Annual Report (ESEF) • Apr 22, 2022
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Download Source FileUntitled Annual Financial Report 2021 In 2021, the Company continued to build the sustainable growth of its property portfolio. REGULATED INFORMATION Published on 22 April 2022 after trading hours ANNUAL FINANCIAL REPORT for the period from 1 January 2021 to 31 December 2021 AUDITED Care Property Invest declares that: the 2021 Annual Financial Report has been led as a Universal Registration Document with the FSMA on the date of 22 April 2022, as the competent authority under Regulation (EU) 2017/1129 without prior approval under Article 9 of Regulation (EU) 2017/1129; the Universal Registration Document may be used for an offer of securities to the public or the admission of securities to trading on a regulated market, provided that it has been approved by the FSMA, together with any amendments and a securities note and summary approved in accordance with Regulation (EU) 2017/1129. The Dutch version as well as the French and English version of this annual nancial report are legally binding. Within the framework of their contractual relationship with the Company, investors can therefore always appeal to the translated versions. Care Property invest, represented by its responsible people, is responsible for the translation and conformity of the Dutch, French and English language versions. However, in case of discrepancies between language versions, the Dutch version always prevails. Care Property Invest nv / Table of Contents 4 5 Table of Contents / Care Property Invest nv Table of Contents I. Risk factors 8 1. Operational risks 10 2. Financial risks 15 3. Regulatory and other risks 21 III. Report of the board of directors 34 1. Strategy: Care building in complete condence 34 2. Important events 44 3. Synthesis of the consolidated balance sheet and the global result statement 50 4. Appropriation of the result 58 5. Outlook 59 6. Main risks and insecurities 63 7. Research and development 63 8. Capital increases within the context of authorised capital 63 9. Treasury shares 64 10. Internal organisation Care Property Invest 65 11. Corporate Governance Statement 66 IV. Care Property Invest on the stock market 112 1. Stock price and volume 112 2. Dividend policy 114 3. Bonds and short-term debt securities 115 4. Shareholding structure 116 5. Financial calendar 117 V. EPRA 120 1. EPRA (European Public Real Estate Association) - Membership 120 VI. Real Estate report 132 1. Status of the property market in which the Company operates 132 2. Analysis of the full consolidated property portfolio 138 3. Summary tables consolidated property portfolio 142 4. Report of the real estate expert 149 VII. Financial statements 156 1. Consolidated nancial statements as at 31 December 2021 156 2. Notes to the consolidated nancial statements 162 3. Auditor’s Report 214 4. Abridged statutory nancial statements as at 31 December 2021 220 VIII. Permanent document 230 1. General information 230 2. Information likely to affect any public takeover bid 240 3. Declarations (Annex I to Regulation (EU) No. 2019/980) 244 4. Other declarations 245 5. History of the Company and its share capital 246 6. Coordinated Articles of Association 248 7. The public regulated real estate company (RREC) 260 XI. Glossary 270 1. Denitions 270 2. Abbreviations 282 Alsemberg (BE) I Orelia Ter Beuken I. Risk Factors The strategy of Care Property Invest is aimed at creating stability for the investors, in terms of both dividends and income in the long term. The Executive Committee and the Board of Directors are aware of the specic risks associated with the management of the Care Property Invest property portfolio and aim for optimal management of these and to limit them as far as possible. The list of risks which are described in this section is not exhaustive. Most of these factors relate to uncertain events that could occur. Based on the ESMA guidelines on risk factors under the Prospectus Regulation, the Company (1) has, on the one hand, limited itself to those risk factors that apply specically to it and therefore not to the entire real estate sector, RREC sector or all listed companies and, on the other hand, to those that are also material. General, non-material or other unknown or improbable risks or risks which, on the basis of the information currently available, are not assumed to have an adverse effect on the Company or on its activities or nancial situation, may exist. Care Property Invest is of the opinion that the factors described below reect the main risks currently associated with the Company and its activities. The order in which the risk factors are listed is an indication of the importance, per category (in relation to the probability that they will occur and the expected scale of the adverse effect) of the risk factors. It should also be noted that risk management is (1) The term ‘Company’ refers in this annual nancial report to: Care Property Invest nv. I. RISK FACTORS not an exercise only conducted at certain intervals, but an integral part of the way in which Care Property Invest is run on a daily basis. The main risk factors that Care Property Invest faces are the subject of regular and daily monitoring by the Risk Manager, the Effective Leaders and the Board of Directors, who have dened a prudent policy in this respect, which they will update regularly if necessary. This ranges from daily nancial and operational management, analysis of new investment projects and formulating the strategy and objectives to laying down strict procedures for decision-making. Understanding and protecting against/eliminating risks arising from both internal and external factors is essential in order to achieve a stable total return in the long term. Since 2019, the Company has had an Audit Committee whose task, in terms of risk management, is to monitor the efciency of the Company's risk management systems. COVID-19 impact Although the impact of the COVID-19 pandemic on the wider society was still being felt at the beginning of 2021, it can be said that the roll-out of vaccination programmes across Europe, prioritising residents and staff of residential care centres, has contributed to a more positive perception of the risk in residential care centres, where occupancy rates are rising again. The pandemic has therefore not had a signicant impact on the nancial performance of Care Property Invest to date, as the local governments of several countries have approved aid programmes that allow healthcare operators to (partially) cover the additional costs resulting from the COVID-19 pandemic. Moreover, the fundamentals of healthcare real estate remain unaffected, with the pandemic only underlining the importance of quality care for the elderly. The strategy of Care Property Invest is aimed at creating stability for investors, both in terms of dividends and long-term income. Turnhout (BE) I Aan De Kaai Care Property Invest nv / Risk Factors 8 9 Risk Factors / Care Property Invest nv 1. Operational risks 1.1 Risks associated with the solvency of lessees (1) The initial portfolio concerns the nancial leases (with a balance sheet value (nance lease receivables) of €156,518,610 and a generated rental stream of €14,574,287 as at 31/12/2021) that the Company concluded until 2014. 1.1.1 Description of the risk This risk can be described as the risk of (partial) default or mandatory liquidation of tenants, lessees and long-term leasehol- ders. 1.1.2 Potential impact for the company The potential impact concerns a sudden, unexpected diminution in rental income due to a deterioration in the debt collection rate or a fall in the occupancy rate, as well as rising commercial costs for re-letting if the insolvency of tenants leads to voids. There is a risk that if the relevant tenants, lessees or long-term leaseholders remain in default, the surety will not sufce and the Company will consequently bear the risk of being unable to recuperate sufcient amounts, if any. This all has an impact on the protability of the Company and the capacity to distribute dividends or at least to maintain the level of these. The Company assesses the probability of this intrinsic risk as well as the possible impact as average. 1.1.3 Limiting factors and management of the risk The Company arms itself against these risks on different levels. For the projects in the initial portfolio (1) , the costs in the event of a possible insolvency of an operator (in this case a public centre for social welfare (OCMW/ CPAS)) are hedged by the muni- cipal guarantee fund. A carefully selected portfolio of operators with a balanced spread further provides for an excellent spread of risks. The solvency of the tenants is thoroughly screened before inclusion in the portfolio, whether or not with the help of an external nancial adviser. The Company aims to expand its portfolio via long-term contracts with stable and solvent rst-class tenants. Before inves- ting in a particular healthcare property, a thorough analysis is conducted of the busi- ness plan of the operator and certain ratios that reect the economic viability of the project. On a half-yearly or quarterly basis, the Company also monitors the nancial position of the operators and reviews a number of operational parameters that the operators are required to provide on the basis of the provisions of the rental agree- ments or lease contracts. As at the date of publication of this univer- sal registration document, the Company has no rental arrears for which there are insufcient guarantees in favour of the Company. Nevertheless, it estimates the residual risk, i.e., taking account of the limiting factors of the risk and management of the risk as de- scribed above, as average in terms of both probability and in terms of impact. 1.2 Risks associated with the concentration risk 1.2.1 Description of the risk This risk can be described as the risk of concentration of lessees or investments in one or more buildings in relation to the overall real estate portfolio. In accordance with the RREC legislation the Company is required to limit these risks and to spread its risks by respecting a diversication of its real estate on the geo- graphical level, per type of property and per lessee. Article 30 of the RREC legislation provides that ‘no action performed by the Public RREC may result in (1°) more than 20% of its consolidated assets being inves- ted in real estate forming a single real esta- te unit; or (2°) this percentage increasing further if it already amounts to more than 20%, regardless of the cause, in the latter case, of the original overrun of this percen- tage. This restriction applies at the time of the action concerned’. If the Company exceeds the 20% diversication rule, it may not make any investments, divestments or take other actions that could result in a further overrun of this percentage. In other words, this limits the possibilities of the Company in relation to additional invest- ments or divestments. The reason for this is that excessive exposure to an operating lessee also entails excessive exposure to the risk of that lessee’s insolvency (see ‘1.1 Risks associated with the solvency of les- sees’ on page 10). In view of the dynamism of the large groups of operators active in the accom- modation for senior citizens sector and the consolidation that has been underway in the sector for several years, one or more concentrations between two or more groups that are afliated to legal entities with which the Company has contracted rental or long-term lease contracts cannot be ruled out. This could potentially impact the diversication level of the lessee. As at 31 December 2021, the ratio of the fair value of the three largest investment properties to the consolidated assets of the Company (including the fair value of the nancial leases) was as follows: • Résidence des Ardennes (Attert): 4.65% • Les Terrasses du Bois (Watermaal- Bosvoorde): 3.63% • Westduin (Westende): 3.55% The concentration risk for Armonea (Groupe Colisée), Vulpia Care Group and Groupe Korian is less than 20% for each of these operators individually, i.e., 16.92%, 11.42% and 9.66 % respectively. Regarding the rental income for these properties in relation to the consolidated rental income, the ratio on 31 December 2021 is as follows: • Résidence des Ardennes (Attert): 4.42% • Les Terrasses du Bois (Watermaal- Bosvoorde): 4.42% • Westduin (Westende): 3.63% Care Property Invest nv / Risk Factors 10 11 Risk Factors / Care Property Invest nv 1.2.2 Potential impact for the company The potential impact concerns a sharp diminution in income or cash ows in the event of the departure of a lessor, which in turn has an impact on the protability of the Company and the possibility of paying dividends or at least maintaining the level of these. The impact could be strengthened by a fall in the fair value of the real estate and consequently, a fall in the net active value (NAV) in the event of a concentration of investments in one or more buildings (see also below under risk factor ‘1.3 Risks associated with negative changes in the fair value of the buildings’ on page 13). The Company assesses the probability of this intrinsic risk as well as the possible impact as average. 1.2.3 Limiting factors and management of the risk Care Property Invest strictly follows the statutory diversication rules in this re- gard, as provided in the RREC legislation. The Company did obtain permission from the FSMA to take account of the fair value of the nancial leases in the denominator in the calculation of the ratio of the con- centration risk instead of the book value. The Company has no opportunities to expand its activities to sectors other than healthcare real estate, which means that diversication at the sectoral level is not possible, although this is possible on the geographical level. Care Property Invest aims for a strongly diversied lessee base. At the close of the nancial year, the largest lessee accounted for 18.5% of the total revenue, spread over several sites (see the ‘2.3 Distribution of income received from rental and long lease agreements per operator’ on page 139 diagram in Chapter ‘VI. Real estate report’). Furthermore, the Company’s real estate portfolio already has a good spread over more than 130 sites, with the largest site representing less than 5% of the fair value of the portfolio (see diagram ‘2.2 Distributi- on of the number of projects per operator)’ on page 139 in Chapter ‘VI. Real estate report’). The Company estimates the residual risk, taking account of the limiting factors of the risk and management of the risk as described above, associated with the con- centration risk, as average in terms of both probability and impact. Care Property Invest aims for a strongly diversified tenant base. 1.3 Risks associated with negative changes in the fair value of the buildings 1.3.1 Description of the risk This risk can be described as the exposure of the Company to a potential fall in the fair value of its real estate portfolio, as a result of a revaluation of the real estate portfolio or otherwise. The Company is also exposed to the risk of a diminution in the value of the real estate in its portfolio as a result of: • wear and tear/damage or voids • errors during the transaction (e.g., erroneous plans and/or measurements or errors in the due diligence process) • failure to comply with the increasing (statutory or commercial) requirements, including on the level of sustainable development • economic cycle or market conditions: the acquisition of real estate for an excessively high price in relation to the underlying value or the sale of real estate for too low a price in relation to the underlying value, e.g., by investing or disinvesting at an unfavourable moment in the investment cycle. In the longer term, the impact of the Covid19 crisis could manifest itself in a reduction (negative variation) in the fair value of the buildings. 1.3.2 Potential impact for the company The impact of a fall in the fair value is a fall in the Company’s equity, which has a nega- tive impact on the debt ratio. If the fair va- lue of the buildings as at 31 December 2021 were to fall by €260.2 million, or 36.2% of the fair value of the investment properties as at 31 December 2021, this would result in the Company’s debt ratio rising to 65% (see also ‘2.2 Risks associated with the evo- lution of the debt ratio’ on page 16). If the cumulative changes in the fair value exceed the distributable reserves, there is a risk of partial or total inability to pay dividends. The Company monitors its debt ratio and the evolution of the fair value of its invest- ment properties on a regular basis (see also risk factor ‘2.2 Risks associated with the evolution of the debt ratio’ on page 16). The Company also runs the risk that, as a result of the application of Article 7:212 BCCA, it would no longer be able to pay the anticipated dividend or a dividend in accordance with Article 7:212 BCCA. Care Property Invest nv / Risk Factors 12 13 Risk Factors / Care Property Invest nv If the Company conducts a transaction, through investment or disinvestment in real estate, it also runs the risk that it will not identify certain risks on the basis of its due diligence inquiries or that, even after performing due diligence inquiries and an independent real estate assessment, it will acquire or sell real estate for too high or too low a price in relation to the underlying va- lue, for example by conducting transactions at an unfavourable moment in an economic cycle. The Company assesses the probability of the intrinsic risk as low. 1.3.3 LIMITING FACTORS AND MANAGEMENT OF THE RISK Care Property Invest therefore has an in- vestment strategy aimed at high quality as- sets that offer a stable income and provides for adequate monitoring of its assets, com- bined with a prudent debt policy. The real estate portfolio (more specically, the part shown as real estate investment) is valued by a real estate expert every quar- ter. The lease receivables portfolio is ac- counted for in accordance with IFRS 16 and the book value is not subject to negative variations due to the value of the property itself, but rather due to an increase in mar- ket interest rates. A value uctuation of 1% of the real estate portfolio would have an impact of about €7.18 million on the net results, of about €0.28 on the net result per share and of about 0.36% on the debt ratio. This value uctuation concerns a non-cash element that therefore, as such, has no impact on the adjusted EPRA Earnings, ex- cept in the case of a realisation that entails a net loss that is not exempt from distribu- tion and therefore the Company’s result for the payment of its dividend. In the event of accumulated negative variations, it is pos- sible that the Company’s ability to pay its dividend will come under pressure. The Company estimates the residual risk, i.e., taking account of the limiting factors and the management of the risk as descri- bed above, as low in terms of probability. Also in the 2021 nancial year, there is no negative variation in the fair value of the buildings as a result of COVID-19 but rather an upward trend as a result of the combi- nation of increased ination expectations and a slight tightening of the market yield for healthcare properties in the various markets in which Care Property Invest is present. Also in the 2021 financial year, there is no negative variation in the fair value of the buildings due to COVID-19 but rather an upward trend. 2. Financial risks 2.1 Risks associated with covenants and statutory nancial parameters 2.1.1 Description of the risk This risk can be described as the risk of non-compliance with statutory or contrac- tual requirements to comply with certain nancial parameters in relation to the cre- dit contract. The following parameters were included in the covenants: • A maximum debt ratio of 60%. As at 31 December 2021, the consolidated debt ratio of the Company was 47.06%, resulting in an available space of €305 million. The limitation of the debt ratio to 60% is included in the credit agreements for a total amount of €426,650,370 (of which an amount of €183,150,370 or 43.0% of the total nancial debts was drawn as at 31 December 2021). For more information on the debt ratio, reference is made to ‘‘2.2 Risks associated with the evolution of the debt ratio’ on page 16. • An interest coverage ratio (being the operating result before the result on the portfolio, divided by the interest charges paid) of at least 2.5. As at 31 December 2021 the interest coverage ratio was 4.5 compared to 4.27 on 31 December 2020. The Company’s interest charges must increase by €6,276,787, from €7,844,467 to €14,121,254 in order to reach the required minimum of 2.5. However, severe and abrupt pressure on the operating result could jeopardise compliance with the interest coverage ratio parameter. The operating result before result on portfolio must fall by 44.4% from €35,303,597 to €19,611,168 before the limit of 2.5 is reached. 2.1.2 Potential impact for the company The potential impact concerns any cancel- lation of loans and damaged trust between investors and bankers on non-compliance with contractual covenants. It is possible that the Company would no longer be able to raise the external nancing necessary for its growth strategy on favourable terms or that the market conditions are of a na- ture that necessary external nancing can no longer be found for the activities of the Company. The Company runs the risk of the termi- nation, renegotiation or cancellation of nancing agreements or that these contain an obligation to make early repayment if certain undertakings, such as complian- ce with nancial ratios, are not met. This could lead to liquidity problems, in view of the similar character in the covenants of the nancial institutions of the maximum debt ratio or interest cover ratio of a cumu- lative nature and could force the Company to liquidate xed assets (e.g., sale of real estate) or to implement a capital increase or other measures in order to bring the debt level below the required threshold. Care Property Invest nv / Risk Factors 14 15 Risk Factors / Care Property Invest nv There is also a possibility that the regulator will impose sanctions or tighter supervi- sion in the event of failure to comply with certain statutory nancial parameters (e.g., compliance with the statutory debt ratio, as laid down in Article 13 of the RREC Royal Decree). The consequences for the shareholders could include a reduction in the equity and, therefore, the NAV, because a sale must take place at a price below that book value, a dilution can take place because a capital in- crease will have to be organised and this will have an impact on the value of the shares and the future dividend prospects. The Company assesses the probability of this risk factor as average. The impact of the intrinsic risk is assessed as high. 2.1.3 Restrictive measures and management of the risk In order to limit these risks, the Company pursues a prudent nancial policy with con- tinual monitoring in order to comply with the nancial parameters of the covenants. The Company estimates the residual risk, i.e., taking account of the limiting factors and the management of the risk as descri- bed above, as average in terms of probability and as high in terms of its impact. 2.2 Risks associated with the evolution of the debt ratio 2.2.1 Description of the risk The Company’s borrowing capacity is limi- ted by the statutory maximum debt ratio of 65% which is permitted by the RREC legisla- tion. At the same time, thresholds have been set in the nancing contracts concluded with nancial institutions. The maximum debt ratio imposed by the nancial institu- tions is 60% (see also ‘2.1 Risks associated with covenants and statutory nancial para- meters’ on page 15). The Company runs the risk of the termina- tion, renegotiation or cancellation of nan- cing agreements or that these contain an obligation to make early repayment if cer- tain undertakings, such as compliance with nancial ratios included in covenants, are not met. On exceeding the statutory maxi- mum threshold of 65%, the Company runs the risk of losing its RREC certicate through withdrawal by the FSMA. In general, it is possible that the Company would no longer be able to raise the ex- ternal nancing necessary for its growth strategy on favourable terms or that the market conditions are of a nature that ne- cessary external nancing can no longer be found for activities of the Company. The Company runs the risk of the termination, renegotiation or cancellation of nancing agreements or that these contain an obli- gation to make early repayment if certain undertakings, such as compliance with nancial ratios, are not met. As at 31 December 2021, the consolidated debt ratio was 47.06%, compared to 46.31% as at 31 December 2020. As at 31 December 2021, the Company has additional debt capacity of €483 million before reaching a debt ratio of 65% and of €305 million before reaching a debt ratio of 60%. The value of the property portfolio also has an impact on the debt ratio. Taking account of the capital base as at 31 December 2021, the maximum debt ratio of 65% would be exceeded only with a po- tential fall in the value of the real estate portfolio of about €260.2 million, or 36.2% of the real estate portfolio of €718.0 million as at 31 December 2021. With a fall in the value of about €203.3 million, or 28.3% of the property portfolio, the debt ratio of 60% would be exceeded. The Company does wish to note that it has contracted payment obligations for the unrealised part of the developments that it has already included in its balance sheet, representing €25.4 million. In addition, the Company has acquired a number of projects under suspensory conditions, for which the estimated cash-out amounts to €47.6 million. As a result, the available capacity for the debt ratio is €232.0 million before reaching a debt ratio of 60% and €410.0 million before reaching a debt ratio of 65%. 2.2.2 Potential impact for the Company The potential impact concerns the risk that statutory sanctions may be imposed if certain thresholds are exceeded (including a prohibition of payment of a dividend) or that a breach of certain conditions of the nancing contracts is committed. Like all public RRECS, Care Property Invest is subject to tighter supervision by the supervisory authority of compliance with these maximum debt levels. The Company assesses the probability of this intrinsic risk factor as low and the im- pact of the intrinsic risk as high. 2.2.3 Restrictive measures and management of the risk In this case too, it pursues a prudent nan- cial policy with continual monitoring of all planned investments and earnings fore- casts, and the coordination of the possibi- lity of a capital increase under the forms permitted by the RREC legislation in order to avoid any statutory sanctions for excee- ding this maximum limit at all times. The Company estimates the residual risk, i.e., taking account of the limiting factors as described above, associated with the risk as low in terms of probability and high in terms of impact. Tilburg (NL) I Maria Margarithakerk Care Property Invest nv / Risk Factors 16 17 Risk Factors / Care Property Invest nv 2.3 Risks associated with the cost of the capital 2.3.1 Description of the risk This risk can be described as the risk of unfavourable uctuations in interest rates, an increased risk premium in the stock markets and/or an increase in the cost of the debts. 2.3.2 Potential impact for the Company The potential impact concerns a material increase in the weighted average cost of the Company’s capital (equity and debts) and an impact on the protability of the business as a whole and of new invest- ments. As at 31 December 2021, the xed-interest and oating rate loans ac- counted for 56.34% and 43.66% of the total nancial liabilities respectively. The per- centage of oating rate debt contracted that was converted into a xed-interest in- strument (in relation to the total nancial debt) via a derivative instrument amoun- ted to 36.75% as at 31 December 2021. An increase in the interest rate of 1%, without taking into account the hedging instru- ments, would mean an extra nancing cost for the Company of €115,563. The conclu- sion relating to this cost can be extended on a linear basis to sharper changes in the interest rate. Such an increase will have an impact on the adjusted EPRA Earnings and, therefore, on the scope for the Company to pay a dividend of €0.004 per share. A change in the interest curve of 1% (up- ward) would have an impact on the fair va- lue of the credit portfolio of approximately €13.5 million. The conclusion relating to the impact of the change in the interest curve can be continued on a linear basis. An increase in interest rates would have a positive effect on the status of the global result via the va- riations in the fair value of nancial assets/ liabilities, amounting to €0.625 per share, but a negative inuence on the distribu- table result and also on the global result through the increase of part of the net inte- rest costs that is exposed to uctuations in interest rates, amounting to €0.004, so that the overall effect on the global result of an increase in the interest rate of 1% would amount to €0.621 per share. A fall in inte- rest rates would have a negative impact on the status of the global result amounting to €0.708 per share, but a positive inuence on the distributable result and also on the global result, amounting to €0.004, so that the overall effect on the global result of a fall in the interest rate of 1% would amount to €-0.704 per share. The increase in the required risk premium on the stock markets could result in a fall in the price of the share and make nan- cing of new acquisitions more costly for the Company. The Company intrinsically assesses the probability of this risk factor as well as the impact of this risk as average. 2.3.3 Restrictive measures and management of the risk (1) The initial portfolio concerns the nance leases (with a balance sheet value of €156,518,610 (nance lease receivables) and a generated rental income stream of €14,574,287 as at 31/12/2021) that the Company concluded until 2014. (2) The new portfolio as referred to here concerns the nance leases (with a balance sheet value of €30,257,159 and a generated rental income stream of €1,290,414 as at 31/12/2021) and the investment properties (with a balance sheet value of €718,031,800 and a generated rental income ow of €27,368,967 as at 31/12/2021) that the Company acquired after 2014. With regard to the initial portfolio (1) , Care Property Invest protects itself against interest rate rises through the use of xed-interest contracts or swaps. For the initial portfolio, only the renewable loans at Belus, amounting to€6,890,000, are subject to a limited interest risk, as these loans are subject to review every three years. For the new portfolio, (2) the outstan- ding commercial paper of €96.5 million and 2 roll-over credits of €30 million and €55 million respectively (of which €21.5 million was drawn at 31 December 2021) are subject to changes in interest rates on the nancial markets. Care Property Invest aims to hedge itself against xed interest rates for at least 80% via swaps. In this way the Company wishes to anticipate the risk that the increase in interest rates will be primarily attributable to an increase in real interest rates. There are also 10 loans with revisable in- terest for the new portfolio. Care Property Invest monitors movements in interest rates with close attention and will hedge itself against timely any excessively high increase in interest rates. Further explanation on the credit lines are provided in Chapter VII. Financial statements, with ‘Note 5: Notes to the con- solidated nancial statements’ on page 185, ‘T 5.10 Net interest expense’ on page 189, ‘T 5.27 Financial liabilities’ on page 204 and ‘T 5.17 Financial xed assets and other non-current nancial liabilities’ on page 195. If the increase in interest rates results from an increase in the level of ination, the indexation of the rental income also serves as a tempering factor, albeit only after the indexation of the lease agreements can be implemented, so that there is a delaying effect here. In general, Care Property Invest aims to build up a relationship of trust with its bank partners and investors and maintains a continual dialogue with them in order to develop a solid long-term relationship. Nevertheless, the Company continues to regard this risk as material. 2.4 Risks associated with the use of derivative nancial products 2.4.1 Description of the risk This risk can be described as the risks of the use of derivatives to hedge the interest rate risk. The fair value of the derivative products is inuenced by uctuations in interest rates in the nancial markets. The fair value of the derivative nancial pro- ducts amounted to €-16,810,790 as at 31 De- cember 2021, compared with €-27,975,990 as at 31 December 2020. The variation in the fair value of derivatives amounted to €11,165,200 as at 31 December 2021. 2.4.2 Potential impact for the Company The potential impact concerns the com- plexity and volatility of the fair value of the hedging instruments and consequently, also the net asset value (NAV), as publis- hed under the IFRS standards and also the counter-party risk in relation to partners Care Property Invest nv / Risk Factors 18 19 Risk Factors / Care Property Invest nv with which we contract derivative nanci- al products. The increase in the fair value of the derivative products amounting to €11,165,200 represents an increase in the net result of €0.43 per share and in the net asset value (NAV) per share of €0.41 per share, without having an impact in the adjusted EPRA Earnings and, therefore, the capacity of the Company to pay its proposed dividend. An increase in market interest rates by 1% results in an increase in the fair value of the derivative nancial products amounting to €16,214,669 or €0.625 per share and an increase in the net asset value (NAV) per share amounting to €0.60 per share. A fall in market interest rates by 1% results in a diminution in the fair value amounting to €18,380,792 or €0.71 per share and a fall in the net asset value (NAV) per share amounting to €0.68. The Company assesses the probability of this risk factor as well as the impact intrin- sically as average. 2.4.3 Restrictive measures and management of the risk All derivative nancial products are held solely for hedging purposes. No speculative instruments are held. All derivative nan- cial products are interest rate. Care Proper- ty Invest also works only with reputable nancial institutions (Belus Bank, KBC Bank, BNP Paribas Fortis and ING). The Company conducts frequent talks with these nancial institutions on the evoluti- on of the interest rates and the impact on the existing derivative nancial products. The Company also monitors the relevant interest rates itself. However, the COVID-19 crisis causes grea- ter volatility and pressure on the interest rates, so that this monitoring becomes all the more important in order to counter the volatility. Nevertheless, the Company estimates the residual risk, i.e., taking account of the limiting factors and the management of the risk as low in terms of probability and average in terms of impact. (BE) I Orelia Ter Beuken 3. Regulatory and other risks 3.1 Risks associated with changes in the withholding tax rate 3.1.1 Description of the risk In principle, the withholding tax amounts to 30%, with the possibility of a reduction or exemption from this rate. On the basis of Articles 89, 90 and 91 of the Act of 18 December 2016, which ente- red into force on 1 January 2017, reduced withholding tax of 15% applies (instead of 30%) to RRECs that invest at least 60% of their real estate directly or indirectly in real estate located in a member state of the European Economic Area and which is exclusively or primarily intended for re- sidential care or residential units adapted for healthcare. The Programme Law of 27 December 2021, which entered into force on 1 January 2022, increases this percen- tage to 80% pursuant to Articles 20,21 and 22. Care Property Invest shareholders have therefore beneted from this reduced rate since 1 January 2017 and will continue to benet from it after the increase based on the Programme Law, since 100% of its property portfolio is invested in the sector of housing for senior citizens. There is a risk that, for budgetary or other reasons, (e.g., the expansion of the applica- tion scope of this exemption because other RRECs comply with this requirement) the government will scrap this exception and the general rate of 30% will become appli- cable or will be raised still further in its entirety. On the basis of the proposal of the Board of Directors, the Company will pay a gross dividend of €0.87 per share or a total of €22,588,331. An increase in the withholding tax from 15% to 30% would therefore mean an increase of €3,388,250 in the withhol- ding tax to be withheld or a fall in the net dividend of €0.1305, from €0.7395 to €0.6090 per share. (1) The initial portfolio concerns the nance leases (with a balance sheet value of €156,518,610 (nance lease receivables) and a generated rental income stream of €14,574,287 as at 31/12/2021) that the Company concluded until 2014. (2) The new portfolio as referred to here concerns the nance leases (with a balance sheet value of €30,257,159 and a generated rental income stream of €1,290,414 as at 31/12/2021) and the investment properties (with a balance sheet value of €718,031,800 and a generated rental income ow of €27,368,967 as at 31/12/2021) that the Company acquired after 2014. 3.1.2 Potential impact for the Company The potential impact concerns a negative inuence on the net dividend for the sha- reholders that cannot recoup the withhol- ding tax, which would make the Company less attractive as an investment and dis- rupt the contacts with the local authorities and charitable NPOs and would therefore have an impact on the current operating model in relation to these lessees (in connection with possible charging on to lessees - see below, for both existing and potential future investments). The Com- pany assesses the probability of this risk factor as low. 3.1.3 Limiting factors and management of the risk For the lease receivables in the initial portfolio (1) , Care Property Invest can absorb uctuations in withholding tax and char- ge these on to its lessees, so that this risk does not exist for the shareholders. This part of the portfolio represents 33.7% of the total rental income. For the new portfolio (2) , no such clause is included. This means that the net dividend Care Property Invest nv / Risk Factors 20 21 Risk Factors / Care Property Invest nv would amount to €0.65 per share in the event of the increase in the rental charges as a result of this contractual provision. The Company estimates the residual risk, i.e., taking account of the limiting factors and the management of the risk associated with this risk factor as low in terms of pro- bability and average in terms of impact. 3.2 Risks associated with inheritance tax 3.2.1 Description of the risk This risk can be described as the risk con- cerning the changes in the conditions for exemption from inheritance tax. Subject to compliance with certain condi- tions, heirs of the shareholders enjoy an exemption from inheritance tax (Article 2.7.6.0.1. of the Flemish Codex (VCF)). The shares must have been in the possession of the holder for at least ve years on the date of decease. In addition, the sharehol- der must have acquired the shares no later than the year 2005, excluding acquisition among spouses and heirs in the rst de- gree, for which no exemption from inheri- tance tax has yet been granted. The market value of the shares may be exempted up to a maximum of the issue price of €5.95. Likewise, the sum of the net dividends paid during the period in which the deceased or his or her spouse was the holder of the shares may also be exemp- ted, in as far as the shares form part of the estate. This means an exempted amount of €17.92 per share at year-end 2021, assu- ming that a share was acquired on the IPO of the Company. The last notice that the Company received from the banks pursuant to the promotor and formation agreement (BNP Paribas Fortis, VDK Bank, Belus Bank, KBC, CBC and Bank Degroof Petercam) and its own register of shareholders show that 4,823,646 shares or 17.92% of the total num- ber of outstanding shares were entitled to an exemption. The Company wishes to draw attention to the fact that the num- ber of shares entitled to the exemption is higher as some of its shares are held by other nancial institutions. As the exemp- tion from the property tax for the future will be lost on violation of the conditions, this loss would at present represent a loss for the shareholders of the exemption for the net dividend paid for the 2021 nancial year of €3,567,086. The ultimate amount would rise further, depending on the period for which the shares in question are held. 3.2.2 Potential impact on the Company The potential impact on the Company lies in the fact that its shareholders may claim against it if the permit is withdrawn due to an action of the Company in contravention of the recognition conditions. The Com- pany assesses the probability of this risk factor as low. 3.2.3 Limiting factors and management of the risk In this case too, Care Property Invest per- manently monitors the statutory require- ments and compliance with these within the team, with the support of specialised external advisers. It also maintains an intensive dialogue with the Flemish tax authority (Vlabel). The Company estimates the residual risk, i.e., taking account of the limiting factors and the management of the risk as descri- bed above, as low in terms of probability and average in terms of the size. 3.3 Risks associated with the statute 3.3.1 Description of the risk As a public RREC, the Company is subject to the RREC legislation, which contains restrictions regarding the activities, the debt ratio, the processing of results, con- icts of interest and corporate governance. The ability to (continually) meet these specic requirements depends inter alia on the Company’s ability to successfully manage its asset and liability position and on compliance with strict internal audit procedures. 3.3.2 Potential impact on the Company The Company may not be able to meet these requirements in the event of a sig- nicant change in its nancial position or other changes. The Company is therefore also exposed to the risk of future amend- ments of the legislation on regulated real estate companies. There is also the risk that the FSMA, as the supervisory authori- ty, will impose sanctions in the event of a violation of applicable rules, including the loss of the RREC status. If the Company were to lose its certicate as an RREC, it would no longer enjoy the different scal system for RRECs and the full taxable base for corporation tax would therefore beco- me applicable. This would mean a corpo- ration tax liability for Care Property Invest of about €15 million or approximately €0.60 per share. Furthermore, as a rule the loss of the permit for RREC status is noted in the Company’s credit agreements as a circum- stance as a result of which the loans that the Company has contracted could become payable on demand. (See risk factor ‘2.1 Risks associated with covenants and statu- tory nancial parameters’ on page 15). 3.3.3 Limiting factors and management of the risk Care Property Invest therefore permanent- ly monitors the statutory requirements and compliance with these within the team, with the support of specialised external advisers. It also has regular contacts with government authorities and regularly ta- kes part in study days of associations and federations that represent the sector, such as the NPO BE-REIT Association, which it co-founded. The Company estimates the residual risk, i.e., taking account of the limiting factors and the management of the risk, as low to average in terms of probability and high in terms of impact on the Company. Care Property Invest nv / Risk Factors 22 23 Risk Factors / Care Property Invest nv Bonheiden-Rijmeneam (BE) I Ter Bleuk II. Letter to the Shareholders Care Property Invest nv / Letter to the Shareholders 26 27 Letter to the Shareholders / Care Property Invest nv Dear shareholder, In 2021, forces were joined to meet the challenging expectations regarding the growth of the healthcare property port- folio as well as the nancial results. The expansion of the European real estate portfolio was pursued through additional acquisitions and completions in the three European countries where the Company is operating. The focus on sustainability also continued in 2021, enabling the Company to successfully conclude its rst transaction on the debt capital market by issuing sus- tainability bonds for €32.5 million. This issue conrms the condence of the nan- cial market in Care Property Invest, and allows it to continue its planned sustaina- bility efforts. Like last year, 2021 was still dominated by the coronapandemic, despite the fur- ther rollout of vaccination campaigns. As a company active in the healthcare real PORTFOLIO GROWTH Care Property Invest has the ambition to expand its portfolio within Europe. Therefore, the focus in 2021 was on further growth of the existing healthcare real estate portfolios in Belgium, The Netherlands and Spain. Additional investments of € 170 million were made (of which €35 million under suspensory conditions). As a result, the fair value of the real estate portfolio (including nancial leases) as at 31 December 2021 amounts to approximately €986 million (+20%). In addition, the Company had an ongoing investment programme in pre-let development projects amounting to €25 million. 25 YEARS ON THE STOCK MARKET 2021 was also an anniversary year for Care Property Invest after the 25th anniversary of the Company in 2020. 25 years ago, in 1996, Serviceats Invest, the predecessor of today's Care Property Invest, was admitted to listing on the Brussels stock exchange. During these 25 years, the Company has been able to create signicant value and distribute a stable but increasing annual dividend to its shareholders. The Company aims to continue this trend in the coming years. estate segment, we have witnessed the terrible situations in the residential care centres rst-hand and would like to ex- press our gratitude to the care workers for their unrelenting efforts. We hope that in 2022, as the pressure on residential care centres continues to ease, they will be able to gradually evolve back to their normal operations. In addition, early this year we were shocked worldwide by the outbreak of the war in Ukraine. We as a Company therefore deeply regret the terrible situation in which many Ukrainians are living today and we sympathise with the families of all victims. II. In 2021, Care Property Invest succeeded in expanding its property portfolio to approximately 986 million. Letter to the Shareholders Care Property Invest nv / Letter to the Shareholders 28 29 Letter to the Shareholders / Care Property Invest nv FINANCIAL RESULTS In addition to the focus on growth of the real estate portfolio through additional in- vestments, Care Property Invest also aims to create added value for its stakeholders. Therefore, the Company managed to in- crease its rental income in 2021 to approximately €43 million (+19%). Despite the necessary investments made in human capital in 2021 in order to achieve further growth, the Company managed to close the year with adjusted EPRA earnings of €27.5 million (+20%), or €1.06 per share. These results exceed the announced forecasts for 2021 in the Annual Financial Report 2020 as well as the increased guidance in the Half-Yearly Financial Report 2021 and prove that Care Property Invest is able to realise growth of its real estate portfolio in combination with the associated additional costs while aiming at an increase of the earnings per share. A gross dividend of €0.87 per share will be proposed to the Ordinary Annual General Meeting, to be held on 25 May 2022, representing an increase of 9%. After deduction of the reduced withholding tax rate (15%), the shareholder will receive a net dividend of €0.74 per share. SUSTAINABILITY Care Property Invest is increasingly focus- ing on the sustainability of both its existing and future real estate portfolio. To this end, it published its second sustainability report in 2021. In September 2021, the efforts made for this sustainability report- ing were rewarded by receiving the EPRA sBPR Silver Award and the EPRA sBPR Most Improved Award. The Company also has a Sustainable Finance Framework, with a second party opinion, which was also used in 2021 for the successful issue of sustainability bonds totalling €32.5 million. OUTLOOK The past year Care Property Invest has proven to be capable of realising its growth objec- tives and also for 2022 it has the intention to continue this growth ambition. In this new year Care Property Invest has already taken an important step towards further European growth by acquiring its rst projects in Ireland, but also by announcing additional acquisi- tions in The Netherlands and Spain. Furthermore, the Company is always looking for new qualitative, protable projects. For the 2022 nancial year, the Company expects an increase in adjusted EPRA earnings to a minimum of €1.15 per share. The Board of Directors therefore intends to pay a gross dividend of €0.94 per share. Finally, the Board of Directors would like to thank the shareholders for their condence, the clients for their belief in the added value that Care Property Invest brings to their projects and, of course, its employees for their commitment and enthusiasm in achieving the Company's objectives. Peter Van Heukelom Mark Suykens Chief Executive Ofcer Chairman of the Board of Directors The Board of Directors intends to pay a gross dividend of 0.87 per share (+9%) for 2021. Berchem (BE) I Park Kemmelberg III. Report of the Board of Directors HISTORY 1995 - 2021 . . . . . . . . . . 2012 Initial investment programme 2,000 serviceats completed. 2000 Innovation award for ‘Technology and housing of elderly people’. . 2016 Inclusion in the Bel MID index. Start of EPRA membership. 1995 Establishment of Serviceats Invest nv. Recognition as a Belgian real estate investment fund, on the initiative of the Flemish government with the objective to build and finance 2,000 service flats for PCSW’s and social non-profit organisations in the Flemish and Brussels-Capital Region. As of 30 October 1995 210 fully paid-up shares 2014 Optional dividend May-June 2014 Total amount of capital increase: approx. €2 million As of 20 June 2014 10,359,425 fully paid-up shares 2014 Serviceats Invest nv becomes Care Property invest nv. Share split 1: 1000 As of 24 March 2014 10,210,000 fully paid-up shares Acquisition of the status of a Public Regulated Real Estate Company (Public RREC). 2013-2014 Amendments to the articles of association to expand the Company’s objective. 2015 New address: Horstebaan 3, 2900 Schoten.. 2015 Capital increase in cash. 22 June 2015 Total amount of capital increase: approx. €36 million As of 22 June 2015 13,184,720 fully paid-up shares 1996 Capital increase in cash (IPO - Eurnext Brussels). 7 February 1996 Total amount of capital increase: approx. €59 million As of 7 February 1996 10,210 fully paid-up shares . 2022 Entry onto the Irish market. . . . . . . . . . . . . 2017 Capital increase in cash. 27 October 2017 Total amount of capital increase: approx. €70 million As of 27 October 2017 19,322,845 fully paid-up shares. 2017 Acquisition of rst projects in Walloon and Brussels-Capital Regions. 2017 Capital increase in kind. 15 March 2017 Total amount of capital increase: approx. €34 million. As of 15 March 2017 15,028,880 fully paid-up shares. 2018 Entry onto the Dutch market. Acquisition of 100th residential care project. 2019 Capital increase in kind. 3 April 2019 Total amount of capital increase: approx. €16 million. As of 3 April 2019 20,086,876 fully paid-up shares. 2019 Optional dividend May-June 2020 Total amount of capital increase: approx. €7 million. As of 26 June 2019 20,394,746 fully paid-up shares. 2020 Entry onto the Spanish market. 2020 Optional dividend May-June 2020 Total amount of capital increase: approx. €7 million. As of 19 June 2020 21,918,213 fully paid-up shares. 2020 Capital increase in kind. 15 January 2020 Total amount of capital increase: approx. €34 million. As of 15 January 2020 21,645,122 fully paid-up shares. 2020 Capital increase in cash (ABB). June 2020 Total amount of capital increase: approx. €60 million. As of 25 June 2020 24,110,034 fully paid-up shares. 2021 Capital increase in kind. 20 January 2021 Total amount of capital increase: approx. €42 million. As of 20 January 2021 25,806,148 fully paid-up shares. 2021 Capital increase in kind. 17 November 2021 Total amount of capital increase: approx. €27 million. As of 17 November 2021 26.931.116 fully paid-up shares. • Design-Build-Finance-(Maintain): a formula in which Care Property Invest is responsible for the entire development of the project, including funding. A Design Build & Finance (‘DBF’) contract is drawn up, that can be expanded with a ‘maintain’ component (‘DBFM’). Upon provisional acceptance,. the building will be made available to the operator through a lease or leasehold agreement. 