA, that to the best of their knowledge: - the financial statements, prepared in accordance with the applicable accounting standards, give an accurate picture of the assets, financial situation and results of Aedifica NV/SA and the businesses included in the consolidation; - the Annual Financial Report contains an accurate account of the development of the business, results and situation of Aedifica NV/SA and businesses included in the consolidation, and a description of the main risks and uncertainties they face. Information from third parties Aedifica NV/SA declares that the information provided by the valuation experts and by the accredited statutory auditor have been faithfully reproduced and included with their consent. As far as Aedifica NV/SA knows and is able to assure, in the light of data published by these third parties, no facts have been omitted that might render the information reproduced incorrect or misleading. Forecast information This report contains forecast information. This information is based on Company’s estimates and projections and is, by its nature, subject to risks, uncertainties and other factors. Consequently, the results, financial situation, performance and figures, expressed or implicitly communicated, may differ substantially from those mentioned or suggested by the forecast information. Taking into account these uncertain factors, statements regarding future developments cannot be interpreted as a guarantee in any way. Proceedings and arbitration procedures The Board of Directors of Aedifica NV/SA declares that there exists no government intervention, proceeding or arbitration procedure that may have a significant influence, or may have had such an influence in the recent past, on the financial position or profitability of Aedifica NV/SA and that, as far as is known, there are no situations or facts that could give rise to such government intervention, proceeding or arbitration procedure. Declaration concerning the Directors and the members of the Executive Committee The Board of Directors declares that, to the best of its knowledge: - none of the Directors and none of the members of the Executive Committee has ever been convicted for a fraud-related offence, that no official and/or public accusation has been expressed against one of them by statutory or regulatory authorities (including designated professional bodies) for at least the previous five years; - none of the Directors and none of the members of the Executive Committee has ever been disqualified by a court from acting as a member of the administrative, management or supervisory bodies of an issuer or from acting in the management or conduct of the affairs of any issuer for at least the previous five years; - none of the Directors and none of the members of the Executive Committee has been involved in any bankruptcies, receiverships or liquidations for at least the previous five years, with the exception of the following: - Ms Ingrid Daerden was director and manager of JIND BV/SP. This company was voluntarily dissolved and liquidated on 2 July 2020; - no employment contract has been concluded with the Non-Executive Directors, which provides for the payment of indemnities upon termination of the employment contract. However, there exists a (management) agreement between the Company and the Executive Directors and members of the Executive Committee providing for such indemnities; - no option on the Company’s shares has been given to date; - no family ties exist between the Directors and/or members of the Executive Committee; - the following Directors and members of the Executive Committee hold shares of the Company: Mr Serge Wibaut (200 shares), Mr Stefaan Gielens (14,701 shares), Mr Sven Bogaerts (3,936 shares), Ms Ingrid Daerden (3,532 shares), Mr Jean Franken (1,200 shares), Mr Pertti Huuskonen (660 shares), Ms Katrien Kesteloot (71 shares), Ms Elisabeth May-Roberti (216 shares), Mr Luc Plasman (381 shares), Mr Raoul Thomassen (1,046 shares), Mr Charles-Antoine van Aelst (3,839 shares) and Ms Marleen Willekens (37 shares). – 261 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 91 – Aedifica – Annual Financial Report 2021 3. Statements Persons responsible (Royal Decree 14 November 2007) Mr Serge Wibaut, Chair of the Board of Directors of Aedifica NV/SA, and Mr Stefaan Gielens, CEO of Aedifica NV/SA, declare for and on behalf of Aedifica NV/SA, that to the best of their knowledge: - the financial statements, prepared in accordance with the applicable accounting standards, give an accurate picture of the assets, financial situation and results of Aedifica NV/SA and the businesses included in the consolidation; - the Annual Financial Report contains an accurate account of the development of the business, results and situation of Aedifica NV/SA and businesses included in the consolidation, and a