1. Strategy: Care building in complete condence Founded on 30 October 1995, Care Property Invest was the rst listed property investor in the form of a property investment fund (currently RREC) specialised in senior citizens housing. It is using the expertise and know- how that it has since accumulated with the construction of 1,988 service ats (initial investment programme) to create affordable, high-quality and attractive care infrastructure and various types of housing for senior citizens and people with disabilities. A selection from the range of housing types are residential care centres, short- stay centres, groups of assisted-living apartments and residential complexes for people with physical and / or intellectual disabilities. In 2014, the last of 2 purpose changes took place that expanded the original geographical constraint, restricted to Flanders and the Brussels-Capital Region only, to the entire European Economic Area (EEA). This expansion opportunity was followed that same year by a name change to ‘Care Property Invest’ and a related rebranding that clearly reected its new approach. The Company will be pursuing the following operations in the eld of healthcare real estate, both in the public and private domain: Our activities as a healthcare investor The legal structure of the initial portfolio (1) is as follows: A legal analysis of the Company’s nancial lease shows that the Company is and has always been the legal sole and full owner of the constructions and will remain so for the total duration of the building right. The ownership of income-producing real estate is critical to the Company’s activities. Thus, the granting of a building right creates a horizontal division of ownership between, on the one hand, the holder of the building right until expiry of the building right and the landowner (freeholder) on the other. The ownership of the buildings is linked to obligations towards the landowner/ freeholder/holder of the leasehold: The Company has the obligation to obtain all necessary permits and administrative authorisations in relation to the construction of the service ats during the construction period. The Company has the obligation to conclude (i) an insurance covering all building site risks, and (ii) an insurance covering the 10-year liability of the (1) The initial portfolio concerns the nancial leases (with a balance sheet value of €156,518,610 and a generated rental stream of €14,574,287 as at 31/12/2021) that the Company concluded until 2014. III. REPORT OF THE BOARD OF DIRECTORS • Renancing of existing buildings: existing buildings in need of a thorough renovation, can be passed through to Care Property Invest by means of a right of lease, right of supercie or simply by purchase. After the renovation, the building will also be made available to an experienced operator. • Investing in health care real estate: acquiring land and/or buildings, projects under development and new build projects. Care Property will make the projects available to the operator on the basis of a long-term agreement. PRIVATE SECTOR (INVESTMENT PROPERTIES) • • Private operator (Client) CPI acquires land and buildings Triple net LT rental agreement Rental fee • • PUBLIC SECTOR (FIN. LEASINGS) right of supercie for CPI Leasehold building Triple net canon • • • • (Client) contractor and the architect of the constructions. The Company has the right to regularly check whether the tenant complies with its obligations under the leasehold contract, e.g., by visiting the service ats. The leasehold right on the constructions is granted against payment of periodical rental income (canon), indexed on a yearly basis, by the tenants. Receiving recurring income from properties owned is at the core of any REIT activity and not to be confused with nancing activities. The Company has the legal possibility to dispose of the ownership of buildings over the course of the contract at market value (being different from the book value which equals the initial investment outlay) and thus take the opportunity to monetise the capital gain. A pre-emption right for the tenant, which is not uncommon in lease contracts for healthcare facilities whatever the legal structure or type of tenant, is included in the contracts and proves this (1) Same structure applies for NPO’s DESIGN - BUILD - FINANCE STRUCTURE NV • OPENBARE BE VA K NAAR BELGISCH RECH T Development Financing Owner building and its freehold footprint PCSW (1) Leasehold building Building right Retains freehold of land (ex. buildings) Triple net Canon Care Property Invest nv / Report of the Board of Directors 34 35 Report of the Board of Directors / Care Property Invest nv ability. This pre-emption right can only be exercised at market value thus afrming the possibility for the Company to take the opportunity to monetise the capital gain. However, it is not the strategy of the Company to dispose of the ownership and rental income generated by this initial portfolio as it is an important component of the top line. At the end of building right the constructions will automatically become the full ownership of the tenant, in accordance with the Belgian law on building rights, and in return, the tenant will owe a contractually agreed compensation amount equal to 98% of the total investment amount to Care Property Invest. As the Company is the legal owner of the constructions, the obligations of the operators under the agreements are not, and cannot, be secured or guaranteed by securities or collateral (e.g., a mortgage or other right in rem) on the constructions owned by the Company. Therefore, the obligations of the operators under the contracts with the Company are secured by undertakings or guarantees given by the local authorities (i.e., a mechanism similar to a parent guarantee in lease agreements) and an overall claim for the nancing of local authorities against the Flemish government. The legal framework in Belgium describes the activities as an active, and operational company that is specialised in making immovable goods available to users. Active management implies ownership of immovable goods as a prerequisite to obtain and maintain a REIT license in Belgium. According to current REIT laws activities as a mortgage REIT are not allowed. Therefore, in the 25 years after the founding of the Company the income generated by the initial portfolio or indeed all nancial leases the Company entered into is consistently accounted for as rental income and not interest income or any nancial income as would be the case for a mortgage REIT. Care Property Invest plays an active role as the property developer; its objective is to make high-quality projects available to those operating in the healthcare sector. Investment projects for new acquisitions as well as new property developments are analysed in great detail. The Board of Directors thoroughly assesses both the property project and the future operator based on a detailed investment dossier and the feasibility of the business plan for the project. Care Property Invest aims for a balanced, diversied portfolio that can generate stable income. The affordability of its ‘recognised’ projects and the operation of these by professional, solvent and specialised care providers is designed to ensure this. The management of the Company also ensures that all the requirements of the Regulated Real Estate Companies Act (‘RREC Law’) and the Regulated Real Estate Companies Royal Decree (‘RREC Royal Decree’) are always observed. In order to further dene its changing role, Care Property Invest has claried its mission statement and recorded its values. MISSION STATEMENT Care Property Invest is a public regulated real estate company (public RREC) under Belgian law. Care Property Invest helps healthcare entrepreneurs to realise their projects by offering good quality and socially responsible real estate tailored to the needs of the end users, and this from a solid organisation. For its shareholders, it always aims for stable long-term returns. VALUES Professionalism Care Property Invest always executes both current and future projects after completing a detailed research process, conducted both internally and by external research agencies. As a result, it can make an accurate assessment of the potential risks associated with every project. The internal processes are also monitored from close by and are adjusted on time where necessary to guarantee the smooth operation of the organisation. Care Property Invest aims for the highest possible form of professionalism in all its activities. Innovation Care Property Invest believes in excelling through continuous innovation. Care Property Invest believes in growth through the continuous innovation in the approach and implementation of its projects and at the same time, through additional training and education of its staff. It aims to offer custom solutions for its healthcare real estate, in consultation and with the input of its key stakeholders. Zeist (NL) I Villa Wulperhorst Care Property Invest nv / Report of the Board of Directors 36 37 Report of the Board of Directors / Care Property Invest nv Trust Care Property Invest aims for a lasting relationship of trust with its shareholders, employees, the operators of its healthcare real estate, contractors, the political world, the RREC sector and all stakeholders in general. VISION STATEMENT Care Property Invest has the ambition to become the reference Company in the market for the development of and investment in healthcare real estate and to realise accelerated growth within this market. It is a dynamic player, focused at independently realising innovation in real estate for care and welfare. REAL ESTATE STRATEGY A growing market Its current strategy for residential healthcare real estate for senior citizens is based on the progressive ageing of the population which, according to the Federal Planning Bureau, will peak by 2070. Now and in the coming decades, this will lead to an increasing demand for healthcare real estate with social added value. A similar trend also applies to The Netherlands, Spain and Ireland in terms of population ageing gures. For more details, we refer to the graphs presented hereafter, which show the demographic evolution in Belgium, the Netherlands, Spain and Ireland. (1) Based on data from the Federal Planning Bureau - Report on demographic projections 2017-2070. (2) Based on the following data source: ‘Projections of population intervals; age group, 2018-2060’, CBS - 19 December 2017. (3) Based on data from the Organisation for Economic Cooperation and Development (OECD), http://stats.oecd.org. (4) Based on data from the Irish Central Statistics Ofce: ‘Projected population, 2016 - 2051’, https://www.cso.ie. The guaranteed demographic evolution in combination with its growth strategy, the implementation of its corporate purpose and the fact that as a RREC it invests for 100% in healthcare real estate, ensures that its share always provides a stable return for its shareholders, and this at a reduced withholding tax rate of 15% (instead of the general rate of 30%). Care Property Invest spreads its risks by ensuring a good geographic market distribution of its real estate, diversifying between the operators of its real estate and by creating a good balance between public-private and private partnerships. This was, among other things, also a major motivator for the Company to make its move onto the Dutch healthcare property market in 2018 and also onto the Spanish healthcare property market in 2020. In 2022 the Company will also continue its strategy by investing in the Irish care real estate market. Care Property Invest helps healthcare entrepreneurs to realise their projects by offering high-quality and socially responsible real estate tailored to the needs of the end users, and this from a solid organisation. The Company strives to provide its shareholders with a stable long-term return at all times. DEMOGRAPHIC EVOLUTION BELGIAN POPULATION ( 1) 85+ 66-85 0-65 85+ 65-85 0-64 EXPECTED GROWTH total Belgian population of +15% EXPECTED GROWTH total Dutch population of +7% +168% in age category 85+ +63% in age category 66-85 +206% in age category 85+ +38% in age category 65-85 DEMOGRAPHIC EVOLUTION DUTCH POPULATION ( 2) DEMOGRAPHIC EVOLUTION SPANISH POPULATION(3) EXPECTED GROWTH total Spanish population of +5% +182% in age category 80+ +44% in age category 66-80 80+ 66-80 0-65 DEMOGRAPHIC EVOLUTION IRISH POPULATION(4) EXPECTED GROWTH total Irish population of +20% +252% in age category 85+ +76% in age category 65-85 85+ 65-85 0-64 20512046204120362031202620212016 0 20 40 60 80 100 +20% -15% +5% +15% +7% +182% +252% +44% +76% Care Property Invest nv / Report of the Board of Directors 38 39 Report of the Board of Directors / Care Property Invest nv CUSTOMISED QUALITY REAL ESTATE The careful selection of new projects for the Company always takes place after a detailed risk analysis with a well-founded assessment of the investment le by the Executive Committee, subject to positive advice from the Investment Committee or by the Board of Directors of the Company. This may involve the Company developing the property itself, or building and funding the construction, but may also involve renancing or acquiring existing buildings, with an option of renovation or expansion, both in the private and the public market. The main selection criteria are presented below: • Correct price-quality ratio of the project; • Potential returns of the project; • Solvency, reputation and spread of operators; • Good location of the project: easy access, both by car and by public transport and absence of other healthcare real estate. For this purpose, an extensive market research is always carried out. • Environment: in the immediate vicinity of a village/city centre with shops, pharmacies and catering facilities; • The property complies with high quality standards in combination with advanced technological equipment and perfectly meets the needs of the Care Property Invest target public. In essence, Care Property Invest’s strategy is of the ‘buy and hold’ type, and as such, is by denition aimed at keeping the property in the long term. FINANCIAL STRATEGY Management of investor and stakeholder relations Care Property Invest aims to develop a continual dialogue with the healthcare sector, the government, potential and current investors, credit providers and more in general all stakeholders. The Company attempts to align its nancial strategy with the overall strategy and growth achieved by the Company. By continuously expanding its scale, the Company strives for a competitive distribution of debt and capital costs and an improvement of its operating margin. Origin of nancial sources Care Property Invest aims to nance itself in the best possible way, making use of shareholders’ equity and borrowed funds. Equity Equity is raised by using the capital market. By means of capital increases in cash and in kind, counterbalanced by immediately protable assets and/or a concrete pipeline, growth in earnings per share can be ensured and maintained. Care Property Invest strives for a permanent dialogue with investors, directly and indirectly. By organising or participating in roadshows and trade fairs at home and abroad, it builds a permanent dialogue with both institutional and private investors. As a RREC, Care Property Invest is fully aware of the importance of its dividend policy for its shareholders. The Company therefore endeavours to increase its dividend whenever this is sustainably possible. This prevents the Company from having to reduce this again in a later nancial year. Given the Company’s strong growth, it attempts to allocate as much of its prots as possible so it can be reinvested within the legal framework. In doing so, the Company strives for a pay-out ratio (distribution rate of the dividend per share compared to the earnings per share) that comes as close as possible to the legal minimum of 80%, while at the same time striving for a sustainable increase in the dividend. It also examines the possibility of an optional dividend. Despite the already improved liquidity of its share, Care Property Invest is still in the process of increasing this further in order to boost the attractiveness of its share. To this end, it appointed both KBC Securities and Bank Degroof Petercam as liquidity providers in 2018. The appointment of these liquidity providers results in smaller price uctuations and thus a steadier share price and a smaller bid-ask spread. Foreign funds The foreign funds were raised as diversied as possible. This allows the risk on the banking counterparty to be limited. Care Property Invest aims for a further spread of its lenders both domestically and internationally. In order to further diversify the origins of its sources of borrowed funds, the Company also has an MTN programme in place with Belus that offers the possibility of issuing bonds and commercial papers. In 2018, the ceiling of this programme was raised for the rst time from €50 million to €100 million and KBC was appointed as an additional dealer to limit the placement risk. Then in 2019, the ceiling was further increased to €140 million, in 2020 to €200 million and in 2021 to €300 million. The Company disposes of the necessary lines for the portion of the commercial paper offering the necessary coverage, in order not to increase the liquidity risk. Care Property Invest tries to further limit its liquidity risk by keeping sufcient credit lines available for its short-term needs and the nancing of additional investments over the current nancial year. In addition, there is also a liquidity risk if the Company would no longer respect the covenants linked to these credit agreements. These covenants contain market-based provisions on, among other things, the debt ratio and compliance with the provisions of the RREC Legislation. Care Property Invest monitors the parameters of these covenants on a regular basis and whenever a new investment is being considered. At the end of the nancial year, Care Property Invest did not mortgage or pledge any building in its real estate portfolio. Correct nancing is necessary for a protable and solid business model, in view of the capital-intensive character of the sector in which the Company operates and the Company’s buy-and-hold strategy. As a result, the Company has a structural debt position with mainly bullet loans. The investment loans that the Company pays off are mainly loans that had already been contracted by subsidiaries prior to acquisition and that the Company acquired with the acquisition of the shares Care Property Invest nv / Report of the Board of Directors 40 41 Report of the Board of Directors / Care Property Invest nv of the subsidiary. The cash position held permanently by the Company is limited. The Company’s long-term objective is to have a debt ratio between 50% and 55%. This debt ratio allows for an optimal balance between own and foreign resources and also offers the possibility of taking advantage of investment opportunities. The Company also tries to limit the interest rate risk on its debts by striving for a hedging percentage of its debts between 75% and 80%. The Company closely monitors developments on the nancial markets in order to optimise its nancial structure and to obtain a good composition of short and long-term nancing and the conclusion of derivative contracts in order to achieve the desired hedging percentage. The Company also aims to take into account the long-term income from its investments in the average duration of its loans. Low risk and resilient sources of income through long-term leasehold and rental contracts (1) With the exception of the project ‘Les Terrasses du Bois’ in Watermaal Bosvoorde, for which a long-term agreement of the ‘double net’ type has been concluded and the project ‘Tillia’ in Gullegem for which a long-term agreement of the ‘single net’ type has been concluded. By contracting long-term leasehold and rental agreements, the Company creates long-term cash ows. Through the triple net character (1) of these contracts with solid operators and the transfer of the vacancy risk to the operator (apart from the investment in Gullegem), the Company succeeds in maintaining a low risk prole. Also, the annual indexation of the rental agreements provides protection against ination. The fact that on 31 December 2021 about one third of the rental income comes from agreements with local authorities, reinforces the low risk prole and makes the Company unique compared to other RRECs. This applies all the more since the healthcare real estate is linked to the demographic factors which, in view of the underlying demographic trend of the ageing of the population, are favourable, rather than to economic trends. Financial result Vision for the future Broadening the Company objectives Care Property Invest positions itself as an investor in elderly care and adapted infrastructure for the disabled. The objectives stated in the Articles of Association are set as broadly as possible. Priorities are set within the care and welfare property segment. Expansion of service portfolio Care Property Invest focuses on investments in care and welfare and has also devoted opportunity-driven attention to concept development. Strategic objectives 1. Market expansion and (internal) service portfolio in care and welfare. 2. Managing investor and stakeholder relations. 3. Internationalisation. 4. Follow-up and inuencing of the regulatory framework. 5. Coordination of resources with growth (growth management). Care Property Invest’s ambitions are to be the (leading) reference company in its market and to realise accelerated growth. Care Property Invest is a highly dynamic player in its market, which generates innovation in property for care and well-being for seniors and people with disabilities. Care Property Invest would like to achieve this independently. Turnhout (BE) I De Nieuwe Kaai Care Property Invest nv / Report of the Board of Directors 42 43 Report of the Board of Directors / Care Property Invest nv (1) Information on the Company’s activities and investments during the previous 2 nancial years is included in the Annual Financial Report 2020, chapter ‘III Report of the Board of Directors’, item ‘2. Important events’ starting on page 40 and in the Annual Financial Report 2019, chapter ‘IV Report of the Board of Directors’, item ‘2. Important events’ starting on page 37. Both reports are available on the website www.carepropertyinvest.be. 2. Important events (1) 2.1 Important events during the 2021 nancial year Below is a brief overview of the acquisitions and projects under development during the 2021 nancial year. For further information regarding the real estate of the acquired projects, please see the individual press releases on the website, https://carepropertyinvest.be/en/investments/press-releases/ 2.1.1 Name Operator Acquisition date Location Year of construction / renovation or expected completion Contract Conv. Value (in € million) Type of transaction New projectswith an immediate return Résidence des Ardennes My-Assist 20/01/2021 Attert Q4 2021 29 years (triple net) €44.3 Asset deal Dungelhoeff Vulpia Care Group 17/11/2021 Lier Q4 2021 27 years (triple net) €26.5 Share deal New projects signed under suspensory conditions Vulpia Elsene Vulpia Care Group 09/09/2021 Elsene Q4 2025 27 years (triple net) €11.6 Asset deal 2.1.2 Name Operator Acquisition date Location Year of construction / renovation or expected completion Contract Conv. Value (in € million) Type of transaction Ongoing projects under development Amstel Korian Holding Nederland 31/03/2021 Ouderkerk aan de Amstel Q3 2022 15 years (triple net) €9.6 Asset deal Villa Vught Valuas Zorggroep 29/12/2020 Vught Q2 2022 25 years (triple net) €6.2 Asset deal Huize Elsrijk Com4care 29/12/2020 Amstelveen Q3 2022 20,5 years (triple net) €6.2 Share deal Mariënhaven Valuas Zorggroep 28/12/2020 Warmond Q3 2022 20 years (triple net) €11.6 Asset deal Aldenborgh Aldenborgh Exploitatie 05/11/2020 Roermond Q1 2022 25 years (triple net) €8.2 Asset deal St. Josephkerk Korian Holding Nederland 26/09/2019 Hillegom Q4 2022 20 years (triple net) €9.1 Asset deal Sterrenwacht Korian Holding Nederland 12/06/2019 Middelburg Q3 2022 20 years (triple net) €5.7 Asset deal Margaritha Maria Kerk (vicarage) Korian Holding Nederland 26/03/2019 Tilburg Q1 2022 20 years (triple net) €2.0 Asset deal Completed projects Villa Wulperhorst Valuas Zorggroep 06/08/2019 (Manor) 16/10/2019 (Coach house) Zeist Q2 2021 25 years (triple net) €13.0 Asset deal De Gouden Leeuw (Zutphen) De Gouden Leeuw 19/12/2019 Zutphen Q2 2021 25 years (triple net) €11.8 Asset deal Margaritha Maria Kerk (church) Korian Holding Nederland 26/03/2019 Tilburg Q3 2021 20 years (triple net) €5.7 Asset deal De Orangerie Korian Holding Nederland 23/10/2018 Nijmegen Q4 2021 20 years (triple net) €9.8 Asset deal 2.1.3 Name Operator Acquisition date Location Year of construction / renovation or expected completion Contract Conv. Value (in € million) Type of transaction New projects with an immediate return Emera Almeria Emera Group 18/03/2021 Almería 2021 15 years (triple net) €10.0 Share deal Forum Mare Nostrum I Forum de Inversiones Inmobiliarias Mare Nostrum S.A. 21/07/2021 Alfaz Del Pi 2008 20 years (triple net) €35.0 Asset deal Ongoing projects under development Emera Mostoles Emera Group 21/06/2021 Mostoles (Madrid) Q2 2023 15 years (triple net) €12.0 Asset deal Emera Carabanchel Emera Group 24/07/2020 Carabanchel (Madrid) Q2 2022 15 years (triple net) €14.6 Asset deal New projects signed under suspensory conditions Solimar Tavernes Blanques Vivalto Group 15/07/2021 Tavernes Blanques Q1 2025 20 years (triple net) €10.2 Asset deal Solimar Elche Vivalto Group 21/12/2021 Elche Q2 2025 20 years (triple net) €10.2 Asset deal 2.1.4 2.1.4.1 Mergers Merging company Absorbing company Date effective absorption Date of deed Date publication Belgian Ofcial Gazette Code publication Belgian Ofcial Gazette t Neerhof Service nv Care Property Invest nv 1 January 2021 23 June 2021 26 July 2021 BS 26-07-2021/0089297 Ruiterschool Van Dooren nv Care Property Invest nv 1 January 2021 23 June 2021 26 July 2021 BS 26-07-2021/0089018 Zilvermolen nv Care Property Invest nv 1 January 2021 23 June 2021 26 July 2021 BS 26-07-2021/0089016 De Wand-Janson nv Care Property Invest nv 1 January 2021 23 June 2021 26 July 2021 BS 26-07-2021/0089014 For more information on the merger proposals, see www.carepropertyinvest.be/en/investments/mergers/. 2.1.4.2 Name acquired subsidiary Date of acquisition of control Purpose Care Property Invest Jasmine S.L. 18 March 2021 Acquiring healthcare real estate sites in Spain Care Property Invest Iris S.L. 13 July 2021 Acquiring healthcare real estate sites in Spain Apollo Lier nv 17 November 2021 Acquiring healthcare real estate sites in Belgium 2.1.4.3 Capital increase in kind On 20 January 2021, Care Property Invest acquired the project 'Résidence des Ardennes' in Attert by means of a contribution in kind of the land and the real estate into the capital of Care Property Invest within the framework of the authorised capital. A separate agreement was also concluded regarding the completion of the construction works in progress. As a result of this contribution, which led to a capital increase of €42,087,805 (including issue premium), 1,696,114 Care Property Invest shares were issued. The issue price was €24.81 per share. Care Property Invest nv / Report of the Board of Directors 44 45 Report of the Board of Directors / Care Property Invest nv On 22 September 2021, Care Property Invest received both the EPRA sBPR Silver Award and the EPRA sBPR Most Improved Award. On 17 November 2021, Care Property Invest acquired the project ‘Dungelhoeff' in Lier by means of a contribution in kind of 100% of the shares in Apollo Lier nv, which owns the property, into the capital of Care Property Invest within the framework of the authorised capital. As a result of this contribution, which led to a capital increase of €26,532,633 (including issue premium), 1,124,968 new Care Property Invest shares were issued. The issue price was €23.59 per share. 2.1.4.4 MTN programme extension In early 2021, Care Property Invest increased the ceiling of its MTN programme to €300 million, including an increase in the amount of back-up lines specically established for this purpose. 2.1.4.5 Successful inaugural issue of sustainability bonds for €32.5 million Care Property Invest has successfully completed its rst debt capital markets transaction by means of a €32.5 million Sustainability Bonds private placement. The bonds have a maturity of 10 years, with coupons of 2.05%, which means that Care Property Invest is able to further extend its average debt maturity at nancing costs comparable to its weighted average interest rate at the time of issuance. The bonds were placed with an institutional investor, belonging to an international insurance group. With this transaction Care Property Invest secured nancing to cover its existing commitments and planned capex for the next 12 months and demonstrates the diversication opportunities in funding that the Company has, as well as the condence that the Company also enjoys among bond investors. The issue took place on 8 July 2021. This issuance conrms Care Property Invest’s commitment to sustainable development and further strengthening of its ESG strategy (Environmental, Social, and Governance). The Sustainability Bonds are issued under the newly established Sustainable Finance Framework of Care Property Invest, on which Care Property Invest obtained a positive Second Party Opinion provided by Sustainalytics. It is also conrmed that the principles of this nancing programme are in line with the ICMA Green Bond Principles. The net proceeds from these bonds are used exclusively to nance or renance eligible sustainable assets as included in the Care Property Invest Sustainable Finance Framework. The assets provide direct environmental and social prot benets and are required to meet the eligible criteria reported in the Sustainable Finance Framework, mapped on the project categories of the ICMA Green – and Social Bond Principles, the EU Environmental Objectives as well as the UN Sustainable Development Goals (SDGs). The allocation will be reported on in the 2021 Sustainability report which will contain the amount allocated, a breakdown on categories of eligible assets and a breakdown by country and a breakdown between nancing and renancing of eligible assets. The bonds are listed on Euronext Growth Brussels and added to the Euronext ESG Bond Initiative. Care Property Invest‘s Sustainable Finance Framework is consistent with amongst others the guidelines of the Green Bond Principles (ICMA, 2018), Social Bond Principles (ICMA, 2020) and the Sustainability Bond Guidelines (2018). 2.1.4.6 Award for sustainability reporting by receiving the EPRA sBPR Silver Award and the EPRA sBPR Most Improved Award and for financial reporting by receiving the EPRA BPR Gold Award On 22 September 2021, Care Property Invest received both the EPRA sBPR Silver Award and the EPRA sBPR Most Improved Award. The Company is pleased with this recognition of the efforts made in the eld of sustainability reporting. On 22 September 2021, the Company also received the EPRA BPR Gold Award for the fth consecutive time for its continued high level of transparency in its nancial reporting. 2.1.4.7 Purchase of own shares On 8 December 2021, Care Property Invest announced that the Board of Directors has decided to continue the share buy-back programme announced on 8 April 2019 for a total amount of up to €180,000 to acquire up to 7,500 shares, within the limits of the (renewed) authorisation to buy back own shares granted by the Extraordinary General Meeting of Shareholders of 15 June 2020. The purpose of the buy-back programme is to enable Care Property Invest to meet its obligations with respect to the remuneration of the executive management of Care Property Invest. On 22 December 2021, Care Property Invest announced that, in accordance with Article 8:4 of the Royal Decree of 29 April 2019 implementing the BCCA, it had purchased 7,500 own shares on Euronext Brussels (this purchase was ratied by the Board of Directors). The shares were purchased at an average price (rounded) of €25.85 per share. Detailed overview of the transactions per day: Date Number of shares Average price (in €) Minimum price (in €) Maximum price (in €) Total price (in €) 14 December 2021 4,769 25.86 25.80 25.90 123,340 15 December 2021 2,731 25.83 25.75 25.95 70,532 Total 7,500 25.85 193,872 Care Property Invest will submit a new remuneration policy for voting at the annual general meeting. 2.1.4.8 Coronavirus (COVID-19) Although the impact of the COVID-19 pandemic on the wider community was still being felt at the beginning of 2021, it can be said that the roll-out of vaccination programmes across Europe, prioritising residents and staff of residential care centres, has contributed to a more positive perception of the risk in residential care centres, where occupancy rates are rising again. Therefore, the pandemic has not had a signicant impact on the nancial performance of Care Property Invest to date, as the local governments of several countries have approved aid programmes that allow healthcare operators to (partially) cover the additional costs resulting from the COVID-19 pandemic. Moreover, the fundamentals of healthcare real estate remain unaffected, with the pandemic only underlining the importance of quality care for the elderly. Care Property Invest nv / Report of the Board of Directors 46 47 Report of the Board of Directors / Care Property Invest nv 2.3 Outlook Care Property Invest actively pursues the development of a balanced and protable real estate portfolio and investigates investment opportunities that are fully in line with the Company’s strategy in Belgium, The Netherlands, Spain and Ireland as well as in other key geographic markets within the EEA. More information on these projects can be found in section ‘2.1 Important events during the 2021 nancial year’ on page 44. The Board of Directors is also constantly examining various investment and nancing possibilities in order to realise its activities. 2.2 Events afte the closing of the 2021 nancial year 2.2.1 Additional investments As already announced in separate press releases, Care Property Invest is proud to announce that it has made the following investments after the closing of the 2021 nancial year: 2.2.1.1 Additional projects in The Netherlands Name Operator Acquisition date Location Year of construction / renovation or expected completion Contract Conv. Value (in € million) Type of transaction Completed projects Aldenborgh Aldenborgh Exploitatie 05/11/2020 Roermond Q1 2022 25 years (triple net) €8.2 Asset deal New projects under development Warm Hart Zuidwolde Warm Hart Zorghuizen 3/02/2022 Zuidwolde Q2 2023 20 years (triple net) €10.4 Asset deal 2.2.1.2 Additional project in Spain Name Operator Acquisition date Location Year of construction / renovation or expected completion Contract Conv. Value (in € million) Type of transaction New projects with an immediate return Emera Murcia Emera Group 25/02/2022 Murcia 2021 15 years (triple net) €10.8 Share deal New projects under development Solimar Tavernes Blanques Vivalto Group 11/03/2022 Tavernes Blanques Q1 2025 20 years (triple net) €10.2 Asset deal 2.2.1.3 Additional projects in Ireland Name Operator Acquisition date Location Year of construction / renovation or expected completion Contract Conv. Value (in € million) Type of transaction New projects with an immediate return Ballincurrig Care Centre Silver Stream Healthcare 25/02/2022 Ballincurrig 2003 25 years (triple net) €6.2 Asset deal Ratoath Manor Nursing Home Silver Stream Healthcare 08/04/2022 Ratoath 1995 25 years (triple net) €6.9 Asset deal Dunlavin Nursing Home Silver Stream Healthcare 08/04/2022 Dunlavin 2016 25 years (triple net) €11.3 Asset deal Leeson Park Nursing Home Silver Stream Healthcare 08/04/2022 Ranelagh 1960/2013 25 years (triple net) €14.6 Asset deal New projects signed undersuspensory conditions Elm Green Nursing Home DomusVi 15/03/2022 Dunsink 2015 15 years (triple net) €26.7 Asset deal 2.2.2 Name established subsidiary Date of establishment Purpose Care Property Invest Emerald Limited 25 January 2022 Acquiring healthcare real estate sites in Ireland Name acquired subsidiary Date of acquisition of control Purpose Care Property Invest Lily S.L. 25 February 2022 Acquiring healthcare real estate sites in Spain Care Property Invest nv / Report of the Board of Directors 48 49 Report of the Board of Directors / Care Property Invest nv 3. Synthesis of the consolidated balance sheet and the global result statement 3.1 Consolidated global result statement Amounts in EUR 31/12/2021 31/12/2020 I Rental income (+) 43,233,668 36,203,096 Net rental result 43,233,668 36,203,096 V Recovery of rental charges and taxes normally borne by tenants on let properties (+) 419,382 551,247 VII Rental charges and taxes normally borne by tenants on let properties (-) -419,382 -551,247 Real estate result 43,233,668 36,203,096 IX Technical costs (-) -4,090 -2,284 Real estate costs -4,090 -2,284 Real estate operating result 43,229,578 36,200,812 XIV General expenses of the Company (-) -7,896,542 -7,217,459 XV Other operating income and expenses (+/-) -29,439 1,362,430 Operating result before result on portfolio 35,303,597 30,345,783 XVIII Changes in fair value of investment properties (+/-) 22,143,057 2,598,197 Operating result 57,446,654 32,943,980 XX Financial income (+) 430 90 XXI Net interest expense (-) -7,844,467 -7,099,028 XXII Other nancial costs (-) -586,893 -535,760 XXIII Changes in fair value of nancial assets and liabilities (+/-) 11,165,200 -5,358,254 Financial result 2,734,270 -12,992,952 Result before taxes 60,180,924 19,951,028 XXIV Corporation tax (-) -405,372 90,241 XXV Exit tax (-) -120,731 -176,357 Taxes -526,103 -86,116 NET RESULT (group share) 59,654,821 19,864,912 Other elements of the global result 0 0 GLOBAL RESULT 59,654,821 19,864,912 3.2 Net result per share on a consolidated basis Amounts in EUR 31/12/2021 31/12/2020 NET RESULT / GLOBAL RESULT 59,654,821 19,864,912 Net result per share based on weighted average shares outstanding € 2.2976 € 0.8598 Gross yield compared to the initial issuing price in 1996 38.62% 14.45% Gross yield compared to stock market price on closing date 8.92% 3.20% 3.3 Components of the net result Amounts in EUR 31/12/2021 31/12/2020 NET RESULT / GLOBAL RESULT 59,654,821 19,864,912 Non-cash elements included in the net result -32,196,859 3,094,548 Depreciations, impairments and reversal of impairments 254,511 211,654 Changes in fair value of investment properties -22,143,057 -2,598,197 Changes in fair value of authorised hedging instruments -11,165,200 5,358,254 Projects' prot or loss margin attributed to the period 856,887 122,836 ADJUSTED EPRA EARNINGS 27,457,962 22,959,461 Adjusted EPRA earnings per share based on weighted average number of outstanding shares € 1.0576 € 0.9937 Gross yield compared to the initial issuing price in 1996 17.78% 16.70% Gross yield compared to stock market price on closing date 4.11% 3.69% The weighted average number of outstanding shares was 23,105,198 as at 31 December 2020 and increased to 25,963,657 shares as at 31 December 2021. The number of shares amounted to 24,110,034 as at 31 December 2020 (including 6,878 treasury shares) and increased to 26,931,116 shares as at 31 December 2021 (including 9,192 treasury shares). The number of shares changed as a result of (i) the contribution in kind of the residential care centre with assisted living apartments 'Résidence des Ardennes', located in Attert, on 20 January 2021 for which 1,696,114 new shares were issued and (ii) a capital increase in kind on 17 November 2021 for the purchase of 100% of the shares in Apollo Lier nv, which owns the residential care centre with assisted living apartments, ‘Dungelhoeff', located in Lier, for which 1,124,968 new shares were issued. The shares issued under (i) are entitled to dividends for the full 2021 nancial year, those issued under (ii) share in the result as from 10 November 2021 (coupon 15 et seq.). The gross return is calculated in table ‘3.2 Net result per share on a consolidated basis’ by dividing the net result per share by the initial issue price in 1996 (i.e., €5.9495) on the one hand and the market value on the closing date on the other hand. In table ‘3.3 Components of the net result’, the gross yield is calculated by dividing the adjusted EPRA earnings per share by the initial issue price in 1996 (i.e., €5.9495), on the one hand, and the market capitalisation on the closing date, on the other. The share price was €25.75 on 31 December 2021 and €26.90 on 31 December 2020. There are no instruments that have a potentially dilutive effect on the net result per share. Care Property Invest nv / Report of the Board of Directors 50 51 Report of the Board of Directors / Care Property Invest nv Notes to the global result statement Operating result The Company’s operating result increased by 74.38% compared to 31 December 2020. Rental income as at 31 December 2021 increased by 19.42% compared to the same period last year. The increase in rental income can be explained, besides indexation, by the additional rental income following (i) the acquisition of new investment properties and (ii) the completion of development projects in 2021. The acquired investment properties during 2020 also contribute to the increased rental income in 2021. As at 31 December 2021, the Company had no outstanding rent receivables for which receivables had to be transferred to the doubtful debtors. The Company’s general expenses increased by €679,083 compared to 31 December 2020. This increase can be largely attributed to the increase in remuneration as the average workforce increased from 15.30 FTEs as at 31 December 2020 to 20.90 FTEs as at 31 December 2021. In addition, the Company's growth also contributes to the increase in the Company's general expenses. Other operating income and expenses decreased from €1,362,430 as at 31 December 2020 to €-29,439 as at 31 December 2021. The decrease is mainly due to the completion of the ‘Assistentiewoningen De Stille Meers’ project in Middelkerke, which generated signicant revenue in 2020. In addition, the amount of pre-nancing to be recovered was lower in nancial year 2021 than in 2020. As at 31 December 2021, this item consists mainly of the fee for project management of €720,080, which largely concerns the recovery of the pre-nancing of existing Dutch projects, contributing to the Company's cash result and the prot and loss margin for these projects of €-856,887. The latter concerns a non-cash element which is corrected for the calculation of the adjusted EPRA earnings. The variations in the fair value of investment properties amount to €22,143,057 as at 31 December 2021. The increase reects an overall positive variation in the fair value of the investment properties in portfolio as a result of ination expectations on the real estate market and, in addition to this general trend, can be attributed to the variations in fair value of the acquisitions in 2021 and the completion of the ‘Nuance' project in Vorst (Belgium). Also here it concerns unrealised variations that are corrected in the adjusted EPRA earnings. Financial result Interest charges rose as a result of the additional raising of external funds to nance the acquisitions that took place in the course of 2020 and 2021 on the one hand, and to nance ongoing project developments on the other. The weighted average interest rate amounts to 1.92% as at 31 December 2021. This is a signicant decrease compared to the weighted average interest rate of 2.22% as at 31 December 2020. This is due to a lower marginal interest rate that the Company has to pay on new debts that it enters into. The nancial result was positively inuenced by the inclusion of the fair value of the nancial instruments concluded. Due to an increase in market interest rates, a positive value of €11,165,200 was obtained as at 31 December 2021. As a result, the total impact to date is €-16,810,790 compared to €-27,975,990 as at 31 December 2020. The variation in fair value of nancial assets and liabilities is a non-cash element and is therefore not taken into account for the calculation of the distributable result, i.e., the adjusted EPRA earnings. Taxes The amount of taxes as at 31 December 2021 includes the estimated and prepaid corporate income taxes as well as the modication of the calculated exit tax of the subsidiaries. Adjusted EPRA earnings The adjusted EPRA earnings on a consolidated basis amounted to €27,457,962 as at 31 December 2021 compared to €22,959,461 as at 31 December 2020. This represents an increase of 19.59%. The adjusted EPRA earnings per share rose from €0.9937 as at 31 December 2020 to € 1.0576 as at 31 December 2021. This represents an increase of 6.43% and is lower than the increase in total adjusted EPRA earnings due to the increase in the number of issued shares. Berchem (BE) I Park Kemmelberg Care Property Invest nv / Report of the Board of Directors 52 53 Report of the Board of Directors / Care Property Invest nv 3.4 Consolidated balance sheet Amounts in EUR 31/12/2021 31/12/2020 ASSETS I. NON-CURRENT ASSETS 927,165,460 739,484,884 B. Intangible assets 122,671 158,457 C. Investment properties 718,031,800 533,854,521 D. Other tangible xed assets 4,739,677 2,271,023 E. Financial xed assets 2,685,847 177,036 F. Finance lease receivables 186,775,769 187,355,753 G. Trade receivables and other non-current assets 14,809,696 15,666,584 H. Deferred tax - assets 0 1,510 II. CURRENT ASSETS 18,150,751 9,732,072 D. Trade receivables 4,514,443 2,459,728 E. Tax receivables and other current assets 10,167,850 2,294,990 F. Cash and cash equivalents 2,544,873 3,751,851 G. Deferrals and accruals 923,585 1,225,503 TOTAL ASSETS 945,316,211 749,216,956 EQUITY AND LIABILITIES EQUITY 479,258,685 369,779,481 A. Capital 160,226,675 143,442,647 B. Share premium 233,064,630 181,447,992 C. Reserves 26,312,559 25,023,930 D. Net result for the nancial year 59,654,821 19,864,912 LIABILITIES 466,057,526 379,437,475 I. Non-current liabilities 296,256,614 237,598,310 B. Non-current nancial debts 274,600,056 205,399,114 C. Other non-current nancial liabilities 19,494,005 27,975,990 E. Other non-current liabilities 1,993,405 1,782,301 F. Deferred tax - liabilities 169,148 2,440,905 II. Current liabilities 169,800,912 141,839,165 B. Current nancial liabilities 151,220,542 125,266,029 D. Trade payables and other current liabilities 12,245,266 12,096,802 E. Other current liabilities 3,550,796 2,440,285 F. Deferrals and accruals 2,784,308 2,036,049 TOTAL EQUITY AND LIABILITIES 945,316,211 749,216,956 Notes to the consolidated balance sheet Investment Properties The Company’s property portfolio increased by €184,177,279 in 2021 due to the acquisition of investment properties, namely the projects 'Résidence des Ardennes' in Attert (BE), ‘Dungelhoeff’ in Lier (BE), 'Emera Almeria' in Almeria (ES) and ‘Forum Mare Nostrum I’ in Alfaz del Pi (ES) and the development projects, namely the projects 'Amstel' in Ouderkerk aan de Amstel (NL) and ‘Emera Mostoles’ in Madrid (ES). The increase can also be explained by the further development of the projects 'De Orangerie' in Nijmegen (NL), 'Margaritha Maria Kerk' in Tilburg (NL), 'Sterrenwacht' in Middelburg (NL), 'Villa Wulperhorst' in Zeist (NL), 'St. Josephkerk' in Hillegom (NL), 'De Gouden Leeuw' in Zutphen (NL), ‘Aldenborgh' in Roermond (NL), 'Villa Vught' in Vught (NL), 'Mariënhaven’ in Warmond (NL), ‘Huize Elsrijk’ in Amstelveen (NL) and ‘Emera Carabanchel’ in Madrid (ES). The projects 'Villa Wulperhorst' in Zeist (NL), ‘De Gouden Leeuw' in Zutphen (NL), ‘ De Orangerie’ in Nijmegen (NL) and the church building of the ‘Margaritha Maria Kerk’ project in Tilburg (NL) were completed during the 2021 nancial year. The real estate experts conrm the fair value of the property portfolio at a total amount of €716.6 million (excluding €1.4 million in rights in rem). The fair value is equal to the investment value (or the value deed-in-hand, being the value in which all acquisition costs were included) from which the transaction costs were deducted for an amount of 2.5% for the real estate in Belgium and 8.5% for the real estate in The Netherlands. For real estate in Spain, these are determined by the region where the property is located. Other tangible xed assets As at 31 December 2021, this item contains €4,715,961 of ‘tangible xed assets for own use’. The increase compared to 31 December 2020 is explained by the further development of the head ofce in Schoten. Finance lease receivables The item ‘nance lease receivables’ includes all nal building rights fees that were due for repayment at the end of the contract for the 76 projects in the initial portfolio and during the term of the contract for the projects ‘Hof ter Moere’ in Moerbeke (BE), ‘Hof Driane’ in Herenthout (BE), ‘Residentie De Anjers’ in Balen (BE), ‘De Nieuwe Ceder’ in Deinze (BE) and ‘Assistentiewoningen De Stille Meers’ in Middelkerke (BE). Unlike the projects in the initial portfolio, for the aforementioned reason, the ground rent for the projects in Moerbeke, Herenthout, Balen, Deinze and Middelkerke consists, not only of a revenue component, but also of a repayment of the investment value, as a result of which the amount of the receivable will gradually decrease over the term of the leasehold agreement. The fair value of the nancial leases amounted to €267,844,539 as at 31 December 2021. Trade receivables regarding the projects included in the item ‘Finance lease receivables’ The difference between the nominal value of the building lease payments (included under the heading ‘nance lease receivables’) and the fair value, which at the time of making available is calculated by discounting future cash ows, is included under ‘trade receivables’ and is depreciated on an annual basis. Tax receivables and other current assets amount to €10,167,850 as at 31 December 2021, which is considerably higher than usual. Of this, €8.5 million related to an amount registered in a third-party account with the notary in connection with the purchase of a real estate project, which was completed after year-end. Care Property Invest nv / Report of the Board of Directors 54 55 Report of the Board of Directors / Care Property Invest nv Debts and liabilities As at 31 December 2021, the Company has an MTN programme at Belus (arranger) amounting to € €300 million with dealers Belus and KBC. The Company has set up the necessary backup lines for this purpose. As at 31 December 2021, the amount already drawn amounts to €96.5 million in commercial paper and €21.0 million in bonds. Amounts in EUR 31/12/2021 31/12/2020 Average remaining term of nancial debt 6.55 6.33 Nominal amount of current and non-current nancial debts 425,932,431 330,582,772 Weighted average interest rate (1) 1.92% 2.22% Nominal amount of derivative instruments 156,527,042 156,914,042 Fair value of hedging instruments -16,810,790 -27,975,990 (1) The weighted average interest rate refers to interest rates after conversion of variable interest rates to xed interest rates through swaps. On 26 June 2021, the Company successfully announced its rst transaction on the debt capital market through a private placement of €32.5 million in Sustainability Bonds. The bonds, which were issued on 8 July 2021, have a maturity of 10 years, with coupons of 2.05%, meaning that Care Property Invest has further extended its average debt maturity at nancing costs comparable to its weighted average interest rate at the time of issue. The bonds were placed with an institutional investor, which is part of an international insurance group. The net proceeds of these bonds are used exclusively for the (re)nancing of eligible sustainable assets as included in the Care Property Invest Sustainable Finance Framework. This transaction offers the Company further diversication in terms of credit providers and provides hedging in the medium term. To hedge its debts with a oating interest rate, the Company also uses interest rate swaps. As at 31 December 2021, the Company has hedged 93,08% of its debts, either by means of an interest rate swap or by means of a xed interest rate. The consolidated debt ratio, calculated in accordance with Article 13, §1, 2° of the RREC Decree, was 47.06% as at 31 December 2021. The available margin for further investments and completion of the developments already acquired before reaching a debt ratio of 60% amounts to €305.0 million as at 31 December 2021. The other non-current nancial liabilities amount to €19,494,005 as at 31 December 2021, compared to €27,975,990 as at 31 December 2020. This item relates to the inclusion of the fair value of the nancial instruments entered into. The decrease in this liability is a result of the increase in market interest rates during the 2021 nancial year. Financial instruments with a positive fair value are included in the item nancial xed assets. The other non-current liabilities amount to €1,993,405 and have remained virtually unchanged compared to 31 December 2020. They concern the debts relating to the rights in rem for the projects 'La Résidence du Lac' in Genval (BE), 'Residence De Anjers' in Balen (BE) and 'Villa Wulperhorst' in Zeist (NL), which are included in the balance sheet in accordance with IFRS 16. The other current liabilities increased in comparison to 31 December 2020 to an amount of €3,550,796 and relate to short-term liabilities with respect to development projects. Of the outstanding amount at year-end, an amount of €2,242,195 was paid at the beginning of January 2022 within the framework of the completion of the extension of the 'Résidence des Ardennes' project in Attert (BE). 3.5 Consolidated balance sheet nance leases at fair value (1) Amounts in EUR 31/12/2021 31/12/2020 Intangible assets 122,671 158,457 Investment properties 718,031,800 533,854,521 Finance lease receivables and trade receivables 267,844,539 287,828,165 Authorised hedging instruments 2,683,216 0 Deferred tax - assets 0 1,510 Other assets included in the debt ratio 20,348,186 8,428,280 Cash and cash equivalents 2,544,873 3,751,851 Total assets 1,011,575,284 834,022,785 Equity 479,258,685 369,779,481 Revaluation gain on nance lease receivables 66,259,073 84,805,829 Debt and liabilities included in the debt ratio (2) 443,610,065 346,984,529 Other liabilities 22,447,460 32,452,946 Total equity and liabilities 1,011,575,283 834,022,785 Debt ratio of the company 43.97% 41.60% (1) This balance sheet has not been prepared in accordance with IFRS standards. (2) The following debts and liabilities are not included in the calculation of the debt ratio: provisions, authorised hedging instruments, deferred taxes and accrued charges and deferred income. 3.6 Net assets and net value per share on a consolidated basis (1) Amounts in EUR 31/12/2021 31/12/2020 Total assets 945,316,211 749,216,956 Liabilities -466,057,526 -379,437,475 Net assets 479,258,685 369,779,481 Net value per share € 17.80 € 15.34 Total assets 945,316,211 749,216,956 Current and non-current liabilities (excluding 'authorised hedging instruments') -449,246,737 -351,461,485 Net assets excluding 'authorised hedging instruments' 496,069,475 397,755,471 Net value per share excluding 'authorised hedging instruments' € 18.43 € 16.50 Total assets including the calculated fair value of nance lease receivables 1,011,575,284 834,022,785 Current and non-current liabilities (excluding 'authorised hedging instruments' and 'deferred taxes') -449,077,589 -349,020,580 Net assets excluding 'authorised hedging instruments' and 'deferred taxes' and including 'fair value of lease receivables' (epra nav) 562,497,695 485,002,205 Net value per share excluding 'authorised hedging instruments' and 'deferred taxes' and including 'fair value of nance lease receivables (EPRA NAV) € 20.89 € 20.12 (1) In accordance with the RREC Law, the net value per share is calculated on the basis of the total number of shares less own shares. As at 31 December 2021, the Company held 9,192 own shares. Care Property Invest nv / Report of the Board of Directors 56 57 Report of the Board of Directors / Care Property Invest nv 5. Outlook The debt ratio is calculated in accordance with Section 13, paragraph 1, bullet 2 of the RREC-RD (Royal Decree regarding Regulated Real Estate Companies) and amounts to 47.06% as at 31 December 2021. In view of the fact that Care Property Invest’s debt ratio does not exceed 50%, it is not subject to mandatory submission of a nancial plan as referred to in Section 24 of the RREC Royal Decree. 5.1 Assumptions On the basis of the balance sheet and the global result statement for the 2021 nancial year, a forecast has been made for the following nancial years, in accordance with the Company’s accounting policy and in a manner comparable to the historical nancial information. The following hypotheses are used as points of view: Assumptions regarding factors that can be inuenced by the members of the Company’s administrative, management and supervisory bodies directly: • Increase in the Company’s operating expenses; • For the time being, new projects are nanced using own resources from operating activities and additional new credit lines, or the revenue from issuing commercial paper; • The nancial costs are in line with the increase in nancing during the 2021 nancial year. • Additional nancing costs for acquisitions in the rst quarter of 2022 were also taken into account. Assumptions regarding factors that cannot be inuenced by the members of the Company’s administrative, management and supervisory bodies directly: • Rental income was increased by the annual indexation and the impact of new investments; • Further uctuations in the fair value of both the investment properties and the nancial instruments have not been included as they are difcult to predict and, moreover, have no impact on the result to be distributed. In the context of the COVID-19 pandemic, which continued into 2021, the Company does not see any impact on the fair value of investment properties to date. However, the increased volatility of interest rates may have an impact on the fair value of nancial instruments; • Care Property Invest expects no impact from any doubtful debt; • Due to the ‘triple net’ nature (1) of the agreement, no maintenance costs were taken into account for the investment properties. In spite of the fact that the nance lease agreements also concern ‘triple net’ agreements, a limited provision was created for these agreements. (1) With the exception of the project ‘Les Terrasses du Bois’ in Watermaal-Bosvoorde, for which a long-term double net agreement was concluded and the project 'Tilia' in Gullegem for which a long-term single net agreement was concluded. Care Property Invest nv / Report of the Board of Directors 58 59 Report of the Board of Directors / Care Property Invest nv 4. Appropriation of the result Taking into account the minimum distribution obligation pursuant to Article 13 of the RREC Decree, the Board of Directors will propose to the Company's annual general meeting on 25 May 2022 to distribute a total gross dividend for the 2021 nancial year of €22,588,331 or €0.87 per share (€0.7461 for coupon 14 and €0.1239 for coupon 15). After deduction of the 15% withholding tax rate, this represents a net dividend of €0.7395 per share (€0.6342 for coupon 14 and €0.1053 for coupon 15). This represents an increase of 8.75% compared with the dividend paid for the 2020 nancial year. The payout ratio will then be 80.03% at statutory level and 82.27% at consolidated level, based on the adjusted EPRA earnings. The shares with coupon No. 14 will be entitled to a pro rata dividend from 1 January 2021 to 9 November 2021. The shares with coupon no.15 will be entitled to a pro rata dividend from 10 November 2021 to 31 December 2021. In accordance with Article 13 of the RREC Decree, the minimum dividend payment amounts to €22,579,171 for the 2021 nancial year. In the event of a positive net result for the nancial year, this is the minimum amount that must be paid out as a remuneration for the capital, i.e. 80% of the corrected result less the decrease in debt during the nancial year. Summary table: Number of shares with rights to dividends - coupon No. 14 25,804,456 Number of shares with rights to dividends - coupon No. 15 26,921,924 Remuneration of the capital - coupon No. 14 € 19,252,705 Remuneration of the capital - coupon No. 15 € 3,335,626 Total remuneration of the capital € 22,588,331 Gross dividend per share for shares with coupon No.14 € 0.7461 Gross dividend per share for shares with coupon No.15 € 0.1239 Total gross dividend per share for shares with coupon Nos. 14 and 15 € 0.87 Gross yield in relation to the share price as at 31 December 2021 3.38% Net dividend per share for shares with coupon No.14 (1) € 0.6342 Net dividend per share for shares with coupon No.15 (1) € 0.1053 Total net dividend per share for shares with coupons Nos. 14 and 15 (1) € 0.74 Net yield in relation to the share price as at 31 December 2021 2.87% Dividend payment 31 May 2022 (1) Gross dividend after deduction of the 15% withholding tax. 5.2 Conclusion on debt ratio outlook Based on the aforementioned assumptions, the Company still has sufcient margin to make additional investments before the maximum debt ratio of 65% is exceeded on a consolidated basis. The consolidated debt ratio as calculated in accordance with Section 13 of the RREC-RD amounts to 47.06% as at 31 December 2021. The Company forecasts an increase in the debt ratio during the nancial year 2022 based on additional investments and further completion of the projects currently in development. The Board of Directors evaluates its liquidity needs in due time and may, in order to prevent the maximum debt ratio from being reached, consider a capital increase, which might include a contribution in kind. 5.3 Conclusion on outlook for dividends and distributable results Taking into account the uncertainty of the current economic situation and its impact on Care Property Invest’s results, the Company would have no obligation to distribute a compensation for the capital in the event of a negative result. Based on the current contracts, which will still generate income for an average of 15.94 years, barring unforeseen circumstances, the Company assumes an increase in the distributable result and the dividend payment for the 2022 nancial year. The Company's solvency is supported by the stable value of its real estate projects. For the 2021 nancial year the Company received total rental income of approximately €43 million. This represented an increase in rental income of about 19% compared with the 2020 nancial year (total rental income for the 2020 nancial year was about €36 million). The Company expects to receive a total rental income of at least €53 million for the 2022 nancial year. This results in an adjusted EPRA result per share of at least €1.15. Care Property Invest intends to pay at least a gross dividend of €094 per share for the 2022 nancial year. After deduction of withholding tax rate of 15%, this results in a net dividend of €0.80 per share. The Company provides an EPS guidance of €1.15 for the 2022 financial year and a DPS guidance of €0.94 for the 2022 financial year. 5.4 Statutory auditor’s report on the consolidated nancial forecasts of Care Property Invest nv/sa As a statutory auditor of Care Property Invest nv/sa (the “Company”), we have prepared, upon request by the Board of Directors, the present report on the forecasts of the adjusted EPRA earnings per share and the rental income for the 12months period ending 31 December 2022 (the “Forecast”) of Care Property Invest nv/ sa, included in the paragraph III.5 “Outlook” of their yearly nancial report as of 31 December 2021 as approved by the Board of Directors of the Company on 19 April 2022. The assumptions included in the paragraph III.5 “Outlook” result in the following consolidated nancial forecasts for the accounting year 2022: • Adjusted EPRA earnings per share: €1.15; • Rental income: €53 million. Board of Directors’ responsibility It is the Company’s Board of Directors’ responsibility to prepare the consolidated nancial 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 nancial 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 forecasts. 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 related guidance from its research institute and with the standard ‘International Standard on Assurance Engagements 3400’ relating to the examination of prospective nancial 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 forecasts with the accounting policies normally adopted by Care Property Invest 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. Care Property Invest nv / Report of the Board of Directors 60 61 Report of the Board of Directors / Care Property Invest nv Opinion We have examined (a) the adjusted EPRA earnings per share and (b) the rental income of Care Property Invest 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 nancial information.The Board of Directors is responsible for the consolidated nancial forecasts including the assumptions referenced above. In our opinion the consolidated nancial forecasts are properly prepared on the basis of the assumptions and presented in accordance with the accounting policies applied by Care Property Invest nv/sa for the consolidated nancial statements of 2021. Since the forecasts 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. These differences may be material. Diegem, 22 April 2022 EY Réviseurs d’Entreprises bv/srl Statutory auditor Represented by Christel Weymeersch (1) Christophe Boschmans Partner Director (1) Acting on behalf of a bv/srl 6. Main risks and insecurities The Company's activities are situated in an economic climate that involves risks. The main risk factors (included here in implementation of Article 3:32 BCCA but explained in detail in a separate section of the Annual Financial Report) which Care Property Invest faces, are regularly monitored by both Management and the Board of Directors, which have dened a prudent policy in this regard and which, if necessary, regularly adjust this policy. 7. Research and development Care Property Invest has not undertaken any activities within the meaning of Articles 3:6, 3:7, 3:8 and 3:32 BCCA 8. Capital increases within the context of authorised capital On 16 May 2018, the Company renewed its authorisation concerning the authorised capital for the entire amount of the authorised capital, i.e., € 114,961,266. This authorisation was used twice during the 2019 nancial year, on the one hand for the capital increase through a contribution in kind of the company Immo du Lac nv, the owner of the 'La Résidence du Lac' project in Genval, on 3 April 2019 whereby € 4,545,602 was charged to the authorised capital and on the other hand for the capital increase in cash by means of an optional dividend on 26 June 2019 whereby €1,831,673 was charged to the authorised capital. Both capital increases raised the balance of the authorised capital available as at 31 December 2019 to €108,583,991. On 18 December 2019, the Extraordinary General Meeting decided to extend the authorisation granted to the Board of Directors to include all possibilities permitted in the applicable legislation. Accordingly, Articles 7 'Authorised Capital' and 8 'Amendment of Capital' of the Articles of Association were amended. During the 2020 nancial year, the authorisation regarding the authorised The following risks are discussed in detail in Chapter ‘I. Risk factors’ on page 8 et seq. of this report: operational risks, nancial risks, regulatory risks and other risks. Zutphen (NL) I De Gouden Leeuw Zutphen Meise (BE) I Oase Care Property Invest nv / Report of the Board of Directors 62 63 Report of the Board of Directors / Care Property Invest nv Board of Directors Executive Committee Financial team Investment Committee Operations and Investment Team Audit Committee Legal team Nomination and Remuneration Committee Secretariat-HR-ICT- Communications 9. Treasury shares On 15 June 2020, the extraordinary general meeting decided to grant the (renewed) authorisation to buy back shares. The purpose of the buy-back programme is to enable the Company to meet its obligations with respect to the remuneration of the executive management of Care Property Invest. Situation as at 01/01/2021 6,878 Sale/transfer of shares in order to fulll its obligations regarding the remuneration of the executive management -5,186 Purchase of shares in order to fulll its obligations regarding the remuneration of the executive management 7,500 Situation as at 31/12/2021 9,192 For the 9,192 shares in portfolio as at 31 December 2021, a total amount of €296,787 was included in the Company's equity as a reserve. The capital value of these shares, being €54,688, represents 0.03% of the total issued capital as at 31 December 2021. The value of the shares based on the share price of €25.75 as at 31 December 2021 amounts to €236,694. capital was used for the rst time for the capital increase through contribution in kind of the projects 'La Reposée' and 'New Beaugency' located respectively in Mons and Bernissart on 15 January 2020 whereby €7,439,112 was charged to the authorised capital. The authorisation was also used for a second time for the capital increase in cash of an optional dividend on 19 June 2020, charging €1,624,755 to the authorised capital. Finally, it was also used a third time for the capital increase in cash (ABB) on 25 June 2020, whereby €13,040,239 was charged to the authorised capital. The aforementioned capital increases brought the balance of the available authorised capital as at 31 December 2019 to an amount of €86,479,885. In 2021, the Company used the authorisation concerning authorised capital twice in connection with the capital increase through a contribution in kind of the 'Résidence des Ardennes' project in Attert on 20 January 2021 for which €10,091,030 was charged to the authorised capital. The authorisation was used a second time for a capital increase through a contribution in kind of the company Apollo Lier nv, the owner of the ‘Dungelhoeff' project in Lier, on 17 November 2021, for which €6,692,997 was charged to the authorised capital. On 31 December 2021, the available balance of the authorised capital amounted to €69,695,858. 10. Internal organisation Care Property Invest 10.1 Internal organisation The internal organisation comprises an operational and investment team that, together with the nancial and legal team led by the COO and CFO, is responsible for the management and further development of the international real estate portfolio. The secretariat, HR, ICT and communication services support the other teams under the leadership of the CEO. The corporate governance related considerations are described in point ‘11. Corporate Governance Statement’ as from page 66. 10.2 Workforce Company’s workforce 2021 2020 2019 number of persons connected by an employment contract on 31/12 24 20 13 average number of employees in full-time equivalents during the nancial year 20.9 15.3 12.4 Care Property Invest nv / Report of the Board of Directors 64 65 Report of the Board of Directors / Care Property Invest nv 11. Corporate Governance Statement 11.1 Corporate Governance Statement Care Property Invest (‘The Company’) recognises the importance of correct and transparent corporate governance and intends to ensure clear communication about this issue with all persons and parties involved. The Board of Directors therefore dedicates this specic chapter to corporate governance in its Annual Financial Report. This sets out the Company’s practices relating to correct corporate governance during the relevant nancial year, including the specic information required pursuant to the applicable legislation and the Corporate Governance Code. This Corporate Government Statement is a chapter in the 2021 Annual Report and is part of the management report. It describes the situation as at 31 December 2021. As from 2020, Care Property Invest applies the new Belgian Corporate Governance Code (the ‘2020 Code’), in addition to compliance with general and sector- specic legislation and with its own Articles of Association, in accordance with the Royal Decree of 12 May 2019 specifying the corporate governance code to be complied with by listed companies. The Code 2020 is also available on the website of the Belgian Ofcial Gazette and on www. corporategovernancecommittee.be. The full Corporate Governance Charter (the ‘Charter’) sets out the principles, rules and agreements that determine the Company’s management, checks and balances, and the company structure that form the framework of the Company’s corporate governance. The Board of Directors of Care Property Invest subscribes to these principles based on transparency and accountability. This enhances the shareholders’ and investors’ trust in the Company. From the Company’s establishment onwards, Care Property Invest has considered fair and correct business conduct as a main priority. In addition, Care Property Invest attaches a great deal of importance to a good balance between the interests of the shareholders and those of the other parties that are directly or indirectly involved with the undertaking. The Board of Directors guarantees frequent updating of the Charter. On 18 March 2020, the Charter was adapted to the Code 2020, followed by a nal update of the Charter on 14 December 2020. The latest version can be consulted on the Company’s website, www.carepropertyinvest.be. The Charter also includes the rules and code of conduct to prevent market abuse and insider dealing (the ‘Dealing Code’). The Board of Directors makes every effort to comply at all times with the principles of corporate governance, always taking into account the specic character of the Company and applied the 2020 Code in accordance with the ‘comply or explain’ principle in 2021. The scope and specic deviations from the 2020 Code are further explained in this Corporate Governance Statement (the ‘Statement’). Deviations from the Code 2020 Care Property Invest deviated from the 2020 Code only on a limited number of points in 2021. The deviations from these recommendations could mainly be explained in light of the Company’s activities and the associated operation and structure of the Board of Directors. In revising its Charter and drawing up its remuneration policy (also referred to in the Charter), Care Property Invest decided to deviate from the following recommendations of the 2020 Code: Recommendation 5.5: in line with the 2020 Code, Non-Executive Directors should not hold more than ve Directorships in listed companies. Indeed, the Company believes that when comparing the amount of duties of the relevant Director within the Company and the time commitment required as a result thereof with the amount and time commitment required of this relevant Director in connection with other commitments or mandates in listed companies, in certain cases a deviation from this recommendation might be justied. For this reason, the Charter provides that the Board of Directors can grant permission to deviate from this recommendation. To date, however, no such deviation has been approved by the Board of Directors. Recommendation 7.6: contrary to the 2020 Code, the Company does not pay its Non- Executive Director remuneration in the form of shares. This deviation is motivated by the fact that remuneration in shares of Non-Executive Directors is new in the 2020 Code and is not common practice among Belgian listed companies in general or more specically in the RREC sector. The Company believes that the judgement of these Directors - in particular as Non- Executive Directors - is not affected by the absence of remuneration in shares. Also, to the Company’s knowledge, there is no international consensus yet that share- based remuneration guarantees that the interests of the Non-Executive Directors are aligned with the shareholders’ interests. The Company has decided to await the development of the practice of Belgian listed companies in general or more specically in the RREC sector and to reconsider on a regular basis whether it could be in the interest of the Company and its shareholders to proceed to (partial) payment of Non-Executive Directors in shares. Recommendation 7.8: Contrary to the Code 2020, two of the Executive Directors do not receive variable remuneration. The absence of a variable remuneration and a remuneration in shares for these two Executive Directors and this distinction in remuneration with the other Executive Directors (CEO, COO and CFO) is justied in the light of the difference in scope of duties of these Directors compared to the other executive directors (CEO, COO and CFO). The duties of the Executive Directors other than the CEO, COO and CFO mainly consist of the global supervision and monitoring of the day-to-day operations of the Company. In addition, they are always available to the CEO, COO and CFO for consultation and discussion concerning the daily management and operation of the Company. For this reason, the Company does not consider it appropriate to remunerate these Executive Directors in shares or to grant them a performance- related remuneration. The Company is of the opinion that the absence of such remuneration does not prevent the interest of these Executive Directors from being in line with the shareholders’ interest and does not affect the judgement of these Executive Directors. Care Property Invest nv / Report of the Board of Directors 66 67 Report of the Board of Directors / Care Property Invest nv Recommendation 7.12: Contrary to the Code 2020, the Company does not stipulate a right of reclaim with regard to the variable remuneration. The absence of this right is motivated by the fact that the Company only grants the variable remuneration after the audit of the consolidated annual gures has been completed. 11.2 Internal audit and risk management This section describes the key characteristics of the systems that the Company has specied relating to internal auditing and risk management. 11.2.1 Internal auditing (methodology) The audit committee is responsible for identifying and evaluating the Company’s risks and reports to the Board of Directors, which approves the framework of the internal control systems and risk management set up by the Executive Committee. The Executive Committee is responsible for setting up a system of appropriate internal controls in accordance with Article 17 of the RREC Law. In addition, the Executive Committee is responsible for the overall supervision of this internal control system. The Executive Committee is required to report to the Board of Directors on the internal control system, for which it has the nal responsibility. These appropriate internal controls consist of three components, i.e., 1. internal audit (internal audit procedures + internal audit function); 2. risk management (risk management + risk manager); 3. compliance (integrity policy and compliance function) whereas internal audit should not be seen solely as a stand-alone third pillar here, but also as playing a ‘transversal’ role with respect to the two other pillars. The internal control system shall aim in particular to achieve the following elements: • business operations are conducted in an orderly manner, with due care and clearly delineated • the resources deployed are used economically and efciently; the risks are known and adequately controlled for the protection of assets • the nancial and management information is sound and reliable; laws and regulations as well as general policies, plans and internal rules are all complied with. An internal control system is set up within the Company, which is appropriate to the nature, scale and complexity of the business of the Company and its environment. Care Property Invest has a relatively limited size in terms of employees, which has an impact on the structure and operation of the system of internal controls within the Company. The design of the internal controls took account of the Committee of Sponsoring Organisations of the Threadway Commission (COSO) model, which is built around ve components that are discussed below. Account was also taken of the guidelines in the context of the Law of 6 April 2010 to strengthen corporate governance in listed companies and autonomous public enterprises and to amend the regulation on professional prohibitions in the banking and nancial sector and the 2020 Code. The ve control components considered were: 1. the control environment; 2. the risk management process; 3. the control activities; 4. information and communication; 5. management. Risk management function (Risk Manager) At least once a year, the Board of Directors examines the internal control and risk management systems set up by the Executive Committee in order to ensure that the main risks (including the risks related to compliance with existing laws and regulations) are properly identied, managed and be notied to the Board of Directors. Mr Dirk van den Broeck, Managing Director/member of the Executive Committee, was appointed as risk manager, in compliance with Article 17, §5 of the RREC Law. The mandate of Mr Dirk Van den Broeck as risk manager is of indenite duration. He has the required professional reliability and the appropriate expertise. More information on risk management can be found in section 11.2.3 ‘Risk management’. Compliance function The Compliance Ofcer shall ensure that Care Property Invest complies with the applicable laws, regulations and rules of conduct, in particular the rules relating to the integrity of the Company’s activities, by monitoring of the various risks which the Company runs on the basis of its Articles of Association and activities. The Company has appointed Ms Nathalie Byl as Reporter/Secretary and Compliance Ofcer. The Compliance Ofcer is appointed for an indenite duration and has the necessary professional reputation and appropriate expertise for the performance of her duties. Internal audit function The internal audit function, within the meaning of Article 17 §3 of the RREC Law, is fullled by an external consultant, namely Mazars Advisory Services (also referred to as the ‘external Internal Auditor’). The Company has also appointed Mr Willy Pintens, Managing Director/ member of the Executive Committee, as Internal Audit Manager within the meaning of Article 17 §3 of the RREC Law. Mr Willy Pintens’ mandate as Internal Audit Manager is for an indenite period of time. He has the required professional reliability and appropriate expertise. For more information on the internal audit, please refer to title 11.2.4 ‘Control activities’ hereafter. Care Property Invest nv / Report of the Board of Directors 68 69 Report of the Board of Directors / Care Property Invest nv 11.2.2 The control environment Care Property Invest’s governing body has dened its own corporate culture and ethical rules, subscribing to the principles set out in its integrity policy. Throughout the Company’s organisation, the Company continuously highlights integrity, the ethical values and expertise of the personnel, the management style and its philosophy, the organisational culture in general, the policy relating to delegation of authorisations and responsibilities and the human resources policy. The integrity policy of Care Property Invest forms an inseparable part of its corporate culture and places particular emphasis on honesty and integrity, adherence to ethical standards and the specic applicable regulations. In that regard, the Company or its Directors and its employees must conduct themselves with integrity, i.e., in an honest, reliable and trustworthy manner. The integrity policy specically includes, but is not limited to the following elds of work: 1. rules on conicts of interest, 2. rules on incompatibility of mandates, 3. the Company’s code of ethics 4. insider trading and abuse of power (insider trading and market manipulation), 5. rules on abuse of company property and bribery (Article 492 bis of the Criminal Code). Care Property Invest has a compliance ofcer, within the meaning of Article 17 §4 of the RREC Law, who is responsible for ensuring compliance with the rules relating to the integrity of the business operations of the public RREC by the RREC itself, its Directors, its Effective Leadership, employees and authorised representative(s) and more specically for drafting and testing recommendations. The Compliance Ofcer has always the possibility to directly contact the (chairman of) the Board of Directors. Since 2016, the company has had a compliance function charter, in which the working method and organisation of the compliance functions are explained in more detail. Furthermore, the Board of Directors supervises the integrity of nancial information provided by Care Property Invest, in particular by assessing the relevance and consistency of the accounting standards applied by the Company, as provided for in Article 5 of the RREC Royal Decree. This supervision involves assessment of the accuracy, completeness and consistency of the nancial information. This supervision covers the regular information before it is disclosed. In doing so, the Audit Committee shall inform the Board of Directors of the methods used for recording signicant and unusual transactions, the processing of which may be open to different approaches. The Board of Directors discusses these signicant nancial reporting issues with both the Audit Committee, the Executive Committee and the Statutory Auditor. Since 1 July 2016, Care Property Invest also has a CFO, namely Mr Filip Van Zeebroeck. In this way, the nancial reporting process to the Board of Directors is strengthened and the Board of Directors has an additional point of contact. The Care Property Invest has defined its own corporate culture and ethical rules. annual accounts and the (semi-)annual nancial report are subject to a review by the Statutory Auditor, who explains the work carried out as part of his assignment to the Audit Committee. 11.2.3 Risk management At least once a year the Audit Committee examines the internal control and risk management systems set up by the Executive Committee in order to ensure that the main risks (including the risks related to compliance with existing laws and regulations) are properly identied, managed and be notied to the Board of Directors. As a result of the adoption of the status of RREC, a risk manager was appointed, in compliance with Article 17, §5 of the RREC Law, namely Mr Dirk Van den Broeck. The risk manager’s responsibilities include, among other things, drafting, developing, monitoring, updating and implementing the risk policy and risk management procedures (e.g., the whistleblowers’ scheme, conict of interest regulations and the procedures described in the Dealing Code). On the basis of his position, the risk manager fulls his role by analysing and evaluating each category of risks facing the Company, both at regular intervals and on an ad hoc basis. On this basis, concrete recommendations can be formulated for the Executive Committee or the Board of Directors (which bears nal responsibility for the risk management of the Company). The Board of Directors annually adopts the risk policy, ensuring correct analysis and estimates of the existing risks as prepared by the risk manager prior to inclusion in the annual report. The Company also provides a specic arrangement according to which staff members may express concerns regarding possible irregularities in nancial reporting or other matters in condence. (the ‘whistle-blowers’ scheme’) If deemed necessary, arrangements will be made for an independent investigation and appropriate follow-up of these matters, in proportion to their alleged seriousness. Regulations are also made with regard to which staff members can inform the Chairman of the Board of Directors directly. The Company also has detailed policies on staff, including with regard to integrity, qualications, training and assessment, and applies a business continuity policy, including a business continuity plan. As part of its supervisory task, the Board of Directors evaluates twice a year the main risks that give rise to a mention in the half- yearly and annual nancial reports on the basis of the reports of the Audit Committee. In addition to these periodic reviews, the Board of Directors closely monitors the risks in its regular meetings and also takes note of the risk analysis and the ndings of both internal and external audit. Care Property Invest nv / Report of the Board of Directors 70 71 Report of the Board of Directors / Care Property Invest nv 11.2.4 The control activities The organisation is structured in such a way that all the important decisions concerning strategic, tactical, nancial and operational matters are taken by several different people or are at least be subject to control by the management. With regard to the nancial reporting process, it can be reported that controls are built in which should ensure the quality and accuracy of the reported information. The internal audit function, within the meaning of Article 17 §3 of the RREC Law, is fullled by an external consultant, namely Mazars Advisory Services (also referred to as an ‘external Internal Auditor’). This auditor is appointed based on a contract ‘relating to outsourcing the internal audit function’ of an indenite duration and an internal audit charter approved by the Board of Directors, that will be revised every three years. The Internal Auditor performs a risk analysis for each risk area, determining a risk prole and a score for each of these domains. On the basis of this analysis, a plan is prepared and comprehensive annual audits are conducted of each area, with recommendations being formulated. These recommendations are followed up regularly by Mazars Advisory Services. Since the Company has opted for an external Internal Auditor, it has also designated a Managing Director from among its own members (Mr Willy Pintens) to ensure implementation of the recommendations of this Internal External Auditor and who will also check the Auditor’s work. In addition, the reports will be submitted to the Board of Directors. The nancial reporting function is also subject of frequent evaluation by the Internal Auditor. Please see the description above with regard to the supervision by the Board of Directors of the integrity of nancial information provided by the Company. The Company always takes into account the ndings and possible observations of the internal and external audit. These provide a guide for the Company to optimise its operations in relation to operational, nancial and management matters, as well as risk management and compliance. The Board of Directors receives all internal audit reports and/or regular summaries of these. The external Internal Auditor also provides explanation on the work carried out on a regular basis. The Board of Directors, on the advice of the Audit Committee, assesses the effectiveness of the internal audit and, in particular, makes recommendations on its operation. It also examines to what extent its ndings and recommendations are met. 11.2.5 Information and communication Communication is an important element of internal control and within Care Property Invest, is adjusted to the size of the organisation. General staff communication, internal memos, working meetings, e-mail and electronic calendars are used for communications. For the records, there is a system of central archive, stored both in physical form and electronically. The Executive Committee is responsible for appropriate communication and exchange of information from and to all levels within the Company, and monitors the objectives and responsibilities required for internal control, supporting the performance level of internal control, and presenting and expressing this with transparency. Providing periodical nancial and other occasional external information is streamlined and supported by appropriate allocation of responsibilities, coordination between the various employees involved and a detailed nancial calendar. 11.2.6 Supervision and monitoring Managing internal control within an organisation is a continuous process that should be evaluated on an ongoing basis and if necessary, adjusted. Periodical assessments are conducted at the level of the Board of Directors concerning the adequacy of internal control and risk management. Among other things, the ndings and recommendations of the internal and external audit constitute an important source of information in this context. The follow-up procedure consists of a combination of supervision by the Board of Directors and the Executive Committee, and independent objective assessments of these activities based on internal audit, external audit or other third parties. Relevant ndings of the internal audit and/or the Statutory Auditor relating to guidelines and procedures, segregation of responsibilities and application of IFRS accounting standards are reported to the Audit Committee and, if necessary, the Board of Directors. In addition, nancial information is explained in detail by the CFO in the Executive Committee and subsequently in the Audit Committee, which reports to the Board of Directors. Meise (BE) I Oase Care Property Invest nv / Report of the Board of Directors 72 73 Report of the Board of Directors / Care Property Invest nv 11.3 Shareholding structure The Company has no knowledge of any shareholders holding more than 5% of the voting rights, as no notications have been received to this effect within the context of the transparency legislation. During the 2021 nancial year the Company has received the following notications for exceeding the threshold of 3%. • On 8 April 2021, KBC Asset Management informed the Company in a notication that it no longer exceeds the 3% threshold and this since 26 June 2020 as a result of the capital increase (ABB) successfully carried out by the Company in June 2020; • On 31 May 2021, KBC Asset Management informed the Company that as a result of a capital increase carried out by the Company, it exceeded the 3% threshold again; • On 3 November 2021, KBC Asset Management notied the Company that, as a result of a transfer of voting securities or voting rights, it no longer exceeds the 3% threshold; • On 16 December 2021, KBC Asset Management notied the Company that, as a result of a transfer of voting securities or voting rights, the overall percentage of voting rights exercisable by KBC Asset Management NV has again exceeded 3%. An overview of the shareholder structure is given in chapter ‘IV. Care Property Invest on the stock market’ on page 112 of the annual nancial report. 11.4 Board of Directors 11.4.1 Current composition of the board of directors On 31 December 2021, the Board of Directors consisted of eleven members, ve of whom were independent Directors who met the conditions of the Article 7:87 BCCA). There are ve Executive (Managing) Directors and six Non-Executive Directors. The ve Managing Directors are members of the Executive Committee. The Directors do not have to be shareholders. There are no family ties between the members of the Board of Directors. In order to improve the continuity of the functioning of the Board of Directors and thus prevent several Directors from resigning at the same time, the Board of Directors drew up a schedule according to which the Directors are to resign periodically. The Directors were appointed at the Ordinary General Meeting of 16 May 2018 for a period of three years and four years respectively until after the Ordinary General Meetings in 2021 and 2022. Their appointment may be revoked at any time by the General Meeting. The Directors are eligible for reappointment. The list of Directors is shown on the following pages. Mark Suykens Non-Executive Director Chairman Board of Directors Chairman Nomination and Remuneration Committee Chairman Investment Committee Member of the Audit Committee ° 04/01/1952 Riemenstraat 76, 2290 Vorselaar Start 1st mandate 28/01/2004, Chairman of the Board of Directors since 01/01/2006 End of mandate After the OGM of 2025 Current position Retired. Former CEO of the Association of Flemish Cities and Municipalities (VVSG vzw/NPO). Background As a Law graduate, he heads the Board and oversees the interaction between the Board and the Executive Committee. His experience and knowledge in the eld of municipal and public welfare authorities are particularly important to his constructive contribution to the decision- making of the Board and, where appropriate, its communications with the public authorities. Other current mandates Director of Natuurwerk vzw, Director of Regionale Televisie Kempen/Mechelen vzw, acting Director of Poolstok cvba. Mandates expired in the last 5 years Chairman of the Board of Directors of Pinakes nv Mandates in listed companies / Dirk Van den Broeck Executive Director Member of the Executive Committee Member of the Audit Committee (advisory) Risk manager ° 11/09/1956 Leo de Bethunelaan 79, 9300 Aalst Start 1st mandate As Non-Executive Director from the establishment of the Company on 30/10/1995 and as Executive Director from 01/07/2012 End of mandate After the OGM of 2025 Current position Director of companies. Background A Law and Economics graduate, he was a partner at Petercam until the end of 2010. He is a former member of several Boards of Directors of property companies and was involved in the launch of several REITs. He is currently active as Director of real estate companies. His nancial expertise in this eld contributes to balanced and well-founded decision- making of the Board of Directors. Other current mandates Director of Meli nv, Patrimmonia Real Estate nv and subsidiaries, Promotus bvba, Radiodiagnose vzw and Radiomatix nv. Also Director in various Spanish subsidiaries of Care Property Invest. Mandates expired in the last 5 years Director Warehouses De Pauw Comm. VA (until April 2015), Independent Director Omega Preservation Fund (until June 2015), Director Reconstruction Capital II Ltd, Chairman Terra Capital Partners (end of mandate in the course of 2019) Mandates in listed companies As indicated above with *. Peter Van Heukelom Executive Director CEO Chairman of the Executive Committee ° 26/08/1955 Wijnegemsteenweg 85 bus 0007, 2970 Schilde Start 1st mandate 21/05/2003 End of mandate After the OGM of 2022 Current position CEO of Care Property Invest. Background After graduating in Commercial Law and Financial Sciences, specialising in marketing, and post-graduate studies in Health Economics, Peter van Heukelom has continually enhanced his professional experience through courses in the eld of nance/investments in social prot and the public sector. Prior to taking up his position as CEO of the Company in October 2009, he served in several positions, most recently as General Manager Social Prot and Public Sector at KBC Bank. Other current mandates Various mandates held in subsidiaries of Care Property Invest as Director or as permanent representative of Care Property Invest. Mandates expired in the last 5 years Only mandates held in various subsidiaries of Care Property Invest. Mandates in listed companies / Willy Pintens Executive Director Member of the Executive Committee Member of the Nomination and Remuneration Committee (advisory) Internal Audit Manager ° 11/09/1946 Biezenmaat 10, 8301 Ramskapelle Start 1st mandate 30/10/1995 and as Managing Director since 08/04/1998 End of mandate After the OGM of 2025 Current position Retired Background Commercial Engineer and graduate in Commercial and Consular Sciences. He has extensive professional experience at Belus Bank in the areas of nance, investment in social prot and the public sector. As a Director and Managing Director, his expertise gives him the necessary skills to contribute towards balanced and well- founded decision-making by the Board. Willy Pintens has been closely involved in the effective management and daily operations of the Company since its formation. Other current mandates / Mandates expired in the last 5 years Director Frontida vzw (mandate expires on 29 December 2021) Mandates in listed companies / Report of the Board of Directors / Care Property Invest nvCare Property Invest nv / Report of the Board of Directors 74 75 Valérie Jonkers Executive Director COO Member of the Executive Committee ° 7/09/1985 Kempenlaan 25, 2160 Wommelgem Start 1st mandate 27/05/2020 End of mandate 29/05/2024 Current position Chief Operating Ofcer Background She obtained her law degree at the University of Antwerp and followed various trainings to deepen her specialisation in healthcare real estate. She started her career as a legal consultant in healthcare real estate, advising the various stakeholders (investors, developers, operators and contractors) in relation to healthcare real estate. Since mid- May 2014, she joined Care Property Invest as Investment Manager and since 1 July 2016 as COO and member of the Executive Committee. She is also a Director in a number of Care Property Invest subsidiaries. Other current mandates Various mandates held in subsidiaries of Care Property Invest. Mandates expired in the last 5 years Vzw Herenhof (mandate expires in June 2017), Frontida vzw (mandate expires 29 December 2021) and various mandates in subsidiaries of Care Property Invest. Mandates in listed companies / Michel van Geyte Non-executive Independent Director Member of the Investment Committee Member of the Audit Committee ° 6/02/1966 Sint-Thomasstraat 42, 2018 Antwerp Start 1st mandate 27/05/2020 End of mandate 29/05/2024 Current position CEO Nextensa nv Background He has been CEO of Leasinvest Real Estate since 22 May 2018, and since 19 July 2022, the groups Extensa nv and Leasinvest Real Estate have been brought together by means of a contribution of shares in LRE, resulting in a new entity, Nextensa nv, where Mr Michel Van Geyte was appointed as CEO. He studied at the K.U. Leuven where he obtained a Master in Economics and afterwards a Postgraduate Graduate in Real Estate. In 2016, he also completed the Executive Master Class in Corporate Finance at Vlerick Business School. Besides his position as CEO, he is also a member of the BIV, RICS and is a lecturer at the KULeuven. He is also a Director of, among others, Extensa and all related companies and Retail Estates. He is also a member of the Management Committee of ULI. He meets the criteria of Independent Director within the meaning of Article 7:87 BCCA. Other current mandates Various mandates held in Nextensa’s subsidiaries. Mandates expired in the last 5 years / Mandates in listed companies Director Nextensa nv and Retail Estates Filip Van Zeebroeck Executive Director CFO Member of the Executive Committee ° 30/05/1979 Cornelis de Herdtstraat 16, 2640 Mortsel Start 1st mandate 27/05/2020 End of mandate 29/05/2024 Current position Chief Financial Ofcer Background Filip Van Zeebroeck obtained his law degree at the University of Antwerp and subsequently followed a Manama in Business Law at the VUB and UA and in Tax Law at the UA. He started his career at the Bar of Antwerp and then worked as a legal advisor at Moore Stephens Verschelden and SBB in corporate and tax law. Since 22 April 2014, he has been employed by Care Property Invest as Company Lawyer and since 1 July 2016 as CFO and member of the Executive Committee. As part of this, he completed an MBA at the Antwerp Management School and an Executive Master Class in Corporate Finance at the Vlerick Business School. He is also a Director in a number of subsidiaries of Care Property Invest. He was also the Compliance Ofcer until 31/12/2019. Other current mandates Various mandates held in subsidiaries of Care Property Invest as Director or as permanent representative of Care Property Invest. Mandates expired in the last 5 years Only mandates held in various subsidiaries of Care Property Invest. Mandates in listed companies / Ingrid Ceusters-Luyten Non-executive Independent Director Member of the Audit Committee Member of the Nomination and Remuneration Committee ° 18/12/1952 P. Benoitstraat 15, 2018 Antwerp Start 1st mandate 27/05/2020 End of mandate 29/05/2024 Current position Director of companies Background She holds a Master’s degree in Dentistry from the VUB and started her career as a dentist at the Maxillofacial Surgery Department of the OCMW Antwerp. After her marriage to Hugo Ceusters, she left the medical sector for what it was and joined the family business, where she has been in charge ever since her husband passed away. In 1996, she completed her training as a real estate agent / syndic. In addition to her commitment to the family business, she is also a board member of the Antwerp Symphony Orchestra, Voka Antwerp, Women on Board, Infrabel and UZ Gent. She also received the IWEC award 2016 (International Women Entrepreneurial Award) and is a Commander in the Order of the Crown: 2008 by HRH King Albert II. She meets the criteria of Independent Director within the meaning of Article 7:87 BCCA. Other current mandates Managing Director at Ceusters nv, Director at Infrabel nv and Inhu bv and member of the Board Committee and Chairwoman of the Audit Committee at UZ Gent. Mandates expired in the last 5 years / Mandates in listed companies / Caroline Riské Non-executive Independent Director Member of the Nomination and Remuneration Committee Member of the Investment Committee ° 11/05/1964 Vrijgeweide 7, 2980 Zoersel Start 1st mandate 16/09/2015 End of mandate After the OGM of 2022 Current position Managing Director/ gerontologist of Adinzo bvba / business manager Senes bvba Background Qualied Hospital Nurse with a degree in Medical and Social Sciences (Catholic University of Leuven), a Master’s degree in Gerontology (Benelux University) and a Post Graduate degree in Healthcare Real Estate. She has attended various courses in subjects such as social legislation and psycho-gerontology and has gained experience in a variety of healthcare-related elds. With her expertise, she is able to make a valuable contribution to decision-making by the Board of Directors. Other current mandates Managing Director Adinzo bvba Mandates expired in the last 5 years Business Manager of Senes bvba which acted as shareholder and manager at C. Consult (Curaedis) (July 2014 to December 2015), Herenhof vzw (end of mandate 2015). Mandates in listed companies / Paul Van Gorp Non-executive Independent Director Chairman of the Audit Committee Member of the Investment Committee ° 18/10/1954 Rudolf Esserstraat 20 bus 403, 9120 Melsele Start 1st mandate 18/05/2011 End of mandate After the OGM of 2022 Current position Chairman of the Board of Dorp nr. 2 Koningin Fabiola npo, as well as of the customised work company ACG vzw and the care company De Vijver vzw (npo). Background Graduated in Commercial and Financial Sciences. Served as General Secretary of the Antwerp Public Social Welfare Centre (OCMW) in the period from 2000 to 2007, with responsibilities including the management of 17 nursing homes (2,400 beds), more than 2,000 assisted living ats and nine general hospitals. As Managing Direcotr of non- prot associations, he is today active in employment, housing and care for people with disabilities. From 2007 to October 2019, Managing Director of Dorp nr 2 Koningin Fabiola vzw, ACG vzw and De Vijver vzw, which are active in the employment, housing and care of people with disabilities. Other current mandates Director vertrouwenscentrum kindermishandeling VKA (Condential Child Abuse Centre) Mandates expired in the last 5 years Director of Het Orgel in Vlaanderen vzw (mandate expires in 2016) (social organisation). Managing Director of Dorp nr. 2 Koningin Fabiola, as well as of vzw ACG and vzw De Vijver active (mandate expires in 2019) Mandates in listed companies / Brigitte Grouwels Non-executive Independent Director Member of the Nomination and Remuneration Committee Member of the Audit Committee ° 30/05/1953 Bordiaustraat 30, 1000 Brussels Start 1st mandate 20/05/2015 End of mandate After the OGM of 2022 Current position Retired Background Former People’s Deputy for the Brussels-Capital Region, Vice-Chairman of the Flemish Community Commission and Senator. Her political career includes the following public functions: Member of the Parliament of the Brussels- Capital Region (1992-97)/Member of the Flemish Parliament (1995-97)/Flemish Minister for Brussels Affairs and Equal Opportunities Policy (1997-99)/Party leader in the Parliament of the Brussels-Capital Region and member of the Flemish Parliament (1999 -2004)/ State Secretary Brussels-Capital Region (2004-2009), responsible for Equal Opportunities Policy, Public Administration and the Port of Brussels/member of Flemish Community Commission (VGC) for Welfare, Health and Family, Ethnic and Cultural Minorities and Civil Service Affairs/Minister of the Brussels Regional Government (2009- 2014) responsible for Public Works and Transport, Information Technology Policy, Port of Brussels/ member of Flemish Community Commission for Welfare, Health and Family Affairs (including Flemish local service centers, child care, care of the disabled and other areas)/Ethnic and Cultural Minorities and media policy/member of Joint Community Commission for Assistance to persons (bi-Community N/F rest homes, care of the disabled, etc./guardianship of CPASs/OCMWs and Public Hospitals). Other current mandates / Mandates expired in the last 5 years / Mandates in listed companies / Care Property Invest nv / Report of the Board of Directors 76 77 Report of the Board of Directors / Care Property Invest nv 11.4.2 Changes in the composition of the Board of Directors during the 2021 On 26 May 2021, the General Meeting appointed with immediate effect Mr Mark Suykens as non-executive director and Messrs Willy Pintens and Dirk Van den Broeck as executive directors for a term of four years until the end of the ordinary general meeting in 2025. 11.4.3 Proposed amendments to the general meeting 2022 The Board of Directors will propose to the Annual Meeting on 25 May 2022 that the following persons be reappointed as Directors, as their mandate will expire after the Annual Meeting in 2022: • Mr. Peter Van Heukelom, as Executive Director, for a term of four years until the end of the Ordinary General Meeting of 2026. • Mr. Paul Van Gorp, as Non-Executive Director, for a term of one year until the end of the Ordinary Annual General Meeting in 2023. • Ms Caroline Riské, as Non-Executive Director, for a term of four years until the end of the Ordinary General Meeting of 2026. • Ms Brigitte Grouwels, as Non- Executive Director, for a term of four years until the end of the Ordinary General Meeting of 2026. 11.4.4 Assignments of the Board of Directors The Board of Directors has the broadest powers to perform all acts that are necessary or useful for the realization of the objects of the Company. The Board may perform all other actions that are not expressly reserved for the general meeting by law or by the Articles of Association. The Board of Directors decides upon the long-term operating strategy, investments, disinvestments and nancing strategy of the Company, closes the annual nancial statements, and draws up the half-yearly and quarterly nancial statements of the RREC. It draws up the ‘Report of the Board of Directors’ that contains, among others, the ‘Corporate Governance Statement’, it decides how the authorised capital is used and convenes the Ordinary and Extraordinary General Meetings of Shareholders. It ensures the relevance, accuracy and transparency of communication to the shareholders, nancial analysts and the general public, such as prospectuses, Annual and Half- yearly Financial Reports, quarterly statements, and press releases. It is also the body that decides on the Company’s Executive Committee structure and determines the powers and duties of the Company’s Effective Managers. 11.4.5 Functioning of the Board of Directors 11.4.5.1 Frequency and convocation of meetings The Board of Directors convenes meetings as often as necessary for the performance of its duties. The Board of Directors normally meets every month, and also whenever this is required in the interests of the Company. The Board of Directors is convened by the Chairman or by two Directors whenever the interests of the Company so require. The notices shall state the place, date, time and agenda of the meeting and shall be sent by letter, e-mail or other written means at least two full days before the meeting. Each Director who attends a meeting of the Board of Directors or is represented at such meeting is considered to be regularly called up. 11.4.5.2 Deliberations and voting The Board of Directors can only validly deliberate and decide if at least a majority of the Directors are present or represented. If this quorum is not reached, a new Board of Directors may be convened with the same agenda, which will validly deliberate and decide if at least two Directors are present or represented. With respect to items not on the agenda, it may only deliberate with the consent of the entire Board of Directors and provided that all Directors are present or represented. Any Director may authorize another member of the Board of Directors by letter, e-mail or in another written form to represent him or her at a meeting of the Board of Directors and validly vote in his place. The Board of Directors may meet by conference call, video conference or similar communication equipment, by means of which all persons participating in the meeting can hear each other. Any Director may also provide his or her advice to the chairman by letter, e-mail or other written form. The Board of Directors may adopt a decision as provided for in the BCCA by unanimous written consent of all Directors. If a Director has a direct or indirect nancial interest that is contrary to a decision or transaction that falls within the powers of the Board of Directors, he shall comply with the provisions of Article 7:96 BCCA. The members of the Board of Directors shall also comply with Articles 37-38 of the public RREC Law. The decision-making within the Board of Directors may not be dominated by an individual or by a group of Directors. Resolutions are carried by a simple majority of the votes cast. Blank or invalid votes shall not be counted as votes cast. In the event of a tie in the votes of the Board of Directors, the Director chairing the meeting shall have a casting vote. Care Property Invest nv / Report of the Board of Directors 78 79 Report of the Board of Directors / Care Property Invest nv 11.4.5.3 Minutes The decisions of the Board of Directors are recorded in minutes after each meeting. They are sent to each Director together with the invitation to the next meeting and approved and signed at this meeting. The minutes of the meeting summarise the discussions, specify the decisions taken and mention any reservations on the part of certain Directors. They are kept in a special register held at the Company’s registered ofce. The Board of Directors of 11 December 2019 decided to appoint a Secretary as of the nancial year 2020. 11.4.5.4 Integrity and commitment of the directors All Directors, Executive and Non-Executive, and the latter regardless of whether or not they are independent, must make decisions on the basis of an independent view. The Directors should ensure that they receive detailed and accurate information and should study it thoroughly in order to be able to control the main aspects of the Company’s business properly, in the present and the future. They should seek clarication whenever they deem it necessary. Although they are part of the same collegiate body, both Executive and Non- Executive Directors each have a specic and complementary role on the Board. The Executive Directors provide the Board of Directors with all relevant business and nancial information to enable it to full its role effectively. The Non-Executive Directors discuss the strategy and key policies proposed by the Executive Committee in a critical and constructive manner and help to develop these in more detail. Non-Executive Directors should scrutinize the performance of the Executive Committee in light of the agreed goals. Directors must treat condential information they have received in their capacity as Directors with due care and may use it only in the context of their mandate. 11.4.5.5 Representation In view of the resolution of the extraordinary general meeting of 15 June 2020 to discontinue the Management Committee as a managing body and the resulting amended Articles of Association, the Company shall, in accordance with Article 26 of the Articles of Association, be validly represented in all its acts, including those in which a public ofcial or ministerial ofcer cooperates, as well as in judicial matters, either by two Directors acting jointly or, within the limits of day- to-day management, by two members of the Executive Committee acting jointly. 11.4.6 Activity report of the board of directors During the 2021 nancial year, the Board of Directors met 17 times. The main agenda items handled by the Board of Directors during the 2021 nancial year can be summarised as follows: • Operating and nancial reporting. • Analysis and approval of the nancial and business plan. • Analysis and approval of budgeting. • Discussion of the nancial and investment strategy. • Analysis and determination of the Company’s strategic initiatives. • Reporting on the implementation of decisions taken. • Internal audit reporting • Reporting by the Effective Leaders on internal control. • Reporting of the Nomination and Remuneration Committee • Reporting of the Audit Committee • Preparation of Interim Statements, Annual and Half-yearly Reports. • Discussion and approval press release on the annual gures. • Remuneration policy and bonus scheme. • Decision to proceed with a long-term incentive plan including discussion and decision on Share Purchase Plan. • Staff framework. • Evaluation of the size, composition and functioning of the Board of Directors and its interaction with the Effective Leaders. • Preparation of the General and Extraordinary General Meetings. • Preparation of the special reports of the Board of Directors within the framework of a capital increase by means of a contribution in kind. • Analysis and approval of investment les. • Approval of merger proposals and realisation of these mergers. • Establishment of Dutch, Spanish and Irish subsidiaries. • Discussion and nomination to the General Meeting of the reappointment of Directors • Reappointment of the Chairman of the Board of Directors. • Reappointment of members of the Executive Board. • Discussion of the result of the credit application. • Decision on MTN programme. • Discussion Sustainability Report. • Amendment of the Dealing Code. • Amendment of the Whistleblower Regulations. • Amendments to the integrity policy. 11.4.7 Remuneration of the directors See further in the remuneration report, point ‘11.11.2.4 Overview of the remuneration for directorships in the 2021 nancial year’ on page 101 hereafter. 11.4.8 Committees of the board of directors The Board of Directors has set up Committees in its midst to assist and advise the Board of Directors in their specic areas. They have no decision- making power but report to the Board of Directors, respectively the Executive Committee which takes the nal decisions. The Nomination and Remuneration Committee was set up in 2018. The Audit Committee and the Investment Committee, on the other hand, were only set up at the beginning of 2019. On 31 December 2021, the Board of Directors consists of 11 members, 5 of whom are independent directors. Care Property Invest nv / Report of the Board of Directors 80 81 Report of the Board of Directors / Care Property Invest nv 11.4.8.1 Nomination and remuneration committee On 14 February 2018, the Board of Directors decided to set up a Nomination and Remuneration Committee that, in terms of composition, meets the conditions imposed by the Article7:100 BCCA and the Code 2020. The chairman of the Board of Directors, Mr Mark Suykens, is chairman of this Committee. Furthermore, the Committee consists of three Non- Executive Directors, namely Ms Caroline Riské, Ms Brigitte Grouwels and Ms Ingrid Ceusters. They are regarded as independent Directors within the meaning of the Article7:87 of the Belgian Code for Companies and Associations (BCCA). The Board of Directors is of the opinion that they have the required expertise in the eld of remuneration policy. Mr Willy Pintens, Managing Director and member of the Executive Committee, attends the meetings of the Nomination and Remuneration Committee in an advisory capacity as representative and as member of the Executive Committee. 11.4.8.1.1 THE ROLE OF THE NOMINATION AND REMUNERATION COMMITTEE The Nomination and Remuneration Committee is an advisory body within the Board of Directors and will assist and advise it. It will make proposals to the Board of Directors with regard to the composition and evaluation of the Board of Directors and its interaction with the Executive Committee, the remuneration policy, the individual remuneration of the Directors and the members of the Executive Committee, including variable remuneration and long-term performance premiums, that may or may not be linked to shares, in the form of stock options or other nancial instruments, and of severance payments, and where applicable, the resulting proposals to be submitted by the Board of Directors to the shareholders. In its role as remuneration committee, the committee prepares the remuneration report that is added by the Board of Directors in the corporate governance statement as referred to in Article3:6, §2 BCCA. The remuneration report is further included in this chapter under item ‘11.11 Remuneration report 2021’ on page 100. 11.4.8.1.2 THE FUNCTIONING AND RESPONSIBILITIES OF THE NOMINATION AND REMUNERATION COMMITTEE The Nomination and Remuneration Committee shall meet at least twice a year and whenever it deems it necessary for the proper performance of its duties. The Chairman of the Nomination and Remuneration Committee, in consultation with the Managing Director who participates in the meetings with an advisory vote as representative of the Executive Committee, draws up the agenda for each meeting of the Nomination and Remuneration Committee. The Committee reports regularly to the Board of Directors about the exercise of its tasks. The Nomination and Remuneration Committee evaluates at least every three years its efciency, its functioning and its synergy with the Board of Directors, revises its internal regulations and recommends subsequently, when applicable, the necessary modications to the Board of Directors. A more detailed description of the role, functioning and responsibilities of the Nomination and Remuneration Committee can be found in the Charter, which is available on the website www. carepropertyinvest.be. 11.4.8.1.3 ACTIVITY REPORT OF THE NOMINATION AND REMUNERATION COMMITTEE (1) On 9 March 2021, the Board of Directors decided to appoint Brigitte Grouwels as an additional member of the Audit Committee. During the nancial year 2021, the Nomination and Remuneration Committee met 3 times to discuss the following matters: • Evaluation of the interaction of the Non-Executive Directors and the Executive Committee. • Determination of the amount of the variable remuneration of the CEO, CFO and COO for performance year 2020, payable in 2021. • Determination of the parameters of the variable remuneration for the management. • Discussion of remuneration policy • Discussion of the remuneration report that is part of the corporate governance statement. • Proposal to reappoint one Non-Executive Director. • Proposal to reappoint two Executive Directors. • Analysis reallocation internal committees. • Collective suitability of Directors. 11.4.8.2 Audit committee The Board of Directors decided on 13 February 2019 to establish an Audit Committee, the composition of which was last changed on 9 March 2021. The composition of the Audit Committee and the qualications of its members meet the requirements of section 7:99 BCCA, as well as the Code 2020. The committee consists of 5 (1) Non-Executive Directors, all of whom are independent, namely Mr Paul Van Gorp, as chairman, Ms Ingrid Ceusters, Mr Mark Suykens, Ms Brigitte Grouwels and Mr Michel Van Geyte. Mr Dirk Van den Broeck participates as a representative of the Executive Committee and as a member with an advisory vote. All members of the Audit Committee have the collective expertise required by law with regard to the activities of the audited company. The independent Directors who sit on the Audit Committee and the Board of Directors of Care Property Invest all meet the criteria set out in Article7:87 BCCA and the Code 2020. 11.4.8.2.1 THE ROLE OF THE AUDIT COMMITTEE In summary, the Company’s Audit Committee has the task of ensuring the accuracy and reliability of all nancial information, both internal and external. It ensures that the Company’s periodic nancial reports give a true, fair and clear picture of the situation and of future prospects of the Company and audits in particular the annual and periodic nancial statements before they are published. The Audit Committee also veries the correct and consistent application of the various applied accounting standards and valuation rules. It also monitors the independence of the Statutory Auditor and has an advisory role during the (re)appointment of the Statutory Auditor. Care Property Invest nv / Report of the Board of Directors 82 83 Report of the Board of Directors / Care Property Invest nv 11.4.8.2.2 THE FUNCTIONING AND RESPONSIBILITIES OF THE AUDIT COMMITTEE The Audit Committee meets at least 4 times a year, i.e., at the end of each quarter, and then reports its ndings to the Board of Directors. Its main tasks are the following: • notifying the Board of Directors of the result of the Statutory Audit of the Annual Accounts and, as the case may be, the Consolidated Annual Accounts and explaining how the Statutory Audit of the Annual Accounts and, as the case may be, the Consolidated Annual Accounts contributed to the integrity of the nancial reporting and the role played by the Audit Committee in that process; • monitoring the Company’s quarterly periodic nancial reports, consisting of monitoring the integrity and accuracy of the gures and the relevance of the accounting standards applied, and making recommendations or proposals to ensure the integrity of the process; • monitoring the effectiveness of the internal control and risk management systems, including the adaptation of the IT system to cover risks relating to IT security and internal security as much as possible, as well as monitoring the internal audit and its effectiveness; • following up the recommendations of the external Internal Auditor; • monitoring the Statutory Audit of the Annual and Consolidated Financial Statements, including following up the questions and recommendations formulated by the Statutory Auditor; • assessing and monitoring the independence of the Statutory Auditor, in particular assessing whether the provision of additional services to the Company is appropriate. More specically, the Audit Committee analyses with the Statutory Auditor the threats to his independence and the security measures taken to mitigate these threats, when the total fees in a public-interest entity, exceed the criteria set out in Article 4, § 3 of Regulation (EU) No 537/2014; • recommend to the Board of Directors of the Company for the appointment of the Statutory Auditor and, where appropriate, the auditor responsible for the Statutory Audit of the Consolidated Financial Statements, in accordance with Article 16(2) of Regulation (EU) No 537/2014. The Company’s Internal Auditor and Statutory Auditor report to the Audit Committee on the important issues that they identify during their assignment for the Statutory Audit of the Annual Accounts. The Audit Committee gives an explanation of this to the Board of Directors. The Audit Committee makes recommendations to the Board of Directors regarding the selection, appointment and reappointment of the external auditor and regarding the conditions of his appointment. The Board of Directors submits the Audit Committee’s proposal to the shareholders for approval. A more detailed description of the role, functioning and responsibilities of the Audit Committee has been included in the Charter, which is available on the website www.carepropertyinvest.be. 11.4.8.3 Investment committee The Board of Directors decided on 13 February 2019 to establish an Investment Committee, the composition and functioning of which was amended on 4 November 2020. The members, in diverse elds within both the real estate and economic domains, have the desired professional experience and the necessary educational background. This allows the different skills of its members to be deployed according to the nature and needs of the investment dossier presented. The Committee consists of four Non- Executive Directors, namely Mr Mark Suykens as chairman, Mr Michel Van Geyte, Ms Caroline Riské and Mr Paul Van Gorp. The independent Directors who have a seat on the Investment Committee all meet the criteria set out in section 7:87 BCCA and the 2020 Code. 11.4.8.3.1 THE ROLE OF THE INVESTMENT COMMITTEE The Investment Committee is an advisory body charged with the task of advising on investment and possible divestment les in order to speed up the decision- making process. The Board of Directors, respectively the Executive Committee, remains responsible for supervising and taking the nal decision on this matter. The Investment Committee carries out its task in accordance with the Company’s Integrity Policy. 11.4.8.3.2 THE FUNCTIONING AND RESPONSIBILITIES OF THE INVESTMENT COMMITTEE The Investment Committee meets on an ad hoc basis, i.e., whenever the discussion of a concrete le is deemed necessary. The Investment Committee then formulates its ndings and verdict on a le to the Board of Directors. The nal decision on a handled le is always taken by the Board of Directors, respectively the Executive Committee of the Company. The Investment Committee is responsible for the following tasks: • selection of investment les (or possible divestment les) • analysis of investment les (or possible divestment les) • preparation of investment les (or possible divestment les) • following up on the negotiations In the Charter, which is available on the Company’s website, www. carepropertyinvest.be, a more detailed description of the role, functioning and responsibilities of the Investment Committee is included. Care Property Invest nv / Report of the Board of Directors 84 85 Report of the Board of Directors / Care Property Invest nv 11.4.9 Overview of the directors and their attendance at meetings as at 31 december 2021: Name Board of Directors Executive Committee Audit Committee Nomination and Remuneration Committee Investment Com- mittee Peter Van Heukelom 17/17 21/21 - - - Valérie Jonkers 16/17 21/21 - - - Filip Van Zeebroeck 14/17 21/21 - - - Willy Pintens 16/17 21/21 - 3/3 - Dirk Van den Broeck 15/17 20/21 4/4 - - Mark Suykens 17/17 - 4/4 3/3 5/5 Ingrid Ceusters 14/17 - 4/4 3/3 - Brigitte Grouwels 16/17 - 3/4 2/3 - Caroline Riské 15/17 - - 3/3 5/5 Michel Van Geyte 13/17 - 2/4 - 3/5 Paul Van Gorp 17/17 - 4/4 - 5/5 La Reposée (BE) I Bergen 11.5 Executive Committee 11.5.1 Executive committee and effective managers In accordance with Article 7:104 of BCCA and Article 27 of the coordinated Articles of Association, the Board of Directors delegated management powers to the Executive Committee. The Executive Committee is responsible for the daily management of the Company. The role, functioning and composition of the Executive Committee have been determined, in addition to the Statutes, by the Board of Directors and are described below: 11.5.2 Amendment in 2020 In view of the decision of the Extraordinary General Meeting of 15 June 2020 to discontinue the Management Committee as a managing body and the resulting amended Articles of Association, the Company shall, in accordance with Article26 of the Articles of Association, be validly represented in all its acts, including those to which a public ofcial or ministerial ofcer cooperates, as well as in court, either by two Managers acting jointly or, within the limits of day-to-day management, by two members of the Executive Committee acting jointly. 