description of the main risks and uncertainties they face. Information from third parties Aedifica NV/SA declares that the information provided by the valuation experts and by the accredited statutory auditor have been faithfully reproduced and included with their consent. As far as Aedifica NV/SA knows and is able to assure, in the light of data published by these third parties, no facts have been omitted that might render the information reproduced incorrect or misleading. Forecast information This report contains forecast information. This information is based on Company’s estimates and projections and is, by its nature, subject to risks, uncertainties and other factors. Consequently, the results, financial situation, performance and figures, expressed or implicitly communicated, may differ substantially from those mentioned or suggested by the forecast information. Taking into account these uncertain factors, statements regarding future developments cannot be interpreted as a guarantee in any way. Proceedings and arbitration procedures The Board of Directors of Aedifica NV/SA declares that there exists no government intervention, proceeding or arbitration procedure that may have a significant influence, or may have had such an influence in the recent past, on the financial position or profitability of Aedifica NV/SA and that, as far as is known, there are no situations or facts that could give rise to such government intervention, proceeding or arbitration procedure. Declaration concerning the Directors and the members of the Executive Committee The Board of Directors declares that, to the best of its knowledge: - none of the Directors and none of the members of the Executive Committee has ever been convicted for a fraud-related offence, that no official and/or public accusation has been expressed against one of them by statutory or regulatory authorities (including designated professional bodies) for at least the previous five years; - none of the Directors and none of the members of the Executive Committee has ever been disqualified by a court from acting as a member of the administrative, management or supervisory bodies of an issuer or from acting in the management or conduct of the affairs of any issuer for at least the previous five years; - none of the Directors and none of the members of the Executive Committee has been involved in any bankruptcies, receiverships or liquidations for at least the previous five years, with the exception of the following: - Ms Ingrid Daerden was director and manager of JIND BV/SP. This company was voluntarily dissolved and liquidated on 2 July 2020; - no employment contract has been concluded with the Non-Executive Directors, which provides for the payment of indemnities upon termination of the employment contract. However, there exists a (management) agreement between the Company and the Executive Directors and members of the Executive Committee providing for such indemnities; - no option on the Company’s shares has been given to date; - no family ties exist between the Directors and/or members of the Executive Committee; - the following Directors and members of the Executive Committee hold shares of the Company: Mr Serge Wibaut (200 shares), Mr Stefaan Gielens (14,701 shares), Mr Sven Bogaerts (3,936 shares), Ms Ingrid Daerden (3,532 shares), Mr Jean Franken (1,200 shares), Mr Pertti Huuskonen (660 shares), Ms Katrien Kesteloot (71 shares), Ms Elisabeth May-Roberti (216 shares), Mr Luc Plasman (381 shares), Mr Raoul Thomassen (1,046 shares), Mr Charles-Antoine van Aelst (3,839 shares) and Ms Marleen Willekens (37 shares). Aedifica – Annual Financial Report 2021 – 92 4. Glossary 1. Definitions Acquisition value The acquisition value is the agreed value between parties on the basis of which the transaction is performed. If the acquisition of a building takes place by cash payment, through the acquisition of shares of a real estate Company, through the non-monetary contribution of a building against the issue of new shares, by merger through takeover of a property, or by a partial de-merger, the deed costs, audit and consultancy costs, reinvestment bank fees and costs of lifting security on the financing of the absorbed Company and other costs of the merger are also considered as part of the acquisition cost and capitalised in the asset accounts on the balance sheet. Alternative performance measures (APM) Since many years, Aedifica uses in its financial communication Alternative Performance Measures according to the guidelines issued by the ESMA on 5 October 2015. Some of these APM are recommended by the European Public Real Estate Association (EPRA) and others have been defined by the industry or by Aedifica in order to provide readers with a better understanding of its results and performance. The APM used in this annual financial report are identified