11.5.3 Executive Committee in 2021 11.5.3.1 The role of the Executive Committee The role of the Executive Committee mainly consists of: • Implementing the decisions made by the Board of Directors; • Performance of the daily management of the Company and reporting to the Board of Directors accordingly; • A suitable governance structure and implementing and maintaining an administrative, accounting, nancial and technical organisation that enables the Company to perform its activities and organise suitable controls, such in accordance with the RREC Law, based on a reference framework as approved by the Board of Directors; • Supervision of the nancial reporting process in accordance with the applicable standards for annual nancial statements, the accounting standards and the valuation rules of the Company; • Proposing a balanced and comprehensible assessment of the Company’s nancial situation, the budget and the business plan to the Board of Directors; • Implementing general management of the property assets insofar not already inherent in the items above. Care Property Invest nv / Report of the Board of Directors 86 87 Report of the Board of Directors / Care Property Invest nv The Executive Committee 11.5.3.2 The powers and functioning of the Executive Committee The powers of the Executive Committee include at least the following elements: • Analysis, denition and setting out proposals of the Company’s general policy and strategy, and presenting this to the Board of Directors for discussion and adoption (including the general policy themes relating to nancial management, risk management, preparing the business plan and the budget); • Analysis, review and approval of investment and disposal projects in line with the general strategy determined by the Board of Directors and preparing recommendations to the Board of Directors relating to property projects; • Detailing, preparing and presenting proposals to the Board of Directors or its Committees, if any, relating to all issues that fall within their responsibility; • All nancial and non-nancial communication, including publication of the Company’s mandatory disclosures (including the Statutory and Consolidated Annual Financial Statements, the Annual and Half yearly Financial Reports and Interim Statements) and other key nancial and non-nancial information, based on mandatory or voluntary disclosure; • Operational management of the Company; daily operations that includes the following aspects, not limited to the listed items; • Implementing the decisions made and policies issued by the Board of Directors; • The commercial, operational and technical management of the property assets; • Managing the nancial liabilities; • Preparing nancing schemes relating to investment projects; • The introduction and continued implementation of a suitable internal control in accordance with the RREC Law (including an independent internal audit function, a risk management function and a risk policy, and an independent compliance functions including integrity policy), based on the reference framework as adopted by the Board of Directors and any committees, without prejudice to the statutory requirements to persons tasked with the internal controls as set out in the RREC Law; • Organisation and management of the supporting functions, including: • Human resources, including recruitment, training and remuneration of the Company’s personnel; • Internal and external (if relevant) communication; • Management of the information systems (IT); • Legal and tax issues. • Providing all the information in due course that the Board of Directors requires for the performance of its obligations. The CEO, who is also a Managing Director, has, next to his responsibility as the Chairman of the Executive Committee, a general and coordinating function and is responsible for the daily management of the Company. As head of staff he is also responsible for the general management and supervision of the team, including determination of the task allocation and monitoring of their presence, missions and performance. Care Property Invest nv / Report of the Board of Directors 88 89 Report of the Board of Directors / Care Property Invest nv The CFO, who is also an Executive Director, leads the nance team in addition to his mandate within the Executive Committee. The COO, who is also the Managing Director, is in charge of the operational and investment team in addition to her mandate within the Executive Committee. The other Managing Directors provide general supervision of the day-to-day operations and take on the role of internal audit manager on the one hand and risk manager on the other. Article 26 of the Articles of Association provides that the Company in all its actions, including legal representation, is validly represented by two members of the Executive Committee acting jointly. The Executive Committee and its members exercise their powers in accordance with the Charter, the Company’s Articles of Association, the decisions of the Executive Committee and of the Board of Directors, the specic or general guidelines of the Board of Directors, the provisions of the BCCA, the provisions of the RREC legislation and any other applicable legal, administrative or regulatory provisions. The Committees support the Executive Committee in a number of its aforementioned powers. If there is a conict of interest on the part of one of the members of the Executive Committee, this member shall refrain from the deliberations and decisions taken by the other members of the Executive Committee. 11.5.3.2.1 COMPOSITION OF THE EXECUTIVE COMMITTEE As at 31 December 2021, the Executive Committee consisted of the following persons, all Effective Managers in the sense of Article 14 of the Act of 12 May 2014, as altered by the Act of 22 October 2017: Name Function Start of rst mandate End of mandate of the Executive Committee Peter Van Heukelom Chief Executive Ofcer (CEO) and Managing Director Chairman of the Executive Committee 21/05/2003 After the OGM of 2022 Dirk Van den Broeck Managing (Executive) Director and Risk Manager 30/10/1995 After the OGM of 2025 Willy Pintens Managing (Executive) Director and Internal Audit Manager 30/10/1995 After the OGM of 2025 Filip Van Zeebroeck Chief Financial Ofcer (CFO) and Managing (Executive) Director 7/01/2016 After the OGM of 2024 Valérie Jonkers Chief Operation Ofcer (COO) and Managing (Executive) Director 7/01/2016 After the OGM of 2024 The term of ofce of the members of the Executive Committee coincides with the duration of their term of ofce in the Board of Directors. 11.5.3.3 Remuneration of the members of the Executive Committee See further in the remuneration report, point ‘11.11.2.2 Remuneration of Executive Directors other than the CEO, CFO and COO’ on page 100 hereafter. 11.6 Statements concerning the Directors, Effective Leaders and members of the management team (Annex I to the Delegated Regulation (EU) No 2019/980) The Board of Directors of Care Property Invest declares that on 31 December 2021: • none of its Directors, Effective Leaders or members of the Executive Management have been convicted of any fraudulent offences during the last 5 years, • none of its Directors, Effective Leaders or members of the Executive Management have been subject to or involved in any ofcial and publicly expressed accusation and/or sanction by any statutory or regulatory authority (including recognised professional organisations) during the last 5 years; • none of its Directors, Effective Managers or members of the Executive Management have been disqualied 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 exercise of the activities of an issuer for the preceding 5 years; • none of its Directors, Effective Managers or members of the Executive Management have been involved in bankruptcy, suspension of payments (sequestration) or liquidation during the last 5 years; • no employment contract has been concluded with the Directors, Effective Leaders or members of the Executive Management that provides for benets on termination of employment, with the exception of the management contracts with the CEO, COO and CFO that are of indenite duration and provide for contractual provisions on termination and severance pay that never exceed eighteen (18) months; • the following Directors, Executive Directors or members of the Executive Management of Care Property Invest hold shares: Valérie Jonkers (4,901), Willy Pintens (2,709), Mark Suykens (2,642), Dirk Van den Broeck (9,260, of which 7,000 are held by a person closely related to him), Paul Van Gorp (2,948), Peter Van Heukelom (10,246), Filip Van Zeebroeck (6,599) (Directors). • no option on the shares of Care Property Invest has so far been granted by Care Property Invest; • there is no family relationship between the Directors, Effective Leaders or members of the Executive Management among themselves. Care Property Invest continues to strive to maintain its gender diversity. Care Property Invest nv / Report of the Board of Directors 90 91 Report of the Board of Directors / Care Property Invest nv 11.7 Diversity policy The Board of Directors takes into account gender diversity, diversity in general and complementarity in terms of skills, experience and knowledge when dening the long-term values, core policies, standards and objectives of the Company. The Nomination and Remuneration Committee also takes this intended diversity within the Board of Directors into account when formulating advice regarding the appointment of Directors, members of the Executive Committee and other leaders. After all, such a diversity policy makes it possible to approach problems from different points of view within the Board of Directors and within the Executive Committee, thus contributing to balanced decision-making. On the basis of Article 7:86 BCCA, at least one third of the members of the Board of Directors (rounded up to the nearest whole number) must be of a different gender from the other members. As at 31 December 2021, the Board of Directors consists of 4 women and 7 men, as a result of which this one-third rule has already been complied with. Care Property Invest will continue to strive to maintain this gender diversity when proposals for appointment are considered. 11.8 Prevention of conicts of interest Each Director and Effective Manager is encouraged to arrange his/her personal and business affairs so as to avoid any direct or indirect conicts of interest with the Company. With regard to the regulation of conicts of interest, the Company is subject to the legal rules, being articles 7:86 BCCA and 36 to 38 of the RREC Law and the rules in its Articles of Association and in the Charter. Without prejudice to the application of legal procedures, the Company’s Charter sets out specic procedures to offer a way of resolving potential conicts. The Board of Directors ensures that the Company is managed exclusively in the Company’s interests and in accordance with the provisions of the RREC legislation. The integrity policy attached to the Charter also sets out rules relating to conicts of interest. 11.8.1 Committee If a Director has, directly or indirectly, an interest of a proprietary nature that conicts with a decision or transaction falling within the competence of the Board of Directors, he or she must comply with the provisions of Article7:96 BCCA. This means that all Directors must notify the Board of Directors and the Statutory Auditor of any conicts of interest when they arise and must abstain from voting on these matters. Any abstention due to a conict of interest must be disclosed in accordance with the relevant provisions of the BCCA and is therefore reported in the annual report. The members of the Board of Directors must also comply with Articles 36 to 38 of the RREC Law. In addition to the provisions of the BCCA and the rules on conict of interest arising from the RREC Law, Care Property Invest requires each (managing) Director or member of the Executive Committee to avoid conict of interest as far as possible. If a conict of interest (not covered by the statutory regulations on conicts of interest) nevertheless arises in relation to a matter that falls within the competence of the Board of Directors or the Executive Committee, and on which it must take a decision, the Director in question must notify his or her fellow Directors of this. They then decide whether the member concerned may or may not vote on the matter to which the conict of interest relates and whether he/she may attend the discussions on this matter. It is explicitly made clear here that non-compliance with the above (additional) rules on conicts of interest cannot affect the validity of decision-making by the Board of Directors. 11.8.1.1 Conflicts of interest relating to transactions with affiliated companies Care Property Invest also serves the procedure of the then applicable Article7:97 BCCA. In the nancial year 2021, the Company had no persons who qualify as afliated persons within the meaning of Section 7:97 BCCA, being natural persons or legal entities afliated with the Company and which are not a subsidiary of the Company. 11.8.1.2 Conflicts of interest concerning transactions with affiliated persons, the effective managers and staff of the company Transactions between the Company or an afliated company and a member of the Board of Directors, the Executive Committee or member of staff must always be conducted on an arm’s length basis, under the supervision of the Board of Directors. Pursuant to Article 37 of the RREC Law, the Company must notify the FSMA in advance if one of the persons referred to below acts as a counterparty in a property transaction with the Company or with a company over which it has control, or if any benets are gained through such a transaction by persons including those listed below: • the persons who control the public RREC or hold participating interests in it; • the promoters of the public RREC; • the persons with whom the RREC or a promoter of the RREC are afliated or with which the RREC or a promoter of the RREC have a participating interest relationship; • the Directors, Managers, members of the Executive Committee, the persons responsible for the daily management, the senior managers or agents of the RREC or the promoters of the RREC, or the persons who control the Company or hold participating interests in the Company. Care Property Invest nv / Report of the Board of Directors 92 93 Report of the Board of Directors / Care Property Invest nv In its notication of the FSMA, the RREC must show its interest in the planned transaction and that the transaction in question forms part of the normal activities of the RREC. If the FSMA nds that the information in the aforementioned notice is insufcient, incomplete, inconclusive or irrelevant, it shall notify the RREC accordingly. If no action is taken in response, the FSMA may publish its position. These transactions must be conducted on an arm’s length basis. When a transaction that takes place in the circumstances described above relates to property as referred to in Article 47 § 1 of the RREC Law, the valuation of the expert is binding on the RREC (for determining the minimum price in the case of a transfer, or the maximum price in the case of an acquisition). The transactions referred to above, as well as the information contained in the preceding notice to the FSMA, must be disclosed immediately and explained in the annual nancial report and the Statutory Auditor’s report. Pursuant to Article 38 of the RREC Law, these provisions do not apply to: ` • transactions relating to a sum of less than the lower of 1% of the Company’s consolidated assets and €2,500,000; • the acquisition of securities by the Company in connection with a public issue by a third-party issuer for which a promoter of the RREC or one of the persons referred to in Article 37 § 1 of the RREC Law act as intermediaries within the meaning of Article 2, 10° of the Act of 2 August 2002; • the acquisition of or subscription to shares in the Company issued pursuant to a decision of the general meeting by the persons referred to in Article 37 § 1 of the RREC Law; and • transactions relating to cash and cash equivalents of the Company or one of its subsidiaries, provided that the person acting as the counterparty has the status of intermediary within the meaning of Article 2, 10°, of the Act of 2 August 2002 and that these transactions are conducted on an arm’s length basis. The Board of Directors ensures that the Company is governed in accordance with the provisions of the RREC Law, in the exclusive interest of the Company. 11.8.2 Article 7:96 BCCA on conicts of interest between the Company and a Director was applied during the deliberations of the Board of Directors described below: The Board of Directors meeting of 9 March 2021 decided on the approval of the amount of the bonus for the 2020 nancial year, as well as on the proposal for the reappointment of one Non-Executive and two Executive Directors Extract from the Minutes; ‘1. Notication of possible conicts of interest Peter Van Heukelom, Filip Van Zeebroeck and Valérie Jonkers declared that they had a conict of interest within the meaning of Article 7:96 of the BCCA, given that they are beneciaries of the bonus as explained in agenda item 5. Consequently, they were excluded from the deliberation and vote for this specic agenda item. Mark Suykens declared that he had a conict of interest within the meaning of Article 7:96 of the BCCA in view of agenda item 12 concerning his reappointment as director. Consequently, he was excluded from the deliberation and vote on this specic agenda item. Dirk Van den Broeck and Willy Pintens declared that they had a conict of interest within the meaning of Article 7:96 of the BCCA in view of item 13 on the agenda concerning their reappointment as directors. Consequently, they were excluded from the deliberation and vote for this specic agenda item.. 5. Report of the Nomination and Remuneration Committee held on 9 March 2021 and approval of the amount of the bonus for the 2020 nancial year Peter Van Heukelom, Filip Van Zeebroeck and Valérie Jonkers declared that they had a conict of interest within the meaning of Article 7:96 of the BCCA since they are beneciaries of the bonus as explained in this agenda item. Consequently, they are excluded from the deliberation and vote on this specic agenda item. (...) The Board of Directors takes note of the report of the Nomination and Remuneration Committee and approves the amount of the bonus for the scal year 2020 (...) 12. Proposal to reappoint one Non- Executive Director Mark Suykens declared that he had a conict of interest within the meaning of Article 7:96 of the BCCA given that this agenda item relates to his reappointment as director. Consequently, he is excluded from the deliberation and vote on this specic agenda item. With due consideration of the advice of the Nomination and Remuneration Committee and subject to the approval by the FSMA, the Board of Directors approves the reappointment of Mark Suykens as Non-Executive Director and Chairman of the Board of Directors for a term of four years, with effect from 26 May 2021 and until after the end of the Annual General Meeting in 2025. The remuneration is (re)xed at a xed lump sum of twenty thousand euros (EUR 20,000.00) per year and is supplemented with an attendance fee in accordance with the remuneration policy. The Board of Directors decided to submit the aforementioned reappointment of Mark Suykens to the General Meeting of 26 May 2021. Care Property Invest nv / Report of the Board of Directors 94 95 Report of the Board of Directors / Care Property Invest nv 13. Proposal to reappoint two executive directors Dirk Van den Broeck and Willy Pintens declared that they had a conict of interest within the meaning of Article 7:96 of the BCCA in view of the fact that agenda item 13 concerns their reappointment as directors. Consequently, they are excluded from the deliberation and vote for this specic agenda item. With due consideration of the advice of the Nomination and Remuneration Committee and subject to the approval of the FSMA, the Board of Directors approves the reappointment of Willy Pintens and Dirk Van den Broeck as Executive Directors for a term of four years, with effect from 26 May 2021 and until after the end of the Ordinary General Meeting in 2025. The remuneration is (re)xed at a xed lump sum of ten thousand euros (EUR 10,000.00) per year and is supplemented with an attendance fee in accordance with the remuneration policy. The Board of Directors resolves to submit the aforementioned reappointment of Willy Pintens and Dirk Van den Broeck to the General Meeting of 26 May 2021.’ The Nomination and Remuneration Committee of 9 November 2021 discussed the reappointment of three Non-Executive Directors Extract from the Minutes; “1. Notication of possible conicts of interest Carol Riské declared that she has a conict of interest within the meaning of Article 7:96 of the BCCA, given that agenda item 4 deals with her reappointment as director. Consequently, she is excluded from the deliberation and vote for this specic agenda item. The other members of the Nomination and Remuneration Committee present at the meeting declare that they individually have no direct or indirect interest of a proprietary nature in conict with the decisions to be taken. 4. Proposal to reappoint three Non- Executive Directors Carol Riské declared that she has a conict of interest within the meaning of Article 7:96 of the BCCA as this agenda item concerns her reappointment as director. Consequently, she is excluded from the deliberation and vote on this specic agenda item. The Nomination and Remuneration Committee takes note of the proposal to reappoint Paul Van Gorp, Carol Riské and Brigitte Grouwels as Non-Executive Directors for a period of four years, starting 25 May 2022 and ending at the end of the Annual General Meeting in 2026. (...) The committee advises to start the preparations in the framework of the ‘t & proper test’ with FSMA and will further discuss this in a later meeting and submit an advice to the Board of Directors.’ In its written decisions of 8 December 2021, the Board of Directors decided to purchase 7,500 treasury shares. Extract from the Minutes; “1. Recapitulation of the agenda and notication of any conicts of interest Peter Van Heukelom, Filip Van Zeebroeck and Valérie Jonkers declare that they have a conict of interest within the meaning of Article 7:96 of the BCCA in that they are, on the one hand, Directors of the Company and, on the other hand, beneciary of the Plan, as explained in agenda item 2. Consequently, they are excluded from the vote, but sign the minutes purely for informational purposes and in the spirit of the unanimous written decision. 2. Decision to purchase 7,500 treasury shares as of 8 December 2021 In implementation of the ‘2019 Share Purchase Plan’ and the ‘2019 bis Share Purchase Plan’ (hereinafter the ‘Plan’), as published on 8 April 2019, the Board of Directors resolves today to continue the share buy-back programme and to do so for a total amount of up to EUR 180,000 to acquire up to 7,500 shares and this within the limits of the (renewed) authorisation to purchase treasury shares, as granted by the Extraordinary General Meeting of Shareholders on 15 June 2020. (...) The Board of Directors unanimously decides to approve the purchase of 7,500 treasury shares as of 8 December 2021.’ The Company is not aware of any other possible conicts of interest during the 2021 nancial year. 11.8.3 Supervison of transactions in Care Property Invest shares The Board of Directors has published its policy on the prevention of market abuse and insider trading in the Charter. The independent compliance function is carried out by Ms Nathalie Byl. The Company has drawn up a charter of the compliance function in which the objective and the functioning of the compliance function are set out in accordance with the FSMA circular. The Board of Directors, the Executive Committee and the staff of the Company have taken note of this charter. The compliance ofcer ensures, amongst other things, that the rules of conduct and the declarations relating to transactions on Care Property Invest shares, carried out by directors and other insiders for their own account, are observed, in order to limit the risk of insider trading. Care Property Invest nv / Report of the Board of Directors 96 97 Report of the Board of Directors / Care Property Invest nv 11.9 The powers of the administrative body, in particular with regard to the possibility of issuing or repurchasing shares In response to the decision of the extraordinary general meeting of 15 June 2020, the Board of Directors is allowed to acquire and hold in pledge own shares with a maximum of ten per cent (10%) of the total issued shares, to a unit price not lower than ninety per cent (90%) of the average rate of the last thirty (30) days of the listing of the share on the regulated market of Euronext Brussels, nor higher than hundred and ten per cent (110%) of the average rate of the last thirty (30) days of the listing of the share on the regulated market of Euronext Brussels, or a maximum raise or decrease of ten per cent (10%) in comparison with the above mentioned rate. This approbation is granted for a renewable period of ve (5) years, counting from publication in the attachment of the Belgian Ofcial Gazette of the decision of the Extraordinary General Meeting of 15 June 2020. The Board of Directors is permitted, in particular, to acquire, hold in pledge and sell the own shares of the Company without prior decision of the General Meeting when this acquirement or sale is necessary to avoid serious or threatening damage to the Company for a duration of ve (5) years, counting from publication in the Belgian Ofcial Gazette of the decision of the Extraordinary General Meeting of 15 June 2020. The Company can sell its own shares, in or out of stock market, with respect to the conditions set by the Board of Directors, without prior permission of the general meeting, provided they respect the applicable market regulations. Pursuant to this authorisation, the Board of Directors is authorised to alienate its own shares listed within the meaning of Article 1:11 BCCA within the meaning of Article 7:218, §1, paragraph 1, 2° BCCA, on the basis of which the Board of Directors is also authorised to alienate its own shares without the authorisation of the General Meeting. The permissions that are mentioned above are also applicable to the acquisition and sale of shares of the Company by one or multiple direct subsidiaries, in terms of the legal regulations concerning the acquisition of shares of the parent company by its subsidiaries. In the 2021 nancial year, the Company acquired 7,500 own shares. As of 31 December 2021, the Company holds a total of 9,192 own shares. 11.10 Evaluation process Under the direction of its Chairman, the Board of Directors evaluates, every two to three years, its size, composition, operation and interaction with the Executive Committee. Prior to any reappointment of Directors, the individual contribution, commitment and effectiveness of each Director shall be assessed in accordance with the evaluation procedure. The evaluation process has four objectives: • assessing the functioning of the Board of Directors; • checking that important items of business are thoroughly prepared and discussed; • evaluating the actual contribution of each Director, his or her attendance of meetings of the Board and his or her constructive involvement in discussions and decision-making; • examining whether the current composition of the Board of Directors corresponds to the desirable composition. The Non-Executive Directors should regularly (preferably once a year) assess their interaction with the Executive Committee. They must meet for this purpose at least once a year, in the absence of the Executive Committee members. The contribution of each Director is reviewed periodically - taking account of changing circumstances - in order to be able to adjust the composition of the Board of Directors. The Board should act on the basis of the results of the evaluation by recognising its strengths and addressing its weaknesses. Where appropriate, this will mean that nominations are made for new members, proposals are made not to reappoint existing members or that measures are taken that are deemed to be conducive to the effective functioning of the Board of Directors. The Board of Directors ensures that the necessary measures are taken to provide for orderly succession of the members of the Board of Directors. The Board also ensures that all appointments and reappointments of both Executive and Non-Executive Directors make it possible to maintain an appropriate balance of skills and experience on the Board. The Board of Directors is assisted in this evaluation process by the Nomination and Remuneration Committee. Under the leadership of the Chairman, the Board of Directors evaluates its size, composition and functioning every 2 to 3 years. Care Property Invest nv / Report of the Board of Directors 98 99 Report of the Board of Directors / Care Property Invest nv 11.11 Remuneration report 2021 This remuneration report falls within the framework of the provisions of the Belgian Corporate Governance Code of 12 May 2019 (the '2020 Code') and of Article 3:6, §3 of the BCCA. The remuneration report is included as a specic section in the Corporate Governance Statement, which forms part of the annual report of Care Property Invest (or the ‘Company’). The Nomination and Remuneration Committee assists the Board of Directors in its policy and prepared this remuneration report. The 2021 remuneration report relates to the remuneration paid or denitively due to the persons concerned for the performance year 2021. 11.11.1 Applied policy Following the entry into force of the law of 28 April 2020, Care Property Invest is required to submit its remuneration policy to the binding approval of the ordinary general meeting. The 2021 Annual General Meeting rejected the 2021 Remuneration Policy as proposed by the Board of Directors. Consequently, the Board of Directors was required to apply the remuneration policy approved by the 2020 Annual General Meeting, which was not fundamentally different from the proposed 2021 policy. Following an engagement exercise with shareholders, the Board of Directors considered it appropriate to revise the policy. The new proposed remuneration policy that will apply from the 2022 nancial year, subject to approval by the Annual General Meeting on 25 May 2022, was published separately together with the notice of the Annual General Meeting on 25 May 2022. In the revised remuneration policy, the Board of Directors further explains how the votes cast by shareholders and the results of engagement discussions with shareholders or their representatives were taken into account. Pursuant to the remuneration policy still in force - which can be consulted at www.carepropertyinvest.be/en/investments/general- meeting/ - Remuneration policy-2020-05-27.pdf- including the change in the remuneration for the members of the Investment Committee as approved by the Ordinary General Meeting of 26 May 2021, the Company allocated the remuneration as shown below for the 2021 nancial year. 11.11.2 Remuneration of Executive and Non-Executive Directors 11.11.2.1 Remuneration of the Non-Executive Directors In accordance with the decision of the Ordinary General Meeting of 29 May 2019, the Chairman of the Board of Directors received a xed remuneration of €20,000 for the 2021 nancial year. The other Non-Executive Directors received an annual xed remuneration of €10,000 and an attendance fee of €750 was granted to the directors per attendance at the meetings of the Board of Directors, the Nomination and Remuneration Committee, the Audit Committee and, as from 4 November 2020, also the Investment Committee. All remunerations are xed, at-rate payments. The non-executive directors did not receive any variable remuneration or a share- related remuneration. The detail of the individual remuneration is included in the table below. 11.11.2.2 Remuneration of Executive Directors other than the CEO, CFO and COO In accordance with the 2020 remuneration policy, the Executive (Managing) Directors, with the exception of the CEO, CFO and COO, received the same remuneration as the Non-Executive Directors for the exercise of their directorship (cf. 11.11.2). In addition, they received an additional xed remuneration of €10,000 for their mandate as a member of the Executive Committee, supplemented by a xed representation allowance of €1,800 per year. For their participation in the meetings of the Executive Committee, an attendance fee of €750 per meeting was also granted. Finally, they also received a per mileage allowance. These allowances are xed, at-rate allowances. There is no variable remuneration provided, nor is there a share-linked remuneration. 11.11.2.3 Remuneration of the CEO, CFO and COO in their capacity as Director The CEO, CFO and COO do not receive any remuneration in their capacity as Director. 11.11.2.4 Overview of the remuneration for directorships in the 2021 financial year 2021 Board of Directors Audit Committee Nomination and Remuneration Committee Investment Committee Fixed remuneration Atten- dance fee Total remuneration Name Mandate Attendances Peter Van Heukelom Executive Director 17/17 - - - Valérie Jonkers Executive Director 16/17 - - - Filip Van Zeebroeck Executive Director 14/17 - - - Willy Pintens (1) Executive Director 16/17 3/3 10,000 14,250 24,250 Dirk Van den Broeck (2) Executive Director 15/17 4/4 10,000 14,250 24,250 Mark Suykens Non- Executive Director 17/17 4/4 3/3 5/5 20,000 21,750 41,750 Ingrid Ceusters Non- Executive Director / Independent Director 14/17 4/4 3/3 10,000 15,750 25,750 Brigitte Grouwels Non- Executive Director / Independent Director 16/17 3/4 2/3 10,000w 15,750 25,750 Carol Riské Non- Executive Director / Independent Director 15/17 3/3 5/5 10,000 17,250 27,250 Michel Van Geyte Non- Executive Director / Independent Director 13/17 2/4 3/5 10,000 13,500 23,500 Paul Van Gorp Non- Executive Director / Independent Director 17/17 4/4 5/5 10,000 19,500 29,500 Total 90,000 132,000 222,000 (1) In addition, Willy Pintens receives a separate remuneration in his capacity as member of the Executive Committee (see under 11.11.3 ‘Global overview (gross) remuneration of the Managing (executive) Directors (effective leaders) in the nancial year 2021’). (2) In addition, Dirk Van den Broeck receives a separate remuneration in his capacity as member of the Executive Committee (see under 11.11.3 ‘Global overview (gross) remuneration of the Managing (executive) Directors (effective leaders) in the nancial year 2021’). Care Property Invest nv / Report of the Board of Directors 100 101 Report of the Board of Directors / Care Property Invest nv 11.11.3 Remuneration of the CEO, CFO and COO In general The remuneration level of the CEO, CFO and COO (the effective leaders of the Company) is - in their capacity of member of the Executive Committee - determined by the Board of Directors, upon advice of the Nomination and Remuneration Committee, and is based on their respective management contracts. In accordance with the applicable remuneration policy, these contracts provide for a xed remuneration, a variable remuneration in the form of an annual bonus, the allocation modalities and amount of which are established by the Board of Directors in the bonus regulations, and other components (hospitalisation insurance, meal vouchers (only CEO) and benets in kind such as a company car, mobile phone and laptop). Fixed remuneration The xed remuneration consists of (i) an indexed annual (gross) base remuneration, payable in monthly instalments, including a representation allowance, (ii) a Share Purchase Plan (long term incentive plan) and (iii) an insurance 'individual pension commitment' with certain contributions and additional coverage (amounting to €6,080 for the CFO and €6,029 for the COO). Long-term incentive plan (‘LTIP') In 2020 and 2021, the Board of Directors applied the long-term incentive plan for the CEO, CFO and COO. Under this plan, the CEO received a gross cash amount of €100,000 and the CFO and COO each received a gross cash amount of €75,000 in 2020 and again in 2021, with the specic purpose and under the obligation to use the net amount, after tax and social security contributions, to purchase a package of shares of the Company. For this purpose, they purchase the Company's shares at a price per share equal to the weighted average share price during the period of twenty (20) trading days preceding the day before the date of signing the purchase agreement, multiplied by 100/120ths. The Company considers this to be a market-based price, and justies the discount by, among other things, the lock-up period. The gross amount was determined for 2020 and 2021 based on the relative weight of the remuneration of the CEO, CFO and COO. In accordance with the LTIP, the beneciaries purchased shares in 2020 as follows. LTIP 2020 Award date End of retention period Shares purchased in 2020 CEO 30/01/2020 30/01/2023 1912 CFO 30/01/2020 30/01/2023 1434 COO 30/01/2020 30/01/2023 1434 In accordance with the LTIP, the beneciaries purchased shares in 2021 as follows: LTIP 2021 Award date End of retention period Shares purchased in 2021 CEO 11/01/2021 11/01/2024 2074 CFO 11/01/2021 11/01/2024 1556 COO 11/01/2021 11/01/2024 1556 The purchased shares must be held by the beneciaries for a lock-up period of three (3) years. During this lock-up period, they are entitled to dividends, voting rights, preferential subscription rights or irreducible allocation rights attached to the purchased shares and the right to participate or not in an optional dividend. Deferred part of the annual variable remuneration for the 2019 and 2020 nancial years, acquired on 31 December 2021: The variable remuneration was max. 50% of the xed remuneration for the 2019 nancial year. The bonus is spread over three years (2019, 2020, 2021); over the 2021 nancial year, the third and nal 25% tranche was acquired, being an amount of €79,935 for the CEO and €41,792 for the CFO and COO each, and paid out at the beginning of 2022. The variable remuneration was max. 50% of the xed remuneration for the 2020 nancial year. The bonus is spread over three years (2020, 2021, 2022); over the 2021 nancial year, the second 25% tranche was acquired, i.e. an amount of €80,766 for the CEO and €42,010 for the CFO and COO each, and paid out in early 2022. The conditions for granting the above-mentioned tranches - redened by the Board of Directors on 9 March 2021 upon recommendation of the Nomination and Remuneration Committee - were achieved in FY 2021 as follows: - EPS (adjusted EPRA earnings per share): (weighting: 65%). Target: minimal €1.00 per share. Result achieved: €1.06 per share. - Operating margin on cash elements (weight: 10%). Objective (expressed as operating cost): max. 18%. Result achieved: 16%. - Communication between management and the Board of Directors, HR policy, quality of investment les and ultimately sustainability and sustainability reporting (qualitative criteria) (weighting: 25%). Objective: Satisfactory according to the assessment of the Board of Directors. Achieved result: Fully achieved. The nal 25% tranche of the bonus for the 2020 nancial year is payable under the conditions set in the remuneration policy, based on the performance of the CEO, CFO and COO in the 2022 nancial year. Care Property Invest nv / Report of the Board of Directors 102 103 Report of the Board of Directors / Care Property Invest nv Part of the annual variable remuneration for the 2021 nancial year, acquired on 31 December 2021: The variable remuneration for the 2021 nancial year was a maximum of 50% of the xed remuneration. The bonus is spread over three years (2021, 2022, 2023); over the 2021 nancial year, the rst 50% tranche was acquired, being an amount of €162,408 for the CEO and €84,439 for the CFO and COO each, and paid out in early 2022. The conditions for the grant of the bonus for the 2021 nancial year - set by the Board of Directors on 9 March 2021 on the recommendation of the Nomination and Remuneration Committee - were achieved in the 2021 nancial year as follows: • EPS (adjusted EPRA earnings per share): (weighting: 65%). Target: minus €1.00 per share. Result achieved: €1.06 per share. • Operating margin on cash elements (weight: 10%). Objective (expressed as operating cost): max. 18%. Result achieved: 16%. • Communication between management and the Board of Directors, HR policy, quality of investment les and nally sustainability and sustainability reporting (qualitative criteria) (weighting: 25%). Objective: Satisfactory according to the assessment of the Board of Directors. Achieved result: Fully achieved. The other half of this bonus is payable in two instalments of 25% each under the conditions set in the remuneration policy, based on the performance of the CEO, CFO and COO in the nancial years 2022 and 2023.. Performance criteria CEO for the 2021 performance year (in €) Criterion Weight Year variable remuneration Due on 31/12/2021 EPS (adjusted EPRA earnings per share): €1,00 per share 65% 2019 25% bonus 2019 (Y3) = 51,957 2020 25% bonus 2020 (Y2) = 52,498 2021 50% bonus 2021 (Y1) = 105,565 Operating margin on cashelements: max. 18% (operating cost) 10% 2019 25% bonus 2019 (Y3) = 7,993 2020 25% bonus 2020 (Y2) = 8,077 2021 50% bonus 2021 (Y1) = 16,241 Qualitative criteria (1) 25% 2019 25% bonus 2019 (Y3) = 19,984 2020 25% bonus 2020 (Y2) = 20,192 2021 50% bonus 2021 (Y1) = 40,602 Total 323,109 (1) Communication between management and the Board of Directors, HR policy, quality of investment les and sustainability and sustainability reporting.. Performance criteria CFO for the 2021 performance year (in €) Criterion Weight Year variable remuneration Due on 31/12/2021 EPS (adjusted EPRA earnings per share): €1,00 per share 65% 2019 25% bonus 2019 (Y3) = 27,165 2020 25% bonus 2020 (Y2) = 27,307 2021 50% bonus 2021 (Y1) = 54,884 Operating margin on cashelements: max. 18% (operating cost) 10% 2019 25% bonus 2019 (Y3) = 4,179 2020 25% bonus 2020 (Y2) = 4,201 2021 50% bonus 2021 (Y1) = 8,443 Qualitative criteria (1) 25% 2019 25% bonus 2019 (Y3) = 10,448 2020 25% bonus 2020 (Y2) = 10,503 2021 50% bonus 2021 (Y1) = 21,110 Total 168,240 (1) Communication between management and the Board of Directors, HR policy, quality of investment les and sustainability and sustainability reporting. Performance criteria COO for the 2021 performance year (in €) Criterion Weight Year variable remuneration Due on 31/12/2021 EPS (adjusted EPRA earnings per share): €1,00 per share 65% 2019 25% bonus 2019 (Y3) = 27,165 2020 25% bonus 2020 (Y2) = 27,307 2021 50% bonus 2021 (Y1) = 54,884 Operating margin on cashelements: max. 18% (operating cost) 10% 2019 25% bonus 2019 (Y3) = 4,179 2020 25% bonus 2020 (Y2) = 4,201 2021 50% bonus 2021 (Y1) = 8,443 Qualitative criteria (1) 25% 2019 25% bonus 2019 (Y3) = 10,448 2020 25% bonus 2020 (Y2) = 10,503 2021 50% bonus 2021 (Y1) = 21,110 Total 168,240 (1) Communication between management and the Board of Directors, HR policy, quality of investment les and sustainability and sustainability reporting. The central objective of the application of these criteria is to align the interests of the members of the Executive Committee with the interests of the shareholders and to promote a sustainable long-term value creation of the Company. Care Property Invest nv / Report of the Board of Directors 104 105 Report of the Board of Directors / Care Property Invest nv Global overview (gross) remuneration of the Executive Directors for the 2021 nancial year (in €) Peter Van Heukelom, CEO / Managing Director Filip Van Zeebroeck, CFO / Managing Director Valérie Jonkers, COO / Managing Director Willy Pintens, Managing Director Dirk Van den Broeck, Managing Director Fixed remuneration (basis) (1) 546,632 253,726 253,726 10,000 10,000 Pension plan (1) 0 6,080 6,029 0 0 Fixed remuneration in shares (Long term incentive plan) 100,000 75,000 75,000 0 0 Remuneration for participation in meetings of the Executive Committee by the Managing Directors (other than CEO, CFO, COO) (2) 0 0 0 15,750 15,000 Representation fee and travel costs 3,000 3,000 3,000 3,146 2,769 Benets in kind 8,038 5,093 5,133 0 0 Variable remuneration acquired in nancial year 2020 (variable remuneration for FY 2021 (Y1), FY 2020 (Y2) and FY 2019 (Y3)) 323,109 168,240 168,240 0 0 TOTAL 980,779 511,139 511,128 28,896 27,769 % Fixed remuneration 67% 67% 67% 100% 100% % Variable remuneration 33% 33% 33% 0% 0% (1) Individual pension commitment (CEO included) as the premium can no longer be deposited in the IPT insurance due to the CEO reaching retirement age. (2) The meetings of the Executive Committee were attended 21 times by Willy Pintens and 20 times by Dirk Van den Broeck. 11.11.4 Annual change in the average remuneration of the employees and effective leaders and the annual The xed remuneration of the CEO, COO and CFO is xed for the nancial years 2019, 2020 and 2021 and therefore does not change (except by indexation). The target of the earnings per share is always increased now that the Company is experiencing signicant growth. The fact that the predetermined criteria of the variable remuneration are not only to be met in the relevant reference year, but also to be achieved and assessed in the two following years in order for the variable remuneration for the reference year to be fully vested, contributes to the long-term perspective of the remuneration. The remuneration policy also contributes to the Company's long- term strategy. The lock-up period of three years that applies to the shares paid out under the LTIP also contributes to the alignment in the longer term of the interests of the CEO, CFO and COO with those of the shareholder, with the Company's long-term strategy in mind. The same applies to the long notice period (12 months) provided for in the management contracts with the CEO, CFO and COO. The ratio between the remuneration of the CEO for the nancial year 2021 and the lowest remuneration (in full- time equivalent) of the employees is 12.96. Overview of the evolution over the last 5 nancial years 2017 vs 2016 2018 vs 2017 2019 vs 2018 2020 vs 2019 2021 vs 2020 Evolution in the remuneration FTE at 31/12 63% 26% 27% 56% 20% Average remuneration employees (in FTE) 4% 4% 13% 2% 2% Fixed remuneration CEO 25% 1% 44% 1% 1% Variable remuneration effective leaders (excl. CEO) 116% 2% 56% -1% 4% Evolution of the Company's development Rental income 28% 27% 17% 23% 19% Adjusted EPRA Earnings 40% 41% 12% 23% 20% EPS 17% 15% 6% 9% 6% Operating margin (calculated on cash elements) -3% 0% -1% 1% -1% (1) The average remuneration of the employees is calculated by dividing the total gross salary of the employees in service on 31/12 (other than the CEO, CFO and COO) by the total FTE. (2) As of 1 January 2016, the CEO has been remunerated on the basis of a management contract providing for a remuneration in line with the market. As of 1 July 2016, the CFO and COO are part of the Executive Committee as effective leaders and are also remunerated on the basis of management contracts. From nancial year 2017, the Managing Directors (other than the CEO, CFO and COO) received a higher remuneration for their mandate as (Managing) Director and, after a run-in period in the second half of 2016, the remuneration of the CFO and COO was adjusted in order to continue offering a remuneration level in line with the market. As of 2019, a gross amount under the LTIP is included in the xed remuneration of the CEO, CFO and COO and the amount of individual pension benet for the CEO has been adjusted. The remuneration for the mandate of (Managing) Director was also increased. Due to the inclusion of attendance fees, the xed remuneration of the Managing Directors (other than the CEO, CFO and COO) uctuates from year to year. 11.11.5 Severance pay There were no departing Directors in 2021. Therefore, no severance pay was granted or paid in 2021. 11.11.6 Reclaiming of variable remuneration No variable remuneration was reclaimed in 2021. 11.11.7 Deviations from the remuneration policy There were no deviations in 2021 from the remuneration policy approved in 2020. Care Property Invest nv / Report of the Board of Directors 106 107 Report of the Board of Directors / Care Property Invest nv 11.12 Other relevant parties 11.12.1 The auditor The audit of the nancial situation, the nancial statements and the regularity in terms of the BCCA and the Articles of Association of the operations of the Company, shall be entrusted to one or more statutory auditors appointed by the auditors or rms of auditors approved by the FSMA in compliance with Article 222 of the Act of 25 April 2014 concerning the Articles of Association and supervision of credit institutions. The General Meeting of 29 May 2019 appointed the limited liability company EY Bedrijfsrevisoren bv, with registered ofce at De Kleetlaan 2, 1831 Diegem, registered with the Crossroads Bank for Enterprises under number 0446.334.711 (RPR Brussels) as Statutory Auditor for a period of three years. This company has appointed Mrs Christel Weymeersch and Mr Christophe Boschmans, both company auditors, as representatives authorised to represent it and charged with the performance of the mandate in the name and on behalf of EY. The mandate expires after the General Meeting that must approve the Annual Accounts as at December 31, 2021. The fees at consolidated level of the current Statutory Auditor for the nancial year 2021 amount to €119,042 excluding VAT and costs, and are broken down as follows: Amounts in EUR 31/12/2021 31/12/2020 Mandate 80,312 80,127 Other audit assignments 20,700 22,315 Other non-audit assignments 18,030 8,160 No separate fee or split is provided for the two representatives of the Statutory Auditor. The other tasks outside the auditing tasks have always been approved in advance by the Audit Committee of the Company. 11.12.2 Internal audit The internal audit function within the meaning of article 17 §3 of the RREC Law is fullled by an external consultant (also referred to as an external internal auditor), who is appointed by means of an agreement on outsourcing the ‘internal auditing function’, which on 6 September 2017 was extended for an indenite duration with Mazars Advisory Services bv, with registered ofce at Manhattan Ofce Tower, Bolwerklaan 21 box 8, 1210 Brussels, Marcel Thirylaan 77, represented by Ms Cindy Van Humbeeck, director-manager. The agreement can be terminated on the basis of compliance with a notice period of 3 months. The fee paid for this audit assignment in 2021 amounts to €18,119, exclusive of VAT. 11.12.3 Real estate expert The Company appoints 2 real estate experts to value the property portfolio (in Belgium, The Netherlands and Spain) based on a temporary contract. The real estate expert Stadim CVBA, represented by Philippe Janssens, was appointed for a new period of three years with effect from 1 January 2020. The fee is determined according to the nature of the property to be valued (nursing home or assisted living accommodation), the number of units and the valuation method (full report on initial valuation or quarterly valuation). The fee is therefore independent of the fair value of the property. The fee for the valuations of the property portfolio in the 2021 nancial year amounts to €173,884 (amounts are subject to indexation) and is determined as follows: Assisted living apartments Residential care centres € 50 per unit € 80 per unit (for the rst 40 units) rst entry at € 1,250 € 40 per unit (from the 41st unit) projects in project phase at 75% rst valuation at 30% with a minimum of € 1,500 nal valuation at 50% with a minimum of € 1,000 projects in project phase at 75% On 1 April 2020, Cushman & Wakeeld was appointed as additional real estate expert for a period of three years. The fee is based on the number of residential units and the valuation method (full report at initial valuation or quarterly or annual valuation), but with a maximum fee per property. The fee is thus independent of the fair value of the properties. The fee for the valuation of the properties in portfolio in the 2021 nancial year amounts to €35,460 (amounts are subject to indexation) and is determined as follows: Quarterly valuation Annual valuation Comprehensive valuation report Fee per property €700 €900 €2,000 Fee per bed €10 15 €20 Maximum fee per property €1,500 €2,250 €4,000 Care Property Invest nv / Report of the Board of Directors 108 109 Report of the Board of Directors / Care Property Invest nv Gullegem (BE) I Tilia IV. Care Property Invest on the Stock Market 1. Stock price and volume 1.1 Number and types of shares Number of shares on 31/12/2021 31/12/2020 Total number of shares 26,931,116 24,110,034 of which: - Number of shares in circulation 26,921,924 24,103,156 - Number of own shares 9,192 6,878 Value of shares on 31/12/2021 31/12/2020 Stock price on cut-off date € 25.75 € 26.90 Highest closing share price of this period € 28.45 € 34.90 Lowest closing share price of this period € 24.50 € 22.30 Average share price € 26.47 € 27.93 Market capitalisation € 693,476,237 € 648,559,915 Net value per share € 17.80 € 15.34 Premium compared to the net fair value 44.65% 75.38% EPRA NAV per share € 20.89 € 20.12 Premium compared to EPRA NAV 23.24% 33.72% Free oat 99.97% 99.97% Average daily volume 23,870 30,696 Turnover rate 23.83% 34.96% Dividend per share on 31/12/2021 31/12/2020 Gross dividend per share (1) € 0.87 € 0.80 Net dividend per share € 0.74 € 0.68 Applicable withholding tax rate 15% 15% Gross dividend per share compared to the share price 3.38% 2.97% Pay-out ratio (on statutory level) 80.03% 84.14% Pay-out ratio (on consolidated level) 82.27% 80.57% (1) Subject to approval by the Annual General Meeting of 25 May 2022. Coupon 14 entitles the holder to a dividend of €0.7461 and coupon 15 to a dividend of €0.1239. IV. CARE PROPERTY INVEST ON THE STOCK MARKET For the 2021 financial year, the Company proposes a gross dividend of €0.87 per share. This represents a net dividend of €0.7395 per share and an increase of 8.75%. Liquidity of the shares (Average number of shares traded per day ) Evolution market capitalisation ( (in € million) Comparison stock price shares (in %) Care Property Invest BEL Mid (in %) Bel 20 EPRA Index (in %) Evolution of the share price in relation to the net value (or net asset value) of the share Share price per share (in €) IFRS NPV per share (in €) EPRA NAV per share (in €) -10 0 10 20 30 40 50 60 70 80 90 100 20212020201920182017201620152014 0,0 7,5 15,0 22,5 30,0 0 5000 10000 15000 20000 25000 30000 35000 2021202120202020201920192018201820172017201620162015201520142014 0 100 200 300 400 500 600 700 20212020201920182017201620152014 270 359 390 602 649 693 200 166 Care Property Invest nv / Care Property Invest on the Stock Market 112 113 Care Property Invest on the Stock Market / Care Property Invest nv 2. Dividend policy In accordance with Article 11 §3 of the RREC Law, Article 7: 211 of the Belgian Code of companies and associations (BCCA) – which requires a statutory reserve to be kept - is not applicable. The minimum pay-out requirement is established in accordance with Article 13 of the RREC Royal Decree and amounts to 80%. If necessary, and to the extent that there is sufcient prot, part of the prot is reserved and transferred to the following nancial years in order to have more own funds for pre-nancing and to provide the shareholders, in accordance with the original prospectus (1) , a stable dividend for the subsequent nancial years. The Company’s strategy is to increase the dividend whenever sustainably possible and at least to keep it stable. In addition, it aims for a payout ratio close to the legal minimum of 80% and is considering using an optional dividend to keep prots within the Company to nance its growth strategy. Taking into account the minimum distribution obligation pursuant to Article 13 of the RREC Royal Decree, the Board of Directors will propose to the Ordinary General Meeting of 25 May 2022 that a gross dividend of €0.87 per share (or €0.74 net per share) is paid for the 2021 nancial year, subject to the application of the special withholding tax rate of 15%, which would represent an increase in the dividend of 8.75% compared to that paid for the 2020 nancial year. For the 2022 nancial year, the Company proposes a gross dividend of at least €0.94 per share. This represents a net dividend of €0.80 per share and an increase of 8.05%. The Company’s solvency is supported by the stable value of its property projects. (1) Prospectus of public offering for subscription to 10,000 shares as issued by Serviceats Invest nv./sa. 1.2 Index inclusions of the Care Property Invest share On 31 December 2021, the Care Property Invest share is included in 4 indexes, being the Euronext BEL Mid Index, the Euronext BEL Real Estate index and the GPR Index (General Europe and General Europe Quoted). Since December 2016, the Company is also a member of the EPRA organisation and although its share is not included in the EPRA index, it uses this index as a benchmark and also applies the EPRA standards in its yearly and half- yearly nancial reporting. Inclusion index as at 31 December 2021 Index Name Index recording weight Euronext Bel Mid index (Euronext Brussels) 2.03% Euronext Real Estate (Euronext Brussels) 1.78% GPR (Global Property Research) General Europe Index 0.1328% GPR (Global Property Research) General Europe Quoted Index (excl. open-end bankfondsen) 0.1796% 3. Bonds and short-term debt securities 3.1 MTN programme For the nancing of its projects, the Company also relied on the capital market by issuing bonds and commercial paper through an MTN programme with Belus as arranger and Belus and KBC as dealers (KBC only for the CP part). In March 2021, this programme was increased to €300 million. As at 31 December 2021, this form of nancing is composed as follows: 3.1.1 Bonds Issuer ISIN code Nominal amount Issue date Expiry date Remaining term in years Coupon Indicative price as at 31/12/2021 Care Property Invest nv BE6296620592 € 5,000,000 12/07/2017 12/07/2023 6 1.49% 102.27% Care Property Invest nv BE6296621608 € 5,000,000 12/07/2017 12/07/2024 7 1.72% 103.97% Care Property Invest nv BE6303016537 € 7,500,000 28/03/2018 28/03/2029 11 2.08% 109.09% Care Property Invest nv BE6311814246 € 1,500,000 14/02/2019 14/02/2027 8 1.70% 106.47% Care Property Invest nv BE6311813230 € 500,000 14/02/2019 14/02/2030 11 1.99% 108.80% Care Property Invest nv BE6318510276 € 1,500,000 21/01/2020 21/01/2028 8 0.90% 101.45% TOTAL € 21,000,000 Evolution of the gross dividend (in €/share) since initial public offering (1) Decrease in earnings per share, by creation of additional shares by optional dividend. (2) Decrease in earnings per share, by creation of additional shares through a capital increase in 2015. Although the proceeds of the capital increase were used for new investments in the remaining months of 2015, the result only became apparent in 2016. (3) Earnings per share in increasing trend, despite 2 capital increases in 2019 totalling €23 million (capital + share premium), 3 capital increases in 2020 totalling €99 million (capital + share premium) and 2 capital increases in 2021 totalling €68 million (capital + share premium). (4) Outlook. Adjusted EPRA result (in €/share). Gross dividend (in €/share) - On 24 March 2014 a share split took place (1/1,000). 0.49 0.46 0.47 0,0 0,2 0,4 0,6 0,8 1,0 1,2 202220212020201920182017201620152014201320122011201020092008200720062005200420032002200120001999199819971996 0.37 0.52 0.52 0.53 0.55 0.61 0.77 0.73 (1) 0.66 (2) 0.65 0.74 0.86 0.92 (3) 0.99 (3) 1.06 (3) 1.15 (4) 0.32 0.29 0.30 0.35 0.39 0.48 0.47 0.49 0.51 0.51 0.34 0.34 0.30 0.30 0.35 0.39 0.41 0.41 0.46 0.47 0.48 0.49 0.49 0.51 0.51 0.51 0.51 0.55 0.63 0.63 0.63 0.63 0.68 0.72 0.77 0.80 0.87 0.94 (4) Care Property Invest nv / Care Property Invest on the Stock Market 114 115 Care Property Invest on the Stock Market / Care Property Invest nv 4. Shareholding structure The Company has no knowledge of any shareholders holding more than 5% of the voting rights, as no notications have been received to this effect within the context of the transparency legislation. On 31 May 2021, 5 November 2021 and 17 December 2021, the Company received several notications from KBC Asset Management with regard to the exceeding/ undercutting of the 3% threshold. In its last notication of 17 December 2021, KBC Asset Management informed the 3.1.2 Short-term debt securities The MTN programme of €300 million provides for a maximum withdrawal of €200 million in commercial paper. Of this, an amount of €96.5 million was drawn as at 31 December 2021. Company that it exceeds the 3% threshold and this since 13 December 2021. Care Property Invest refers to its website www. carepropertyinvest.be for the publication of these transparency notications. Apart from these new notications from KBC Asset Management and the already known crossing of the 3% threshold by Pensio B, the Company received no new notications during the 2021 nancial year for exceeding or undercutting the 3% threshold. 3.2 Sustainability bonds On 26 June 2021, the Company successfully announced its rst transaction on the debt capital markets through a private placement of €32.5 million in Sustainability Bonds. The bonds, which were issued on 8 July 2021, have a term of 10 years, with coupons of 2.05%. The bonds were placed with an institutional investor, which is part of an international insurance group. The net proceeds of these bonds will be used exclusively for the (re)nancing of eligible sustainable assets as included in the Care Property Invest Sustainable Finance Framework. This Sustainable Finance Framework, as well as the allocation of the net proceeds to the sustainable assets to be considered for this purpose, can be found on the Company's website under the section sustainability. Bonheiden-Rijmenam (BE) I Ter Bleuk 5. Financial calendar Interim Statement 1st Quarter 2022 17 May 2022, after trading hours Ordinary General Meeting 25 May 2022, 11 a.m. (at the registered ofce: Horstebaan 3, 2900 Schoten) Payment of dividend coupons 14 and 15 31 May 2022 Half-yearly Financial Report 2022 1 September 2022, after trading hours Interim Statement 3rd Quarter 2022 8 November 2022, after trading hours Share distribution on 31 December 2021 17 November 2021 (2) 20 January 2021 (1) 31 December 2020 % Proportion vis-à-vis total capital Number of shares (expressed in nominal value) % Proportion vis-à-vis total capital Number of shares (expressed in nominal value) % Proportion vis-à-vis total capital Number of shares (expressed in nominal value) % Proportion vis-à-vis total capital Number of shares (expressed in nominal value) Ordinary shares 100% 26,921,924 100% 26,929,424 100% 25,804,456 100% 24,103,156 Own shares 0% 9,192 0% 1,692 0% 1,692 0% 6,878 Registered ordinary shares 6.17% 1,661,354 6.17% 1,661,354 6.03% 1,554,935 6.62% 1,595,167 Dematerialised ordinary shares 93.83% 25,269,762 93.83% 25,269,762 93.97% 24,251,213 93.38% 22,514,867 As at 31 December 2021, all shares are ordinary shares, the vast majority of which are dematerialised. (1) The number of shares changed as a result of a capital increase in kind for the purchase of the residential care centre with assisted living apartments ‘Résidences des Ardennes’, located in Attert. To this end, 1,696,114 new shares were issued on 20 January 2021. The share capital as of this date amounts to €153,533,678 and is represented by a total number of 25,806,148 ordinary fully paid-up shares with voting rights, including 1,692 treasury shares. (2) The number of shares changed as a result of a capital increase in kind for the acquisition of 100% of the shares in Apollo Lier nv, which owns the residential care centre with assisted living apartments ‘Dungelhoeff’ in Lier. For this purpose 1,124,968 new shares were issued on 17 November 2021. The share capital as of this date amounts to €160,226,674 and is represented by a total number of 26,931,116 ordinary fully paid-up shares conferring voting rights, including 1,692 treasury shares (9,192 as of 31 December 2021). Care Property Invest nv / Care Property Invest on the Stock Market 116 117 Care Property Invest on the Stock Market / Care Property Invest nv Oudsbergen (BE) I Ter Meeuwen V. EPRA Care Property Invest nv / EPRA 120 121 EPRA / Care Property Invest nv 1. EPRA (European Public Real Estate Association) - Membership Care Property Invest is a member of the European Public Real Estate Association (EPRA) since December 2016. With a joint real estate portfolio that exceeds the mark of €690 billion (1) , more than 280 EPRA members (companies, investors and their suppliers) represent the core of the European listed real estate. The purpose of this non-prot organisation is to promote the European (listed) real estate and its role in society. Its members are listed companies and join forces to improve accounting guidelines, the supply of information and corporate governance within the European real estate sector. Furthermore, EPRA provides high-quality information to investors and publishes standards for nancial reporting which from the annual nancial report of the nancial year 2016 on were included in the half-yearly and annual nancial reports of Care Property Invest. In October 2019 the Board of directors of the European Public Real Estate Association (EPRA) published an update of the report ‘EPRA Reporting: Best Practices Recommendations’ (‘EPRA Best Practices’). The report is available on the EPRA website (www.epra.com). This report contains recommendations for the most important indicators of the nancial performance of listed real estate companies. Care Property Invest supports the current tendency to standardise reporting in view of higher (1) Exclusively in European real estate quality and comparability of information and provides the investors with the majority of the indicators recommended by EPRA. Care Property Invest’s efforts in the 2020 nancial year to apply the EPRA standards as completely as possible in its yearly and half-yearly nancial reports have been rewarded for the fth time in September 2021 with an EPRA BPR Gold Award at the annual EPRA conference. The Company is committed to continually improve the transparency and quality of the nancial reporting and also wants to earn this recognition in the coming nancial years. In addition, EPRA also publishes principles regarding sustainability reporting and sustainability performance measures, the EPRA Sustainability Best Practices Recommendations (sBPR). The Company already published a sustainability report for the 2019 and 2020 nancial years, applying the sBPR. Care Property Invest received both the EPRA sBPR Silver Award and the EPRA sBPR Most Improved Award for its sustainability report in September 2021. The Company is pleased with this recognition of the efforts made in the eld of sustainability reporting and intends to continue to make progress in this area in the future. V. EPRA legislation and is not subject to review by the FSMA. The statutory auditor has veried for the EPRA indicators relating to 2021, by means of a limited review, that these data have been calculated in accordance with the denitions of the EPRA Best Practices Recommendations Guidelines and that the nancial data used correspond to the gures included in the audited consolidated nancial statements. 31/12/2021 31/12/2020 EPRA Earnings x € 1,000 26,347 22,625 Earnings from operational activities. €/share 1.01 0.98 Adjusted EPRA Earnings x € 1,000 27,458 22,959 Earnings from operational activities corrected with company-specic non-cash items (being nance leases - prot or loss margin attributable to the period, depreciation, provisions and other portfolio result). €/share 1.06 0.99 EPRA Cost ratio (incl. costs of direct vacancy) % 18.28% 15.91% Administrative/operating costs including the direct costs of the vacant buildings, divided by gross rental income. EPRA Cost ratio (excl. costs of direct vacancy) % 18.28% 15.91% Administrative/operating costs less the direct costs of the vacant buildings, divided by gross rental income. 1.1 The EPRA-index The EPRA index is used worldwide as a benchmark and is the most used investment index to compare performances of listed real estate companies and REITS. Per 31 December 2021, the FTSE EPRA Nareit Developed Europe Index is composed on the basis of a group of 106 companies with a combined market capitalisation of more than €357 billion (full market capitalisation). 1.2 EPRA key performance indicators: detailed overview The EPRA indicators below are considered to be the Company’s APMs, which are recommended by the European Association of listed real estate companies (EPRA) and which have been drawn up in accordance with the APM guidelines issued by ESMA. For the objective and denition of these indicators, we refer to the chapter ‘XI. Glossary’ on page 270. The information in this chapter is not compulsory according to the RREC Care Property Invest nv / EPRA 122 123 EPRA / Care Property Invest nv 31/12/2021 31/12/2020 EPRA NAV x € 1,000 562,498 485,002 Net Asset Value (NAV), adjusted to include the investment properties at their fair value and to exclude certain items not expected to crystallise in a long-term investment property business model €/share 20.89 20.12 EPRA NNNAV x € 1,000 512,986 419,811 EPRA NAV, adjusted to include the fair value of (i) nancial instruments, (ii) debt and (iii) deferred taxes. €/share 19.05 17.42 EPRA NRV x € 1,000 585,953 498,785 EPRA Net Reinstatement Value, assumes that the Company will never sell its assets and gives an estimate of the amount needed to re-establish the company. €/share 21.76 20.69 EPRA NTA x € 1,000 562,206 482,403 EPRA Net Tangible Assets, assumes that the company acquires and sells assets, which would result in the realization of certain unavoidable deferred taxes. €/share 20.88 20.01 EPRA NDV x € 1,000 512,986 419,811 EPRA Net Disposal Value, represents the value payable to the shareholders of the Company in the event of a sale of its assets, which would result in the settlement of deferred taxes, the liquidation of the nancial instruments and the taking into account of other liabilities at their maximum amount, less taxes. €/share 19.05 17.42 EPRA Net Initial Yield (NIY) % 4.87% 5.08% Annualized gross rental income based on current rents ('passing rents') at the closing date, excluding property charges, divided by the market value of the portfolio and increased by the estimated transfer rights and costs in the event of hypothetical disposal of investment properties. EPRA adjusted NIY ('topped-up' NIY) % 5.07% 5.08% This measure incorporates an adjustment to the EPRA NIY in respect of the expiration of rental-free periods and other incentives. EPRA vacancy rate (1) (2) % 0.08% 0.11% Estimated rental value (ERV) of vacant space divided by the ERV of the total portfolio. (1) Care Property Invest only runs a vacancy risk for the Tilia project in Gullegem. For the other projects, the risk is placed with the counterparty and the Company receives the canon/rent, regardless of the occurrence of a certain vacancy. On 31 December 2021 there are 4 vacant ats in the ‘Tilia' project. (2) Due to changes in the calculation method for this indicator, the 2020 comparative gures have been adjusted to allow for correct comparability. 1.2.1 EPRA earnings Amounts in EUR 1,000 31/12/2021 31/12/2020 Net income as mentioned in the nancial statements 59,655 19,865 Adjustments to calculate EPRA Earnings: -33,308 2,760 (i) Changes in fair value of investment properties and assets held for sale -22,143 -2,598 (vi) Changes in fair value of nancial assets and liabilities (IFRS 9) and associated close-out costs -11,165 5,358 EPRA Earnings 26,347 22,625 Weighted average number of shares outstanding (1) 25,963,657 23,105,198 EPRA Earnings per share (in €) 1.01 0.98 (1) The weighted average of outstanding shares are the number of shares on closing date with rights to dividends. 1.2.2 Adjusted EPRA earnings Amounts in EUR 1,000 31/12/2021 31/12/2020 Net income as mentioned in the nancial statements 59,655 19,865 Adjustments to calculate adjusted EPRA Earnings: -32,197 3,095 (i) Changes in fair value of investment properties and assets held for sale -22,143 -2,598 (vi) Changes in fair value of nancial assets and liabilities (IFRS 9) and associated close-out costs -11,165 5,358 (xi) Company-specic non-cash elements 1,111 334 Adjusted EPRA Earnings 27,458 22,959 Weighted average number of shares outstanding (1) 25,963,657 23,105,198 Adjusted EPRA Earnings per share (in €) 1.06 0.99 (1) The weighted average of outstanding shares are the number of shares on closing date with rights to dividends. 1.2.3 Reconciliation of the EPRA earnings to adjusted EPRA earnings Amounts in EUR 1,000 31/12/2021 31/12/2020 EPRA Earnings 26,347 22,625 Depreciation, amortization and reversals of impairments 255 212 Prot or loss margin projects allocated to the period 857 123 ADJUSTED EPRA Earnings 27,458 22,959 Amounts in EUR/share 31/12/2021 31/12/2020 EPRA Earnings 1.0147 0.9792 Depreciation, amortization and reversals of impairments 0.0098 0.0092 Prot or loss margin projects allocated to the period 0.0330 0.0053 ADJUSTED EPRA Earnings 1.0576 0.9937 Care Property Invest nv / EPRA 124 125 EPRA / Care Property Invest nv 1.2.4 Epra Net Asset Value (NAV) Amounts in EUR 1,000 31/12/2021 31/12/2020 NAV per the nancial statements 479,259 369,779 NAV per share per the nancial statements 17.80 15.34 Diluted NAV, after exercising options, convertibles and other equity instruments 479,259 369,779 To be included: (ii) Revaluation at fair value of nance lease receivables (1) 66,259 84,806 To be excluded: (iv) Fair value of nancial instruments -16,811 -27,976 (v.a) Deferred tax -169 -2,441 EPRA NAV 562,498 485,002 Number of shares (2) 26,921,924 24,103,156 EPRA NAV per share (in €) 20.89 20.12 (1) The fair value of the ‘nance lease receivables’ was calculated by discounting future cash ows at an IRS rate prevailing on closing date, depending on the remaining duration of the underlying contract, increased by a margin. (2) The number of shares is the number of shares on closing date with rights to dividends. 1.2.5 EPRA Triple Net Asset Value (NNNAV) Amounts in EUR 1,000 31/12/2021 31/12/2020 EPRA NAV 562,498 485,002 To be included: (i) Fair value of nancial instruments -16,811 -27,976 (ii) Fair value of debt -32,531 -34,774 (iii) Deferred tax -169 -2,441 EPRA NNNAV 512,986 419,811 Number of shares (1) 26,921,924 24,103,156 EPRA NNNAV per share (in €) 19.05 17.42 (1) The number of shares is the number of shares on closing date with rights to dividends. 1.2.6 EPRA Net Reinstatement Value (NRV) Amounts in EUR 1,000 31/12/2021 31/12/2020 IFRS equity attributable to shareholders 479,259 369,779 Diluted NAV 479,259 369,779 To be included: (ii) Revaluation at fair value of nance lease receivables (1) 66,259 84,806 Diluted NAV at fair value 545,518 454,585 To be excluded: (vi) Fair value of nancial instruments -16,811 -27,976 To be included: (xi) Transfer tax on immovable property 23,624 16,223 EPRA NRV 585,953 498,785 Number of shares (2) 26,921,924 24,103,156 EPRA NRV per share (in €) 21.76 20.69 (1) The fair value of the ‘nance lease receivables’ was calculated by discounting future cash ows at an IRS rate prevailing on closing date, depending on the remaining duration of the underlying contract, increased by a margin. (2) The number of shares is the number of shares on closing date with rights to dividends. 1.2.7 EPRA Net Tangible Assets (NTA) Amounts in EUR 1,000 31/12/2021 31/12/2020 IFRS equity attributable to shareholders 479,259 369,779 Diluted NAV 479,259 369,779 To be included: (ii) Revaluation at fair value of nance lease receivables (1) 66,259 84,806 Diluted NAV at fair value 545,518 454,585 To be excluded: (vi) Fair value of nancial instruments -16,811 -27,976 (viii.b) Intangible assets 123 158 EPRA NTA 562,206 482,403 Number of shares (2) 26,921,924 24,103,156 EPRA NTA per share (in €) 20.88 20.01 (1) The fair value of the ‘nance lease receivables’ was calculated by discounting future cash ows at an IRS rate prevailing on closing date, depending on the remaining duration of the underlying contract, increased by a margin. (2) The number of shares is the number of shares on closing date with rights to dividends. Care Property Invest nv / EPRA 126 127 EPRA / Care Property Invest nv 1.2.8 EPRA Net Disposal Value (NDV) Amounts in EUR 1,000 31/12/2021 31/12/2020 IFRS equity attributable to shareholders 479,259 369,779 Diluted NAV 479,259 369,779 To be included: (ii) Revaluation at fair value of nance lease receivables (1) 66,259 84,806 Diluted NAV at fair value 545,518 454,585 To be included: (ix) Fair value of debt -32,531 -34,774 EPRA NDV 512,986 419,811 Number of shares (2) 26,921,924 24,103,156 EPRA NDV per share (in €) 19.05 17.42 (1) The fair value of the ‘nance lease receivables’ was calculated by discounting future cash ows at an IRS rate prevailing on closing date, depending on the remaining duration of the underlying contract, increased by a margin. (2) The number of shares is the number of shares on closing date with rights to dividends. 1.2.9 EPRA Net Initial Yield (NIY) & Topped Up Net Initial Yield (EPRA ‘Topped Up’ NIY) Amounts in EUR 1,000 31/12/2021 31/12/2020 Investment properties at fair value 716,565 532,442 Finance lease receivables at fair value (1) 267,845 287,828 Development projects (-) -62,598 -60,926 Investment properties in exploitation at fair value 921,812 759,344 Allowance for estimated purchasers' rights and costs in case of hypotheticaldisposal of investment properties 19,913 13,493 Investment value of investment properties in exploitation 941,725 772,837 Annualized gross rental income (+) 45,894 39,239 Annualised net rental income 45,894 39,239 Rental discounts expiring within 12 months and other incentives (-) 1,878 46 Topped-up and annualized net rental income 47,771 39,285 EPRA NIY ( in %) 4.87% 5.08% EPRA TOPPED-UP NIY ( in %) 5.07% 5.08% (1) The fair value of the ‘nance lease receivables’ was calculated by discounting future cash ows at an IRS rate prevailing on closing date, depending on the remaining duration of the underlying contract, increased by a margin. 1.2.10 EPRA Rental Vacancy (1) Financial year closed on 31/12/2021 31/12/2020 Rental area (in m²) 479,934 392,660 ERV of vacant surfaces 37 45 ERV of total portfolio 48,574 41,036 EPRA rental vacancy (in %) 0.08% 0.11% (1) Due to changes in the calculation method for this indicator, the 2020 comparative gures have been adjusted to allow for correct comparability Care Property Invest only runs a vacancy risk for the “Tilia” project in Gullegem. For the other projects, the risk is placed with the counterparty and the Company receives the canon/rent, regardless of the occurrence of a certain vacancy. On 31 December 2021, there are 4 vacant ats in the ‘Tilia' project. 1.2.11 Property Portfolio - Like-For-Like Net Rental Income The like-for-like net rental income compares the net rental income of the portfolio (including capital repayments and rental discounts) coming from the projects that were kept in operation during 2 consecutive years and were therefore not under development. Information regarding the growth of the net rental income, other than through acquisitions or disposals, allows the stakeholders to ewstimate the organic growth of the portfolio. Amounts in EUR 1,000 31/12/2020 31/12/2021 Net rental income at current perimeter Acquisitions Sales In operation Net rental income at current perimeter Net rental income for the period Evolution of net rental income at current perimeter Belgium 29,317 2,064 0 6,736 29,421 38,220 0.35% Investment properties in operation 14,042 2,064 0 6,174 14,118 22,355 Finance leases 15,275 0 0 562 15,303 15,865 The Netherlands 1,531 1,020 0 1,143 1,547 3,710 1.01% Investment properties in operation 1,531 1,020 0 1,143 1,547 3,710 Spain 0 1,304 0 0 0 1,304 0.00% Investment properties in operation 0 1,304 0 0 0 1,304 Total investment properties and nance leases in operation 30,848 4,387 0 7,879 30,967 43,234 0.39% Care Property Invest nv / EPRA 128 129 EPRA / Care Property Invest nv 1.2.12 EPRA Cost Ratios Amounts in EUR 1,000 31/12/2021 31/12/2020 Administrative/operating expenses according to IFRS nancial statements -7,930 -5,857 Technical costs -4 -2 Overheads -7,897 -7,217 Other operating income and charges -29 1,362 EPRA costs (including direct vacancy costs) (A) -7,930 -5,857 Charges and taxes on unlet properties 0 0 EPRA costs (excluding direct vacancy costs) (B) -7,930 -5,857 Gross rental income (C) 43,374 36,824 EPRA Cost Ratio (including direct vacancy costs) (A/C) 18.28% 15.91% EPRA Cost Ratio (excluding direct vacancy costs) (B/C) 18.28% 15.91% General and capitalised operating expenses (including share of joint ventures) 1,205 2,429 Care Property Invest capitalises overhead costs and operating expenses that are directly related to the development projects (legal expenses, project management, ...) and acquisitions. In September 2021, the Company’s efforts were rewarded for the fifth time with an EPRA BPR Gold Award. 1.2.13 EPRA CAPEX Amounts in EUR 1,000 31/12/2021 31/12/2020 Capitalized investment costs related to investment properties (1) Acquisitions 102,014 109,905 (2) Developments 54,933 30,507 (3) Real estate in operation 632 65 Other material non-allocated types of expenditure 632 65 Total capitalized investment costs of investment properties 157,579 140,477 Conversion from accrual to cash basis 0 0 Total Capex investment properties on cash basis 157,579 140,477 Amounts in EUR 1,000 31/12/2021 31/12/2020 Capitalized investment costs related to nance leases (2) Developments 0 427 (3) Real estate in operation 0 99 Other material non-allocated types of expenditure 0 99 (4) Capitalised interest (if applicable) 0 529 Total capitalized investment costs of nance leases 0 1,054 Conversion from accrual to cash basis 0 0 Total Capex nance leases on cash basis 0 1,054 Care Property Invest does not own a share in a joint venture. (1) 2021: It concerns the acquisitions of the projects Résidence des Ardennes in Attert (BE), Dungelhoeff in Lier (BE), Emera Almeria in Almeria (ES) and Forum Mare Nostrum I in Alfaz del Pi (ES). 2020: These are the acquisitions of the projects La Reposée in Mons (BE), New Beaugency in Bernissart (BE), De Wand in Laeken (BE), Keymolen in Lennik (BE), Westduin in Westende (BE), Het Witte Huis in Oegstgeest (NL), Villa Oranjepark in Oegstgeest (NL), De Meerlhorst in Heemstede (NL) and Boarnsterhim State in Aldeboarn (NL). (2) Investment properties: 2021: This relates to the further development of the projects De Orangerie in Nijmegen (NL), Margaritha Mariakerk in Tilburg (NL), Sterrenwacht in Middelburg (NL), Villa Wulperhorst in Zeist (NL), St. Josephkerk in Hillegom (NL), De Gouden Leeuw in Zutphen (NL), Aldenborgh in Roermond (NL), Mariënhaven in Warmond (NL), Villa Vught in Vught (NL), Huize Elsrijk in Amstelveen (NL) and Emera Carabanchel in Madrid (ES), as well as the acquisition of the development projects Résidence des Ardennes in Attert (BE), Amstel in Ouderkerk aan de Amstel (NL) and Mostoles in Madrid (ES). 2020: This relates to the further development of the projects Nuance in Vorst (BE), De Orangerie in Nijmegen (NL), Margaritha Mariakerk in Tilburg (NL), Sterrenwacht in Middelburg (NL), Villa Wulperhorst in Zeist (NL), St. Josephkerk in Hillegom (NL) and De Gouden Leeuw in Zutphen (NL), as well as the acquisition of the development projects Aldenborgh in Roermond (NL), Mariënhaven in Warmond (NL), Villa Vught in Vught (NL), Huize Elsrijk in Amstelveen (NL) and Emera Carabanchel in Madrid (ES). Finance leases: 2020: his relates to the further development of the project Assistentiewoningen De Stille Meers in Middelkerke (BE) for completion. (3) Investment properties: These are the limited capitalised costs relating to the real estate in operation. Finance leases: 2020: This relates to the capitalisation of costs following the provisional delivery of the Assistentiewoningen De Stille Meers project in Middelkerke (BE). (4) 2020: This relates to the capitalised nancing costs for the Assistentiewoningen De Stille Meers project in Middelkerke (BE) Watermaal-Bosvoorde (BE) I Les Terrasses du Bois VI. Real Estate Report Care Property Invest nv / Real Estate Report 132 133 Real Estate Report / Care Property Invest nv VI. REAL ESTATE REPORT 1. Status of the property market in which the Company operates Care Property Invest occupies a clear position within the RREC landscape through its specialisation within the market segment of housing for senior citizens. This is the segment in which it is mainly active today, but certainly not exclusively, because in 2014 it extended the denition of its social purpose to the market for people with disabilities in order to realise projects in this segment as well. Geographical expansion also gured on the agenda through the realisation of an objective expansion to the entire European Economic Area. The Company’s preparations in this context paid off in 2018 with a substantial number of new investments, of which the icing on the cake was its rst acquisitions on the Dutch healthcare property market. In June 2020 the Company entered its third target market, Spain. Finally, in 2022, the company moved into its fourth target market, Ireland. The table below provides an overview of the projects that the Company was able to acquire in Belgium, The Netherlands and Spain during the 2021 nancial year. More information on these projects can be found in chapter ‘III. Report of the Board of Directors’, point ‘2.1 Important events during the 2021 nancial year’ on page 44. Project name Project location Project type Classication Belgium Effectively acquired projects generating immediate returns Résidence des Ardennes Attert Residential care centre with group of assisted living apartments Investment property Dungelhoeff Lier Residential care centre with group of assisted living apartments Investment property Projects signed under suspensory conditions Vulpia Elsene Elsene Residential care centre Investment property The Netherlands Effectively acquired projects Amstel Ouderkerk aan de Amstel Care residence Investment property Projects acquired Villa Wulperhorst Zeist Care residence Investment property De Gouden Leeuw (Zutphen) Zutphen Care residence Investment property Margaritha Maria kerk (church) Tilburg Care residence Investment property De Orangerie Nijmegen Care residence Investment property Spain Effectively acquired projects generating immediate returns Emera Almeria Almeria Residential care centre Investment property Forum Mare Nostrum I Alfaz Del Pi Group of assisted living apartments Investment property Effectively acquired projects Emera Mostoles Mostoles Residential care centre Investment property Projects signed under suspensory conditions Solimar Tavernes Blanques Tavernes Blanques Residential care centre Investment property Solimar Elche Elche Residential care centre Investment property The Company’s real estate strategy is largely determined by the growing demand for real estate with a social added value, specically care infrastructure that is fully tailored to the needs of its residents. This strategy is supported by the demographic evolution of both the Belgian, Dutch, Spanish as Irish populations. For new investment projects, the Company focuses on quality buildings, located in good locations with reliable operators where a long-term commitment can be made, preferably under a triple net regime. The Company applies this strategy to all the markets in which it is active. Care Property Invest’s approach simultaneously meets the expectations and needs of operators in this market by entering into long-term contracts and partnerships. From its experience in building service ats for the Flemish Government, Belgian local authorities and charitable organisations still form an important target group. In this segment, the demand for affordable quality residential accommodation for the elderly and people with disabilities has been further exacerbated by the economic crisis. Furthermore, Care Property Invest also focuses on the private market through the realisation of residential care projects with experienced private operators in Belgium, The Netherlands, Spain and since 2022 Ireland. Below, the Company includes the description of the healthcare property markets in the countries in which it operates in 2021, as provided by the Company’s property expert, in addition to the valuation report: The market for housing for the elderly in Belgium (1) After the global outbreak of the covid-19 crisis in early 2020, our society as a whole but especially residential care homes were hit hard. By the end of 2021, the worst of the damage will have been done, thanks to extensive vaccination. Nevertheless, the collective aspect, combined with often more limited resources in terms of staff and protection, make these institutions very vulnerable to epidemics. This has its consequences for the operator of the healthcare property. On the one hand, the inux of new residents seems to be mainly a short-term problem. Residents were taken away from residential care centres, which also suffered a substantial number of deaths, while admissions were halted during the rst lockdown period. Now that most of the crisis measures are over, we can expect a new inow, given the ageing statistics and increasing need for care of the population. However, problems could arise on the side of operating costs and available resources. Personnel costs will rise, both from the expectations of the personnel themselves and also from the need for sufciently trained care personnel. Additional resources will also have to be devoted to the protection and prevention of staff and residents. Healthcare real estate is valued relatively highly because of the underlying long- term triple-net contracts with professional and solvent operators. These contracts are valued with limited risks. Today, this results in prime yields with long-term contracts varying between 4.0% and 4.5%, suggesting that healthcare real estate is (1) Prepared by, and included in this yearly nancial report, in agreement with Stadim cvba. Care Property Invest nv / Real Estate Report 134 135 Real Estate Report / Care Property Invest nv almost considered a nancial product rather than a real estate product. This crisis is likely to show that healthcare real estate also has an inherent risk: long- term contracts will only last as long as the EBITDAR of the operation is not affected. Continuity in the operation of residential care centres during the coming months will have to show whether there will be an impact on the current healthcare real estate market and more specically on current yields. Healthcare real estate as a long-term investment has attracted increasing interest in recent years. The investor market is rapidly expanding to insurance companies and pension funds, for which (very) long term and, furthermore, index- linked contracts form a decisive element. This is also consistent with the desire of health care operators to pursue a policy that is also focused on the long term. However, other nancial ratios apply for this group, such as the ratio of debt to revenue, than for real estate investors. For the latter, a debt equal to eight times the revenue (rental income) is quite feasible, while for operators, the debt ratio is usually 25% of the revenue. The ‘afliated’ division between operation and the real estate, which also occurs in the hotel segment, is therefore a logical consequence. However, the two parties remain afliated in the need for a balanced protability: they are therefore co-dependent. For the operator, the building, and in the case of expansion, the property is the property machine, as it were, that can never be allowed to stutter. Logically, as in the hotel segment, triple net contracts are also concluded in the care sector. For the operator, it is crucial that the quality of the property is maintained and that the operator can also intervene quickly if there is a threat of restraints. This is a misleading attraction for the investor. The investor is largely relieved of concern for the management of the building and the contract with the operator is for a very long term. The Achilles heel lies in the nancial feasibility of the operation and the technical requirements of the building, including conformity with evolving regional regulations. What remains of the value of a building that, in the foreseeable future, will no longer meet the standards? If it is located in a zone for community facilities, the familiar blue zone, what possibilities for re-zoning remain? If the operation proves to be insufciently protable due to a reduction in government intervention, altered regulations or an excessive lease agreement, a downward correction of the contract will become necessary, or operation may even become impossible. The estimation and follow-up of all possible technical, regulatory and operation-related changes and trends are crucial for the investor. It is to be welcomed that various government bodies are making moves to limit the offer of individual rooms as Lennik (BE) I Keymolen investment objects. Fortunately, this will lead to a dead end for joint ownership of health care real estate, as with apartments. Furthermore, apart from for justiable social reasons, in due course it will be impossible to oblige the multitude of joint owners to make sometimes substantial investments at the same time. Hopefully, not only will this legislation be adopted by the different regional federated entities, but it will also be expanded to other types of ownership for the purpose of operation. How do you enforce the quality requirements for a hotel, a student home or even housing converted into multi- family accommodation in a case of joint ownership? Within this general development of further professionalisation of the operating sector and broadening of the candidate investors, with simultaneous downward pressure on the interest rates, gross rental returns will steadily diminish. Transactions with triple net longer- term rental contracts are already being concluded with rental returns from 4%. The need for quality and polyvalence, or in general terms, the sustainability of the investment only increases as a result of this. With such low returns, a correction for incorrect expectations is no longer possible. Research in order to link other target groups needing care, such as young handicapped persons, to the experience built up and the expansion of care for the elderly, in which a number of services are offered jointly, such as catering, reception etc. could provide for a desirable addition and exibility. For a number of target groups, the number of patients is too low to keep the operation affordable and complementarity will generate new opportunities, including for local projects. The market for housing for the elderly in The Netherlands (1) Dutch Economy The economy suffered a sharp contraction in 2020 due to the outbreak of the coronavirus. In 2021, a recovery of economic growth was visible again. After the necessary easing of the corona crisis in the last quarters of 2021, which brought the Dutch economy out of lockdown and started the recovery, the necessary measures were introduced in December 2021 due to the “omnikron” variant. As a result, shops, the hospitality industry and the cultural sector temporarily went into lockdown again. Since January 2022, this lockdown is slowly being lifted again. As a result, the economic outlook for 2022 has become more uncertain. Market for Dutch Healthcare Real Estate The Dutch care real estate market is estimated to be about the same size as the Dutch ofce market. The market is not only large, but also diverse, with extra and intramural care housing and primary and secondary care real estate. Primary care includes general practitioners and physiotherapists, who are increasingly grouped together in a health centre. An example of second-line care is the hospital. Extra and intramural care properties are sometimes called ‘Care’, while rst and second line care are also called ‘Cure’. The big advantages of Dutch healthcare real estate are the relatively stable expectations with regard to returns, the cyclical insensitivity, the limited correlation with other real estate segments and the possibility of often concluding long-term rental agreements. (1) Prepared by, and included in this yearly nancial report, in agreement with Stadim cvba. Care Property Invest nv / Real Estate Report 136 137 Real Estate Report / Care Property Invest nv Dutch housing corporations are required to focus primarily on the operation of social housing, which forces the traditional Dutch investor in healthcare real estate to be much less active in this eld. It is noticeable that more and more housing corporations are divesting their care- related assets and putting them on hold. Stock exchange funds, pension funds and wealthy private individuals are investing more and more in Dutch care real estate. In long-term care, private parties are emerging as an alternative to housing corporations. The reason for this is largely to be explained by the increasing ageing of the population in the Netherlands. As a result of the extramuralisation of care, with the focus on staying at home for as long as possible, a strong demand has arisen in the Netherlands for the free sector of care apartments. The shortage of private sector care ats in the Netherlands continues to grow. Due to the strong demand, the shortage in the Netherlands has risen to approximately 32,000 ats. As long as the supply is not expanded, this shortage is expected to increase further to a level of approximately 52,000 ats in 2040. Investment volume After a corona dip in the rst half of 2020, investments in care real estate reached a new record this year. In the rst half of 2021, €458 million worth of healthcare real estate was sold which is 22% more than in the rst half of corona year 2020 resulting from research by Capital Value. In the rst half of 2020, care real estate worth approximately € 327 million was still purchased by investors in the Netherlands. This was approximately 33% lower than in the rst half of 2019 (€ 489 million). This is mainly due to the corona crisis. Owners pushed transactions forward and did not (yet) bring their properties to the market. There is still a shortage of care real estate in the Netherlands, especially suitable housing for seniors. The ageing population also continues to grow. Because of this, we expect to continue to see sufcient inves- tment activity in care real estate. Return The economy has undergone a number of changes due to the corona pandemic, including working from home, new housing preferences, the future of ofces, retail and hospitality. Healthcare real estate, on the other hand, is a stable growth sector, due to the certainty of an ageing population and the attractive returns. More and more foreign investors are investing in Dutch elderly care, primary care centres, but also in (parts of) hospitals. The gross initial yield of care homes is therefore between 3.5% and 5.0%, intramural care real estate between 5.0% and 6.5%, and health centres between 5.5% and 7.0%. Murcia (ES) I Emera-Murcia The market for housing for the elderly in Spain (1) Demographic evolution in Spain According to INE, the percentage of persons aged 67 and over in Spain is increasing and will peak at 29% of the population by 2051, representing 14 million people. The proportion of persons aged 80 and over was 6% in 2020 and will gradually rise to reach 14% by 2061. Irrespective of the current offer, an increase in the number of nursing and care homes is required to meet the growing demand associated with the ageing of the population. Considering the growing proportion of elderly in the Spanish population, the total number of care-dependent persons will increase from 1.4 million in 2021 to 2.1 million by 2030, i.e. a 50% increase. Needless to say that the proportion of care- dependent persons increases with age. According to the latest statistics available included in the 2021 report ‘Informes Envejecimiento en red ’, Spain counts about 5,556 nursing and care homes offering together a total capacity of approximately 384,251 beds. It is estimated that additional 200,000 beds will be needed by 2030 and of approximately 400,000 units by 2050. This represents an average annual growth of approximately 100% accommodation units between now and 2050. Public operators account for approximately 27% of the beds, private operators for approximately 73%. Approximately 25% of the total privately operated beds are publicly subsidized (‘camas concertadas’). Therefore, fully private demand represents approximately 50% of the total stock. (1) Prepared by, and included in this yearly nancial report, in agreement with Cushman & Wakeeld. Market Trends The transaction volume in nursing homes over the year 2021 continued at historic record high levels. The number of partnerships between investors and operators has continued to increase during 2021 and it is expected to continue in the future, leading to further increase in investment volumes. The prime yield decreased slightly during 2021 and as at end-2021 it stands at 4.50%, which was an all-time low, but which is still higher than investments return generated by other asset classes such as ofces: 3.15%; retail high street: 3.50% and logistics: 4.00%; amongst others. On the operational side, in 2021 operators have progressively recovered from the covid-19 outbreak. The vaccination program in Spain has been implemented successfully with all the residents in nursing homes having the third vaccine which has contributed to containing the spread of covid-19. Care Property Invest participates actively as a real estate player and aims to make quality projects available to healthcare entrepreneurs as provided for in the residential care decree. Care Property Invest nv / Real Estate Report 138 139 Real Estate Report / Care Property Invest nv 2. Analysis of the full consolidated property portfolio 31 December 2021 Acquisition value (1) Fair value (4) Insured value % Assured value in relation to fair value Rental income received Insurance premium paid (2) Belgium Investment properties in operation 466,408,372 512,280,278 22,355,478 0 Investment properties under development 0 0 0 0 Finance leases in operation (3) 227,690,694 267,844,538 15,864,701 0 The Netherlands Investment properties in operation 89,807,918 96,061,423 3,709,663 0 Investment properties under development 41,857,421 44,522,035 0 0 Spain Investment properties in operation 44,950,000 45,625,770 1,303,826 0 Investment properties under development 17,700,268 18,075,695 0 0 TOTAL 888,414,673 984,409,738 752,443,225 76% 43,233,668 0 (1) For the denition of the acquisition value, reference is made to chapter ‘XI. Glossary’ on page 270. (2) The necessary insurance policies should be concluded by the operator of the property (given the ‘triple net’ agreements) or are passed on so that the nal costs are to be borne by the operator. The construction site insurance for developments is not included in the insured total. This insurance is borne by the developer. (3) In principle, the 10-year liability is covered by the general contractor of the project in question, however the Company, for hedging purposes in case of default by the contractor, has concluded itself an additional 10-year liability insurance for the entire project- the insured values refer only to the construction work covered by the 10-year liability for the projects: Lichtervelde: including administrative center, Hooglede: including municipal center, Zulte: including connecting corridor, Lennik including community facilities, Hooglede (Gits) including day care centre, Sint-Niklaas (Priesteragie): including the substructure – Meise: including connecting corridor – Mol: including the 39 ats. All other insurances should, as determined in the contract, be concluded by the lessees. (4) The fair value is presented excluding the rights in rem (€1,466,599) which are included under the item investment properties on the balance sheet in accordance with IFRS 16. 2.1 Geographical distribution 2.2 Distribution of the number of projects per operator (1)(2) Flemish Region (BE) Walloon Region (BE) The Netherlands (NL) Brussels-Capital Region (BE) Spain (ES) Geographical distribution of the number of projects 31 December 2021 15% 4% 4% 3% 75% Geographical distribution of the number of residential units 31 December 2021 61% 11% 10% 10% 9% (1) For the following operators, the share in the projects was less than 1% on 31 December 2021: Aldenborgh Exploitatie, Anima, Com4Care, Forum de Inversiones Inmobiliarias Mare Nostrum, Ontzorgd Wonen Group and Résidence du Lac. (2) For the following operators, the share in the projects was less than 1% on 31 December 2020: Aldenborgh Exploitatie, Anima, Com4Care, Emera, Ontzorgd Wonen Group and Résidence du Lac. 2.3 Distribution of income received from rental and long lease agreements per operator (3) (3) For the following operators, the share of rental income was less than 1% as at 31 December 2021: Aldenborgh Exploitatie, Com4Care, Emera and Ontzorgd Wonen Group. Armonea Anima VZW My-Assist OCMW Orelia Group Korian Vulpia Care Group Belgium Valuas Zorggroep Ontzorgd Wonen Groep De Gouden Leeuw Groep Korian Forum de Inversiones Inmobilarias Mare Nostrum The Netherlands Emera Group Other Other Résidence du Lac Other Spain 31 December 2021 31 December 202131 December 2020 31 december 2020 58% 7% 6% 5% 5% 5% 5% 2% 60% 6% 6% 6% 5% 5% 6% 2% 2% 33% 19% 10% 8% 7% 5% 4% 3% 4% 3% 1% 40% 18% 8% 5% 11% 4% 4% 2% Care Property Invest nv / Real Estate Report 140 141 Real Estate Report / Care Property Invest nv 2.4 Breakdown of projects by the remaining term of the leasehold or rental period Financial year closed on Number of projects ending between 31 December 2021 0 and 1 years 1 and 5 years 5 and 10 years 10 and 15 years 15 and 20 years >20 years Total Belgium 0 2 31 19 24 31 107 Investment properties in operation 0 0 1 1 1 23 26 Financial leases 0 2 30 18 23 8 81 The Netherlands 0 0 0 0 9 3 12 Investment properties in operation 0 0 0 0 9 3 12 Spain 0 0 0 1 1 0 2 Investment properties in operation 0 0 0 1 1 0 2 TOTAL (1) 0 2 31 20 34 34 121 (1) As at 31 December 2021, Care Property Invest has 130 effectively acquired projects in its portfolio, of which 121 were completed (the care residence 'Margaritha Maria Kerk' in Tilburg (NL) is partly in use) and 9 projects under development (the care residence 'Sterrenwacht' in Middelburg (NL), the care residence 'St. Josephkerk' in Hillegom (NL), the care residence 'Aldenborgh' in Roermond (NL), the care residence 'Mariënhaven' in Warmond (NL), the care residence ‘Villa Vught’ in Vught (NL), the care residence ‘Huize Elsrijk’ in Amstelveen (NL), the residential care centre with group of assisted living apartments ‘Emera Carabanchel’ in Carabanchel (Madrid) (ES) and the residential care centre 'Emera Mostoles' in Mostoles (ES). As at 31 December 2021 it also signed agreements under suspensory conditions for another 5 projects (the ‘La Lucine’ residential care centre complex for persons with disabilities in Stembert (BE), the residential care centre 'Vulpia Elsene' in Elsene (BE), the residential care centre 'Emera Murcia' in Murcia (ES), the residential care centre 'Solimar Tavernes Blanques' in Tavernes Blanques (ES) and the residential care centre 'Solimar Elche' in Elche (ES). The rst building right (of the initial real estate portfolio) will expire in 2026, i.e., within 4.50 years. The average remaining term of the contracts is 15.94 years (1). This period includes the remaining term of the building right which, for the contracts in the initial real estate portfolio, is equal to the remaining leasehold period and the remaining tenancy period. For the new projects, only the rental or leasehold period is taken into account. (1) The average remaining term of nance leases is 13.13 years and that of investment properties 21.64 years. 2.5 Breakdown of income deriving from leasehold and rental agreements in function of their residual duration Financial year closed on Income to be received for the period 31 December 2021 0 and 1 years 1 and 5 years 5 and 10 years 10 and 15 years 15 and 20 years >20 years Total Belgium 33,647,960 134,494,665 157,990,486 142,807,525 128,050,363 110,899,922 707,890,920 Investment properties in operation 22,653,006 90,612,026 113,050,922 111,519,800 107,962,270 96,410,369 542,208,393 Financial leases 10,994,953 43,882,639 44,939,564 31,287,726 20,088,093 14,489,553 165,682,527 The Netherlands 11,429,795 45,719,180 57,148,975 57,148,975 52,051,573 40,430,666 263,929,164 Investment properties in operation 11,429,795 45,719,180 57,148,975 57,148,975 52,051,573 40,430,666 263,929,164 Spain 2,559,750 10,239,000 12,798,750 12,361,685 9,128,767 0 47,087,952 Investment properties in operation 2,559,750 10,239,000 12,798,750 12,361,685 9,128,767 0 47,087,952 TOTAL (1) 47,637,505 190,452,845 227,938,211 212,318,185 189,230,703 151,330,588 1,018,908,037 (1) The balance includes the remaining lease and rental income as at 31 December 2021 on the basis of the non-index-linked ground rent, respectively the rental remuneration for the entire remaining term of the contract (due dates not split) and with regard to the project for which the Company bears the risk of voids (‘Tilia’ in Gullegem), taking into account an occupancy rate of 100%. 2.6 Breakdown of projects by age of the buildings Financial year closed on Number of projects rst occupied 31 December 2021 in 2021 between 1 and 5 years ago between 5 and 10 years ago >10 years ago Total Belgium 2 8 29 68 107 Investment properties in operation 2 2 16 6 26 Financial leases 0 6 13 62 81 The Netherlands 4 1 1 6 12 Investment properties in operation 4 1 1 6 12 Spain 1 0 0 1 2 Investment properties in operation 1 0 0 1 2 TOTAL (1) 7 9 30 75 121 (1) Care Property Invest only encounters a vacancy risk with the project ‘Tilia’ in Gullegem. The vacancy rate for the ‘Tilia’ project is therefore negligible in the entire portfolio. The occupancy rate for 2021 was 69%, and for 2020 it was 92%. With respect to the projects in the initial real estate portfolio, the risk lies with the counterparty. The Company receives the ground rent, whether or not a certain vacancy exists. For the new projects as well, the Company tries to shift this risk entirely or for a large part to the counterparty. (1) As at 31 December 2021, Care Property Invest has 130 effectively acquired projects in its portfolio, of which 121 were completed (the care residence 'Margaritha Maria Kerk' in Tilburg (NL) is partly in use) and 9 projects under development (the care residence 'Sterrenwacht' in Middelburg (NL), the care residence 'St. Josephkerk' in Hillegom (NL), the care residence 'Aldenborgh' in Roermond (NL), the care residence 'Mariënhaven' in Warmond (NL), the care residence ‘Villa Vught’ in Vught (NL), the care residence ‘Huize Elsrijk’ in Amstelveen (NL), the residential care centre with group of assisted living apartments ‘Emera Carabanchel’ in Carabanchel (Madrid) (ES) and the residential care centre 'Emera Mostoles' in Mostoles (ES). As at 31 December 2021 it also signed agreements under suspensory conditions for another 5 projects (the ‘La Lucine’ residential care centre complex for persons with disabilities in Stembert (BE), the residential care centre 'Vulpia Elsene' in Elsene (BE), the residential care centre 'Emera Murcia' in Murcia (ES), the residential care centre 'Solimar Tavernes Blanques' in Tavernes Blanques (ES) and the residential care centre 'Solimar Elche' in Elche (ES). 2.7 Occupancy rate Due to the increasing demand for modied forms of housing for the elderly, the buildings have few, if any voids and enjoy a very high occupancy rate. The vast majority of contracts concluded are ‘triple net’ contracts, as a result of which the ground rent or rental charge is always due in full, regardless of the actual occupancy rate. This implies that the economic occupancy rate of these projects is always 100% (1) . Any voids of the residential units therefore have no impact on the revenues generated by the Company. Therefore, the Company can conrm that the general occupancy rate of its investment properties and nance leases amounts to 100% on 31 December 2021. 2.8 Insured value of the real estate For the buildings that the Company develops or has developed itself, the Company contracts CAR insurance as well as liability insurance during the construction phase. 10-year liability insurance is contracted from the date that the projects are made available. The premiums paid by Care Property Invest are all paid by the operator.The lease-, tenancy and provision contracts include an obligation for all leaseholders, tenants and parties to which the property is made available to contract the necessary re insurance for the new construction value. The leaseholder usually also needs to take out an income loss policy, which covers the company in the event that the property becomes unusable.The insurance obligation for real estate that is shown in investment properties is also borne by the leaseholder or tenant (operator), in accordance with the requirements included in the lease contracts or tenancy agreements. Care Property Invest therefore pays no insurance premiums for these buildings. The Company exercises control over the compliance of the operators with their insurance obligations. 2.9 Breakdown by building In compliance with Article 30 of the RREC Law, no more than 20% of the consolidated assets may be invested in property that constitutes a single property unit. As at 31 December 2021, Care Property Invest did not exceed the legal limit of 20% laid down in Article 30 of the RREC Law. As at 31 December 2021, the concentration risk for Armonea is 16.92%, for Vulpia Care Group 11.42%, for Korian 9.66%, My-Assist 8.11% and Valuas Zorggroep 5.63%. The Company takes this legal provision into consideration with every acquisition it makes and the order in which these investments are made. 143 Real Estate Report / Care Property Invest nv 3. Summary tables consolidated property portfolio 3.1 Summary table investment properties Operator and projects - 31 December 2021 Indication on map Year of constructi- on/(latest) renovation Total lettable oor area (in m²) Number of residential units Contrac- tual rental income Estimated rental value (ERV) (1) Oc- cupan- cy rate (3) Address Fair value compared to consoli- dated assets (%) (2) Belgium 193,925 2,669 22,355,478 24,036,311 Anima Nuance 7 2020 7,239 121 734,441 100% Schaatsstraat 20, 1190 Vorst Armonea 16.92% Les Terrasses du Bois 8 2014 16,568 176 1,909,190 100% Terhulpsesteenweg 130, 1170 Watermaal-Bosvoorde Ter Meeuwen 16 2015 8,628 101 767,766 100% Torenstraat 15, 3670 Oudsbergen Park Kemmelberg 13 2014 2,412 31 362,299 100% Lange Pastoorstraat 37, 2600 Berchem Residentie "Moretus" 12 2011 8,034 139 1,190,410 100% Grotesteenweg 185, 2600 Berchem De Wand 22 2015 10,562 137 1,324,465 100% Wandstraat 21109/2013, 1020 Brussel Keymolen 23 2014 7,245 88 879,184 100% Karel Keymolenstraat 55, 1750 Lennik Westduin 24 2014 11,594 135 1,571,307 100% Badenlaan 62, 8434 Westende OCMW Wevelgem Residentie "Tilia" 1 2015 1,454 15 89,369 69% Dorpsplein 21, 8560 Gullegem Orelia Group Wiart 126 17 2014 6,875 104 982,518 100% Carton de Wiartlaan 126-128, 1090 Jette Ter Beuken 10 2016 6,834 92 884,400 100% Beukenbosstraat 9, 1652 Alsemberg Résidence du Lac La Résidence du Lac 19 2011 5,410 99 929,304 100% Avenue Albert 1er 319, 1332 Genval Korian 6.17% 3 Eiken 6 2016 7,990 122 959,075 100% Drie Eikenstraat 14, 3620 Lanaken Huyse Elckerlyc 18 2008 3,944 73 329,285 100% Trinellestraat 23, 3770 Riemst Ter Bleuk 5 2016 5,593 52 746,951 100% Bleukstraat 11, 2820 Bonheiden- Rijmenam Woonzorgcentrum Oase 11 2016 6,730 76 836,220 100% Tramlaan 14, 1861 Wolvertem My Assist 8.11% La Reposée 20 2020 5,643 98 841,337 100% Rue de Chemin de Fer 1, 7033 Bergen New Beaugency 21 2015 4,805 85 823,475 100% Rue d'Ellezelles 57, 7321 Bernissart Residence des Ardennes 25 2021 14,441 200 1,911,656 100% Rue du Bois de Loo 379, 6717 Attert Vulpia Care Group 11.42% Aan de Kaai 3 2012 7,950 74 864,567 100% Antoine Coppenslaan 33, 2300 Turnhout Boeyendaalhof 4 2011 7,139 117 805,729 100% Itegemsesteenweg 3, 2270 Herenthout Bois de Bernihè 9 2013 6,886 114 615,001 100% Avenue de Houffalize 65, 6800 Libramont-Chevingny De Nieuwe Kaai 2 2005 7,806 99 904,222 100% Nieuwe Kaai 5-7, 2300 Turnhout Operator and projects - 31 December 2021 Indication on map Year of constructi- on/(latest) renovation Total lettable oor area (in m²) Number of residential units Contrac- tual rental income Estimated rental value (ERV) (1) Oc- cupan- cy rate (3) Address Fair value compared to consoli- dated assets (%) (2) Home Aldante 14 2003 2,372 55 180,486 100% Uytroeverstraat 1, 1081 Koekelberg t Neerhof 15 2013 8,236 108 760,793 100% Nieuwstraat 69, 9660 Brakel Dungelhoeff 26 2021 11,535 158 152,027 100% Kazernedreef ZN, 2500 Lier The Netherlands 33,258 362 3,709,663 5,339,793 De Gouden Leeuw Groep De Gouden Leeuw (Laag-Keppel) 6 1980 2,265 36 327,988 100% Rijksweg 91, 6998 AG Laag-Keppel De Gouden Leeuw (Zelhem) 9 2007 5,200 40 567,720 100% Burg. Rijpstrastraat 3-5, 7021 CP Zelhem De Gouden Leeuw (Zutphen) 10 2021 3,708 36 325,161 100% De Clercqstraat 58, 7201 EC Zutphen Korian 3.49% De Orangerie 1 2021 6,567 64 26,317 100% Malvert 5002-5004, 6538 DM Nijmegen Margaritha Maria Kerk 3 2021 3,547 32 149,871 100% Ringbaan West 300, 5025 VB Tilburg Ontzorgd Wonen Groep Villa Sijthof 4 2015 1,411 19 360,400 100% Oud Clingendaal 7, 2245 CH Wassenaar Valuas Zorggroep 5.63% Villa Pavia 2 2004 1,638 16 290,604 100% Laan van Beek en Royen 45, 3701 AK Zeist Boarnsterhim State 11 2011 1,500 19 162,000 100% Wjitteringswei 67, 8495 JM Aldeboarn De Meerlhorst 14 2016 1,380 17 316,200 100% Van Merlenlaan 2, 2103 GD Heemstede Het Witte Huis 13 2011 1,600 25 498,000 100% Endegeesterlaan 2-4, 2342 CZ Oegstgeest Villa Oranjepark 12 2007 942 14 167,151 100% Prins Hendriklaan 2, 2341 JB Oegstgeest Villa Wulperhorst 7 2021 3,500 44 518,250 100% Tiendweg 6-8, 3709 JP Zeist Spain 43,976 354 1,303,826 2,648,122 Emera Group Emera Almeria 2 2021 6,689 125 411,353 100% Calle Severo Ochoa 12, 03015 Almeria Forum de Inversiones Inmobiliarias Mare Nostrum Forum Mare Nostrum I 4 2008 37,287 229 892,473 100% Camino del Pintxo 2, 03580 Alicante TOTAL 271,159 3,385 27,368,967 32,024,226 (1) For the hypotheses and principles adopted for the estimate of the rental value, reference is made to paragraph ‘4. Report of the real estate expert’ on page 149. For the ‘Aan de Kaai’ investment property, the real estate expert based the calculation of the rental value on the assumption that the day-care centre will/can be converted into an additional 10 rooms. This estimated rental value is shown segmented by country. (2) The calculation also takes into account the fair value of the ongoing development projects per operator. The other real estate units do not represent more than 5% of the total assets. The consolidated assets include nancial leases at fair value. (3) For the method of calculating the occupancy rate, we refer to paragraph ‘1.3 Occupancy rate’ on page 270 of Chapter IX. Glossary. Care Property Invest nv / Real Estate Report 144 145 Real Estate Report / Care Property Invest nv 3.2 Table summarising the projects under development Project Name Indication on map Location Estimated total cost Current cost price Estimated future cost Planned delivery ERV after comple- tion Operator Type Investment properties The Netherlands 58,563,703 41,857,423 16,706,280 3,083,363 Margaritha Maria Kerk 3 Tilburg 1,998,158 1,998,158 0 Q1 2022 Korian Redevelopment Sterrenwacht 5 Middelburg 5,680,030 3,954,216 1,725,814 Q3 2022 Korian Redevelopment Sint Josephkerk 8 Hillegom 9,130,000 6,509,156 2,620,844 Q4 2022 Korian Redevelopment Aldenborgh 15 Roermond 8,222,222 7,718,269 503,953 Q1 2022 Aldenborgh Exploitatie Development Mariënhaven 16 Warmond 11,637,692 9,307,774 2,329,918 Q3 2022 Valuas Zorggroep Redevelopment Villa Vught 17 Vught 6,171,429 4,775,403 1,396,026 Q2 2022 Valuas Zorggroep Redevelopment Huize Elsrijk 18 Amstelveen 6,124,172 3,844,071 2,280,101 Q3 2022 Com4Care Redevelopment Amstel 19 Ouderkerk aan de Amstel 9,600,000 3,750,375 5,849,625 Q3 2022 Korian Development Spain 26,586,643 17,700,268 8,886,375 1,564,889 Emera Carabanchel 1 Carabanchel 14,586,643 13,158,328 1,428,315 Q2 2022 Emera Group Development Emera Mostoles 3 Mostoles 12,000,000 4,541,940 7,458,060 Q2 2023 Emera Group Development TOTAL 85,150,346 59,557,691 25,592,655 4,648,252 1 2 3 4 5 Investment properties Belgium 100% Occupancy rate €64 million Fair value portfolio 100% Occupancy rate €268 million Fair value portfolio 100% Occupancy rate €512 million Fair value portfolio 100% Occupancy rate €141 million Fair value portfolio Finance leases Belgium (1) 9 24 4 1 14 6 3 16 8 18 10 12 22 5 26 2 15 7 17 19 11 21 20 13 23 25 1 7 13 2 8 14 3 9 15 4 10 16 5 11 17 6 12 18 19 1 3 2 (1) This concerns the fair value of the nance leases, including the initial portfolio. Investment properties The Netherlands Investment properties Spain 4 9 Care Property Invest nv / Real Estate Report 146 147 Real Estate Report / Care Property Invest nv 3.3 Table summarising the projects in the initial real estate portfolio Project Name Indica- tion on map Year of construc- tion/ (latest) renova - tion Total lettable oor area (in m²) Number of residential units Contrac- tual rental income Oc- cupancy rate Address OCMW/CPAS 180,507 1,885 13,871,496 Antwerp Residentie "'t Lam" 1997 2,465 26 211,077 100% Polderstraat 1, 2070 Zwijndrecht Residentie "De Loteling" 1998 2,103 24 167,944 100% Kapellei 109, 2980 Sint-Antonius (Zoersel) Residentie "De Linde" 1998 2,348 23 188,011 100% Jaak Aertslaan 3, 2320 Hoogstraten Residentie "De Peulder" 1998 1,722 20 160,846 100% Bellekens 2, 2370 Arendonk Residentie "Papegaaienhof" 1999 2,285 24 209,822 100% Burgemeester De Boeylaan 2, 2100 Deurne Residentie "Altena" 2003 2,480 25 266,124 100% Antwerpsesteenweg 75, 2550 Kontich Residentie "Mastbos" 2000 1,728 20 183,914 100% Maststraat 2, 2910 Essen Residentie "Mastbos" - uitbreiding 2010 866 10 89,867 100% Maststraat 2, 2910 Essen Residentie "Kloosterhof" 2001 1,955 24 213,929 100% Kloosterhof 1, 2470 Retie Residentie "De Brem" 2001 3,512 42 345,890 100% Zwaantjeslei 87, 2170 Merksem Residentie "'t Kloosterhof" 2002 1,476 17 155,258 100% Pastoor Woestenborghslaan 4, 2350 Vosselaar Residentie "A. Stappaerts" 2002 2,090 28 313,501 100% Albert Grisarstraat 17-25, 2018 Antwerpen Residentie "Sint-Bernardus" 2004 3,094 24 210,761 100% Sint-Bernardusabdij 1, 2620 Hemiksem Residentie "De Wilders" 2004 2,069 25 229,635 100% De Wilders 39, 2382 Poppel (Ravels) Residentie "Het Sluisken" 2005 2,158 25 200,460 100% Gasthuisstraat 9, 2960 Brecht Residentie "Geestenspoor" 2006 1,660 19 152,901 100% Geestenspoor 69-75, 2180 Ekeren Residentie "'t Zand" 2011 3,378 36 137,743 100% Zandstraat 4, 2960 Sint-Job-in-'t-Goor "Hof van Picardiën" 2012 2,004 22 124,927 100% Molenstraat 68, 2970 Schilde Residentie "De Schittering" 2012 2,537 22 142,547 100% Nieuwstraat 11-15, 2290 Vorselaar Residentie "Nieuwe Molenakkers" 2012 6,125 37 234,232 100% Boudewijnstraat 7, 2340 Beerse Residentie "Ten Hove" 2013 4,771 50 146,808 100% Jakob Smitslaan 26, 2400 Mol West Flanders Residentie "Zevekote" 1998 2,059 22 183,654 100% Kleine Stadenstraat 2, 8830 Hooglede Residentie "D'Hooge" 1998 1,469 19 157,192 100% Statiestraat 80, 8810 Lichtervelde Residentie "Roger Windels" 1998 1,766 21 166,975 100% Karel de Goedelaan 4, 8820 Torhout Residentie "Soetschip" 1999 727 10 84,353 100% Lostraat 3, 8647 Lo-reninge Residentie "Zilverschoon" 2000 2,524 30 242,950 100% Beversesteenweg 51, 8800 Roeselare Residentie "Eugenie Soenens" 2001 1,348 14 122,405 100% Ieperweg 9a, 8211 Loppen (Zedelgem) Residentie "'t Kouterhuys" 2011 2,991 33 243,821 100% Hospitaalstraat 31, 8610 Kortemark Residentie "De Varent" 2002 5,901 63 620,230 100% Zuiderlaan 45, 8790 Waregem Residentie "Ter Drapiers" 2002 1,553 17 148,279 100% Gasstraat 4, 8940 Wervik Residentie "Meulewech" 2002 3,175 36 313,550 100% Kosterijstraat 40-42, 8200 Brugge Residentie "De Vliedberg" 2010 3,306 35 174,573 100% Rudderhove 2, 8000 Brugge Residentie "Ter Leyen" 2012 2,640 33 112,785 100% Wiermeers 12, 8310 Brugge Residentie "Ten Boomgaarde" 2012 4,839 38 186,709 100% Ter Beke 31, 8200 Brugge Residentie "De Vlasblomme" 2003 1,527 19 177,067 100% Grote Molenstraat 43, 8930 Menen Residentie "Leonie" 2005 1,101 17 114,848 100% Leonie de Croixstraat 19, 8890 Dadizele (Moorslede) Residentie "Ter Linde" 2011 1,863 20 157,538 100% Gitsbergstraat 40, 8830 Hooglede Residentie "Duinenzichterf" 2011 4,135 48 315,469 100% Duinenzichterf 10-14, 8450 Bredene East Flanders Residentie "De Lavondel" 1997 1,856 20 146,870 100% Proosdij 15, 9400 Denderwindeke Residentie "De Kaalberg" 1998 4,501 47 373,629 100% Prachting 6, 9310 Moorsel Residentie "Denderzicht" 1999 1,561 17 154,944 100% Burchtstraat 48-54, 9400 Ninove Project Name Indica- tion on map Year of construc- tion/ (latest) renova- tion Total lettable oor area (in m²) Number of residential units Contrac - tual rental income Oc - cupancy rate Address Residentie "Aster" 2000 1,358 16 113,530 100% Koning Albertstraat 7, 9968 Oosteeklo Residentie "Herfstdroom" 2000 1,902 20 173,232 100% Bommelstraat 33, 9840 De Pinte Residentie "Den Eendengaerd" 2000 1,756 20 174,012 100% Marktplein 23, 9920 Hamme Residentie "Den Craenevliet" 2004 816 11 122,892 100% Killestraat 33, 9220 Hamme Residentie "Cuesta" 2005 1,872 24 166,864 100% Molenstraat 41, 9250 Waasmunster Residentie "De Lijsterbes" 2006 1,865 20 166,126 100% Steenvoordestraat 38 bis, 9070 Destelbergen Residentie "De Vlierbes" 2014 1,854 20 177,924 100% Steenvoordestraat 36 bis, 9070 Destelbergen Residentie "De Goudbloem" 2009 4,102 36 157,196 100% Zwijgershoek 10, 9100 Sint-Niklaas Residentie "De Priesteragie" 2012 6,072 60 199,332 100% Azalealaan 6, 9100 Sint-Niklaas Flemish Brabant Residentie "Den Eikendreef" 1998 1,081 13 104,247 100% Kloosterstraat 73, 1745 Opwijk Residentie "De Vlindertuin" 2014 3,152 32 324,887 100% Kloosterstraat 77, 1745 Opwijk Residentie "Dry Coningen" 2007 2,030 24 185,172 100% Leuvensesteenweg 190, 3070 Kortenberg Residentie "De Sterre" 2008 1,320 15 148,034 100% Mechelsesteenweg 197, 1933 Sterrebeek (Zaventem) Residentie "De Veste" 2010 2,037 18 247,078 100% Veste 25, 1932 Sint-Stevens-Woluwe (Zaventem) Seniorie "Houtemhof" 2008 3,187 31 291,261 100% Houtemstraat 45, 3300 Tienen Seniorie "Houtemhof" - uitbreiding 2010 2,429 31 243,783 100% Houtemstraat 45, 3300 Tienen Residentie "Den Bleek" 2011 1,936 16 136,998 100% Stationsstraat 35, 1750 Sint-Kwintens-Lennik Residentie "Paepenbergh" 2012 4,344 36 132,365 100% Fabriekstraat 148, 1770 Liedekerke Residentie "Ter Wolven" 2012 4,284 43 182,014 100% Godshuisstraat 33, 1861 Wolvertem (Meise) Limburg Residentie "De Kempkens II" 2000 1,537 16 137,831 100% De Kempens 1, 3930 Hamont Residentie "'t Heppens Hof" 2003 1,622 19 179,543 100% Heidestraat 1, 3971 Leopoldsburg Residentie "De Parel" 2001 2,713 31 275,321 100% Rozenkransweg 21, 3520 Zonhoven Residentie "Chazal" 2004 2,703 31 284,301 100% De Wittelaan 1, 3970 Leopoldsburg Residentie "Kompas" 2005 1,462 18 176,733 100% Dorpsstraat 82A, 3665 As Residentie "De Lier" 2007 2,807 25 142,995 100% Michielsplein 5, 3930 Achel Residentie "Mazedal" 2008 3,346 28 301,483 100% Langs de Graaf 15, 3650 Dilsen-Stokkem Residentie "De Brug" 2009 4,667 40 171,715 100% Rozenkransweg 25, 3520 Zonhoven Residentie "De Klitsberg" 2009 2,800 24 167,103 100% Klitsbergwijk 28, 3583 Paal (Beringen) Residentie "Carpe Diem" 2012 2,538 28 171,636 100% Hesdinstraat 5, 3550 Heusden-Zolder De Waterjuffer 2013 3,247 37 131,846 100% Speelstraat 8, 3945 Ham VZW/ASBL 8,524 103 702,790 Antwerp Residentie "d' Hoge Bomen" 2000 1,821 22 177,149 100% Hoogboomsteenweg 124, 2950 Kapellen Residentie "Ten Velden" 2010 1,558 21 105,308 100% Kerkevelden 44-60, 2560 Nijlen East Flanders Residentie "Noach" 1998 1,254 15 133,705 100% Nieuw Boekhoutestraat 5A, 9968 Bassevelde Residentie "Serviceats Ten Bosse II" 2002 1,692 19 153,909 100% Ten Bosse 150, 9800 Deinze Residentie "Ponthove" 2005 2,199 26 132,719 100% Pontstraat 18, 9870 Zulte 76 PROJECTS 189,031 1,988 14,574,287 (1) Other properties do not represent more than 5% of total assets. The consolidated assets include nance leases at fair value. Care Property Invest nv / Real Estate Report 148 149 Real Estate Report / Care Property Invest nv 3.4 Summary table nance leases new investment program Project Name Indication on map Year of con- struc- tion/ (latest) renova- tion Total lettable oor area (in m²) Number of residential units Contrac- tual rental income Occupancy rate Address OCMW/CPAS Hof ter Moere 1 2017 1,937 22 121,044 100% Herfstvrede 1A, 9180 Moerbeke Huis Driane 2 2018 1,742 22 114,601 100% Molenstraat 56, 2270 Herenthout De Stille Meers 4 2020 5,326 60 170,127 100% Sluisvaartstraat 56, 8430 Middelkerke Astor vzw/asbl Residentie "De Anjers" 5 2018 5,960 62 493,150 100% Veststraat 60, 2940 Balen Zorghuizen vzw/asbl De Nieuwe Ceder 3 2019 4,779 86 391,492 100% Parijsestraat 34, 9800 Deinze 5 PROJECTS 19,744 252 1,290,414 (1) Other properties do not represent more than 5% of total assets. The consolidated assets include nance leases at fair value. 