with an asterisk (). The performance measures which are defined by IFRS standards or by Law are not considered as APM, neither are those which are not based on the consolidated income statement or the balance sheet. The APM are defined, annotated and connected with the most relevant line, total or subtotal of the financial statements, in the notes of the financial statements or in EPRA chapter. Closed period Period during which any officer or any person covered on the lists established by the Company in accordance with Article 6.5 of the Corporate Governance Charter, as well as any person who is closely related to them, may not carry out any trading of Aedifica shares. Closed periods are shown in the corporate governance statement. Contractual rents Indexed rents, including rental guarantees, but excluding cost of rent-free periods for occupied surface area. Debt-to-assets ratio The Royal Decree of 13 July 2014 regarding RRECs defines the debt-to-assets ratio as follows: ‘Total liabilities’ in balance sheet - I. Non-current liabilities – A. Provisions - I. Non-current liabilities – C. Other non-current financial liabilities - Hedges - I. Non-current liabilities – F. Deferred taxes liabilities - II. Current liabilities – A. Provisions - II. Current liabilities – C. Other current financial liabilities - Hedges - II. Current liabilities – Accrued charges and deferred income as provided in the annexes of the Royal Decree of 13 July 2014 on RRECs. / Total assets less authorised hedging instruments ≤ 65% Double net Type of contract under which the repair and maintenance of the roof, structure and facades of the building remain the responsibility of the owner while other costs and risks are borne by the operator. This type of contract is common for senior housing in Germany. EBIT margin Operating result before result on portfolio divided by net rental income. EPRA European Public Real Estate Association is an association, founded in 1999 in order to promote, develop and regroup listed European real estate companies. EPRA establishes standards of conduct in accounting, reporting and corporate governance matters, and harmonises these rules to different countries in order to provide quality and comparable information to investors. EPRA has created indices that serve as benchmarks for the real estate sector. All this information is available on the website www.epra.com. 262 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 93 – Aedifica – Annual Financial Report 2021 EPRA Earnings Aedifica uses EPRA Earnings to comply with the EPRA’s recommendations and to measure its operational and financial performance; however, this performance measure is not defined under IFRS. It represents the profit (attributable to owners of the Parent) after corrections recommended by the EPRA. In Aedifica’s case, the EPRA Earnings corresponds perfectly to the result excl. changes in fair value, which was previously used in Aedifica’s financial communication. The EPRA Earnings is calculated in Note 19 (in accordance with the Aedifica model) and in the EPRA chapter of the Annual Financial Report (in accordance with the model recommended by EPRA). Estimated rental value (ERV) The estimated rental value (ERV) is the rental value as determined by independent valuation experts. Exit tax Companies applying for approved RREC status, or which merge with a RREC, are subject to an exit tax. This tax is similar to a liquidation tax on net unrealised gains and on tax-exempt reserves. See section 5.2 of the Standing Documents for more information on the current exit tax rates. Fair value The fair value of the Belgian investment properties is calculated as following: - Buildings with an investment value over €2.5 million: Fair value = investment value / (1+ average transaction cost rate defined by the BE-REIT Association) - Buildings with an investment value under €2.5 million: 1. when the expert considers a building can be sold in units, the fair value is defined as the lowest value between the investment value in units / (1 + % transfer taxes depending on the region where they are located) and the investment value / (1 + average transaction cost rate defined by the BE-REIT Association); 2. when the expert considers a building cannot be sold in units, the fair value is the investment value / (1 + % transfer taxes depending on the region where they are located). The average transaction cost rate defined by the BE-REIT Association is reviewed annually and adjusted as necessary in 0.5% increments. The Belgian experts attest the deduction percentage retained in their periodic reports. The fair value of investment properties located abroad take into account locally applicable legal costs. Free float Percentage of shares held by the public, according to the Euronext definition. Gross dividend yield Gross dividend per share divided by