4. Report of the real estate expert The real estate portfolio is valued by Stadim and Cushman & Wakeeld. The total fair value of the portfolio amounts to €718,031,695 (including rights in rem). The fair value of the portfolio valued by Stadim amounts to €598,680,300 (83%). The fair value of the portfolio valued by Cushman & Wakeeld amounts to €119,351,395 (17%). The valuations were carried out at the time of the Covid-19 pandemic and, given the uncertain impact on the nancial markets and economy, should be interpreted with caution. The circumstances and references during this valuation exercise are unclear, so the real estate experts recommend to closely monitor the valuations in the coming period (acc. RICS Red Book Global Material Valuation Uncertainty VPS3 and VPGA 10). 4.1 Report of the real estate by Stadim Dear Madam or Sir, According to the statutory provisions, we have the honour of expressing our view on the value of the real estate portfolio of the public regulated real estate company (public RREC) Care Property Invest as at 31 December 2021. Both Stadim cvba and the natural persons that represent Stadim conrm that they have acted as independent experts and hold the necessary relevant and recognised qualications. The valuation was performed on the basis of the market value, as dened in the ‘International Valuation Standards’ published by the ‘Royal Institution of Chartered Surveyors’ (the ‘Red Book’). As part of a report that complies with the International Financial Reporting Standards (IFRS), our estimates reect the fair value. The fair value is dened by the IAS 40 standard as the amount for which the assets would be transferred between two well-informed parties, on a voluntary basis, without special interests, mutual or otherwise. IVSC considers that these conditions have been met if the above denition of market value is respected. The market value must also reect the current rental agreements, the current gross margin for self-nancing (or cash ow), the reasonable assumptions concerning the potential rental income and the expected costs. The costs of deeds must be adjusted in this context to the current situation in the market. Following an analysis of a large number of transactions, the real estate experts acting in a working group at the request of listed real estate companies reached the conclusion that, as real estate can be transferred in different forms, the impact of the transaction costs on large investment properties in the Belgian market with a value in excess of €2.5 million is limited to 2.5%. The value with no additional costs payable by the buyer therefore corresponds to the fair value plus deed costs of 2.5%. The fair value is therefore calculated by dividing the value with no additional costs payable by the buyer by 1.025. The properties below the threshold of €2.5 million and the foreign properties are subject to the customary registration laws and their fair value therefore corresponds to the value with costs payable by the buyer. Both the current lease contracts and all rights and obligations arising from these contracts were taken into account in the estimates of the property values. Individual estimates were made for each property. The estimates do not take account of The fair value of our property portfolio increased by as much as 20% during 2021. Care Property Invest nv / Real Estate Report 150 151 Real Estate Report / Care Property Invest nv any potential added value that could be realised by offering the portfolio as a whole in the market. Our valuation does not take account of selling costs or taxes payable in relation to a transaction or development of real estate. These could include estate agents’ fees or publicity costs, for example. In addition to an annual inspection of the relevant real estate, our estimates are also based on the information provided by Care Property Invest in relation to the rental situation, the oor areas, the drawings or plans, the rental charges and taxes in connection with the properties concerned, conformity with laws and regulations and environmental pollution. The information provided was deemed to be accurate and complete. Our estimates assume that elements that were not reported are not of a nature that would inuence the value of the property. This valuation reects the value in the market on the valuation date. On 31 December 2021, the fair value of the property portfolio amounted to €597,213,700 and the market value with no additional costs payable by the buyer (or the investment value, before deduction of transfer tax) to €618,769,600. The fair value of the outstanding ground rent amounts to €1,466,600. Antwerp, 31 December 2021 Yasmin Verwilt Valuation expert-Advisor STADIM bv Céline Janssens, FRICS Managing Director STADIM bv Mostoles (ES) I Emera Mostoles 4.2 Report of the real estate by Cushman & Wakeeld Dear Madam, Sir, We are pleased to send you our estimate of the fair value of investment properties held by Care property Invest as of 31 December 2021. The valuations have been carried out taking into account the comments and denitions included in the reports and this according to the guidelines of the International Valuation Standards issued by the 'IVSC'. We have acted individually as experts for the valuation where we have the necessary and recognised qualications as well as the necessary expertise for these locations and types of buildings to be assessed. The determination of the fair value of the assessor has been derived primarily by using recent, comparable transactions that have taken place in the market, at arm's length conditions. The valuation of the properties is assessed on the basis of the current rental contract and all associated rights and obligations. Each property was evaluated individually. This valuation does not take into account the potential value that can be realised by putting the entire portfolio on the market. The valuations do not take into account the selling costs of a specic transaction such as brokerage or publicity costs. The valuations are based on property visits and information provided by Care Property Invest (such as current rent, area, plans, changes in rent, property taxes and regulations and pollution). The information provided is assumed to be accurate and complete. The valuation is carried out on the assumption that the unavailable information does not affect the valuation of the property. The 3 internationally dened valuation methods, as dened in the RICS Red Book, are the market approach, the cost approach and the income approach. These valuation methods are easily recognised by their basic principles: The market approach equates to the comparison method of valuation; The income approach refers to the investment method, either traditional (cap rate) or discounted cash ow (DCF) and is generally used for income generating properties; The Cost Approach is often taken to refer to the Depreciated Replacement Cost method (DRC) and is generally used for non- income generating properties. The different valuation methodologies are explained in the valuation reports and are based on the RICS Red Book. Based on the valuations, the consolidated fair value of the portfolio amounted to €119,351,395 (after deduction of outstanding construction costs) as at 31 December 2021. Bastien Van der Auwermeulen Associate Valuation & Advisory Emeric Inghels MRICS Partner Valuation & Advisory Meise (BE) I Oase VII. Financial Statements VII. FINANCIAL STATEMENTS 1. Consolidated nancial statements as at 31 December 2021 156 1.1 Consolidated global result statement 156 1.2 Net result per share 157 1.3 Consolidated balance sheet 157 1.4 Cash-ow table 158 1.5 Statement of changes in consolidated equity 160 2. Notes to the consolidated nancial statements 162 Note 1: General information on the Company 162 Note 2: Accounting policies 162 T 2.1 Declaration of conformity 162 T 2.2 Consolidation principles 163 T 2.3 Intangible xed assets 164 T 2.4 Investment properties 164 T 2.5 Other xed assets 166 T 2.6 Impairments 168 T 2.7 Financial xed assets 168 T 2.8 Finance lease receivables & trade receivables 169 T 2.9 Current assets 171 T 2.10 Equity 171 T 2.11 Provisions 171 T 2.12 Financial liabilities 172 T 2.13 Staff remuneration 173 T 2.14 Income and expenses 173 T 2.15 Taxes 173 Note 3: Segment information 176 T 3.1 Segmented information - result 177 T 3.2 Segmented information - balance sheet 178 Note 4: Financial risk management 179 T 4.1 Risks associated with covenants and statutory nancial parameters 179 T 4.2 Risks associated with the evolution of the debt ratio 180 T 4.3 Risks associated with the cost of the capital 181 T 4.4 Risks associated with the use of derivative nancial products 183 Note 5: Notes to the consolidated nancial statements 185 T 5.1 Net result per share 185 T 5.2 Components of the net result 185 T 5.3 Rental income 185 T 5.4 Recovery of rental charges and taxes normally borne by the tenant on let properties 186 T 5.5 Rental charges and taxes normally payable by the tenant on let properties 187 T 5.6 General expenses of the company 187 T 5.7 Other operating expenses and income of the Company 187 T 5.8 Changes in the fair value of investment properties 188 T 5.9 Financial income 189 T 5.10 Net interest expense 189 T 5.11 Other nancial costs 189 T 5.12 Changes in the fair value of nancial assets and liabilities 190 T 5.13 Taxes 190 T 5.14 Intangible xed assets 191 T 5.15 Investment properties 191 T 5.16 Other tangible xed assets 194 T 5.17 Financial xed assets and other non-current nancial liabilities 195 T 5.18 Finance lease receivables and trade receivables and other non-current assets 197 T 5.19 Trade receivables 200 T 5.20 Tax receivables and other current assets 200 T 5.21 Cash and cash equivalents 200 T 5.22 Prepayments and accrued income 201 T 5.23 Capital 201 T 5.24 Share premium 202 T 5.25 Reserves 203 T 5.26 Result for the nancial year 203 T 5.27 Financial liabilities 203 T 5.28 Other non-current nancial liabilities 205 T 5.29 Deferred tax liabilities 206 T 5.30 Trade payables and other current liabilities 206 T 5.31 Other current liabilities 206 T 5.32 Accruals and deferred income on the liabilities side 206 T 5.33 Notes on fair value 207 T 5.34 Conditional liabilities 208 T 5.35 Securities received from contractors 209 T 5.36 Related party transactions 209 T 5.37 Events after the end of the 2021 nancial year 210 T 5.38 Information on subsidiaries 211 T 5.40 Alternative performance measures 212 T 5.39 Remuneration of the Statutory Auditor 212 3. Auditor’s Report 214 3.1 Independent auditor’s report to the general meeting of Care Property Invest nv for the year ended 31 December 2021 214 4. Abridged statutory nancial statements as at 31 December 2021 220 4.1 Abridged statutory global result statement 220 4.2 Abridged statutory statement of realised and unrealised results 221 4.3 Abridged statutory balance sheet 222 4.4 Abridged statutory appropriation of results 223 4.5 Dividend payment obligation pursuant to the Royal Decree of 13 July 2014 concerning RRECs 224 4.6 Non-distributable equity in accordance with Article 7:212 BCCA 225 4.7 Statement of changes in non-consolidated equity 226 Care Property Invest nv / Financial Statements 154 155 Financial Statements / Care Property Invest nv VII. FINANCIAL STATEMENTS 1. Consolidated nancial statements as at 31 December 2021 The consolidated nancial statements as at 31 December 2020 were included in the Annual Financial Report 2020 under item 1 et seq in chapter ‘VII. Financial Statements’, from page 160. The consolidated nancial statements as at 31 December 2019 were included in the Annual Financial Report 2019 under item 1 et seq in chapter ‘VIII. Financial Statements’, from page 160. Both reports are available on the website www.carepropertyinvest.be. 1.1 Consolidated global result statement Amounts in EUR Notes 31/12/2021 31/12/2020 I Rental income (+) T 5.3 43,233,668 36,203,096 NET RENTAL RESULT 43,233,668 36,203,096 V Recovery of rental charges and taxes normally borne by tenants on let properties (+) T 5.4 419,382 551,247 VII Rental charges and taxes normally borne by tenants on let properties (-) T 5.5 -419,382 -551,247 REAL ESTATE RESULT 43,233,668 36,203,096 IX Technical costs (-) -4,090 -2,284 REAL ESTATE COSTS -4,090 -2,284 REAL ESTATE OPERATING RESULT 43,229,578 36,200,812 XIV General expenses of the Company (-) T 5.6 -7,896,542 -7,217,459 XV Other operating income and expenses (+/-) T 5.7 -29,439 1,362,430 OPERATING RESULT BEFORE RESULT ON PORTFOLIO 35,303,597 30,345,783 XVIII Changes in fair value of investment properties (+/-) T 5.8 22,143,057 2,598,197 OPERATING RESULT 57,446,654 32,943,980 XX Financial income (+) T 5.9 430 90 XXI Net interest expense (-) T 5.10 -7,844,467 -7,099,028 XXII Other nancial costs (-) T 5.11 -586,893 -535,760 XXIII Changes in fair value of nancial assets and liabilities (+/-) T 5.12 11,165,200 -5,358,254 FINANCIAL RESULT 2,734,270 -12,992,952 RESULT BEFORE TAXES 60,180,924 19,951,028 XXIV Corporation tax (-) T 5.13 -405,372 90,241 XXV Exit tax (-) T 5.13 -120,731 -176,357 TAXES -526,103 -86,116 NET RESULT (group share) 59,654,821 19,864,912 Other elements of the global result 0 0 GLOBAL RESULT 59,654,821 19,864,912 1.2 Net result per share Amounts in EUR 31/12/2021 31/12/2020 NET RESULT / GLOBAL RESULT 59,654,821 19,864,912 Net result per share based on weighted average shares outstanding 2.2976 0.8598 1.3 Consolidated balance sheet Amounts in EUR Notes 31/12/2021 31/12/2020 ASSETS I. NON-CURRENT ASSETS 927,165,460 739,484,884 B. Intangible assets T 5.14 122,671 158,457 C. Investment properties T 5.15 718,031,800 533,854,521 D. Other tangible xed assets T 5.16 4,739,677 2,271,023 E. Financial xed assets T 5.17 2,685,847 177,036 F. Finance lease receivables T 5.18 186,775,769 187,355,753 G. Trade receivables and other non-current assets T 5.18 14,809,696 15,666,584 H. Deferred tax - assets 0 1,510 II. CURRENT ASSETS 18,150,751 9,732,072 D. Trade receivables T 5.19 4,514,443 2,459,728 E. Tax receivables and other current assets T 5.20 10,167,850 2,294,990 F. Cash and cash equivalents T 5.21 2,544,873 3,751,851 G. Deferrals and accruals T 5.22 923,585 1,225,503 TOTAL ASSETS 945,316,211 749,216,956 EQUITY AND LIABILITIES EQUITY 479,258,685 369,779,481 A. Capital T 5.23 160,226,675 143,442,647 B. Share premium T 5.24 233,064,630 181,447,992 C. Reserves T 5.25 26,312,559 25,023,930 D. Net result for the nancial year T 5.26 59,654,821 19,864,912 LIABILITIES 466,057,526 379,437,475 I. Non-current liabilities 296,256,614 237,598,310 B. Non-current nancial debts T 5.27 274,600,056 205,399,114 C. Other non-current nancial liabilities T 5.17 19,494,005 27,975,990 E. Other non-current liabilities T 5.28 1,993,405 1,782,301 F. Deferred tax - liabilities T 5.29 169,148 2,440,905 II. Current liabilities 169,800,912 141,839,165 B. Current nancial liabilities T 5.27 151,220,542 125,266,029 D. Trade payables and other current liabilities T 5.30 12,245,266 12,096,802 E. Other current liabilities T 5.31 3,550,796 2,440,285 F. Deferrals and accruals T 5.32 2,784,308 2,036,049 TOTAL EQUITY AND LIABILITIES 945,316,211 749,216,956 Care Property Invest nv / Financial Statements 156 157 Financial Statements / Care Property Invest nv 1.4 Cash-ow table Amounts in EUR Notes 31/12/2021 31/12/2020 CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE FINANCIAL YEAR 3,751,851 3,347,195 1. CASH FLOW FROM OPERATING ACTIVITIES 27,060,532 32,507,982 Net result for the nancial year 59,654,821 19,864,912 Taxes T 5.13 526,103 86,116 Net interest expense T 5.10 7,844,467 7,099,028 Financial income T 5.9 -430 -90 Net result for the nancial year (excl. interest & taxes) 68,024,961 27,049,966 Non-cash elements added to/deducted from the result -32,196,859 3,094,547 Changes in fair value of swaps T 5.12 -11,165,200 5,358,254 Changes in the fair value of investment properties T 5.8 -22,143,057 -2,598,197 Depreciations, impairments and reversal of impairments of tangible xed assets T 5.6 254,511 211,654 Real estate leasing prot or loss margin of projects allocated to the period T 5.7 856,887 122,836 Change in working capital requirement -8,767,570 2,363,469 Movement of assets -9,555,815 638,705 Movement of liabilities 788,245 1,724,764 2. CASH FLOW FROM INVESTING ACTIVITIES -96,720,881 -131,884,113 Investments in nance leases (developments) T 5.18 0 -1,043 Investments in investment properties (including developments) T 5.15 -85,434,609 -44,076,115 Investments in shares of real estate companies T 5.15 -9,000,073 -87,381,341 Investments in tangible xed assets T 5.16 -2,445,803 -388,155 Investments in intangible xed assets T 5.14 -15,106 -36,393 investments in nancial xed assets T 5.17 174,710 -1,066 Amounts in EUR 31/12/2021 31/12/2020 3. CASH FLOW FROM FINANCING ACTIVITIES 68,453,371 99,780,787 Cash elements included in the result -7,484,204 -6,912,307 Interest expense paid T 5.10 -7,484,634 -6,912,397 Interest received T 5.9 430 90 Change in nancial liabilities and nancial debts 94,733,630 56,780,229 Increase (+) in nancial debts (1) T 5.27 97,917,290 59,982,937 Decrease (-) in nancial debts: repayments (1) T 5.27 -3,183,660 -3,202,708 Change in equity -18,796,055 49,912,865 Buy-back / sale of treasury shares T 5.25 -78,119 -167,049 Dividend payments -18,498,162 -15,703,278 Increase in capital and share premium -219,774 58,831,204 Increase in optional dividend 0 6,951,988 TOTAL CASH FLOWS (1) + (2) + (3) -1,206,978 404,656 CASH AND CASH EQUIVALENTS AT THE END OF THE FINANCIAL YEAR 2,544,873 3,751,851 (1) Due to a reclassication between these items, the gures as at 31 December 2020 were also adjusted in order to allow for correct comparability. Ter Bleuk (BE) I Bonheiden-Rijmenam Care Property Invest nv / Financial Statements 158 159 Financial Statements / Care Property Invest nv 1.5 Statement of changes in consolidated equity CAPITAL SHARE PREMIUM Reserves for the balance of changes in the fair value of real estate Reserves for impact of swaps (1) Notes T 5.23 T 5.24 T 5.25 T 5.25 T 5.25 Reserves for the balance of changes in the investment value of real estate Reserve for the impact on the fair value of estimated transfer taxes and costs from hypothetical disposal of investment properties (-) 1 January 2020 121,338,541 104,174,862 8,315,799 -1,743,507 -19,556,183 Net appropriation account fot the 2019 nancial year 13,020,859 -3,359,320 -3,061,553 Dividends Treasury shares Result of the period (2) Capital increase 22,104,106 77,273,130 31 December 2020 143,442,647 181,447,992 21,336,658 -5,102,827 -22,617,736 1 January 2021 143,442,647 181,447,992 21,336,658 -5,102,827 -22,617,736 Net appropriation account fot the 2020 nancial year 8,263,785 -5,665,588 -5,358,254 Dividends Treasury shares Result of the period (2) Capital increase 16,784,028 51,616,637 31 December 2021 160,226,675 233,064,629 29,600,443 -10,768,415 -27,975,990 (1) Reserve for net changes in the fair value of authorised hedging instruments that are not subject to hedge accounting as dened in the IFRS (+/-). (2) The Company has no ‘other comprehensive income’, within the meaning of IAS 1, so that the Company's net income is equal to the overall result. Other reserves Reserve for treasury shares Result carried forward from previous nancial years RESERVES RESULT FOR THE FINANCIAL YEAR TOTAL SHAREHOLDERS' EQUITY T 5.25 T 5.25 T 5.25 T 5.25 T 5.26 11,283,515 -167,916 16,126,418 14,258,126 26,519,833 266,291,362 143,859 4,072,710 10,816,555 -10,816,555 0 0 -15,703,278 -15,703,278 -50,751 -50,751 0 -50,751 0 19,864,912 19,864,912 0 0 99,377,236 11,427,374 -218,667 20,199,128 25,023,930 19,864,912 369,779,481 11,427,374 -218,667 20,199,128 25,023,930 19,864,912 369,779,481 154,886 3,971,922 1,366,750 -1,366,750 0 0 -18,498,162 -18,498,162 -78,120 -78,120 0 -78,120 0 59,654,821 59,654,821 0 0 68,400,665 11,582,260 -296,787 24,171,050 26,312,560 59,654,821 479,258,685 No distinction is made between capital changes that do and those that do not result from transactions with shareholder-owners, as the Company has no minority interests. Care Property Invest nv / Financial Statements 160 161 Financial Statements / Care Property Invest nv 2. Notes to the consolidated nancial statements Note 1: General information on the Company Care Property Invest (the ‘Company’) is a public limited liability company that acquired the status of a public regulated real estate company (RREC) under Belgian law on 25 November 2014. The head ofces of the Company are located at the following address: Horstebaan 3, 2900 Schoten (Telephone: +3232229494). Care Property Invest actively participates as a real estate player and has the objective of making high-quality projects available to care providers as provided for in the Residential Care Decree. These include residential care centres, service centres, groups of assisted-living apartments and all other housing facilities for people with disabilities. Care Property Invest can develop, realise and nance these facilities itself, or can renance existing buildings, with or without a renovation or expansion. The Care Property Invest share is listed on Euronext Brussels (regulated market). The consolidated nancial statements of the Company as at 31 December 2021 comprise the Company and its subsidiaries. For an overview of the subsidiaries, we refer to note ‘T 5.38 Information on subsidiaries’ on page 211. The nancial statements were approved for publication by the Board of Directors on 19 April 2022. The nancial statements will be submitted to the Ordinary Annual General Meeting of Shareholders to be held on 25 May 2022. Note 2: Accounting policies Declaration of conformity The nancial statements of the company were drawn up in compliance with the International Financial Reporting Standards (IFRS), as approved and accepted within the European Union (EU) and in accordance with the provisions of the RREC Legislation and the RREC Royal Decree of 13 July 2014. These standards cover all new and revised standards and interpretations published by the International Accounting Standards Board (IASB) and the International Financial Reporting Interpretations Committee (IFRIC), in as far as applicable to the activities of the group. The consolidated nancial statements are presented in euro, unless stated otherwise, and cover the twelve-month period ending on 31 December 2021. The consolidated nancial statements have been prepared in accordance with the historical cost convention, except for those assets and liabilities that are stated at fair value, i.e., investment properties and nancial assets and liabilities. Standards and interpretations commencing on 1 January 2021 The following new standards, new amendments and new interpretations are applicable to the Company for the rst time in 2021, but have no impact on the current consolidated nancial statements: • Amendments to IFRS 4 Insurance Contracts - deferral of IFRS 9, effective 1 January 2021 • Amendments to IFRS 9 Financial Instruments, IFRS 7 Financial Instruments: Disclosures, IAS 39 Financial Instruments: Recognition and Measurement, IFRS 4 Insurance Contracts and IFRS 16 Leases - Reform of Benchmark Interests - Phase 2, effective 1 January 2021 • Amendments to IFRS 16 Leases - Lease concessions due to COVID-19 after 30 June 2021, effective 1 April 2021 New or amended standards and interpretations that have not yet entered into force The new and amended standards and interpretations that were issued but not yet effective at the date of publication of the Company’s consolidated nancial statements are set out below. The Company intends to apply these standards when applicable, if they have an impact on the Company: • Amendments to IAS 1 Presentation of Financial Statements - classication of short and long-term liabilities, effective 1 January 2023. • Amendments to IAS 1 Presentation of Financial Statements and IFRS Statement of Practice 2: Disclosure of Accounting Policies for nancial reporting, effective 1 January 2023. • Amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors: Denition of Estimates, effective 1 January 2023. • Amendments to IAS 12 Income Taxes: Deferred Taxes related to Assets and Liabilities arising from a single transaction, effective 1 January 2023. • Amendments to IAS 16 Property, plant and equipment - Revenue from intended use, effective as of 1 January 2022. • Amendments to IAS 37 Provisions, contingent liabilities and contingent assets - onerous contracts - costs to full a contract, effective as of 1 January 2022. • Amendments to IFRS 3 Business Combinations - references to the conceptual framework, effective as of 1 January 2022. • Amendments to IFRS 17 Insurance contracts: Initial Application of IFRS 17 and IFRS 9 - Comparative Information, effective 1 January 2022. • IFRS 17 Insurance Contracts, effective 1 January 2023. • Annual improvements cycle - 2018- 2020, effective 1 January 2022. Care Property Invest nv / Financial Statements 162 163 Financial Statements / Care Property Invest nv Consolidation principles The companies included in the Company’s consolidated nancial statements are subsidiaries over which the Company exerts control. A company exerts control over a subsidiary if, and only if, the parent company: • has power over the participating interest; • is exposed to and has rights to variable proceeds based on its involvement in the participating interest and; • has the possibility of using its power over the participating interest to inuence the scale of the investor’s yields. The companies in which the group directly or indirectly holds participating interests of more than 50% or in which it has the power to determine the nancial and operating policies so as to obtain benets from its activities, are included in the consolidated accounts of the group in full. This means that the assets, liabilities and results of the entire group are fully reected. Inter-company transactions and prots are entirely eliminated. All transactions between the group companies, balances and unrealised prots and losses on transactions between group companies are eliminated in the preparation of the consolidated nancial statements. The minority interests are the interests in the subsidiaries that are not held directly or indirectly by the group. See also the Notes ‘T 5.38 Information on subsidiaries’ on page 211. The intangible xed assets are capitalised at their acquisition value and depreciated according to the linear method at an annual percentage of 20%. Investment properties General Real estate (land and buildings) acquired for valuable consideration or through a contribution in kind for the issue of new shares or via a merger through the acquisition of a real estate company or via a partial split, which is held in order to generate rental income in the long term, and which does not serve for personal use, is shown as investment property. Valuation on initial recognition On initial recognition, investment properties are shown at acquisition cost, including transaction costs and directly attributable expenditure. Differences between the acquisition price and the rst assessment of the fair value at the time of recognition (acquisition) the value differences that relate to the transfer taxes and transfer costs are included via the global result statement. Valuation after initial recognition After initial recognition, investment properties are shown at the fair value, in accordance with IAS 40. The fair value is equal to the amount for which the building could be exchanged between well- informed parties, consenting and acting in circumstances of normal competition. From the seller’s point of view, the valuation must be understood as subject to the deduction of registration fees. The independent real estate experts who carry out the periodic valuation of the assets of regulated real estate companies believe that, for transactions involving buildings in Belgium with an overall value of less than €2.5 million, account must be taken of registration fees of 12% (Flemish Region) to 12.5% (Brussels Capital Region and Walloon Region), depending on the regions where these assets are located. For transactions concerning properties with an overall value of more than €2.5 million, real estate experts have valued the weighted average of the fees at 2.5%. This is because a range of different property transfer methods is used in Belgium. This percentage will, if necessary, be revised annually and adjusted per bracket of 0.5%. The experts will conrm the agreed percentage to be deducted in their regular reports to the shareholders. For real estate in The Netherlands this percentage is 8.5%, while for Spain it is determined regionally. Prots or losses arising from the change in the fair value of investment properties are included in the global result statement shown in section ‘XVIII. Changes in the fair value of investment properties’ in the period in which they arise, and in the prot appropriation in the following year they are allocated to the reserve ‘b) Reserve for the balance of changes in the fair value of real estate’ and 'c) reserve for the impact on the fair value of estimated mutation rights and costs on hypothetical disposal of investment properties', where the latter item always corresponds to the difference between the investment value of the property and the fair value of the property. Disposal of investment property On the sale of investment property, the prots or losses realised on the sale are shown in section ‘XVI. Result of investment properties’ in the global result statement for the period under review. Commission paid to brokers on the sale of buildings and liabilities contracted as a result of transactions are deducted from the sale price obtained in order to determine the realised prot or loss. The realised additional or lower value consists of the difference between the net sale value and the latest book value (fair value on the latest valuation), as well as the counter-entry of the estimated transfer taxes that are taken directly to the equity on the balance sheet on the initial assessment of the fair value. As the real estate is sold, both reserve ‘b) Reserve for the balance of changes in the fair value of real estate’ and reserve ‘c) Reserve for the impact on the fair value of estimated transfer taxes and costs resulting from hypothetical disposal of investment properties’ relating to the sold property are transferred to the disposable reserves. Care Property Invest nv / Financial Statements 164 165 Financial Statements / Care Property Invest nv Project development • Sites held with a view to an increase in value in the long term instead of sale in the short term in relation to normal business operations; • Sites held for future use that has not yet been determined; • Unoccupied buildings held for leasing on the basis of one or more operational leases and; • Real estate under construction or in development for future use as investment property must also be treated as investment property and is shown in the ‘Project development’ sub-section. After the initial recognition, projects are shown at their fair value. This fair value takes account of the substantial development risks. The following criteria must be met in this regard: • There is a clear picture of the project costs to be incurred; • All necessary permits for the project development have been obtained; • A substantial part of the project development has been pre-let (nal signature of rental contract). This assessment of the fair value is based on the valuation by the independent real estate expert (in accordance with the customary methods and assumptions) and takes account of the costs still to be incurred for the full nishing of the project. All costs relating directly to the acquisition or development and all further investment expenditure is shown in the cost price of the development project. In accordance with IAS23, the nancing costs directly attributable to the construction or acquisition of investment property are capitalised for the period for making the investment property ready for letting. The capitalisation of nancing costs as part of the cost price of an asset qualifying for this takes place only if: • Expenditure is made for the asset; • Financing costs are incurred and; • Activities are in progress to prepare the asset for its envisaged use. These include not only the physical construction but also technical and administrative work for the commencement of the actual construction in connection with the acquisition of permits. The capitalisation of nancing costs is suspended during long periods in which the active development is interrupted. The capitalisation is not suspended during a period in which extensive technical and administrative work is performed. Rights in rem Lease agreements with a term longer than 12 months and for which the underlying asset has a high value must be classied by means of a right of use on the asset in accordance with IFRS 16. On the starting date, the asset corresponding to a right of use is valued at cost price. After the starting date, the asset is valued on the basis of the fair value model in accordance with IAS 40. use General Assets that are held for the Company’s own use in the production or delivery of goods or services, for rental to third parties or for administrative purposes and which are expected to be used for longer than a single period, are shown as tangible xed assets, in accordance with IAS 16. Valuation on initial recognition Property, plant and equipment must be shown at cost if it is probable that the future economic benets from the asset will accrue to the Company and if the cost of the asset can be determined reliably. The cost price of an asset is the equivalent of the discounted price on the recognition date (the cost price) and all directly attributable costs for making the asset ready for use. Later costs for day-to-day maintenance of tangible xed assets are not included in the book value of the asset. This expenditure is shown in the income statement at the time at which it is incurred. Future expenditure for maintenance and repairs is capitalised only if this can be clearly shown to result in an increase in the future economic benets from the use of the asset. Valuation after initial recognition All tangible xed assets are shown at cost less any accumulated depreciation and any accumulated impairment losses. Depreciation and amortisation The different categories of tangible xed assets are depreciated using the straight- line method of depreciation over the estimated service life of the asset. The residual value and the service life must be reviewed at least at the end of each reporting period. An asset is depreciated from the date on which it is ready for the envisaged use. Depreciation of an asset is discontinued on the date on which the asset is held for sale or is no longer used. Depreciation takes place even if the fair value of the asset exceeds its book value, until the residual value is reached. From the date on which the residual value is equal to or higher than the book value, the depreciation cost is zero, until such time as the residual value is again less than the book value of the asset. Tangible xed assets for the Company’s own use are depreciated in accordance with the following depreciation rates according to the straight-line method: Building (for the Company’s own use) 3,33% Equipment of building 10% Furniture 10% Computers 33,33% Ofce machinery 25% Rolling stock 20% Ofce ttings and furnishings 10% Disposal of property, plant and equipment At the time when an asset is disposed of or at the time when no future economic benets are expected any longer from the use or disposal of an asset, the property, plant or equipment can no longer be shown in the balance sheet of the Company. The gain or loss arising through the disposal or retirement of an asset is the difference between any net proceeds on disposal and the book value of the asset. This increased or lower value is shown in the global result statement. Care Property Invest nv / Financial Statements 166 167 Financial Statements / Care Property Invest nv - development costs for projects in lease (IFRS 16). The construction costs for projects in preparation and projects under construction are shown at the cost price (nominal value) in the other operating expenses and are capitalised via the other operating revenues in other tangible xed assets. On provisional acceptance of the building, the leasing activities commence, and the amount of the net investment is classied in the balance sheet item ‘I.F. Balance nance lease receivables’. IFRS 16 requires that a lease receivable is valued on commencement at the discounted value of the future income ows. The difference between the construction costs and this discounted value is then the result of the development of the leased object. This must be recognised in the result in proportion to the construction period as the result of the construction activities in ‘Other operational revenues/costs’. Impairments At each reporting date, the Company assesses whether there are indications that a non-nancial asset may be subject to impairment. If any such indication exists, an estimate is made of the realisable value of the asset. If an asset’s book value exceeds its realisable value, an impairment is recognised in order to reduce the book value of the asset to the realisable amount. The realisable value of an asset is dened as the higher of the fair value less selling costs (assuming a non-forced sale) or the value in use (based on the present value of the estimated future cash ows). The resulting impairments are charged to the global result statement. Previously recognised impairments are reversed via the global result statement if a change has occurred in the estimate used to determine the realisable value of the asset since the recognition of the last impairment loss. The nancial assets are classied in one of the categories provided for according to IFRS 9 ‘Financial instruments: recognition and valuation’, depending on the purpose for which the nancial asset is acquired, which are determined on their initial recognition of the assets. This classication determines the valuation of the nancial asset on future balance sheet dates: at the amortised cost price or based on the equity method (in accordance with IAS 28). Financial instruments Derivative products or nancial interest rate derivatives (including Interest Rate Swaps) can be used for hedging interest rate risks arising from operational, nancial and investment activities. The derivative nancial instruments which the Company uses do not meet the criteria of IFRS 9 for the application of hedge accounting (are not held for trading purposes and are not acquired for sales in the near future) and are recognised in the balance sheet at their fair value. Changes in their fair value are taken directly to the global result statement. The fair value of nancial instruments is based on the market value calculations of the counterparty and the respective fair values are regarded as ‘Level 2’, as dened under IFRS 13 (see also the notes ‘T 5.12 Changes in the fair value of nancial assets and liabilities’ on page 190). The fair value of the hedging instruments is the estimated amount of the fees that the Company must pay or should receive in order to settle its positions on the balance sheet date, taking account of the interest curve, the creditworthiness of the counterparties and any option value applying at that time. The fair value of hedging instruments is estimated monthly by the issuing nancial institution. In accordance with IFRS 13, an adjustment is made to the fair value to reect the counterparty’s own credit risk (‘Debt Valuation Adjustment’ or ‘DVA’) and the counterparty’s credit rating (‘Credit Valuation Adjustment’ or ‘CVA’). Participating interests The acquisitions of the shares of subsidiaries of Care Property Invest take place in the context of an asset deal to which IFRS 3 ‘Business Combinations’ does not apply. The participating interests are valued based on the equity method (in accordance with IAS 28). Loans and receivables (including sureties) are non-derivative nancial instruments with xed or determinable payments that are not listed in an active market and are valued at the amortised cost price. Finance lease receivables & trade receivables Care Property Invest as lessor A lease contract is classied as a nancial lease if it transfers virtually all the risks and benets associated with ownership to the lessee. All other forms of lease are treated as operational leases. If a lease contract complies with the terms of a nancial lease (according to International Accounting Standards IFRS 16), Care Property Invest, as the lessor-owner, recognises the lease agreement on its inception in the balance sheet as a receivable at an amount equal to the net investment in the lease agreement. The difference between the latter amount and the book value of the leased property will be recognised in the global result statement for the period. Any periodic payment made by the lessee will be recognised as income under rental income in the global result statement (see ‘T 5.3 Rental income’ on page 186) and/ or as a repayment of the investments in the balance sheet (see ‘T 5.18 Finance lease receivables and trade receivables and other non-current assets’ on page 198), based on a constant periodic return for Care Property Invest. Care Property Invest nv / Financial Statements 168 169 Financial Statements / Care Property Invest nv The item ‘I.F. Finance lease receivables shows the investment cost of the transferred projects and therefore assigned in leasehold, less the contractual prepayments received, and reimbursements already made. Care Property Invest as lessee At the start of the lease period, lease agreements (with the exception of lease agreements with a maximum term of 12 months and lease agreements in which the underlying asset has a low value) are included in the balance sheet as assets (right of use) and lease obligation at the present value of the future lease payments. Subsequently, all rights of use, which classify as investment properties, are measured at fair value in accordance with IAS 40. We refer to ‘T 5.15 Investment properties’ on page 191 for the accounting policies relating to investment properties. Minimum lease payments are included partly as nancing costs and partly as repayments of the outstanding liability in such a way that this results in a constant periodic interest rate for the remaining balance of the liability. Financial charges are included directly in the global result statement. Trade receivables The item ‘I.G. Trade receivable and other xed assets’ regarding the projects included in the nance leases contains the prot or loss margin allocated to the construction phase of a project. The prot or loss margin is the difference between the nominal value of the fee due at the end of the right of supercie (included in the item ‘I.F. Finance lease receivables’) and the fair value at the time of provision, determined by discounting the future cash ows (being the leasehold and rental fees and the fee due at the end of the right of supercie) at a rate equal to the IRS rate plus a margin that would apply on the date on which the lease contract was contracted. The increase by a margin depends on the margin that the Company pays the bank as a cost of funding. For the bank, the margin depends on the underlying surety and is therefore different for a PCSW or a non-prot association. This item also contains a provision for discounted costs of service provision, as the Company remains involved in the maintenance of the property following delivery of the building, in connection with advice or intervention in the event of any construction damage or adjustments imposed, following up lease payments, etc. During the term of the contract, the receivable is phased out, as the added value and provision for costs of services is written down each year and is charged to the global result statement in ‘Other operating income and expenses’. If the discount rate (i.e., the IRS interest rate plus a margin) on the date of the contracting of the lease agreement is higher or virtually equal to the interest rate implicit in the leasehold payments stipulated on commencement of the leasehold, this calculation leads to the recognition of a mathematical loss during the construction phase (e.g., in the event of falling interest rates). Over the entire duration of the contract, however, the projects are protable, since the leasehold payment is always higher than the actual cost of nancing. There is an estimation uncertainty as regards the prot margin on the projects; this is partly due to altered operating expenses, the impact of which is reviewed annually and adjusted if necessary, but the prot or loss margin also depends on rising or falling interest rates. Current assets Trade receivable and other receivables at a maximum of one year Receivables at a maximum of one year are shown at their nominal value less impairments due to dubious or irrecoverable receivables, which are recognised as impairment losses in the global result statement. Tax receivables Tax receivables are shown at the tax rate applying in the period to which they relate. Cash and cash equivalents Cash and cash equivalents (bank accounts, cash and short-term investments) are shown at the amortised cost price. The additional costs are processed directly in the global result statement. Accruals and deferrals The costs incurred during the nancial year that are wholly or partially attributable to the following nancial year are shown in accruals and deferrals on the basis of a proportionality rule. The income and fractions of income received in the course of one or more subsequent nancial years, but relating to the nancial year concerned, are entered for the amount relating to the nancial year in question. Equity Equity instruments issued by the Company are shown at the amount of the sums received (after deduction of directly attributable issuing costs). The treasury shares in the Company’s possession if any are deducted from equity at the initial acquisition cost. The increase and/or decrease in value realised on the sale of treasury shares is recognised directly as equity and has no impact on the adjusted EPRA earnings. Dividends form part of the transferred result and are recognised as a liability only in the period in which they are formally awarded, i.e., approved by the General Meeting of Shareholders. Care Property Invest nv / Financial Statements 170 171 Financial Statements / Care Property Invest nv Provisions A provision is formed when: • the Company has an existing liability -legally enforceable or actual - as a result of an incident in the past; • it is probable that an outow of resources will be required in order to settle the liability and; • the amount of the liability can be reliably estimated. The amount of the provision is based on the best estimate of the expenditure required to settle the existing obligation as at the balance sheet date, taking account of the risks and uncertainties associated with the liability. If the effect of the time value of money is signicant, provisions are discounted using a discount rate that takes account of the current market assessments of the time value of money and the inherent risks of the liability. Financial liabilities Financial payables and trade debts Financial payables at the amortised cost price, including debts, are initially valued at fair value, net of transaction costs. After initial recognition, they are valued at the amortised cost price. The group’s nancial payables are shown in ‘Other current liabilities’ at the amortised cost price, comprising non-current nancial liabilities, other non-current liabilities, current nancial liabilities, trade debts and dividends payable. Derivative products or nancial interest rate derivatives (including Interest Rate Swaps) can be used for hedging interest rate risks arising from operational, nancial and investment activities. The derivative nancial instruments which the Company uses do not meet the criteria of IFRS 9 for the application of hedge accounting (are not held for trading purposes and are not acquired for sales in the near future) and are recognised in the balance sheet at their fair value; changes in their fair value are taken directly to the global result statement. The fair value of nancial instruments is based on the market value calculations of the counterparty and the respective fair values are regarded as ‘Level 2’, as dened under IFRS 13 (see also the notes to ‘T 5.12 Changes in the fair value of nancial assets and liabilities’ on page 190). The fair value of the hedging instruments is the estimated amount of the fees that the Company must pay or shall receive in order to settle its positions on the balance sheet date, taking account of the interest curve, the creditworthiness of the counterparties and any option value applying at that time. The fair value of hedging instruments is estimated on a monthly basis by the issuing nancial institutions. In accordance with IFRS 13, an adjustment is made to the fair value to reect the counterparty’s own credit risk (‘Debt Valuation Adjustment’ or ‘DVA’) and the counterparty’s credit rating (‘Credit Valuation Adjustment’ or ‘CVA’). Lease payments Lease agreements with a term longer than 12 months and for which the underlying asset has a high value must be recognised by way of a lease payment on the balance sheet in accordance with IFRS 16. The lease payment is equal to the current value of the lease payments outstanding on the reporting date. Tax liabilities Tax liabilities are shown at the tax rate applying in the period to which they relate. Accruals and deferrals The costs incurred during the following nancial year that relate wholly or partially to the nancial year concerned are shown in the current nancial year as attributable costs for the amount relating to the nancial year concerned. Income received during the nancial year that is wholly or partially attributable to the following nancial year is shown in accruals and deferrals on the basis of a proportionality rule. Staff remuneration The contracts Care Property Invest has concluded in relation to group insurance are of the ‘dened contribution’ type. This dened contribution pension plan has been entrusted to Belus Bank. These pension plans are regarded as ‘dened contribution’ plans with xed costs for the employer and are shown under ‘group insurance contributions’. Employees make no personal contribution. Premiums are recognised in the nancial year in which they were paid or scheduled. However, under the ‘Vandenbroucke law’ these group insurance policies would be regarded as 'dened benet' plans within the meaning of IAS 19, and the Company would be required to guarantee an average minimum rate of return of 1.75% (currently) on the employer’s contributions. In principle, the Company would have additional obligations if the statutory minimum return could not be achieved. Belus Bank conrmed that the minimum return, including prot sharing, has been achieved up to and including the 2021 nancial year. Moreover, the impact on the Company’s results would be limited, since it has only a small number of employees. Income and expenses Rental income The net rental result comprises the rents, operational lease instalments and other related income, less the costs associated with leases, such as the costs of voids, rent benets and impairments of trade receivables. The rent benets consist of temporary rental discounts or rent-free periods for the operator of the property. Revenues are shown at the fair value of the fee received or to which rights were acquired and are shown on a proportional basis in the global result statement in the period to which they relate. Real estate costs In view of the triple net nature (1) of the contracts, the Company is not liable for the costs of maintenance and repair, utilities, insurance and taxes for the building. With double net contracts, the Company does bear the risk of the maintenance and repair costs. With single net contracts, in addition to maintenance and repair costs, the lessor also bears the vacancy risk. (1) With the exception of the 'Les Terrasses du Bois' project in Watermaal-Bosvoorde, for which a long-term double net agreement has been concluded, and the 'Tilia' project in Gullegem for which a long-term single net agreement has been concluded. Care Property Invest nv / Financial Statements 172 173 Financial Statements / Care Property Invest nv General expenses and other operating income and expenses The Company’s general expenses cover the xed operating costs of Care Property Invest, which is active as a listed company and enjoys RREC status. Revenues and costs are shown on a proportional basis in the global result statement in the period to which they relate. Taxes All information of a scal nature is provided on the basis of laws, decrees and administrative guidelines in effect at the time of the preparation of the nancial statements. Corporate tax The status of an RREC provides for a scally transparent status, as RRECs are only still liable to corporate tax for specic elements of the result, such as rejected expenditure, abnormal and benevolent benets and secret commissions. Generally, rental income, nancial income and the gain realised on the disposal of assets are exempt from tax. The corporate tax is recorded directly to the income statement unless the tax relates to elements that are included directly in equity. In that case, the tax is also shown directly in equity. The current tax burden consists of the expected tax on the taxable income for the year and corrections to previous nancial years. Deferred tax receivables and liabilities are included for all temporary deductible and taxable differences between the taxable base and the book value. Such receivables and liabilities are not shown if the temporary differences arise from the initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets or liabilities. Deferred tax liabilities are generally included for all taxable temporary differences. Deferred tax receivables are recognised as far as it is probable that sufcient scal prot will be available, against which the temporary differences can be offset. Deferred tax receivables are reduced if it is no longer probable that the realised tax benet will be realised. Pursuant to Article 161(1°) of the Inheritance Tax Code, the Company must pay tax each year as a RREC, based on the total net amounts outstanding in Belgium as at 31 December of the preceding year. Withholding tax Pursuant to the Law regulating the recognition and denition of crowd funding and containing various provisions concerning nancing, public RRECs in which at least 60% of the property consists of real estate located in the European Economic Area (EEA) and which is used or intended solely or primarily for residential care or residential units adapted for residential care or health care can enjoy a reduced rate of withholding tax, of 15%. This law was adopted by the House of Representatives on 15 December 2016 and was published in the Belgian Ofcial Gazette on 20 December 2016. The new measure entered into force on 1 January 2017. Based on articles 20, 21 and 22 of the Programme Act of 27 December 2021, which came into force on 1 January 2022, the percentage of 60% was adjusted to 80%. In addition, pursuant to Articles 116 and 118, §1(6th) of the Royal Decree/Income Tax Code 1992, the Company is exempt from withholding tax on income allocated to Belgian public regulated real estate companies. Inheritance tax Subject to compliance with certain conditions, the heirs of shareholders enjoy an exemption from inheritance tax (formerly ‘succession tax’ in the Inheritance Tax Code, Flemish Region, Article 55bis - Order of the Flemish Government of 3 May 1995, replaced by Article 11 of the ‘Decree containing various provisions on nances and budgets’ of 9 November 2012 (Ofcial Gazette of 26 November 2012) - Circular No. 2 of 27 March 1997 and now Article 2.7.6.0.1. of the Flemish Codex Taxation (VCF)). • The shares must have been in the possession of the holder for at least ve years on the date of decease. • In addition, the shareholder must have acquired the shares no later than the year 2005, excluding acquisition among spouses and heirs in the rst degree, for which no exemption from inheritance tax has yet been granted. • To obtain the exemption, the shares must be recorded in the estate declaration and the exemption must be explicitly requested. • A valid certicate must be attached to the declaration, issued by the credit institutions that provide nancial services for Care Property Invest. The maximum exemption for the stock market value of the share amounts to its issue price of €5.95 (= value of the issue price/1,000 due to the share split of 24 March 2014). Likewise, the sum of the net dividends paid during the period in which the deceased or his or her spouse was the holder of the shares may also be exempt, in as far as the shares form part of the estate. The conditions for exemption from inheritance tax can also be viewed on the website at www.carepropertyinvest.be. Exit tax The exit tax is a tax on the added value determined on a taxed merger, split or equated transaction of an RREC with a Belgian company that is not an RREC. If this company is included in the consolidated group statements for the rst time, the exit tax is charged to the equity of that company. If the company is not immediately merged with the RREC, Care Property Invest nv / Financial Statements 174 175 Financial Statements / Care Property Invest nv adjustments to the exit tax liabilities that would prove to be necessary at the time of the merger in relation to the amount provided for are recognised in the global result statement. The exit tax rate as at 31 December 2021 was 15%. The exit tax is calculated on the basis of the deferred added value and the exempted reserves of the real estate company that makes the contribution through a merger, split or equated action. The deferred added value is the positive difference between the actual scal value of the equity of the relevant real estate company (that has been split off) less the previously assumed scal depreciation, amortisation and impairments. Existing tax deferrals (deductible losses, transferred notional interest deductions, etc.) can be deducted from the taxable base. The actual scal value is the value with costs paid by the buyer, i.e., after deduction of registration rights or VAT, and may differ from the fair value of the real estate shown in the RREC’s balance sheet in accordance with IAS 40. Note 3: Segment information In accordance with IFRS 8, the Company makes a distinction between 3 geographical segments: Belgium, The Netherlands and Spain. The segmented information has been prepared taking into account the operating segments and the information used