the stock market price as of closure. Gross yield of the portfolio For the total portfolio: (contractual rents + guaranteed income) / investment value, acquisition value or fair value of the concerned buildings. IFRS The international accounting standards (IFRS, or International Financial Reporting Standards, previously called IAS, or International Accounting Standards) are drawn up by the International Accounting Standards Board (IASB). European listed companies have been obliged to apply these standards in their consolidated accounts since the financial year commencing on or after 1 January 2005. Since 2007, RRECs have also been required to apply IFRS in their statutory accounts. Inside information Inside information about Aedifica is any information: - which has not been made public; - which is accurate, i.e. refers to an existing situation or a situation which can reasonably be expected to exist or an event which has occurred or which can reasonably be expected to occur, and which is sufficiently accurate to draw a conclusion on the possible effect of this situation or event on the price of Aedifica's financial instruments or financial derivatives; - directly or indirectly related to Aedifica; - and which, if made public, could affect the price of Aedifica's financial instruments or derivative financial instruments, information being considered price-sensitive for the financial instruments or derivative financial instruments if a reasonable investor could use this information as one of the reasons for his investment decision. – 263 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 93 – Aedifica – Annual Financial Report 2021 EPRA Earnings Aedifica uses EPRA Earnings to comply with the EPRA’s recommendations and to measure its operational and financial performance; however, this performance measure is not defined under IFRS. It represents the profit (attributable to owners of the Parent) after corrections recommended by the EPRA. In Aedifica’s case, the EPRA Earnings corresponds perfectly to the result excl. changes in fair value, which was previously used in Aedifica’s financial communication. The EPRA Earnings* is calculated in Note 19 (in accordance with the Aedifica model) and in the EPRA chapter of the Annual Financial Report (in accordance with the model recommended by EPRA). Estimated rental value (ERV) The estimated rental value (ERV) is the rental value as determined by independent valuation experts. Exit tax Companies applying for approved RREC status, or which merge with a RREC, are subject to an exit tax. This tax is similar to a liquidation tax on net unrealised gains and on tax-exempt reserves. See section 5.2 of the Standing Documents for more information on the current exit tax rates. Fair value The fair value of the Belgian investment properties is calculated as following: - Buildings with an investment value over €2.5 million: Fair value = investment value / (1+ average transaction cost rate defined by the BE-REIT Association) - Buildings with an investment value under €2.5 million: 1. when the expert considers a building can be sold in units, the fair value is defined as the lowest value between the investment value in units / (1 + % transfer taxes depending on the region where they are located) and the investment value / (1 + average transaction cost rate defined by the BE-REIT Association); 2. when the expert considers a building cannot be sold in units, the fair value is the investment value / (1 + % transfer taxes depending on the region where they are located). The average transaction cost rate defined by the BE-REIT Association is reviewed annually and adjusted as necessary in 0.5% increments. The Belgian experts attest the deduction percentage retained in their periodic reports. The fair value of investment properties located abroad take into account locally applicable legal costs. Free float Percentage of shares held by the public, according to the Euronext definition. Gross dividend yield Gross dividend per share divided by the stock market price as of closure. Gross yield of the portfolio For the total portfolio: (contractual rents + guaranteed income) / investment value, acquisition value or fair value of the concerned buildings. IFRS The international accounting standards (IFRS, or International Financial Reporting Standards, previously called IAS, or International Accounting Standards) are drawn up by the International Accounting Standards Board (IASB). European listed companies have been obliged to apply these standards in their consolidated accounts since the financial year commencing on or after 1 January 2005. Since 2007, RRECs have also been required to apply IFRS in their statutory accounts. Inside information Inside information about Aedifica is any information: - which has not been made public; - which is accurate, i.e. refers to an existing