internally to take decisions. The operating results are regularly assessed by the Chief Operating Decision Maker (senior ofcers of the Company) or CODM in order to take decisions regarding the distribution of available resources and to determine the performance of the segment. Within Care Property Invest nv the Executive Committee acts as CODM. For the accounting policies we refer to Note 2 — Accounting policies. Every group of companies under a joint control are considered to be the same customer. The revenue from transactions with these customers must be stated if it exceeds 10% of the turnover. For Care Property Invest nv, for the 2021 nancial year this only concerns Armonea with a share of 18.5% of the total turnover distributed over 7 buildings in Belgium. The segmented information includes the results, assets and liabilities that can be applied to a specic segment either directly or on a reasonable basis. Segmented information - result Amounts in EUR 31/12/2021 Belgium The Netherlands Spain Non allocated amounts Total Net rental result 38,220,179 3,709,663 1,303,826 0 43,233,668 Real estate operating result 38,216,089 3,709,663 1,303,826 0 43,229,578 General Expenses of the company -7,155,847 -633,044 -107,651 0 -7,896,543 Other operating income and expenses -956,757 927,704 -386 0 -29,439 Operating result before result on portfolio 30,103,485 4,004,323 1,195,789 0 35,303,597 Changes in the fair value of investment properties 20,088,832 2,260,272 -206,047 0 22,143,057 Operating result 50,192,317 6,264,595 989,742 0 57,446,653 Financial result 2,734,270 2,734,270 Result before taxes 60,180,924 Taxes -526,103 -526,103 NET RESULT 59,654,821 GLOBAL RESULT 59,654,821 Amounts in EUR 31/12/2020 Belgium The Netherlands Spain Non allocated amounts Total Net rental result 33,969,736 2,231,076 0 0 36,200,812 Real estate operating result 33,969,737 2,231,076 0 0 36,200,812 General Expenses of the company -6,664,476 -529,520 -23,463 0 -7,217,459 Other operating income and expenses 798,443 563,987 0 0 1,362,430 Operating result before result on portfolio 28,103,704 2,265,542 -23,463 0 30,345,783 Changes in the fair value of investment properties 534,909 1,943,703 119,585 0 2,598,197 Operating result 28,638,613 4,209,245 96,122 0 32,943,980 Financial result -12,992,952 -12,992,952 Result before taxes 19,951,028 Taxes -86,116 -86,116 NET RESULT 19,864,912 GLOBAL RESULT 19,864,912 Care Property Invest nv / Financial Statements 176 177 Financial Statements / Care Property Invest nv Segmented information - balance sheet Amounts in EUR 31/12/2021 Belgium The Netherlands Spain Non allocated amounts Total TOTAL ASSETS 513,154,854 141,175,481 63,701,465 227,284,411 945,316,211 Investment properties 513,154,854 141,175,481 63,701,465 0 718,031,800 Investment properties 512,280,278 96,061,422 45,625,770 0 653,967,470 Investment properties - project developments 0 44,522,035 18,075,695 0 62,597,730 Investment properties - rights in rem 874,576 592,023 0 0 1,466,600 Other assets 227,284,411 227,284,411 TOTAL EQUITY AND LIABILITIES 945,316,211 945,316,211 Shareholders Equity 479,258,685 479,258,685 Liabilities 466,057,526 466,057,526 Amounts in EUR 31/12/2020 Belgium The Netherlands Spain Non allocated amounts Total TOTAL ASSETS 420,948,164 108,191,357 4,715,000 215,362,435 749,216,956 Investment properties 420,948,164 108,191,357 4,715,000 0 533,854,521 Investment properties 420,108,326 51,407,814 0 0 471,516,140 Investment properties - project developments 0 56,210,609 4,715,000 0 60,925,609 Investment properties - rights in rem 839,838 572,934 0 0 1,412,772 Other assets 215,362,435 215,362,435 TOTAL EQUITY AND LIABILITIES 749,216,956 749,216,956 Shareholders Equity 369,779,481 369,779,481 Liabilities 379,437,475 379,437,475 Note 4: Financial risk management The list of risks described in this chapter is not exhaustive. Within the framework of the Prospectus Regulation, the Company has limited itself to the nancial risks that are specic to the Company and therefore not to the general real estate sector, RREC- sector or all listed companies and those that are also material. The operational and regulatory risks are described in chapter ‘I. Risk factors’ on page 8 and following of the annual nancial report. Risks associated with cove- - meters Description of the risk This risk can be described as the risk of non-compliance with statutory or contractual requirements to comply with certain nancial parameters in relation to the credit contract. The following parameters were included in the covenants: • A maximum debt ratio of 60%. As at 31 December 2021, the consolidated debt ratio of the Company was 47.06%, resulting in an available space of €305 million. The limitation of the debt ratio to 60% is included in the credit agreements for a total amount of €426,650,370 (of which an amount of €183,150,370 or 43.0% of the total nancial debts was drawn as at 31 December 2021). For more information on the debt ratio, reference is made to ‘T 4.2 Risks associated with the evolution of the debt ratio’ on page 180. • An interest coverage ratio (being the operating result before the result on the portfolio, divided by the interest charges paid) of at least 2.5. As at 31 December 2021 the interest coverage ratio was 4.5 compared to 4.27 on 31 December 2020. The Company’s interest charges must increase by €6,276,787, from €7,844,467 to €14,121,254 in order to reach the required minimum of 2.5. However, severe and abrupt pressure on the operating result could jeopardise compliance with the interest coverage ratio parameter. The operating result before result on portfolio must fall by 44.4% from €35,303,597 to €19,611,168 before the limit of 2.5 is reached. Potential impact for the company The potential impact concerns any cancellation of loans and damaged trust between investors and bankers on non- compliance with contractual covenants. It is possible that the Company would no longer be able to raise the external nancing necessary for its growth strategy on favourable terms or that the market conditions are of a nature that necessary external nancing can no longer be found for the activities of the Company. The Company runs the risk of the termination, renegotiation or cancellation of nancing agreements or that these contain an obligation to make early repayment if certain undertakings, such as compliance with nancial ratios, are not met. This could lead to liquidity problems, in view of the similar character in the covenants of the nancial institutions of the maximum debt ratio or interest cover ratio of a cumulative nature and could force the Company to liquidate xed assets (e.g., sale of real estate) or to implement a capital increase or other measures in order Care Property Invest nv / Financial Statements 178 179 Financial Statements / Care Property Invest nv to bring the debt level below the required threshold. There is also a possibility that the regulator will impose sanctions or tighter supervision in the event of failure to comply with certain statutory nancial parameters (e.g., compliance with the statutory debt ratio, as laid down in Article 13 of the RREC Royal Decree). The consequences for the shareholders could include a reduction in the equity and, therefore, the NAV, because a sale must take place at a price below that book value, a dilution can take place because a capital increase will have to be organised and this will have an impact on the value of the shares and the future dividend prospects. The Company assesses the probability of this risk factor as average. The impact of the intrinsic risk is assessed as high. Restrictive measures and management of the risk In order to limit these risks, the Company pursues a prudent nancial policy with continual monitoring in order to comply with the nancial parameters of the covenants. The Company estimates the residual risk, i.e., taking account of the limiting factors and the management of the risk as described above, as average in terms of probability and as high in terms of its impact. Risks associated with the evo- lution of the debt ratio Description of the risk The Company’s borrowing capacity is limited by the statutory maximum debt ratio of 65% which is permitted by the RREC legislation. At the same time, thresholds have been set in the nancing contracts concluded with nancial institutions. The maximum debt ratio imposed by the nancial institutions is 60% (see also ‘T 4.1 Risks associated with covenants and statutory nancial parameters’ on page 179). The Company runs the risk of the termination, renegotiation or cancellation of nancing agreements or that these contain an obligation to make early repayment if certain undertakings, such as compliance with nancial ratios included in covenants, are not met. On exceeding the statutory maximum threshold of 65%, the Company runs the risk of losing its RREC certicate through withdrawal by the FSMA. In general, it is possible that the Company would no longer be able to raise the external nancing necessary for its growth strategy on favourable terms or that the market conditions are of a nature that necessary external nancing can no longer be found for activities of the Company. The Company runs the risk of the termination, renegotiation or cancellation of nancing agreements or that these contain an obligation to make early repayment if certain undertakings, such as compliance with nancial ratios, are not met. As at 31 December 2021, the consolidated debt ratio was 47.06%, compared to 46.31% as at 31 December 2020. As at 31 December 2021, the Company has additional debt capacity of €483 million before reaching a debt ratio of 65% and of €305 million before reaching a debt ratio of 60%. The value of the property portfolio also has an impact on the debt ratio. Taking account of the capital base as at 31 December 2021, the maximum debt ratio of 65% would be exceeded only with a potential fall in the value of the real estate portfolio of about €260.2 million, or 36.2% of the real estate portfolio of €718.0 million as at 31 December 2021. With a fall in the value of about €203.3 million, or 28.3% of the property portfolio, the debt ratio of 60% would be exceeded. The Company does wish to note that it has contracted payment obligations for the unrealised part of the developments that it has already included in its balance sheet, representing €25.4 million. In addition, the Company has acquired a number of projects under suspensory conditions, for which the estimated cash-out amounts to €47.6 million. As a result, the available capacity for the debt ratio is €232.0 million before reaching a debt ratio of 60% and €410.0 million before reaching a debt ratio of 65%. Potential impact for the Company The potential impact concerns the risk that statutory sanctions may be imposed if certain thresholds are exceeded (including a prohibition of payment of a dividend) or that a breach of certain conditions of the nancing contracts is committed. Like all public RRECS, Care Property Invest is subject to tighter supervision by the supervisory authority of compliance with these maximum debt levels. The Company assesses the probability of this intrinsic risk factor as low and the impact of the intrinsic risk as high. Restrictive measures and management of the risk In this case too, it pursues a prudent nancial policy with continual monitoring of all planned investments and earnings forecasts, and the coordination of the possibility of a capital increase under the forms permitted by the RREC legislation in order to avoid any statutory sanctions for exceeding this maximum limit at all times. The Company estimates the residual risk, i.e., taking account of the limiting factors as described above, associated with the risk as low in terms of probability and high in terms of impact. Risks associated with the cost of the capital Description of the risk This risk can be described as the risk of unfavourable uctuations in interest rates, an increased risk premium in the stock markets and/or an increase in the cost of the debts. Care Property Invest nv / Financial Statements 180 181 Financial Statements / Care Property Invest nv Potential impact for the Company The potential impact concerns a material increase in the weighted average cost of the Company’s capital (equity and debts) and an impact on the protability of the business as a whole and of new investments. As at 31 December 2021, the xed-interest and oating rate loans accounted for 56.34% and 43.66% of the total nancial liabilities respectively. The percentage of oating rate debt contracted that was converted into a xed-interest instrument (in relation to the total nancial debt) via a derivative instrument amounted to 36.75% as at 31 December 2021. An increase in the interest rate of 1%, without taking into account the hedging instruments, would mean an extra nancing cost for the Company of €115,563. The conclusion relating to this cost can be extended on a linear basis to sharper changes in the interest rate. Such an increase will have an impact on the adjusted EPRA Earnings and, therefore, on the scope for the Company to pay a dividend of €0.004 per share. A change in the interest curve of 1% (upward) would have an impact on the fair value of the credit portfolio of approximately €13.5 million. The conclusion relating to the impact of the change in the interest curve can be continued on a linear basis. An increase in interest rates would have a positive effect on the status of the global result via the variations in the fair value of nancial assets/liabilities, amounting to €0.625 per share, but a negative inuence on the distributable result and also on the global result through the increase of part of the net interest costs that is exposed to uctuations in interest rates, amounting to €0.004, so that the overall effect on the global result of an increase in the interest rate of 1% would amount to €0.621 per share. A fall in interest rates would have a negative impact on the status of the global result amounting to €0.708 per share, but a positive inuence on the distributable result and also on the global result, amounting to €0.004, so that the overall effect on the global result of a fall in the interest rate of 1% would amount to €-0.704 per share. The increase in the required risk premium on the stock markets could result in a fall in the price of the share and make nancing of new acquisitions more costly for the Company. The Company intrinsically assesses the probability of this risk factor as well as the impact of this risk as average. Restrictive measures and management of the risk With regard to the initial portfolio (1) , Care Property Invest protects itself against interest rate rises through the use of xed-interest contracts or swaps. For the initial portfolio, only the renewable loans at Belus, amounting to€6,890,000, are subject to a limited interest risk, as these loans are subject to review every three years. For the new portfolio, (2) the outstanding commercial paper of €96.5 million and 2 roll-over credits of €30 million and €55 million respectively (of which €21.5 million was drawn at 31 December 2021) are subject to changes in interest rates on the nancial markets. Care Property Invest aims to hedge itself against xed interest rates for at least 80% via swaps. In this way the Company wishes to anticipate the risk that the increase in interest rates will be primarily attributable to an increase in real interest rates. There are also 10 loans with revisable interest for the new portfolio. Care Property Invest monitors movements in interest rates with close attention and will hedge itself against timely any excessively high increase in interest rates. (1) The initial portfolio concerns the nance leases (with a balance sheet value of €156,518,610 (nance lease receivables) and a generated rental income stream of €14,574,287 as at 31/12/2021) that the Company concluded until 2014. (2) The new portfolio as referred to here concerns the nance leases (with a balance sheet value of €30,257,159 and a generated rental income stream of €1,290,414 as at 31/12/2021) and the investment properties (with a balance sheet value of €718,031,800 and a generated rental income ow of €27,368,967 as at 31/12/2021) that the Company acquired after 2014. Further explanation on the credit lines is provided in this chapter with ‘Note 5: Notes to the consolidated nancial statements’ on page 185, ‘T 5.10 Net interest expense’ on page 189, ‘T 5.27 Financial liabilities’ on page 204 and ‘T 5.17 Financial xed assets and other non-current nancial liabilities’ on page 195. If the increase in interest rates results from an increase in the level of ination, the indexation of the rental income also serves as a tempering factor, albeit only after the indexation of the lease agreements can be implemented, so that there is a delaying effect here. In general, Care Property Invest aims to build up a relationship of trust with its bank partners and investors and maintains a continual dialogue with them in order to develop a solid long-term relationship. Nevertheless, the Company continues to regard this risk as material. Care Property Invest nv / Financial Statements 182 183 Financial Statements / Care Property Invest nv Risks associated with the use Description of the risk This risk can be described as the risks of the use of derivatives to hedge the interest rate risk. The fair value of the derivative products is inuenced by uctuations in interest rates in the nancial markets. The fair value of the derivative nancial products amounted to €-16,810,790 as at 31 December 2021, compared with €-27,975,990 as at 31 December 2020. The variation in the fair value of derivatives amounted to €11,165,200 as at 31 December 2021. Potential impact for the Company The potential impact concerns the complexity and volatility of the fair value of the hedging instruments and consequently, also the net asset value (NAV), as published under the IFRS standards and also the counter- party risk in relation to partners with which we contract derivative nancial products. The increase in the fair value of the derivative products amounting to €11,165,200 represents an increase in the net result of €0.43 per share and in the net asset value (NAV) per share of €0.41 per share, without having an impact in the adjusted EPRA Earnings and, therefore, the capacity of the Company to pay its proposed dividend. An increase in market interest rates by 1% results in an increase in the fair value of the derivative nancial products amounting to €16,214,669 or €0.625 per share and an increase in the net asset value (NAV) per share amounting to €0.60 per share. A fall in market interest rates by 1% results in a diminution in the fair value amounting to €18,380,792 or €0.71 per share and a fall in the net asset value (NAV) per share amounting to €0.68. The Company assesses the probability of this intrinsic risk factor as average and its impact also as average. Restrictive measures and management of the risk All derivative nancial products are held solely for hedging purposes. No speculative instruments are held. All derivative nancial products are interest rate swaps. Care Property Invest also works only with reputable nancial institutions (Belus Bank, KBC Bank, BNP Paribas Fortis and ING). The Company conducts frequent talks with these nancial institutions on the evolution of the interest rates and the impact on the existing derivative nancial products. The Company also monitors the relevant interest rates itself. However, the COVID-19 crisis causes greater volatility and pressure on the interest rates, so that this monitoring becomes all the more important in order to counter the volatility. Nevertheless, the Company estimates the residual risk, i.e., taking account of the limiting factors and the management of the risk as low in terms of probability and average in terms of impact. Note 5: Notes to the consolidated nancial statements Net result per share Amounts in EUR 31/12/2021 31/12/2020 NET RESULT / GLOBAL RESULT 59,654,821 19,864,912 Net result per share based on weighted average shares outstanding € 2.2976 € 0.8598 Gross yield compared to the initial issuing price in 1996 38.62% 14.45% Gross yield compared to stock market price on closing date 8.92% 3.20% Components of the net result Amounts in EUR 31/12/2021 31/12/2020 NET RESULT / GLOBAL RESULT 59,654,821 19,864,912 NON-CASH ELEMENTS INCLUDED IN THE NET RESULT -32,196,859 3,094,548 Depreciations, impairments and reversal of impairments 254,511 211,654 Changes in fair value of investment properties -22,143,057 -2,598,197 Changes in fair value of authorised hedging instruments -11,165,200 5,358,254 Projects' prot or loss margin attributed to the period 856,887 122,836 ADJUSTED EPRA EARNINGS 27,457,962 22,959,461 Adjusted EPRA earnings per share based on weighted average number of outstanding shares € 1.0576 € 0.9937 Gross yield compared to the initial issuing price in 1996 17.78% 16.70% Gross yield compared to stock market price on closing date 4.11% 3.69% The weighted average number of outstanding shares was 23,105,198 as at 31 December 2020 and increased to 25,963,657 shares as at 31 December 2021. The number of shares amounted to 24,110,034 as at 31 December 2020 (including 6,878 treasury shares) and increased to 26,931,116 shares as at 31 December 2021 (including 9,192 treas- ury shares). The number of shares changed as a result of (i) a capital increase in kind for the purchase of the residential care centre with assisted living apartments 'Résidence des Ardennes' located in Attert, on 20 January 2021 for which 1,696,114 new shares were issued and (ii) a capital increase in kind for the purchase of 100% of the shares in Apollo Lier nv, which owns the residential care centre with assisted living apartments 'Dungelhoeff' located in Lier, on 17 November 2021 for which 1,124,968 new shares were issued. The shares issued under (i) are entitled to dividends for the full 2021 nancial year, those issued under (ii) share in the result as from 10 November 2021 (coupon 15 et seq.). The gross return is calculated in table ‘T 5.1. Net result per share on a consolidated basis’ by dividing the net result per share by the initial issue price in 1996 (i.e., €5.9495) on the one hand and the market value on the closing date on the other hand. In table ‘T 5.2. Components of the net result’, the gross yield is calculated by dividing the adjusted EPRA earnings per share by the initial issue price in 1996 (i.e., €5.9495), on the one hand, and the market capitalisation on the closing date, on the other. The share price was €25.75 on 31 December 2021 and €26.90 on 31 December 2020. There are no instruments that have a potentially dilutive effect on the net result per share. Care Property Invest nv / Financial Statements 184 185 Financial Statements / Care Property Invest nv Rental income Amounts in EUR 31/12/2021 31/12/2020 Rental income and rental discounts for investment properties 27,368,967 20,417,865 Rent 26,928,912 20,530,990 Rental discounts 440,056 -113,125 Income from nancial leases and other similar leases 15,864,701 15,785,231 Ground rent 15,864,701 15,785,231 TOTAL 43,233,668 36,203,096 The item ‘Rental income and rental discounts for investment properties’ concerns the income from I.C. Investment properties, accounted for in accordance with IAS 40. As at 31 December 2021, these accounted for 63.30% of the Company’s total rental income. The item ‘‘Rental income from nance leases and similar’ concerns the rental income from buildings, which the Company owns and which it issues as lessor and were recorded as rental income in the global result statement, as they relate to recurring income that the Company receives from its buildings (1). . This rental income relates on the one hand to the portfolio built up until 2014 with local PCSWs (public centre for social welfare -local governments) and charitable non-prot organisations (initial portfolio (2) ) and on the other hand to new leases entered into after 2014 (new portfolio (3) ), all of which are generated by I.F. Finance lease receivables in the consolidated balance sheet. For the nance leases from the new portfolio, the ground rent payments are split between ‘’investment value’’ and ‘’income’’: the investment part is booked under I.F. Finance lease receivables in the balance sheet, the income part is booked under I. Rental income in the global result statement. As at 31 December 2021, the ground rent received by the Company from its nance leases represents 36.70% of the total rental income of the Company. The 19.42% increase in rental income is the result of the growth of the portfolio during the 2021 nancial year and the indexation of existing rental income. Future ground rent receipts (in accordance with IFRS 16) Amounts in EUR 31/12/2021 31/12/2020 Future ground rent and rent payments 165,682,527 176,650,302 Expiring < 1 year 10,994,953 10,994,953 Expiring between 1 year and 5 years 43,882,639 43,979,812 Expiring > 5 years 110,804,935 121,675,537 Future ground rents are at least equal to the contractually agreed ground rents for the entire duration of the project and do not take into account annual index adjustments. For the nance leases from the new portfolio, these also include the repayment of the investment, which at the time of receipt will be written off from I.F. Finance lease receivables in the balance sheet. (1) For a comprehensive legal analysis, see chapter ‘III. Report of the Board of Directors’ under ‘1. Strategy: Care building in complete condence’ on page 34. (2) The initial portfolio concerns the nancial leases (with a balance sheet value of €156,518,610 and a generated rental income of €14,574,286 as at 31/12/2021) concluded by the Company up to 2014. (3) The new portfolio as referred to here concerns the nancial leases (with a balance sheet value of €30,257,159 and a generated rental income of €1,290,415 as at 31/12/2021). Recovery of rental charges and taxes normally borne by the tenant on let properties Amounts in EUR 31/12/2021 31/12/2020 Recuperated withholding taks and other taxes 303,845 333,381 Recuperated other costs 115,537 217,867 TOTAL 419,382 551,247 Rental charges and taxes normally payable by the tenant on let properties Amounts in EUR 31/12/2021 31/12/2020 Withholding taks and other taxes to recover -303,845 -333,381 Other costs to recuperate -115,537 -217,867 TOTAL -419,382 -551,247 General expenses of the company Amounts in EUR 31/12/2021 31/12/2020 Auditor's fee -133,592 -95,590 Fees for notary, lawyers and architects -236,145 -146,955 External advice -234,284 -361,892 Public relations, communications & marketing -178,943 -193,370 IT -174,070 -162,585 Costs linked to the status of the RREC -600,673 -419,353 Costs of real estate expert -209,344 -150,846 Remuneration of directors, CEO and Executive Committee members -2,303,586 -2,895,200 Remuneration -2,242,171 -1,669,955 Depreciations and impairments -253,990 -208,438 Other general operating expenses -1,329,743 -913,276 Total -7,896,542 -7,217,459 Costs relating to acquisitions are activated in accordance with IAS 40. For additional explanations on the remuneration of the Directors and the Executive Committee, we refer to chapter ‘III. Report of the Board of Directors’ under point ‘11.11 Remuneration report 2021’ on page 100. The increase in the company's general expenses can largely be attributed to the increase in remunerations, as the average workforce increased from 15.30 FTEs as at 31 December 2020 to 20.90 FTEs as at 31 December 2021. Care Property Invest has taken out a dened contribution type group insurance policy (‘Dened Contribution Plan’) for its permanent staff with Belus Bank & Insurance. The contributions to this plan are entirely at the expense of Care Property Invest. In particular, no own contributions are paid by the employee. Belus Bank has conrmed that as at 31 December 2021 the minimum return, including prot participation, has been achieved. In other words, no provision needs to be made. Care Property Invest nv / Financial Statements 186 187 Financial Statements / Care Property Invest nv Other operating expenses and income of the Company Amounts in EUR 31/12/2021 31/12/2020 Costs -1,163,288 -1,647,358 Taxes -71,814 -43,298 Costs to be charged on -5,415 -4,620 Real estate leases - loss margin attributed to the period -1,040,326 -1,023,207 Cost of projects under construction 0 -567,453 Other operating expenses -45,733 -8,780 Income 1,133,849 3,009,788 Costs charged on 10,709 9,720 Project management fees 720,080 1,529,761 Real estate leases - prot margin attributed to the period 183,438 900,370 Capitalised costs of projects under contstruction 0 499,029 Other operating income 219,622 70,909 TOTAL -29,439 1,362,430 The other operating expenses consist mainly of the loss margin for the projects allocated to the period. The other operating income consists mainly of the fees for project management, the prot margin for the projects allocated to the period and the other operating income that mainly relates to various project-related income. In the 2021 nancial year, the project management fees mainly relate to the recovery of pre- nancing costs. During the 2020 nancial year, in addition to this recovery of pre-nancing costs, an amount of €437,251 was received as actual remuneration for the management and execution of projects. The prot/loss margin on the projects results from the further development of these projects. These are unrealised income/expenses and are therefore corrected in the adjusted EPRA earnings and consequently do not qualify for distribution of dividend. Changes in the fair value of investment properties Amounts in EUR 31/12/2021 31/12/2020 Positive variations in the fair value of investment properties 31,233,487 12,694,231 Negative variations in the fair value of investment properties -9,090,430 -10,096,034 TOTAL 22,143,057 2,598,197 The real estate experts value the Company’s investment properties on its balance sheet on a quarterly basis in accordance with IAS 40. An administrative correction was made for rent-free periods awarded to operators of the real estate, as the real estate expert already takes account of the future cash ows (including rent discounts) and double counting would otherwise occur. The increase reects an overall positive variation in the fair value of the investment properties in the portfolio as a result of ination expectations in the real estate market and, in addition to this general trend, can be attributed to the variations in the fair value of the acquisitions in 2021 and the completion of the ‘Nuance' project in Vorst (Belgium). Financial income Amounts in EUR 31/12/2021 31/12/2020 Interest and dividends received 430 90 TOTAL 430 90 Net interest expense Amounts in EUR 31/12/2021 31/12/2020 Nominal interest charges on loans -4,977,354 -4,550,370 Bonds - xed interest rate -686,620 -364,235 Commercial paper - oating interest rate -104,484 -297,848 Investment loans - xed interest rate -3,813,142 -3,680,584 Investment loans - oating interest rate -373,108 -207,703 Cost of authorised hedging instruments -2,783,256 -2,493,935 Authorised hedging instruments that are not subject to hedge accounting as dened in IFRS -2,783,256 -2,493,935 Other interest charges -83,857 -54,723 TOTAL -7,844,467 -7,099,028 The weighted average interest rate (including IRSs) as at 31 December 2021 is 1.92% and the average remaining duration is 6.55 years. The costs and revenues of nancial instruments used for hedging purposes are interest ows paid or received by the Company in relation to derivatives that are presented and analysed in the notes to the liabilities in item ‘T 5.17 Financial xed assets and other non-current nancial liabilities’ on page 195. Middelkerke (BE) I De Sille Meers Care Property Invest nv / Financial Statements 188 189 Financial Statements / Care Property Invest nv Amounts in EUR 31/12/2021 31/12/2020 Bank charges and other commissions -586,893 -535,760 TOTAL -586,893 -535,760 Amounts in EUR 31/12/2021 31/12/2020 Changes in the fair value : interest rate swap (positive) 11,165,200 0 Changes in the fair value : interest rate swap (negative) 0 -5,358,254 Total 11,165,200 -5,358,254 Taxes Amounts in EUR 31/12/2021 31/12/2020 Parent company -79,603 76,268 Result before tax 59,920,692 19,799,959 Result exempt from tax thanks to the RREC regime -59,920,692 -19,799,959 Taxable result in Belgium related to non-deductible expenses 164,889 109,918 Belgian taxes due and deductible -41,222 -27,479 Other -38,381 103,747 Subsidiaries -325,769 13,973 Belgian taxes due and deductible -91,115 12,419 Foreign taxes due and deductible -234,653 1,554 Corporate income tax -405,372 90,241 Exit tax -120,731 -176,357 TOTAL -526,103 -86,116 The corporate income tax consists of the taxes payable on the rejected expenses of Care Property Invest (as a RREC, it is only taxed on the rejected expenses, abnormal gratuitous benets and secret commissions), the tax on the prots of the consolidated subsidiaries and the tax on prots earned abroad. The applicable corporate income tax rate is 25% for the 2020 and 2021 nancial years. The exit tax in 2021 mainly relates to the exit tax due as a result of the silent mergers of De Wand-Janson nv, Ruiterschool Van Dooren nv and Zilvermolen nv with Care Property Invest, which took place on 23 June 2021. Amounts in EUR 31/12/2021 31/12/2020 Book value at the beginning of the nancial year 158,457 174,260 Gross amount 257,946 221,553 Accumulated depreciation -99,488 -47,292 Investments 15,106 36,393 Depreciation -50,892 -52,196 Book value at the end of the nancial year 122,671 158,457 Gross amount 273,052 257,946 Accumulated depreciation -150,381 -99,488 The intangible xed assets relate to licences. Investment properties 2021 2020 Amounts in EUR Real estate in operation Project Developments Rights in rem Real estate in operation Project Developments Rights in rem Book value on 1 January 471,516,140 60,925,609 1,412,772 312,497,264 43,062,441 1,685,965 Acquisitions through purchase or contribution 108,781,386 54,338,538 19,971 139,392,756 30,659,664 21,615 Change in fair value excl. rental discount 19,908,324 1,095,203 33,857 3,243,279 3,586,346 -294,808 Transfer to/from other items (1) 53,761,620 -53,761,620 16,382,841 -16,382,841 Book value on 31 December 653,967,470 62,597,730 1,466,600 471,516,140 60,925,610 1,412,772 (1) 2020: Entry into operation of the 'Nuance' project in Vorst (BE) 2021: Completion of the projects 'Résidences des Ardennes' in Attert (BE), 'De Gouden Leeuw (Zutphen)' in Zutphen (NL), 'Villa Wulperhorst' in Zeist (NL), 'De Orangerie' in Nijmegen (NL) and 'Margaritha Marka Kerk - Church' in Tilburg (NL). Care Property Invest nv / Financial Statements 190 191 Financial Statements / Care Property Invest nv Investment properties are recorded at fair value, using the fair value model, in accordance with the IAS 40 Standard. The fair value is supported by market data and is based on the valuation performed by an independent real estate expert with a relevant and recognised professional qualication who has recent experience in the location and nature of similar investment properties. The valuations were carried out at the time of the Covid-19 pandemic and, given the uncertain impact on the nancial markets and economy, should be interpreted with caution. The circumstances and references during this valuation exercise are unclear, so the real estate expert Stadim recommends to closely monitor the valuations in the coming period (acc. RICS Red Book Global Material Valuation Uncertainty VPS3 and VPGA 10). The portfolio was valued by Stadim and Cushman & Wakeeld at 31 December 2021 for a fair value of €718,0 million (including the rights in rem which are also classied as investment properties in accordance with IFRS 16). The capitalisation rate applied to the contractual rents is on average 5.02% for 2021 compared to 5.11% for 2020. The positive variation in the valuation of the investment properties is explained by the combination of increased ination expectations and the sharpening of the return on healthcare properties in the investment market and the latent capital gain on the project developments. The acquisitions and investments of the nancial year are discussed in chapter ‘III. Report of the Board of Directors’ under ‘2.1 Important events during the 2021 nancial year’ on page 44. For further explanation of the project developments, we also refer to the chapter ‘VI. Real estate report’ at point ‘3.2 Table summarising the projects under development’ on page 144. The investment property rights in rem concern leasehold agreements of the Company that are capitalised under the investment properties in accordance with IFRS 16. A leasehold obligation is also linked to this on the liabilities side of the balance sheet. The fair value is determined using unobservable inputs, as a result of which the assets within the investment properties are considered to be ‘level 3’ on the fair value scale dened by IFRS 13. During the 2021 nancial year there were no shifts between levels 1, 2 and 3. The evaluation methods are mentioned in chapter ‘VIII. Permanent document’ under the point ‘Valuation method’ on page 235 of this annual nancial report. The main quantitative information on the valuation of the fair value of the investment properties based on unobservable data (level 3) and of those presented below are data from the report of the independent real estate expert. Financial year as closed on 31 December 2021 Type of asset Fair value on 31 Dec 2021 (x €1,000) Evaluation method Unobservable data Min Max Weighted average Housing for seniors - Investment properties 653,967 DCF (1) GHW/m² 53.6 370.9 123.8 m² 942 37,287 6,772 Ination 1.50% 1.50% 1.50% Discounting level 4.30% 5.55% 4.97% Remaining duration (years) 8.4 28.1 23.5 Housing for seniors - Project developments 62,598 DCF (1) GHW/m² 73.4 261.0 135.2 m² 1,280 11,790 4,008 Ination 1.50% 1.98% 1.55% Discounting level 4.61% 5.43% 5.25% (1) Discounting of estimated cash ows Financial year as closed on 31 December 2020 Type of asset Fair value on 31 Dec 2020 (x €1,000) Evaluation method Unobservable data Min Max Weighted average Housing for seniors - Investment properties 471,516 DCF (1) GHW/m² 93.1 259.4 135.3 m² 942 16,568 5,686 Ination 1.25% 1.25% 1.25% Discounting level 4.39% 6.13% 5.06% Remaining duration (years) 9.4 29.0 24.2 Housing for seniors - Project developments 60,925 DCF (1) GHW/m² 74.2 355.3 141.2 m² 1,060 11,790 3,563 Ination 1.25% 1.98% 1.27% Discounting level 5.02% 5.56% 5.57% (1) Discounting of estimated cash ows An occupancy rate of 100% is taken into account for the valuation of the buildings. The differences between the minimum and maximum values are explained by the fact that the different parameters applied in the discounted cash ow method depend on the location of the assets, the quality of the building and the operator, the duration of the lease agreement, etc. Moreover, these unobservable data may be linked because they are partly determined by market conditions. In accordance with the legal provisions, the buildings are valued at fair value on a quarterly basis by independent real estate experts appointed by the Company. These reports are based on information provided by the Company, such as contractual rents, tenancy contracts, investment budgets, etc. These data are derived from the Company’s information system and are therefore subject to its internal control environment. Furthermore, the reports were based on assumptions and evaluation models developed by the independent experts based on their professional Care Property Invest nv / Financial Statements 192 193 Financial Statements / Care Property Invest nv judgment and market knowledge. The reports of the independent experts are checked by the Company’s Executive Committee. If the Committee takes the view that the reports of the independent expert are coherent, they are submitted to the Board of Directors. The sensitivity of the fair value to a variation in the principal unobservable data disclosed is generally presented (if all parameters remain the same) as the effect on decrease or increase, as shown below. Unobservable data Fair value impact on decrease Fair value impact on increase ERV (Estimated Rental Value) m 2 Negative Positive Ination Negative Positive discount rate Positive Negative remaining duration (year) Negative Positive A 1% uctuation in the value of the property portfolio (positive or negative) would have an impact of approximately €7,180,318 on the adjusted EPRA prot, €0.28 on the adjusted EPRA earnings per share and 0.36% on the debt ratio. A 1% increase in the nancial return would have a negative impact of 16.2% on the value of the investment properties. Moerbeke (BE) I Hof ter Moere Amounts in EUR 31/12/2021 31/12/2020 Tangible xed assets for own use Book value at the beginning of the nancial year 2,246,034 2,031,811 Gross amount 2,875,892 2,544,161 Accumulated depreciation -629,858 -512,350 Investments 2,470,292 388,110 Divestments -73,316 -56,378 Depreciation -175,368 -166,813 Reversal of depreciations for divestments 49,703 49,305 Book value at the end of the nancial year 4,517,345 2,246,034 Gross amount 5,272,868 2,875,892 Accumulated depreciation -755,523 -629,858 Leasing Book value at the beginning of the nancial year 0 0 Investments 226,345 0 Accumulated depreciation -27,730 0 Book value at the end of the nancial year 198,616 0 Project developments Book value at the beginning of the nancial year 24,989 7,877,785 Completions -1,273 -7,852,796 Book value at the end of the nancial year 23,716 24,989 Amounts in EUR 31/12/2021 31/12/2020 Loans and receivables 2,631 177,036 Deposits 2,326 177,036 Other nancial xed assets 305 0 Assets at fair value through result 2,683,216 0 Hedging instruments 2,683,216 0 TOTAL FINANCIAL FIXED ASSETS 2,685,847 177,036 Liablities at fair value liabilities through result 19,494,005 27,975,990 Hedging instruments 19,494,005 27,975,990 TOTAL OTHER NON-CURRENT FINANCIAL LIABILITIES 19,494,005 27,975,990 Care Property Invest nv / Financial Statements 194 195 Financial Statements / Care Property Invest nv The assets and liabilities at fair value through the result consist of hedging instruments that are not accounted for in accordance with hedging accounting in application of IFRS 9. The purpose of these instruments is to hedge the Company against interest rate risks. In order to hedge the risk of rising interest rates, the Company has opted for hedging instruments in which the debt at a variable interest rate is converted into a debt at a xed interest rate (‘cash ow hedge’). In accordance with IFRS 9, the fair value of nancial instruments is included under the item nancial assets (in case of a positive valuation) or under the item long-term nancial liabilities (in case of a negative valuation). Changes in these fair values are accounted for via the changes in fair value of nancial assets and liabilities in the global result statement (see note ‘T 5.12 Changes in the fair value of nancial assets and liabilities’ on page 190). The nancial instruments are considered to be ‘level 2’ on the fair value scale as dened by IFRS 13. All hedges are entered into within the framework of nancial risk management as described under ‘Note 4: Financial risk management’ on page 179. The fair value of the instruments is calculated by the banks on the basis of the present value of the estimated future cash ows. In accordance with IFRS 13, an adjustment is made to the fair value to reect the bank’s own credit risk (‘debit valuation adjustment’ or ‘DVA’) and the counterparty’s credit rating (‘credit valuation adjustment’ or ‘CVA’). The following is an overview of the hedging instruments held by the Company as at 31 December 2021. IRS payer Amount of the loan Expiration date Interest rate payable Interest receivable Remaining term - number of years Valuation on 31/12/2021 Belus 1,187,486 1/02/2033 5.100% EURIBOR 1M + 25 bp 11.10 -636,543 Belus 1,213,165 3/08/2026 5.190% EURIBOR 1M + 110 bp 4.59 -256,287 Belus 1,511,366 2/10/2034 4.850% EURIBOR 1M + 25 bp 12.76 -800,788 Belus 1,618,799 2/05/2033 4.620% EURIBOR 1M + 25 bp 11.34 -771,064 Belus 1,667,307 2/05/2035 4.315% EURIBOR 1M + 12 bp 13.34 -856,233 Belus 1,736,652 2/01/2036 5.050% EURIBOR 1M + 12 bp 14.01 -1,132,968 Belus 1,885,159 3/10/2033 4.300% EURIBOR 1M + 25 bp 11.76 -816,627 Belus 2,067,360 2/11/2032 4.040% EURIBOR 1M + 25 bp 10.85 -775,969 Belus 2,147,305 3/04/2034 4.065% EURIBOR 1M + 25 bp 12.26 -943,009 Belus 2,283,967 1/10/2036 5.010% EURIBOR 1M + 12 bp 14.76 -1,451,667 Belus 2,406,537 1/08/2036 4.930% EURIBOR 1M + 12 bp 14.59 -1,508,041 Belus 2,993,024 1/03/2035 4.650% EURIBOR 1M + 25 bp 13.17 -1,630,076 Belus 3,003,108 1/12/2034 4.940% EURIBOR 1M + 25 bp 12.93 -1,616,446 Belus 3,061,479 1/02/2027 5.260% EURIBOR 1M + 110 bp 5.09 -795,954 Belus 3,222,433 31/12/2036 4.710% EURIBOR 1M + 15.4 bp 15.01 -1,880,724 Belus 3,786,791 31/12/2036 4.350% EURIBOR 1M + 12 bp 15.01 -2,034,183 Belus 5,000,000 23/10/2034 0.255% EURIBOR 3M 12.82 80,895 Belus 5,000,000 23/10/2034 0.310% EURIBOR 6M 12.82 56,601 Belus 5,000,000 4/12/2034 0.310% EURIBOR 3M 12.93 53,926 BNP Paribas Fortis 3,685,000 31/03/2026 2.460% EURIBOR 1M 4.25 -402,212 BNP Paribas Fortis (1) 1,894,000 31/03/2026 2.060% EURIBOR 1M 4.25 -95,412 BNP Paribas Fortis 2,156,104 30/06/2029 2.530% EURIBOR 1M 7.50 -390,957 KBC 12,000,000 17/07/2029 0.653% EURIBOR 3M 7.55 -481,289 KBC 8,000,000 29/03/2029 0.488% EURIBOR 3M 7.25 -217,556 KBC 8,000,000 11/12/2029 0.050% EURIBOR 3M 7.95 57,715 KBC 10,000,000 19/02/2030 -0.083% EURIBOR 3M 8.14 188,624 KBC 5,000,000 4/03/2030 -0.204% EURIBOR 3M 8.18 146,252 KBC 40,000,000 18/06/2035 0.090% EURIBOR 3M 13.47 1,745,428 ING 5,000,000 30/09/2029 -0.160% EURIBOR 3M 7.75 114,632 ING 10,000,000 28/02/2030 -0.141% EURIBOR 3M 8.17 239,142 TOTAL 156,527,042 -16,810,790 (1) Write-down reference amount over the life of the swap. The fair value of the hedging instruments is subject to the evolution of interest rates on the nancial markets. A change in the yield curve of 0.25% (more positive or negative) would have an impact on the fair value of the loan portfolio of approximately €4.2 million. Care Property Invest nv / Financial Statements 196 197 Financial Statements / Care Property Invest nv Finance lease receivables and trade receivables and other non-current assets Amounts in EUR 31/12/2021 31/12/2020 Finance lease receivables 186,775,769 187,355,753 Trade receivables and other non-curent assets 14,809,696 15,666,584 TOTAL 201,585,466 203,022,336 The balance of nance lease receivables and trade receivables consists on the one hand of the investment cost of the building, included under the item ‘Finance lease receivables’, the prot or loss margin generated during the construction phase and its write-off in relation to the ground rent payments already received, included under the item ‘Trade receivables and other non-current assets’. These buildings, which are owned by the Company, generate rental income, as discussed under ‘T 5.3 Rental income’ on page 186 (1) . Finance lease receivables Amounts in EUR 31/12/2021 31/12/2020 Initial portfolio 156,518,610 156,518,610 New portfolio 30,257,159 30,837,143 TOTAL 186,775,769 187,355,753 In the total amount ‘Finance lease receivables’ at 31 December 2021, the amount of contractual prepayments of €36,090,772 relating to the initial portfolio has already been deducted. The amounts mentioned correspond to the repayable nominal nal building rights (i.e., the total investment cost less the contractual prepayments received). Contrary to the projects in the initial portfolio (2), for the projects in the new portfolio (3) the ground rent, in addition to a return, also consists of a repayment of the investment value, as a result of which the amount of the receivable will gradually decrease over the duration of the leasehold agreement. For the initial portfolio, the nal building right fees must be repaid after the 30-year building period. The average remaining term of the building rights of the projects was 13.13 years as at 31 December 2021. Amounts in EUR 31/12/2021 31/12/2020 Gross investment (end of building rights, ground rent and rent) 322,063,285 333,031,060 Expiring < 1 year 10,994,953 10,994,953 Expiring between 1 year and 5 years 43,882,639 43,979,812 Expiring > 5 years 267,185,693 278,056,295 The gross investment in the lease is the aggregate of the minimum lease payments to be received, in this case the nominal value of the nal building rights fee, the ground rent and the rent (excluding indexations). Amounts in EUR 31/12/2021 31/12/2020 Fair value of nance lease receivables 267,844,539 287,828,165 (1) For a comprehensive legal analysis, see chapter ‘III. Report of the Board of Directors’ under ‘1. Strategy: Care building in complete condence’ on page 34. (2) The initial portfolio concerns the nancial leases (with a balance sheet value of €156,518,610 and a generated rental income of €14,574,286 as at 31/12/2021) concluded by the Company up to 2014. (3) The new portfolio as referred to here concerns the nancial leases (with a balance sheet value of €30,257,159 and a generated rental income of €1,290,415 as at 31/12/2021). The fair value of the nance leases is calculated by discounting the future cash-ows of the delivered projects, including the investment costs included in the item ‘Finance lease receivables’, at an IRS interest rate as applicable on the closing date, in proportion with the remaining term of the building right term, increased by a risk margin that the bank would charge on the relevant closing date. This calculation is based on a conservative approach as no account is taken of further indexation of future cash ows. The tables below provide an overview of the IRS interest rates and risk margins that were applied on 31 December 2021. Initial portfolio (1) (1996-2014) BULLET IRS ASK Duration ICAP Number Public social welfare centres- surety (in bp) Number Other surety (in bp) Number Duration 5 years 0.036% 13 80 12 85 1 Duration 10 years 0.319% 25 90 23 96 2 Duration 15 years 0.508% 15 98 14 103 1 Duration 20 years 0.564% 23 106 22 112 1 Duration 25 years 0.541% 0 115 0 121 0 Duration 30 years 0.495% 0 124 0 130 0 TOTAL 76 71 5 New portfolio (2) (after 2014) AMORTISING IRS ASK Duration ICAP Number Public social welfare centres- surety (in bp) Number Other surety (in bp) Number Duration 5 years -0.119% 0 73 0 77 0 Duration 10 years 0.117% 0 84 0 89 0 Duration 15 years 0.293% 0 90 0 96 0 Duration 20 years 0.405% 0 96 0 102 0 Duration 25 years 0.460% 2 102 2 108 0 Duration 30 years 0.477% 3 109 1 115 2 TOTAL 5 3 2 Financial year as closed on 31/12/2021 31/12/2020 Weighted average IRS interest rate 0.39% -0.16% Weighted average risk margin 0.96% 1.15% (1) The initial portfolio concerns the nancial leases (with a balance sheet value of €156,518,610 and a generated rental income of €14,574,286 as at 31/12/2021) concluded by the Company up to 2014. (2) The new portfolio as referred to here concerns the nancial leases (with a balance sheet value of €30,257,159 and a generated rental income of €1,290,415 as at 31/12/2021). Care Property Invest nv / Financial Statements 198 199 Financial Statements / Care Property Invest nv Trade receivables and other non-current assets Amounts in EUR 31/12/2021 31/12/2020 Initial portfolio 8,730,577 9,275,786 New portfolio 6,079,120 6,390,798 TOTAL 14,809,696 15,666,584 Trade receivables Amounts in EUR 31/12/2021 31/12/2020 Customers 4,247,634 2,430,796 Revenue to be collected 269,309 31,432 Provision for doubtful debtors -2,500 -2,500 TOTAL 4,514,443 2,459,728 (1) The initial portfolio concerns the nancial leases (with a balance sheet value of €156,518,610 and a generated rental income of €14,574,286 as at 31/12/2021) concluded by the Company up to 2014. (2) The new portfolio as referred to here concerns the nancial leases (with a balance sheet value of €30,257,159 and a generated rental income of €1,290,415 as at 31/12/2021). The provision for doubtful debtors relates to a provision made in accordance with IFRS 9 in the context of future credit losses. This provision is based on a thorough analysis carried out on Care Property Invest's client portfolio, splitting it into three categories: the initial portfolio (1) made up of contracts with local authorities and the new portfolio (2) which can be split between SMEs and large companies. The entire portfolio of Care Property Invest falls under stage 1 whereby a provision has to be made for the expected loss in the next 12 months. Given the quality of the tenants on the one hand, and the low credit risk associated with nance lease receivables (due to the guarantees provided by the local authorities) on the other, the model of expected credit losses under IFRS 9 has no material impact on the Company. The very limited provision that has been made stems from the limited risk that can be attributed to the 3 categories of the portfolio. The Board of Directors therefore assumes that the book value of the trade receivables approximates the fair value. Tax receivables and other current assets Amounts in EUR 31/12/2021 31/12/2020 Taxes 717,159 1,020,904 VAT current account 702,843 914,426 Taxes recoverable 14,316 106,478 Remuneration and social insurance charges 2,274 0 Advance payments 2,274 0 Other miscellaneous receivables 9,448,417 1,274,086 Other miscellaneous receivables 9,448,417 1,274,086 TOTAL 10,167,850 2,294,990 The other miscellaneous receivables related for about €8.5 million to an amount registered in a third-party account at the notary's ofce in connection with the purchase of a real estate project, which was completed after year-end. Cash and cash equivalents Amounts in EUR 31/12/2021 31/12/2020 Current accounts with nancial institutions 2,543,106 3,750,641 Cash 1,768 1,210 TOTAL 2,544,873 3,751,851 Cash and cash equivalents comprise cash assets and the balances of current accounts and are recognised in the balance sheet at nominal value. Prepayments and accrued income Amounts in EUR 31/12/2021 31/12/2020 Prepaid real estate costs 733,497 719,536 Prepaid interest and other nancial costs 26,215 28,660 Other deferred charges and accrued income 163,872 477,307 TOTAL 923,585 1,225,503 Capital Evolution of capital Capital movement Accumulated number of shares Date and operation 30/10/1995 - Incorporation 1,249,383 210 07/02/1996 - Capital increase in cash 59,494,446 10,210 16/05/2001 - Capital increase conversion to euro 566 10,210 24/03/2014 - Share split through division by 1,000 0 10,210,000 20/06/2014 - Optional dividend nancial year 2013 889,004 10,359,425 22/06/2015 - Capital increase in cash 16,809,093 13,184,720 15/03/2017 - Capital increase in kind (Watermael-Bosvoorde) 10,971,830 15,028,880 27/10/2017 - Capital increase in cash 25,546,945 19,322,845 03/04/2019 - Capital increase in kind (Immo du Lac) 4,545,602 20,086,876 26/06/2019 - Optional dividend nancial year 2018 1,831,673 20,394,746 15/01/2020 - Capital increase in kind (Bergen & Bernissart) 7,439,112 21,645,122 19/06/2020 - Optional dividend nancial year 2019 1,624,755 21,918,213 25/06/2020 - Capital increase in cash 13,040,239 24,110,034 20/01/2021 - Capital increase in kind (Attert) 10,091,030 25,806,148 17/11/2021 - Capital increase in kind (Lier) 6,692,997 26,931,116 TOTAL 160,226,675 26,931,116 Care Property Invest carried out two capital increases during the 2021 nancial year. On 20 January 2021, there was a contribution in kind of the 'Résidences des Ardennes' project in Attert which led to a capital increase (including share premium) of €42,087,805, for which 1,696,114 new Care Property Invest shares were issued. The issue price was €24.81 per share. On 17 November 2021, Care Property Invest acquired the project 'Dungelhoeff' in Lier by means of a contribution in kind of 100% of the shares in Apollo Lier nv, owner of the real estate, into the capital of Care Property Invest. As a result of this contribution, which led to a capital increase (including share premium) of €26,532,633, a total of 1,124,968 new Care Property Invest shares were issued. The issue price was €23.59 per share. As from this date the authorised capital amounts to €160,226,675. Care Property Invest nv / Financial Statements 200 201 Financial Statements / Care Property Invest nv All shares are ordinary shares and are fully paid up and registered or dematerialised. Each share entitles the holder to one vote at the General Meeting of Shareholders in accordance with Article 38 of the Articles of Association. 