situation or a situation which can reasonably be expected to exist or an event which has occurred or which can reasonably be expected to occur, and which is sufficiently accurate to draw a conclusion on the possible effect of this situation or event on the price of Aedifica's financial instruments or financial derivatives; - directly or indirectly related to Aedifica; - and which, if made public, could affect the price of Aedifica's financial instruments or derivative financial instruments, information being considered price-sensitive for the financial instruments or derivative financial instruments if a reasonable investor could use this information as one of the reasons for his investment decision. Aedifica – Annual Financial Report 2021 – 94 Interest Rate Swap (or IRS) An interest rate exchange contract (usually short-term against long-term and floating against fixed) between two parties to exchange financial flows calculated on a fixed notional amount, frequency and maturity. Aedifica can use this instrument for hedging purposes only. Investment properties Investment properties including buildings intended for sale and development projects. Investment value Value assessed by the expert, of which transfer taxes are not deducted. Long lease Contract with an initial duration of at least 27 years and less than 99 years, giving a temporary right in rem to the tenant. The tenant has full use of the property during this period and pays an annual fee (rent) in return. Market capitalisation Closing stock market price multiplied by the total number of shares. Marketable investment properties Investment properties including buildings intended for sale and excluding development projects. Net asset value per share Total equity and liabilities divided by the number of shares outstanding (after deduction of the treasury shares). Net rental income Rental income - Writeback of lease payments sold and discounted - Rental-related charges Occupancy rate For the total portfolio: (contractual rents + guaranteed income) / (contractual rents + estimated rental value (ERV) on vacant areas of the property portfolio). We note that this occupancy rate includes the investment properties for which units are in renovation and hence temporarily not rentable. Operating margin Property operating result divided by net rental income. Operating result before result on portfolio The Royal Decree of 13 July 2014 regarding RRECs defines the operating result before result on portfolio as follows: Property operating result - Overheads ± Other operating income and charges Pay-out ratio Dividend per share divided by the corrected profit per share. Profits excluding changes in fair value Profit (attributable to owners of the parent) - Changes in fair value of investment properties (IAS 40) - Changes in fair value of financial assets and liabilities (IFRS 9) Property operating result The Royal Decree of 13 July 2014 regarding RRECs defines the property operating result as follows: Property result - Technical, commercial and property management costs - Charges and taxes on unlet properties - Other property charges 264 – AEDIFICA - ANNUAL FINANCIAL REPORT 2021 FUTUREPROOF AEDIFICA LETTER TO THE STAKEHOLDERS AEDIFICA IN 2021 OUR STRATEGY BUSINESS REVIEW CORPORATE GOVERNANCE 95 – Aedifica – Annual Financial Report 2021 Profit to be paid out (or corrected profit) The Royal Decree of 13 July 2014 regarding RRECs defines the profit to be paid out (or corrected profit) as follows: The Company must distribute, as return on capital, an amount corresponding at least to the positive difference between the following amounts: - 80% of an amount equal to the sum of the adjusted result (A) and the net capital gains on realisation of investment properties not exempt from the obligation of distribution (B). (A) and (B) are calculated according to the following scheme: Corrected profit (A) Profit of loss + Depreciations + Write-downs - Reversals of write-downs - Writeback of lease payments sold and discounted ± Other non-cash items ± Gains and losses on disposals of investment properties ± Changes in fair value of investment properties = Corrected profit (A) Net capital gains on realisation of investment properties not exempt from the obligation of distribution (B) ± Gains and losses on disposals of investment properties during the financial year (gains and losses compared to the acquisition value plus capital expenditures) - Gains and losses on disposals of investment properties during the financial year, exempted from the obligation of distribution, subject to reinvestment within 4 years (gains compared to the acquisition value plus capital expenditure) ± Gains and losses on disposals of investment properties earlier exempted from the obligation of distribution and not reinvested within 4 years (gains and losses compared to the acquisition value plus capital expenditures) = Net capital gains on realisation of investment properties not exempt from the obligation of distribution (B) And - net decrease during the financial year of the debt of the public RREC, as provided in Article 13 of the Royal Decree of 13 July 2014 (see definition of the debt-to-assets ratio). Result on portfolio The Royal Decree of 13 July 2014 regarding RRECs defines the result on portfolio as follows: Gains and losses on disposals of investment properties - Gains and losses on disposals of other non-financial assets ± Changes in fair value of investment properties Transfer taxes The transfer of ownership of a property in Belgium is subject to the payment of transfer taxes. The amount of these taxes depends on the method of transfer, the type of purchaser and the location of the property. The first two elements, and therefore the total amount of taxes to be paid, are only known once the transfer has been completed. The range of taxes for the major types of property transfer includes: - Sale of properties: 12.5% for properties situated in the Brussels Capital Region and in the Walloon Region, 12% for properties situated in the Flemish Region; - Sale of real estate under the rules governing estate traders: 4.0 to 8.0%, depending on the Region; - Surface and long lease agreements for real estate (up to 50 years for surface rights and up to 99 years for the long lease right): 2%, or 0.5% if the tenant is a non-profit organisation); - Sales of properties where the purchaser is a public body (e.g. an agency of the European Union, the Federal Government, a regional government or a foreign government): tax exempt; - Contribution in kind of real estate property against the issue of new shares in favour of the contributing party: tax exempt; - Sale of shares of a real estate Company: no taxes; - Merger, split and other forms of Company restructuring: no taxes; - etc. The effective rate of the transfer tax therefore varies from 0 to 12.5%, whereby it is not possible to predict which rate would apply to the transfer of a given property before that transfer has effectively taken place. N.B. We note that, following the interpretations of IFRS by the Belgian Asset Managers Association (BEAMA), the book value of the investment properties under IFRS on the balance sheet is calculated by the expert by deducting a fixed percentage of transfer tax (currently 2.5%) from the investment value. However, for investment properties with a value of less than €2.5 million, the transfer taxes to be deducted vary depending on the rates applicable given the building’s location. – 265 AEDIFICA ON STOCK MARKET RISK FACTORS EPRA FINANCIAL STATEMENTS ADDITIONAL INFORMATION 95 – Aedifica – Annual Financial Report 2021 Profit to be paid out (or corrected profit) The Royal Decree of 13 July 2014 regarding RRECs defines the profit to be paid out (or corrected profit) as follows: The Company must distribute, as return on capital, an amount corresponding at least to the positive difference between the following amounts: - 80% of an amount equal to the sum of the adjusted result (A) and the net capital gains on realisation of investment properties not exempt from the obligation of distribution (B). (A) and (B) are calculated according to the following scheme: Corrected profit (A) Profit of loss + Depreciations + Write-downs - Reversals of write-downs - Writeback of lease payments sold and discounted ± Other non-cash items ± Gains and losses on disposals of investment properties ± Changes in fair value of investment properties = Corrected profit (A) Net capital gains on realisation of investment properties not exempt from the obligation of distribution (B) ± Gains and losses on disposals of investment properties during the financial year (gains and losses compared to the acquisition value plus capital expenditures) - Gains and losses on disposals of investment properties during the financial year, exempted from the obligation of distribution, subject to reinvestment within 4 years (gains compared to the acquisition value plus capital expenditure) ± Gains and losses on disposals of investment properties earlier exempted from the obligation of distribution and not reinvested within 4 years (gains and losses compared to the acquisition value plus capital expenditures) = Net capital gains on realisation of investment properties not exempt from the obligation of distribution (B) And - net decrease during the financial year of the debt of the public RREC, as provided in Article 13 of the Royal Decree of 13 July 2014 (see definition of the debt-to-assets ratio). Result on portfolio The Royal Decree of 13 July 2014 regarding RRECs defines the result on portfolio as follows: Gains and losses on disposals of investment properties - Gains and losses on disposals of other non-financial assets ± Changes in fair value of investment properties Transfer taxes The transfer of ownership of a property in Belgium is subject to the payment of transfer taxes. The amount of these taxes depends on the method of transfer, the type of purchaser and the location of the property. The first two elements, and therefore the total amount of taxes to be paid, are only known once the transfer has been completed. The range of taxes for the major types of property transfer includes: - Sale of properties: 12.5% for properties situated in the Brussels Capital Region and in the Walloon Region, 12% for properties situated in the Flemish Region; - Sale of real estate under the rules governing estate traders: 4.0 to 8.0%, depending on the Region; - Surface and long lease agreements for real estate (up to 50 years for surface rights and up to 99 years for the long lease right): 2%, or 0.5% if the tenant is a non-profit organisation); - Sales of properties where the purchaser is a public body (e.g. an agency of the European Union, the Federal Government, a regional government or a foreign government): tax exempt; - Contribution in kind of real estate property against the issue of new shares in favour of the contributing party: tax exempt; - Sale of shares of a real estate Company: no taxes; - Merger, split and other forms of Company restructuring: no taxes; - etc. The effective rate of the transfer tax therefore varies from 0 to 12.5%, whereby it is not possible to predict which rate would apply to the transfer of a given property before that transfer has effectively taken place. N.B. We note that, following the interpretations of IFRS by the Belgian Asset Managers Association (BEAMA), the book value of the investment properties under IFRS on the balance sheet is calculated by the expert by deducting a fixed percentage of transfer tax (currently 2.5%) from the investment value. However, for investment properties with a value of less than €2.5 million, the transfer taxes to be deducted vary depending on the rates applicable given the building’s location. Aedifica – Annual Financial Report 2021 – 96 Triple net Type of contract under which operating charges, maintenance costs and rents on empty spaces related to the operations are borne by the operator. Velocity Total volume of shares exchanged over the year divided by the total number of listed shares, following the definition of Euronext. 2. Acronyms APM: Alternative Performance Measure CAGR: Compound Annual Growth Rate CEO: Chief Executive Officer CFO: Chief Financial Officer CIO: Chief Investment Officer CLO: Chief Legal Officer CM&AO: Chief Mergers & Acquisitions Officer COO: Chief Operating Officer CPI: Consumer price index CSR: Corporate Social Responsibility DCF: Discounted Cash Flow EBIT: Earnings Before Interests and Taxes ECB: European Central Bank EPRA: European Public Real Estate Association ESMA: European Securities and Markets Authority ERV: Estimated Rental Value FBI: Federale Beleggingsinstelling FSMA: Financial Services and Markets Authority IAS: International Accounting Standards IFRS: International Financial Reporting Standards IPO: Initial Public Offering IRREC: Institutional Regulated Real Estate Company IRS: Interest Rate Swap NN: Double Net NNN: Triple Net NZEB: Nearly zero-energy building REIT: Real Estate Investment Trust RREC: Regulated Real Estate Company SARL: Société à Responsabilité Limitée SCS: Société en Commandite Simple SPV: Special Purpose Vehicle WAULT: Weighted average unexpired lease term SEND US YOUR FEEDBACK info@aedifica.eu FOR FURTHER INFORMATION Ingrid Daerden, CFO – ingrid.daerden@aedifica.eu Delphine Noirhomme, Investor Relations Manager – delphine.noirhomme@aedifica.eu CREATION AND PRODUCTION www.chriscom.eu the Aedifica team PHOTOGRAPHY Buildings: Atelier Jahr, Dan Chadwick, David Plas & Eric Herschaft, Vivianne van der Maas, Telenet Business Portraits: David Plas & Emy Elleboog AEDIFICA NV/SA Public Regulated Real Estate Company under Belgian law Rue Belliard 40 (box 11) in 1040 Brussel - Belgium Tel: +32 (0)2 626 07 70 - Fax: +32 (0)2 626 07 71 BTW-BE 0877 248 501 – Register of Legal Entities of Brussels WWW.AEDIFICA.EU 1. The Dutch version of the document represents the original document. The French and English versions are translations and were prepared under Aedifica’s responsibility. CE RAPPORT FINANCIER ANNUEL EST ÉGALEMENT DISPONIBLE EN FRANÇAIS 1 DIT JAARVERSLAG IS EVENEENS BESCHIKBAAR IN HET NEDERLANDS 1 @aedifica_reit linkedin.com/company/aedifica-reit aedifica_reit WWW.AEDIFICA.EU Belliardstraat 40 Rue Belliard — Brussel 1040 Bruxelles tel +32 (0)2 626 07 70 — fax +32 (0)2 626 07 71 Openbare gereglementeerde vastgoedvennootschap naar Belgisch recht Société immobilière réglementée publique de droit belge BTW BE 0877 248 501 - R.P.R. Brussel — TVA BE 0877 248 501 - R.P.M. Bruxelles
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