31/12/2021 31/12/2020 Ordinary registered shares 1,661,354 1,595,167 Ordinary dematerialised shares 25,269,762 22,514,867 Total number of shares 26,931,116 24,110,034 Notes to the repurchase of own shares Number Amount Starting balance 6,878 218,668 Purchases 7,500 194,299 Sales -5,186 -116,180 Final balance 9,192 296,787 Care Property Invest owns 9,192 own shares as at 31 December 2021. The purpose of the buy- back programme is to enable Care Property Invest to meet its obligations with respect to remuneration in favour of the Company's executive management. The following relevant articles of the articles of association were included in full in the coordinated Articles of Association presented in Chapter ‘VIII. Permanent document’, item ‘6. Coordinated Articles of Association’ on page 248 and available on www.carepropertyinvest.be. ARTICLE 6 of the coordinated articles of association as at 17/11/2021 - CAPITAL ARTICLE 7 of the coordinated articles of association as at 17/11/2021 - AUTHORISED CAPITAL ARTICLE 8 of the coordinated articles of association as at 17/11/2021 - CHANGE IN THE CAPITAL ARTICLE 9 of the coordinated articles of association as at 17/11/2021 - NATURE OF THE SHARES On 31 December 2021, no shareholder owns more than 5% of the capital. On 31 May 2021, 5 November 2021 and 17 December 2021, the Company received several notications from KBC Asset Management with regard to the exceeding/undercutting of the 3% threshold. In its last notication of 17 December 2021, KBC Asset Management informed the Company that it exceeds the 3% threshold and this since 13 December 2021. Care Property Invest refers to its website www.carepropertyinvest.be for the publication of these transparency statements. Apart from these new notications from KBC Asset Management and the already known excess of Pensio B, the Company received no new notications for exceeding or falling below the 3% threshold during the 2021 nancial year. Share premium Amounts in EUR 31/12/2021 31/12/2020 Share premium - optional dividend 11,394,581 11,394,581 Share premium - contribution in kind 112,409,398 60,572,986 Share premium - capital increase 114,469,676 114,469,676 Share premium - costs -5,209,024 -4,989,250 TOTAL 233,064,630 181,447,992 Reserves Amounts in EUR 31/12/2021 31/12/2020 B. Reserve for the balance of variations in the fair value of real estate (+/-) 29,600,441 21,336,658 C. Reserve for the impact on the fair value of estimated transfer taxes and costs resulting from hypothetical disposal of investment properties (-) -10,768,416 -5,102,827 E. Reserve for net changes in the fair value of authorised hedging instruments that are not subject to a hedge accounting as dened in IFRS(+/-) -27,975,990 -22,617,736 H. Reserve for treasury shares (-) -296,787 -218,668 M. Other reserves (+/-) 11,582,260 11,427,374 N. Retained earnings from previous nancial years (+/-) 24,171,050 20,199,128 TOTAL 26,312,559 25,023,930 Amounts in EUR 31/12/2021 31/12/2020 Result of the nancial year 59,654,821 19,864,912 TOTAL 59,654,821 19,864,912 Appropriation of the result It will be proposed to the Company’s Annual General Meeting on 25 May 2022 to distribute a total gross dividend for the 2021 nancial year of €22,588,331 or €0.87 per share (€0.7461 for coupon 14 and €0.1239 for coupon 15). After deduction of the 15% withholding tax, this represents a net dividend of €0.7395 per share (€0.6342 for coupon 14 and €0.1053 for coupon 15). This represents an increase of 8.75% over the dividend paid for the previous year. The payout ratio is 82.27% at consolidated level, based on the adjusted EPRA earnings. Care Property Invest nv / Financial Statements 202 203 Financial Statements / Care Property Invest nv Financial liabilities Amounts in EUR 31/12/2021 31/12/2020 Non-current nancial debts 274,600,056 205,399,114 Credit institutions 221,211,889 184,399,114 Other 53,388,167 21,000,000 Current nancial debts 151,220,542 125,266,029 Credit institutions 54,720,542 33,183,659 Other 96,500,000 92,082,370 TOTAL 425,820,598 330,665,142 As at 31 December 2021, Care Property Invest has €275.9 million in loans taken out divided between non-current and current nancial liabilities and which belong to the category ‘nancial liabilities measured at amortised cost’ in accordance with the IFRS 9 standard. The loans were granted by 8 banks, being Belus Bank, ING Bank, KBC Bank, BNP Paribas Fortis, Argenta, VDK Bank, CBC Banque and ABN-AMRO. These nancial liabilities were xed with a xed interest rate or converted to a xed interest rate by means of a swap transaction or with a revisable interest rate (every three or ve years). Financial Institution Fixed incl hedging Fixed excl hedging Variable Total Belus Bank 35,791,938 46,103,380 0 81,895,317 ING Bank 0 3,514,048 0 3,514,048 KBC Bank 0 10,110,000 0 10,110,000 BNP Paribas Fortis Bank 2,156,104 22,974,078 30,000,000 55,130,182 CBC Banque 0 1,749,550 33,333 1,782,883 Argenta 0 50,000,000 0 50,000,000 VDK Bank 0 12,000,000 0 12,000,000 ABN-AMRO 0 40,000,000 21,500,000 61,500,000 TOTAL 37,948,042 186,451,056 51,533,333 275,932,431 In addition to these credits, the Company also has an MTN programme (classied under ‘Other’) of €300 million as at 31 December 2021 with Belus Bank and KBC Bank as dealers. This programme allows the Company to raise money in both the long (through the issuance of bonds) and short (through commercial paper) term. As required by the covenants, 100% of the outstanding commercial paper is covered by back-up lines and unused credit lines. As at 31 December 2021, the amount already drawn consists of €96.5 million in commercial paper and €21.0 million in bonds. For an overview of the bonds under this MTN programme we refer to chapter ‘IV. Care Property Invest on the Stock Market’ point ‘3. Bonds and short-term debt securities’ on page 115. On 8 July 2021, Care Property Invest successfully completed its rst transaction on the debt capital market through a private placement of €32.5 million in Sustainability Bonds (also classied under 'Other'). The bonds have a maturity of 10 years, with coupons of 2.05% and were placed with an institutional investor, which is part of an international insurance group. The net proceeds of these bonds are used exclusively for the (re)nancing of eligible sustainable assets as included in the Care Property Invest Sustainable Finance Framework. Both this Sustainable Finance Framework and the allocation of the net proceeds of this Sustainability Bond to eligible sustainable assets can be consulted on the website of the Company www.carepropertyinvest.be. This allocation will also be included in the Company's 2021 Sustainability Report, which will also be published on the above website in the course of June 2022. Financing with maturity date Number Nominal funding amount Average remaining term (year) 0-1 years 22 148,033,333 0.18 1-5 years 17 103,236,791 2.86 5-10 years 30 107,755,939 7.51 10-15 years 25 66,906,368 12.43 15-20 years 0 0 0.00 > 20 years 0 0 0.00 TOTAL 94 425,932,431 6.26 The weighted average interest rate (incl. IRS) for the entire portfolio of nancial debts amounts to 1.92% as at 31 December 2021. This is a signicant decrease compared to the weighted average interest rate of 2.22% as at 31 December 2020. This is due to a lower marginal interest rate that the Company has to pay on new debts it enters into. Table of changes in liabilities in accordance with IAS 7: 31/12/2020 Cash elements Non-cash elements 31/12/2021 Acquisitions Exchange rate movements Changes in fair value Other changes Long-term nancial liabilities 205,399,114 71,883,972 0 0 0 -3,160,423 274,122,663 Current nancial liabilities 125,183,659 22,849,658 0 0 0 3,187,225 151,220,542 Authorised hedging instruments 27,975,990 0 0 0 -10,568,646 -596,554 16,810,790 TOTAL 358,558,762 94,733,630 0 0 -10,568,646 -569,752 442,153,994 Amounts in EUR 31/12/2021 31/12/2020 Leasing debt Book value at the beginning of the nancial year 1,782,301 1,764,119 Additions 245,248 21,610 Interest charges 80,228 51,930 Payments -114,371 -55,359 Book value at the end of the nancial year 1,993,405 1,782,301 For a number of investments, Care Property Invest does not maintain bare ownership of the land, but only usufruct through a long-term leasehold agreement. In practice, a liability has been created for this in accordance with IFRS 16. This obligation is included in the other non-current liabilities. The liability concerns the present value of all future lease payments. The discount rate used to determine this liability was based on a combination of the interest curve plus a spread based on the credit risk of Care Property Invest, both in line with the remaining term of the underlying right of use. Care Property Invest nv / Financial Statements 204 205 Financial Statements / Care Property Invest nv Deferred tax liabilities Amounts in EUR 31/12/2021 31/12/2020 Exit tax 169,148 2,440,905 TOTAL 169,148 2,440,905 As of 31 December 2021, the deferred taxes relate to the provisions for the exit tax, made within the subsidiaries Apollo Lier nv and CPI.NL9 BV. These will become payable at the time of the merger with Care Property invest or the conversion to the specialised property investment fund (GVBG/FIIS) statute (or the similar FBI status in The Netherlands). The amount of deferred taxes as at 31 December 2020 relates to the provisions for the exit tax, set up within the subsidiaries De Wand-Janson nv, Zilvermolen nv and Ruiterschool Van Dooren nv at the time of their acquisition by the group on 4 June 2020. This became payable at the time of merger with Care Property Invest which took place on 23 June 2021. Trade payables and other current liabilities Amounts in EUR 31/12/2021 31/12/2020 Exit tax 502,174 0 Suppliers 9,305,279 10,134,622 Taxes, remuneration and social insurance charges 2,437,812 1,962,179 TOTAL 12,245,266 12,096,802 The item Suppliers mainly includes invoices relating to ongoing development projects. The amount of exit tax as at 31 December 2021 relates to the tax still owed after the merger of the subsidiaries De Wand-Janson nv, Zilvermolen nv and Ruiterschool Van Dooren nv with Care Property Invest on 23 June 2021. Other current liabilities Amounts in EUR 31/12/2021 31/12/2020 Miscellaneous debts 3,550,796 2,440,285 TOTAL 3,550,796 2,440,285 The miscellaneous debts relate to short-term liabilities related to development projects. Accruals and deferred income on the liabilities side Amounts in EUR 31/12/2021 31/12/2020 Prepayments of property revenue 1,490,965 1,226,039 Accrued costs 1,293,343 810,010 TOTAL 2,784,308 2,036,049 Notes on fair value In accordance with IFRS 13, the items in the balance sheet for which the fair value can be calculated are presented below, divided into levels as dened by IFRS 13. This scale consists of three levels: Level 1: quoted prices in the asset markets; Level 2: observable data other than quoted prices included in Level 1; Level 3: unobservable data. 31/12/2021 31/12/2020 Balance sheet items Level Book value Fair value Book value Fair value Investment properties 3 718,031,800 718,031,800 533,854,521 533,854,521 Finance lease receivables and trade receivables and other non-current assets (1) 2 201,585,466 267,844,539 203,022,336 287,828,165 Financial xed assets 2 2,685,847 2,685,847 177,036 177,036 Trade receivables 2 4,514,443 4,514,443 2,459,728 2,459,728 Cash and cash equivalents 1 2,544,873 2,544,873 3,751,851 3,751,851 Non-current and current nancial liabilities 2 425,820,598 458,240,052 330,665,142 365,521,490 Other non-current nancial liabilities 2 19,494,005 19,494,005 27,975,990 27,975,990 Other non-current liabilities 2 1,993,405 1,993,405 1,782,301 1,782,301 Trade payables and other current liabilities 2 12,245,266 12,245,266 12,096,802 12,096,802 Other current liabilities 2 3,550,796 3,550,796 2,440,285 2,440,285 (1) The fair value of ‘nancial trade receivables’ and the ‘nancial liabilities’ was calculated by discounting all future cash ows at an IRS rate prevailing as at 31 December of the relevant year, depending on the maturity of the underlying contract, plus a margin. For more information, see item ‘T 5.18 Finance lease receivables and trade receivables and other non-current assets’ on page 198 further on in this section. Care Property Invest nv / Financial Statements 206 207 Financial Statements / Care Property Invest nv Conditional liabilities Residential priority right: maximum daily charge for shareholders with priority residential rights In accordance with the issuing prospectus, priority residential rights could be exercised from 1 January 2005 to 31 December 2020 by each shareholder who has held 10,000 shares (ten shares before the share split) for ve years and has reached the age of 75. A shareholder who exercises his/her priority residential rights to an existing project waiting list also pays a maximum daily charge for his/her residence. This daily charge is adjusted annually to the consumer price index and amounts to €24.56 as at 1 January 2021 and €26.43 as at 1 January 2022. Since 31 December 2020, this residential priority right can no longer be exercised, but it continues to apply to shareholders who were already using it on that date. The maximum daily charge is guaranteed for as long as the shareholder retains at least 10,000 shares and in as far as the pledge on the bare ownership of these shares remains established, as provided for in the terms of the residential priority rights. Pursuant to the decision of the Board of Directors, from the contracting of the lease agreements after 1 August 2001, it is agreed with the PCSWs and non-prot associations that Care Property Invest will bear any difference between the maximum daily charge for holders of residential priority rights and other residents. This measure may have a limited nancial impact for the Company. The exact impact depends on the actual number of shareholders who exercise residential priority rights for the projects concerned, and calculation of a reliable provision is consequently impossible. On 31 December 2021, 2 shareholders were making use of their residential priority rights for which the Company pays total contributions to the landlords concerned of €5,864. This amount is the difference between the maximum daily charge for holders of residential priority rights and the daily charge that the landlord charges the other residents. The maximum daily charge is not exceeded by the other shareholders who make use of residential priority rights. The Company is not required to intervene for these shareholders. All information concerning the residential priority rights can be obtained at the registered ofces of the Company and can also be viewed on the website at www. carepropertyinvest.be. Securities received from con- tractors If a project is awarded to a general contractor following a tendering procedure, the contractor pays a deposit equal to 5% of the original contract sum, in accordance with the administrative provisions of the contract. This deposit can be applied in the event of delays due to late execution or total or partial non-execution of the contract, or even on its dissolution or termination. Half of the bank guarantee is released on provisional delivery of the service ats building. On nal acceptance of a building, the full guarantee is released. At the time of preparation of the nancial statements, the Company had surety for a total amount of €513,380. Related party transactions Transactions with related parties (within the meaning of IAS 24 and the Belgian Code for Companies and Associations (BCCA)) concern the costs included in the ‘Remuneration of Directors and the Executive Committee’ paid to the Executive Committee of the Company, for a total amount of €2,059,711. We also refer to ‘T5.34 Conditional liabilities’ with respect to the priority residential right to which certain shareholders are entitled. The Company has no further transactions to report for the 2021 nancial year. For additional explanations on the remuneration of the Directors and Executive Committee, we refer to the chapter ‘III. Report of the Board of Directors’ at point ‘11.11 Remuneration report 2021’ on page 100. Brakel (BE) I Neerhof Care Property Invest nv / Financial Statements 208 209 Financial Statements / Care Property Invest nv Additional investments As already announced in separate press releases, Care Property Invest is proud to announce that after the closing of the nancial year, it realised the following investments: T.5.37.1.1 Additional investments in The Netherlands Name Operator Acquisition date Location Year of construction / renovation or expected completion Contract Conv. Value (in € million) Type of transaction Completed projects Aldenborgh Aldenborgh Exploitatie 05/11/2020 Roermond Q1 2022 25 years (triple net) €8.2 Asset deal New projects under development Warm Hart Zuidwolde Warm Hart Zorghuizen 3/02/2022 Zuidwolde Q2 2023 20 years (triple net) €10.4 Asset deal T.5.37.1.2 Additional investments in Spain Name Operator Acquisition date Location Year of construction / renovation or expected completion Contract Conv. Value (in € million) Type of transaction New projects with an immediate return Emera Murcia Emera Group 25/2/2022 Murcia 2021 15 years (triple net) €10.8 Share deal New projects under development Solimar Tavernes Blanques Vivalto Group 11/03/2022 Tavernes Blanques Q1 2025 20 years (triple net) €10.2 Asset deal T.5.37.1.3 Additional investments in Ireland Name Operator Acquisition date Location Year of construction / renovation or expected completion Contract Conv. Value (in € million) Type of transaction New projects with an immediate return Ballincurrig Care Centre Silver Stream Healthcare 25/2/2022 Ballincurrig 2003 25 years (triple net) €6.2 Asset deal Ratoath Manor Nursing Home Silver Stream Healthcare 08/04/2022 Ratoath 1995 25 years (triple net) €6.9 Asset deal Dunlavin Nursing Home Silver Stream Healthcare 08/04/2022 Dunlavin 2016 25 years (triple net) €11.3 Asset deal Leeson Park Nursing Home Silver Stream Healthcare 08/04/2022 Ranelagh 1960/2013 25 years (triple net) €14.6 Asset deal New projects signed undersuspensory conditions Elm Green Nursing Home DomusVi 15/03/2022 Dunsink 2015 15 years (triple net) €26.7 Asset deal Name established subsidiary Date of establishment Purpose Care Property Invest Emerald Limited 25 January 2022 Acquiring healthcare real estate sites in Ireland Name acquired subsidiary Date of acquisition of control Purpose Care Property Invest Lily S.L. 25 February 2022 Acquiring healthcare real estate sites in Spain Information on subsidiaries The following companies were fully consolidated and are deemed to be related companies in view of the fact that on 31 December 2021 they were direct or indirect 100% subsidiaries of Care Property Invest: Name Category Company number or Chamber of Commerce Acquisition Date % shares owned by CPI Care Property Invest nv (GVV) Parent company 0456.3780.70 Belgian subsidiaries De Meeuwen nv (GVBF) Subsidiary 0833.779.534 02/10/2018 100% B.E.R.L. Internationaal (GVBF) Subsidiary 0462.037.427 19/12/2018 100% Immo du Lac nv (GVBF) Subsidiary 0888.891.766 03/04/2019 100% Zorginfra nv Subsidiary 0554.777.147 04/06/2020 100% Apollo Lier nv Subsidiary 0627.724.513 17/11/2021 100% Dutch subsidiaries Care Property Invest NL B.V. Subsidiary Kvk 72865687 17/10/2018 100% Care Property Invest NL2 B.V. Subsidiary Kvk 73271470 05/12/2108 100% Care Property Invest NL3 B.V. Subsidiary Kvk 74201298 05/03/2018 100% Care Property Invest NL4 B.V. Subsidiary Kvk 74580000 15/04/2019 100% Care Property Invest NL5 B.V. Subsidiary Kvk 74918516 23/05/2019 100% Care Property Invest NL6 B.V. Subsidiary Kvk 75549808 08/08/2019 100% Care Property Invest NL7 B.V. Subsidiary Kvk 77849922 16/04/2020 100% Care Property Invest NL8 B.V. Subsidiary Kvk 80636357 19/10/2020 100% Care Property Invest NL9 B.V. Subsidiary KvK 68707479 29/12/2020 100% Spanish subsidiaries Care Property Invest Spain S.L. Subsidiary B-01618677 21/07/2020 100% Care Property Invest Tulip S.L. Subsidiary of Care Property Invest Spain, S.L. B-01618727 21/07/2020 100% Care Property Invest Aster S.L. Subsidiary of Care Property Invest Spain, S.L. B-01906189 10/11/2020 100% Care Property Invest Jasmine S.L. Subsidiary of Care Property Invest Spain, S.L. B-88542295 18/03/2021 100% Care Property Invest Iris S.L. Subsidiary of Care Property Invest Spain, S.L. B-06928378 13/07/2021 100% The acquisitions of the above-mentioned subsidiaries were made in the context of an ‘asset deal’ to which IFRS 3 - Business Combinations does not apply. The participating interests are valued based on the equity method. For more information on the mergers that took place during the 2021 nancial year, we refer to chapter ‘III. Report of the Board of Directors’, point ‘2.1.4.1 Mergers’ on page 45. Care Property Invest nv / Financial Statements 210 211 Financial Statements / Care Property Invest nv Remuneration of the Statutory Auditor Amounts in EUR 31/12/2021 31/12/2020 Mandate 80,312 80,127 Other audit assignments 20,700 22,315 Other non-audit assignments 18,030 8,160 The other assignments outside the auditing assignments were always approved in advance by the Company’s Audit Committee. Alternative performance measures An Alternative Performance Measures (APM) is a nancial indicator, historical or forward-looking, of the performance, nancial situation or cash ows of a company other than nancial indicator dened or described by the applicable accounting standards in its nancial reporting Care Property Invest uses APMs in its nancial communication within the meaning of the guidelines issued by the ESMA (European Securities and Markets Authority) on 5 October 2015. A number of these APMs have been recommended by the European Public Real Estate Association (EPRA) and are discussed in the chapter “V. EPRA” starting on page 120 of this Annual Financial Report. The APMs below have been determined by the Company itself in order to provide the reader with a better understanding of its results and performance. Performance measures established by IFRS standards or by law are not considered as APMs, nor are they measures based on items in the global result statement or the balance sheet. Operating margin Denition : This is the operating result before the result on portfolio divided by the net rental result, whereby the operating result before the result on portfolio and the net rental result can be reconciled with global result statement. Use: This indicator measures the protability of the Company’s leasing activities. Amounts in EUR 31/12/2021 31/12/2020 Operating result before portfolio income = A 35,303,597 30,345,783 Net rental result = B 43,233,668 36,203,096 Operating margin = A/B 81.66% 83.82% Denition : This is the nancial result excluding changes in fair value of nancial assets and liabilities (authorised hedging instruments not subject to hedge accounting as dened under IFRS), the sum of the items ‘XX. Financial income’, ‘XXI. Net interest cost’ and ‘XXII. Other nancial costs’ of the global result statement. Use: This indicator does not take into account the impact of nancial assets and liabilities in the global result statement, thus reecting the result from strategic operating activities. Amounts in EUR 31/12/2021 31/12/2020 Financial result = A 2,734,270 -12,992,952 Changes in fair value of nancial assets /liabilities = B 11,165,200 -5,358,254 Financial result before changes in fair value of nancial assets/ liabilities = A-B -8,430,930 -7,634,698 Equity before the reserve for the balance of changes in fair value of authorised hedging Denition : This is equity excluding the accumulated reserve for the balance of changes in fair value of authorised hedging instruments (not subject to hedge accounting as dened under IFRS) and the changes in fair value of nancial assets and liabilities, where the reserve for the balance of changes in fair value of authorised hedging instruments is included in item ‘C’. Reserves’ of the consolidated balance sheet and changes in fair value of nancial assets and liabilities can be reconciled with item ‘XXIII. Changes in fair value of nancial assets/ liabilities in the global result statement. Use: This indicator reects equity without taking into account the hypothetical market value of the derivative instruments. Amounts in EUR 31/12/2021 31/12/2020 Equity = A 479,258,685 369,779,481 Reserve for the balance of changes in fair value of authorised hedging instruments = B 27,975,990 22,617,736 Changes in fair value of nancial assets/liabilities = C -11,165,200 5,358,254 Equity before changes in fair value of nancial products = A-B-C 462,447,896 341,803,491 Interest coverage ratio Denition : This is the operating result before the result on portfolio divided by the interest charges paid, whereby the operating result before the result on portfolio and the interest charges paid can be reconciled with the global result statement. Use: This indicator measures how many times a company earns its interest charges and gives an indication of the extent to which the operating prot can fall back without the company getting into nancial difculties. In accordance with covenants entered into by the Company, this value must be at least 2.5. Amounts in EUR 31/12/2021 31/12/2020 Operating result before portfolio income = A 35,303,597 30,345,783 Total amount of interest charges paid = B 7,844,467 7,099,028 Interest coverage ratio = A/B 4.50 4.27 Care Property Invest nv / Financial Statements 212 213 Financial Statements / Care Property Invest nv 3. Auditor’s Report Independent auditor’s report to the general meeting of Care Property Invest nv 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 Care Property Invest nv (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 statement of overall result, the statement of changes in consolidated equity and the cash ow table 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 29 May 2019, 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 2021. We performed the audit of the Consolidated Financial Statements of the Group during three consecutive years. Report on the audit of the Consolidated Financial Statements We have audited the Consolidated Financial Statements of Care Property Invest nv, that comprise of the consolidated balance sheet as at 31 December 2021, the consolidated statement of overall result, the statement of changes in consolidated equity and the cash ow table for the year ended 31 December 2021 and the disclosures, which show a consolidated balance sheet total of €945.316.211 and of which the consolidated income statement shows a prot for the year of €59.654.821. In our opinion, the Consolidated Financial Statements give a true and fair view of the consolidated net equity and nancial 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. 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 ofcials 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 sufcient 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 signicance in our audit of the Consolidated Financial Statements of the current reporting period. 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 of the investment properties • Description of the matter and audit risk: Investment property represents 76% of the assets of the Group. As at 31 December 2021, the investment properties on the assets of the balance sheet amount to € 718.031.800. In accordance with the accounting policies and IAS 40 standard “Investment property”, investment property is valued 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 of the fair value hierarchy dened within the IFRS 13 standard “Fair Value Measurement”. Some parameters used for valuation purposes being based on only limited observable data (discount rate, future occupancy rate, …) and require therefore an estimation from the management. The audit risk appears in the valuation of these investment properties and is therefore a key audit matter. • Summary of audit 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 the underlying contracts; and • reviewed the models, assumptions and parameters 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 5.15 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 nancial 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. Care Property Invest nv / Financial Statements 214 215 Financial Statements / Care Property Invest nv 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 inuence 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 efciency 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: identication 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 sufcient 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 signicant 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 reect 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 signicant audit ndings, including any signicant deciencies 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. From the matters communicated with the Audit Committee within the Board of Directors, we determine those matters that were of most signicance 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. Care Property Invest nv / Financial Statements 216 217 Financial Statements / Care Property Invest nv 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 specic 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: EPRA (chapter 5) 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 rm 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 nancial 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 nancial statements in the form of an electronic le in ESEF format (hereinafter 'the digital consolidated nancial statements') included in the annual nancial report available on the portal of the FSMA (https://www.fsma.be/en/data- portal). It is our responsibility to obtain sufcient and appropriate supporting evidence to conclude that the format and markup language of the digital consolidated nancial 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 nancial statements of Care Property Invest nv per 31 December 2021 included in the annual nancial report available on the portal of the FSMA (https://www.fsma.be/en/data-portal) 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 specied in article 11 of the regulation (EU) nr. 537/2014. Diegem, 22 April 2022 EY Bedrijfsrevisoren bv Statutory auditor Represented by Christel Weymeersch (1) Partner (1) Acting on behalf of a bv Christophe Boschmans Director Care Property Invest nv / Financial Statements 218 219 Financial Statements / Care Property Invest nv 4. Abridged statutory nancial statements as at 31 December 2021 4.1 Abridged statutory global result statement The Abridged Statutory Financial Statements of Care Property Invest, prepared under IFRS, are summarised below in accordance with article 3:17 BCCA. The unabridged Statutory Financial Statements of Care Property Invest, its Board of Directors’ Report and its Auditors’ Report will be registered at the National Bank of Belgium within the legal deadlines and can be consulted via the website www.carepropertyinvest.be. The abridged statutory nancial statements as at 31 December 2020 were inserted in the Annual Financial Report 2020 under item 4 et seq in section ‘VII. Financial Statements’, from page 219 and the statements as at 31 December 2019 were inserted in the Annual Financial Report 2019 under item 4 et seq in section ‘VIII. Financial Statements’, from page 224. Both reports are available on the website www.carepropertyinvest.be. The auditors issued an unqualied opinion on the Statutory Financial Statements. Amounts in EUR 31/12/2021 31/12/2020 I Rental income (+) 35,388,563 28,418,498 Net rental income 35,388,563 28,418,498 V Recovery of rental charges and taxes normally borne by tenants on let properties (+) 136,823 152,187 VII Rental charges and taxes normally borne by tenants on let properties (-) -136,823 -152,187 Real estate result 35,388,563 28,418,498 IX Technical costs (-) -4,090 -2,284 Real estate costs -4,090 -2,284 Real estate operating result 35,384,473 28,416,214 XIV General expenses of the company (-) -6,931,460 -6,495,193 XV Other operating income and expenses (+/-) 2,763,999 3,698,840 Operating result before the result on portfolio 31,217,012 25,619,861 XVIII Changes in the fair value of investment properties (+/-) 16,998,661 4,178,898 Operating result 48,215,673 29,798,759 XX Financial income (+) 3,498,396 2,528,065 XXI Net interest expense (-) -7,963,224 -6,815,817 XXII Other nancial costs (-) -576,779 -532,487 XXIII Changes in the fair value of nancial assets and liabilities 16,746,626 -5,178,561 Financial result 11,705,019 -9,998,800 Result before taxes 59,920,692 19,799,959 XXIV Corporate tax (-) -79,603 76,268 XXV Exit tax (-) -186,268 -11,314 Taxes -265,872 64,953 NET RESULT (share of the group) 59,654,821 19,864,912 Other elements of the global result 0 0 Net result/global result 59,654,821 19,864,912 4.2 Abridged statutory statement of realised and unrealised results Amounts in EUR 31/12/2021 31/12/2020 NET RESULT/GLOBAL RESULT 59,654,821 19,864,912 Net result per share based on weighted average shares outstanding 2.2976 0.8598 Gross yield compared to the initial issuing price in 1996 38.62% 14.45% Gross yield compared to stock market price on closing date 8.92% 3.20% Amounts in EUR 31/12/2021 31/12/2020 NET RESULT/GLOBAL RESULT 59,654,821 19,864,912 Non-cash elements included in the net result -31,430,857 2,119,643 Depreciations and amortizations, impairments and reversal of write- downs 254,511 211,654 Changes in the fair value of investment properties -16,998,661 -4,178,898 Changes in the fair value of authorised hedging instruments -11,165,200 5,358,254 Changes in the fair value of nancial assets and liabilities -5,581,425 -179,693 Dividends from subsidiaries 1,203,031 785,489 Projects' prot or loss margin attributed to the period 856,887 122,836 ADJUSTED EPRA EARNINGS 28,223,964 21,984,556 Adjusted EPRA earnings per share based on weighted average number of outstanding shares 1.0871 0.9515 Gross yield compared to the initial issuing price in 1996 18.27% 15.99% Gross yield compared to stock market price on closing date 4.22% 3.54% The weighted average number of outstanding shares was 23,105,198 as at 31 December 2020 and increased to 25,963,657 shares as at 31 December 2021. The number of shares amounted to 24,110,034 as at 31 December 2020 (including 6,878 treasury shares) and increased to 26,931,116 shares as at 31 December 2021 (including 9,192 treasury shares). The number of shares changed as a result of (i) a capital increase in kind for the purchase of the residential care centre with assisted living apartments 'Résidence des Ardennes' located in Attert, on 20 January 2021 for which 1,696,114 new shares were issued and (ii) a capital increase in kind for the purchase of 100% of the shares in Apollo Lier nv, which owns the residential care centre with assisted living apartments 'Dungelhoeff' located in Lier, on 17 November 2021 for which 1,124,968 new shares were issued. The shares issued under (i) are entitled to dividends for the full 2021 nancial year, those issued under (ii) share in the result as from 10 November 2021 (coupon 15 et seq.). The share price was €25.75 on 31 December 2021 and €26.90 on 31 December 2020. The gross return is calculated by dividing the net result per share or the adjusted EPRA earnings by the market capitalisation on the closing date. There are no instruments that have a potentially dilutive effect on the net result or the adjusted EPRA earnings per share. Care Property Invest nv / Financial Statements 220 221 Financial Statements / Care Property Invest nv 4.3 Abridged statutory balance sheet Amounts in EUR 31/12/2021 31/12/2020 ASSETS I. FIXED ASSETS 938,458,698 738,103,872 B. Intangible xed assets 122,671 158,457 C. Investment properties 427,962,863 268,654,124 D. Other tangible xed assets 4,739,677 2,266,259 E. Financial xed assets 304,048,023 264,002,695 F. Finance lease receivables 186,775,769 187,355,753 G. Trade receivables and other non-current assets 14,809,696 15,666,584 II. CURRENT ASSETS 16,327,417 D. Trade receivables 2,645,904 2,044,993 E. Tax receivables and other current assets 19,049,402 11,686,661 F. Cash and cash equivalents 1,313,349 1,749,549 G. Deferrals and accruals 878,672 846,214 TOTAL ASSETS 962,346,026 754,431,288 EQUITY AND LIABILITIES EQUITY 479,258,685 369,779,481 A. Capital 160,226,675 143,442,647 B. Share premium 233,064,630 181,447,992 C. Reserves 26,312,560 25,023,929 D. Net result for the nancial year 59,654,821 19,864,912 LIABILITIES 483,087,341 384,651,807 I.Non-current liabilities 290,134,304 223,546,311 B. Non-current nancial liabilities 270,272,018 195,402,659 C. Other non-current nancial liabilities 19,494,005 27,975,990 E. Other non-current liabilities 368,281 167,662 II. Current liabilities 192,953,038 161,105,496 B. Current nancial liabilities 150,891,917 124,429,528 D. Trade payables and other current liabilities 37,594,780 35,054,482 E. Other current liabilities 2,242,195 0 F. Deferrals and accruals 2,224,146 1,621,486 TOTAL EQUITY + LIABILITIES 962,346,026 754,431,288 4.4 Abridged statutory appropriation of results Amounts in EUR 31/12/2021 31/12/2020 A. Net result / global result 59,654,821 19,864,912 B. Appropriation to / release from reserves (-/+) -37,066,490 -1,366,750 1 Appropriation to/release from reserve for the positive or negative balance of changes in the fair value of real estate (-/+) -18,918,196 -5,029,172 2 Appropriation to/release from reserve for estimated charges and costs for hypothetical disposal of investment properties (-/+) 1,919,535 850,274 5 Appropriation to reserve for the net changes in authorised hedging instruments that are not subject to hedge accounting as dened in IFRS (-) -11,165,200 0 6 Release from the reserve for net changes in the fair value of authorised hedging instruments that are not subject to hedge accounting as dened in IFRS (+) 0 5,358,254 11 Addition to/withdrawal from retained earnings in previous nancial years (-/+) -4,524,234 -3,151,903 12 Addition to/withdrawal from reserve for the share in the prot or loss and in the unrealised results of subsidiaries that are accounted for according to the equity method. -4,378,394 605,796 If A+B is less than C, only this sum may be distributed 22,588,331 18,498,162 C. Return on capital in accordance with article 13 of the RREC Royal Decree 22,579,171 17,587,645 D. Return on capital, other than C 9,160 910,517 Heemstede (NL) I De Meerlhorst Care Property Invest nv / Financial Statements 222 223 Financial Statements / Care Property Invest nv 4.5 Dividend payment obligation pursuant to the Royal Decree of 13 July 2014 concerning RRECs Amounts in EUR 31/12/2021 31/12/2020 For the return on capital, the public RREC is required to repay an amount equal to the amount of the positive net result for the nancial year after settlement of losses carried forward and after appropriations to/ releases of reserves as calculated in paragraph ‘4.4 Abridged statutory appropriation of results’ on page 223, item 'B.Appropriations to / releases from reserves (-/+)'. Net result 59,654,821 19,864,912 Amount calculated under 'Appropiation account' point B -37,066,490 -1,366,750 Positive Net Result 22,588,331 18,498,162 If this calculated positive net result is zero, the company is not required to pay a dividend. If this calculated positive net result exceeds nil, the Company must pay a return on the capital amounting to at least the positive difference between 1° and 2° to be paid as a return on the capital. 1°, being 80% of an amount equal to the sum of (A) the adjusted EPRA earnings and of (B) the net gain on realisation of real estate not exempt from distribution. (A) adjusted EPRA earings are calculated cfr. Appendix C, Section 3 of the RREC Royal Decree Net result 59,654,821 19,864,912 (+) Depreciation and impairments 254,511 211,654 (+/-) Other non-monetary items -15,889,738 5,301,398 (+/-) Changes in the fair value of nancial assets and liabilities(swaps) -11,165,200 5,358,254 (+/-) Share in the prot or loss of holdings that are accounted for in accordance with the equity method -5,581,425 -179,693 (+/-) Real estate leasing prot or loss margin on projects attributed to the period 856,887 122,836 (+) Dividends received from equity-accounted subsidiaries 1,203,031 785,489 (+/-) Changes in the fair value of real estate -16,998,661 -4,178,898 (A) ADJUsteD EPRA EARNINGS 28,223,964 21,984,556 (B) Net gain on disposal of real estate not exempt from distribution (B) net gains 1° = 80% OF THE SUM OF (A) + (B) 22,579,171 17,587,645 2° Being the net reduction in the debt levels of the RREC during the nancial year: 2° = 0 0 Positive difference between 1° and 2° 22,579,171 17,587,645 MINIMUM DIVIDEND PAYABLE IN ACCORDANCE WITH ARTICLE 13 OF THE RREC ROYAL DECREE 22,579,171 17,587,645 4.6 Non-distributable equity in accordance with Article 7:212 BCCA The mentioned obligations in Article 13 of the RREC Decree do not affect the application of Article 7:212 BCCA which stipulates that no dividend may be paid out if, as a result thereof, the net assets of the Company would fall below the capital plus the reserves which are not distributable on the basis of the law or the Articles of Association. Amounts in EUR 31/12/2021 31/12/2020 Net assets' refers to the total assets shown in the balance sheet, less provisions and liabilities. Net assets 479,258,685 369,779,481 Proposed dividend -22,588,331 -18,498,162 Net assets after dividend distribution 456,670,354 351,281,319 Capital plus the reserves which may not be distributed by law or pusuant to the Articles of Association as the arithmetical sum of paid-up capital (+) in accordance with the RREC Royal Decree (Annex C - Chapter 4) 160,226,675 143,442,647 Share premium unavailable in accordance with the Articles of Association (+) 233,064,630 181,447,992 Reserve for the positive balance of changes in the fair value of real estate (+) 35,296,163 16,377,967 Reserve for the impact on the fair value of estimated transfer taxes and costs resulting from hypothetical disposal of investment properties (-) -3,388,712 -1,469,177 Reserve for net changes in the fair value of authorised hedging instruments that are not subject to hedge accounting as dened in IFRS (+/-) (1) -16,404,604 -27,569,805 Reserve for the share in prots or losses and in the unrealised results of equity- accounted subsidiaries 16,176,816 11,798,422 NON-DISTRIBUTABLE PROFIT 424,970,967 324,028,046 MARGIN REMAINING UNDER ARTICLE 7:212 OF THE BELGIAN CODE FOR COMPANIES AND ASSOCIATIONS (BCCA) 31,699,387 27,253,273 (1) Due to a change in the calculation method, the comparative gures of 2020 were adjusted in order to allow for correct comparability. Care Property Invest nv / Financial Statements 224 225 Financial Statements / Care Property Invest nv 4.7 Statement of changes in non-consolidated equity (1) CAPITAL SHARE PREMIUM Reserves for the balance of changes in the fair value of real estate Reserves for impact of swaps (2) Reserves for the balance of changes in the investment value of real estate Reserve for the impact on the fair value of estimated transfer taxes and costs resulting from hypothetical disposal of investment properties (-) 1 January 2020 121,338,541 104,174,862 4,823,633 -328,153 -19,149,997 Net appropiation account for the 2019 nancial year 6,525,162 -290,751 -3,061,553 Dividends Treasury shares Result for the period (3) Capital Increase 22,104,106 77,273,130 31 December 2020 143,442,647 181,447,992 11,348,795 -618,904 -22,211,550 1 January 2021 143,442,647 181,447,992 11,348,795 -618,904 -22,211,550 Net appropiation account for the 2020 nancial year 5,029,172 -850,274 -5,358,254 Dividends Treasury shares Result for the period (3) Capital Increase 16,784,027 51,616,637 31 December 2021 160,226,675 233,064,630 16,377,967 -1,469,177 -27,569,805 Appropriation of 2021 prot before distribution of dividends 18,918,196 -1,919,535 11,165,200 TOTAL 160,226,675 233,064,630 35,296,163 -3,388,712 -16,404,604 (1) Following a recommendation by the FSMA, the amounts relating to the equity method, which were distributed among the various reserve items, were reclassied to a new reserve account 'Reserve for the share in the prot or loss and unrealised results of equity accounted investees'. (2) Reserve for net changes in the fair value of authorised hedging instruments that are not subject to hedge accounting as dened in the IFRS (+/-). (3) The Company has no ‘other comprehensive income’, within the meaning of IAS 1, so that the Company's net income is equal to the overall result. Other reserves Reserve treasury shares Reserve for the share in prots or losses and in the unrealised results of subsidiaries accounted for using the equity method Results carried forward from previous nancial years RESERVES RESULT FOR THE FINANCIAL YEAR Total SHAREHOLDERS' EQUITY 11,942,615 -167,916 6,489,985 10,208,338 13,818,506 26,959,453 266,291,362 6,400,828 1,682,489 11,256,175 -11,256,175 0 -486,595 486,595 0 -15,703,278 -15,703,278 -50,752 -50,752 0 -50,752 0 19,864,912 19,864,912 0 0 99,377,236 11,942,615 -218,668 12,404,218 12,377,422 25,023,929 19,864,912 369,779,481 11,942,615 -218,668 12,404,218 12,377,422 25,023,929 19,864,912 369,779,481 179,693 2,366,413 1,366,750 -1,366,750 0 -785,489 785,489 0 -18,498,162 -18,498,162 -78,119 -78,119 -78,119 59,654,821 59,654,821 68,400,665 11,942,615 -296,787 11,798,422 15,529,325 26,312,560 59,654,821 479,258,685 0 0 4,378,394 27,112,565 59,654,821 -59,654,821 11,942,615 -296,787 16,176,816 42,641,890 85,967,381 0 479,258,685 Care Property Invest nv / Financial Statements 226 227 Financial Statements / Care Property Invest nv Lanaken (BE) I 3 Eiken VIII. Permanent document VIII. PERMANENT DOCUMENT 1. General information 1.1 Company name (Article 1 of the Articles of Association) The Company has the status of a public limited liability company. It is subject to the statutory system of public regulated real estate companies, legally abbreviated to ‘public RREC’. It bears the name ‘CARE PROPERTY INVEST’, abbreviated to ‘CP Invest’. The corporate name of the Company and all of the documents that it produces (including all deeds and invoices) contain the words ‘public regulated real estate company’ or are immediately followed by these words. The company name must always be preceded or followed by the words ‘public limited liability company’ or the abbreviation ‘nv’. The Company raises its nancial resources, in Belgium or elsewhere, through a public offering of shares. The Company’s shares have been admitted for trading on a regulated market, Euronext Brussels. The Company is subject to the regulations currently applicable to RRECs and in particular to the provisions of the Law of 12 May 2014 concerning regulated real estate companies as amended by the Law of 22 October 2017 (the ‘RREC Law’) and the Royal Decree of 13 July 2014 with respect to regulated real estate companies, as amended on 23 April 2018 (the ‘RREC Decree’). The Company is also subject to Article 2.7.6.0.1 of the Flemish Tax Code (VCF) in respect of exemption from inheritance rights pertaining to the social rights in companies incorporated within the framework of the realisation and/or nancing of investment programmes for service ats, as amended from time to time. 1.2 Registered ofce, address, telephone number and website The Company’s registered ofce is located in the Flemish Region at 2900 Schoten, Horstebaan 3 and can be reached by telephone at +32 3 222 94 94 and by e-mail at [email protected]. The Board of Directors may relocate the registered ofce to any other place in Belgium, provided that the language legislation is respected. The Company may, by decision of the Board of Directors, establish administrative seats, ofces, branches, agencies and establishments at any other place in Belgium or abroad. For the application of Article 2:31 BCCA, the Company's website is www.carepropertyinvest.be. The Company's e-mail address is [email protected]. The information made available through the website is not part of this Universal Registration Document, unless that information has been included by reference. 1.3 Incorporation and notication The public limited liability company Care Property Invest was incorporated on 30 October 1995 under the name ‘Serviceats Invest’ pursuant to a deed executed before notary Jan Boeykens in Antwerp and published in the Annexes to the Belgian Ofcial Gazette of 21 November 1995 under number 1995-11-21/176. 1.4 Registration number The Company is registered in the Trade Register (RPR) of Antwerp (Antwerp branch) under number 0456.378.070. 1.5 Object (Article 3 of the Articles of Association) The Company’s sole object is, (a) making real estate available to users directly or via a company in which it has a shareholding, in compliance with the provisions of the RREC Law and decrees and regulations issued for the implementation of the RREC Law; (b) property ownership within the limits of the RREC Law, as referred to in Article 2, 5°, vi to xi of the RREC Law; (c) concluding or joining one or more of the following long-term contracts with a public client, directly or via a company in which it has a shareholding in compliance with the provisions of the RREC Law and the decrees and regulations issued for its implementation, possibly in collaboration with third parties: (i) Design, Build, Finance (DBF) contracts, except where these can be qualied solely as a promotional order for works, within the meaning of Article 115, 4° of the Royal Decree of 15 July 2011 on the award of public procurement contracts in the classical sectors; (ii) Design, Build, (Finance) and Maintain (DB(F)M) contracts; (iii) Design, Build, Finance, (Maintain) and Operate (DBF(M)O) contracts; and/or (iv) contracts for concessions for public work relating to buildings and/or other infrastructure of an immovable nature and services relating to this, on the basis of which: (i) it guarantees the provision, maintenance and/or operation for a public entity and/or citizens as end-users, in order to meet a social need and/or to facilitate the provision of a public service; and (ii) for which it is able to bear the associated nancing, availability, demand and/or operating risks, partially or in full, in addition to any construction risk, without necessarily holding rights in rem in that regard. (d) developing, providing for the development, establishing, providing for the establishment, managing, providing for the management, operating, providing for the operation of or making available one or more of the following in the long term, directly or via a company in which it has a shareholding in compliance with the provisions of the RREC Law and the decisions and regulations imposed for its implementation, possibly in collaboration with third parties: (i) utilities and storage locations for transportation, distribution or storage of electricity, gas, fossil or non-fossil fuels and energy in general and the related goods; (ii) utilities for transportation, distribution, storage or treatment of water and the related goods; (iii) installations for the generation, storage and transportation of energy, green or Care Property Invest nv / Permanent document 230 231 Permanent document / Care Property Invest nv otherwise, and the related goods; or (iv) waste and incineration installations and related goods. The activity, as described in the preceding paragraphs, must relate to the nancing and realisation of (i) with regard to the Flemish Region, only projects primarily concerning (a) the realisation of service ats as referred to in Article 88, §5, of the Residential Care Decree of 13 March 2009 (as amended from time to time) or (b) real estate for facilities in relation to the Residential Care Decree of 13 March 2009, or (c) real estate for persons with disabilities, (ii) with regard to the European Economic Area, with the exception of the Flemish Region, projects equivalent to the projects referred to in (i), or (iii) real estate located in a Member State of the European Economic Area and used or intended solely or primarily for residential units adapted for residential care or health care, or (iv) other projects which are approved from time to time under the applicable legislation on exemption from inheritance tax, without withdrawal of recognition under that legislation (hereinafter jointly referred to as ”Projects"). In the context of the provision of real estate, the Company may, in accordance with regulations applicable to RRECs and within the aforementioned limits, perform all activities related to the establishment, construction (without prejudice to the prohibition to act as a property developer, within the meaning of the RREC Law, except in the case of occasional transactions), refurbishment, renovation, furnishing and tting, development, acquisition, disposition, lease, sublease, exchange, contribution, transfer, parcelling, placement under a system of co-ownership or joint ownership of real estate as described above, the provision or acquisition of right of supercie, usufruct, leasehold or other real or personal rights to real estate as described above, the management and operation of real estate. The Company may, in accordance with regulations applicable to regulated real estate companies and within the aforementioned limits: • act as the lessee of real estate, with or without a purchase option; • act as the lessor of real estate, as the main activity or as an additional activity, with or without a purchase option (with the proviso that the leasing of real estate with a purchase option may only be the main activity, as dened in and subject to compliance with the conditions of Article 17(3) of the RREC Decree); • develop activities within the framework of public-private partnerships, whether or not incorporated in an institutional regulated real estate company; • initially hold a share of less than 25% in the capital of a company which performs the activities referred to in sub-paragraph (c) of this Article, in as far as the said participating interest is converted into a participating interest through a share transfer, in accordance with the provisions of the RREC Law and the decisions and regulations for its implementation, within two years of the end of the construction phase of the public-private partnership (PPP) or after every longer term required in that regard by the public entity with which the contract is concluded; • in a secondary or temporary capacity, invest in securities which are not property securities within the meaning of the regulations applicable to RRECs. These investments will be carried out in accordance with the risk management policy adopted by the Company and will be diversied so that they ensure adequate risk diversication. The Company may also own unallocated cash and cash equivalents. The cash and cash equivalents may be held in any currency in the form of deposits on demand, or term deposits or any monetary instrument, which are readily available for mobilisation; • provide mortgages or other securities, or issue guarantees in the context of the activities of the Company or its group, within the limits of the regulations applicable to RRECs; • grant loans within the limits of the legislation applicable to RRECs, and • carry out transactions concerning authorised hedging instruments (as dened in the regulations applicable to regulated real estate companies), where these operations are part of a policy adopted by the Company to cover nancial risks, with the exception of speculative transactions. The Company shall, in compliance with the regulations applicable to regulated real estate companies, within the above limits, carry out all immovable, movable, nancial, commercial and industrial actions which are directly or indirectly related to its objectives or of a basic nature to pursue their realization or to facilitate this, both domestically and abroad. In compliance with the regulations applicable to regulated real estate companies, and within the above limits, the Company may acquire, by means of contribution in cash or in kind, merger, de-merger or other corporate law restructuring, subscription, participation, nancial intervention or otherwise, a share in any existing or future companies or businesses in Belgium or abroad, whose objectives are identical, similar or related to its own, or of a nature as to pursue or promote the objectives of the Company. Care Property Invest nv / Permanent document 232 233 Permanent document / Care Property Invest nv 1.6 Duration (Article 5 of the Articles of Association) The company is established for an indenite period and commences operations on the date of its formation. It can be dissolved by a decision of the General Meeting, deliberating in accordance with the conditions and forms required for an amendment of the Articles of Association. 1.7 Financial year – Financial Statements – Annual Report (Article 41 of the Articles of Association) The nancial year commences on the rst of January and ends on the thirty-rst of December of each year except for the rst nancial year, which ran from 30.10.1995 to 31.12.1996. At the end of each nancial year, the Board of Directors prepares an inventory and the nancial statements. The Directors also prepare a report in which they render account of their policy, i.e., the Annual Report. This report contains a commentary on the nancial statements, which includes a fair overview of the state of affairs and the position of the Company. This report also contains the information required by the BCCA, including a Corporate Governance Declaration, which forms a specic part thereof. This Corporate Governance Declaration also contains the Remuneration Report, which forms a specic part thereof. In view of the Annual General Meeting, the Statutory Auditor prepares a written and detailed report, i.e., the Audit Report. As soon as the notice of the Meeting has been published, the shareholders may take note of the nancial statements and other documents referred to in the BCCA. 1.8 General Meeting In accordance with Article 32 of the coordinated Articles of Association, the Ordinary General Meeting is convened on the last Wednesday of May. 1.9 Accredited auditor In accordance with article 29 of the Articles of Association, the General Meeting of 29 May 2019 appointed the limited liability company EY Bedrijfsrevisoren, with registered ofce at 1831 Diegem, De Kleetlaan 2, company number 0446.334.711, RPR Brussels and membership no. B160, as statutory auditor for a period of three years. This company has appointed Mrs Christel Weymeersch and Mr Christophe Boschmans, both auditors, as representatives authorised to represent the company and charged with the execution of the mandate in the name and on behalf of EY. The mandate expires after the General Meeting of Shareholders that must approve the nancial statements as at 31 December 2021. 1.10 Internal audit The Board of Directors uses bvba Mazars Advisory Services for the performance of the internal audit tasks, with its registered ofce at 1050 Brussels, Marcel Thirylaan 77, represented by Mrs Cindy Van Humbeeck, director- manager. On 6 September 2017, the Board of Directors decided to extend the outsourcing contract for the ‘internal audit’ function for an indenite period. The agreement can be terminated subject to compliance with a notice period of 3 months. 1.11 Real estate expert Pursuant to the RREC Law and RREC Decree, the Company’s real estate must be valued by a recognised, independent real estate expert. This expert must determine the ‘fair value’ of the buildings, which is included in the nancial statements of the Company. For this purpose, the Company calls upon (i) Stadim cvba, with registered ofce at 2018 Antwerp, Mechelsesteenweg 180, and (ii) Cushman & Wakeeld nv, with registered ofce at 1000 Brussels, Kunstlaan 56. The respective agreements were concluded for a renewable term of 3 years. The current term for Stadim cvba expires on 31 December 2022 and that for Cushman & Wakeeld on 31 March 2023. The fee of both real estate experts is independent of the fair value of the real estate to be valued. Valuation method The following approach is used for the purpose of the appraisal: • A detailed update of the nancial ows based on explicit assumptions of future developments of this revenue and the nal value. In this case, the discount rate takes into account the nancial interest rates in the capital markets, plus a specic risk premium for real estate investments. Interest rate uctuations and ination prospects will be taken into account in the evaluation, in a conservative manner. • These evaluations are also assessed in terms of the unit prices quoted on the sale of similar buildings, after which a correction will be applied to take account of any differences between these reference properties and the properties in question. • The development projects (construction, renovation or extension work) are valued by deducting the costs of the project on completion from its estimated value, as determined by applying the above estimates. The costs of the study phase of the construction, renovation or extension works are stated at the acquisition cost. 1.12 Financial services Belus Bank, BNP Paribas Fortis, KBC Bank, CBC Banque, Bank Degroof Petercam, VDK Spaarbank and ABN AMRO Bank. 1.13 Stock market quotation • Euronext Brussels • Industry Classication Benchmark – 8673 Residential REITs. • ISIN code: BE0974273055 • LEI number: 54930096UUTCOUCQDU64. The Company’s shares are admitted to trading on a regulated market, i.e. Euronext Brussels. Care Property Invest nv / Permanent document 234 235 Permanent document / Care Property Invest nv Below is an overview of the indices in which the Care Property Invest share has been included in the meantime: Inclusion indices as at 31 December 2021 Name index Euronext Bel Mid index (Euronext Brussels) Euronext Real Estate (Euronext Brussels) GPR (Global Property Research) General Europe Index GPR (Global Property Research) General Europe Quoted Index (excl. open-end bank funds) 1.14 Analists Care Property Invest is monitored by: Bank Degroof Petercam Herman van der Loos +32 2 229 63 40 [email protected] KBC Securities Wido Jongman +32 2 429 60 32 [email protected] Vlaamse Federatie van Beleggers Gert De Mesure +32 2 253 14 75 [email protected] Belus-Kepler Cheuvreux Frédéric Renard +32 1 149 14 63 [email protected] ABN AMRO Steven Boumans +31 63 056 91 59 [email protected] Stifel Louise Boyer +33 1 70 98 39 40 [email protected] Berenberg Kai Klose +44 20 32 07 78 88 [email protected] Kempen Véronique Meertens +31 20 348 84 44 [email protected] 1.15 Liquidity provider In February 2018, the Company appointed Bank Degroof Petercam as liquidity provider. In November 2018, the Company appointed KBC Securities as additional liquidity provider to further improve the liquidity of its share. 1.16 Investor prole Taking account of the legal regime of the RREC in general and that for residential RRECs in particular, Care Property Invest shares could form an attractive investment for both private and institutional investors. 1.17 Change in the rights of shareholders Pursuant to Articles 7:153 and 7:155 BCCA, the rights of shareholders may only be changed by an Extraordinary General Meeting. The document containing the information on the rights of shareholders referred to in Articles 7:130 and 7:139 BCCA can be viewed on the website of Care Property Invest. (www.carepropertyinvest.be/en/investments/becoming- shareholder/). 1.18 Voting rights of the main shareholders The main shareholders of Care Property Invest do not have voting rights other than those arising from their participation in the share capital (within the meaning of point 16.2 of Annex I to the Delegated Regulation (EU) No 2019/980). 1.19 Strategy or information on governmental, economic, budgetary, monetary or political policies or factors that have or may have a direct or indirect material impact on the activities of Care Property Invest See chapter ‘I. Risk factors’ on page 8 and onwards of this Annual Financial Report 2021. 1.20 History and evolution of the Company - important events in the development of the activities of Care Property Invest Further information on the Company and its history can be found in this chapter under item ‘5. History of the Company and its share capital’ on page 246. 1.21 Public information The necessary information concerning the Company is made available to the public to ensure the transparency, integrity and proper functioning of the market, as required by the Royal Decree of 14 November 2007 concerning the obligations of issuers of nancial instruments admitted for trading on a regulated market. The required information is distributed and stored in accordance with this Royal Decree via the Company’s website (www. carepropertyinvest.be), as well as in accordance with FSMA Circular/2012_01 dated 11 January 2012, including later changes. Care Property Invest nv / Permanent document 236 237 Permanent document / Care Property Invest nv However, the information available on the Company’s website does not form part of this URD, unless the information has been incorporated by reference in this URD. In accordance with the aforementioned Royal Decree, the information provided must be true, accurate and sincere and must enable the shareholders and the public to assess the impact of the information on the position, business and results of the Company. The convocation of the General Meeting is published in the Belgian Ofcial Gazette and in a nancial newspaper and will also be announced through the media and on the Company’s website ( www.carepropertyinvest.be), in accordance with the BCCA. Any interested party can register free of charge on the Company’s website in order to receive press releases by e-mail. The decisions on appointments and dismissals of members of the Board of Directors and the Statutory Auditor are published in the Annexes to the Belgian Ofcial Gazette. The nancial statements are led with the National Bank of Belgium. The Annual and Half-yearly Financial Reports shall be made available to the registered shareholders and to any other persons on request. These reports, the Company’s press releases, annual information, publications concerning the payment of dividends, all information subject to mandatory disclosure, as well as the Company’s Articles of Association and the Corporate Governance Charter, are available on the Company’s website at www.carepropertyinvest.be during the period of validity of this URD. Certain relevant articles of law, royal decrees and decisions applicable to Care Property Invest are posted on the website purely for information purposes and can be viewed there. 1.22 Information incorporated by reference For an overview of the Company’s activities, operations and historical nancial information, reference is made to the Annual Financial Reports of the Company for the nancial years 2020 and 2019, as well as to the Half-yearly nancial reports and the publication of the Interim Statements of the Board of Directors, which are incorporated by reference in this URD. The Annual and Half-yearly Financial Reports have been audited by the Statutory Auditor of the Company. The Interim Statements have not been audited by the Statutory Auditor. This information can be consulted at the registered ofce or on the website (www.carepropertyinvest.be) of Care Property Invest. Where reference is not made to the entire document, but only to certain parts of it, the unabridged parts are not relevant to the investor as far as the current URD is concerned. Annual Financial Report 2019 III. Report of the Board of Directors page 28 VI. Real estate report page 136 VII. Financial Statements, including Consolidated Financial Statements, Notes and Abbreviated Statutory Financial Statements page 160 VII./3. Statutory Auditor’s report (unqualied opinion) page 224 Annual Financial Report 2020 III. Report of the Board of Directors Page 32 VI. Real estate report page 136 VII. Financial Statements, including Consolidated Financial Statements, Notes and Abbreviated Statutory Financial Statements page 160 VII./3. Statutory Auditor’s report (unqualied opinion) page 224 Half-yearly Financial Report 2021 I. Interim report of the Board of Directors page 10 IV. Real estate report page 54 V. Condensed nancial statements, including Notes page 72 V./9. Statutory Auditor’s report page 87 Interim statement from the Board of Directors 3rd quarter 2021 See website of the Company, https://www.carepropertyinvest.be. Coordinated Articles of Association The coordinated Articles of Association as at 17/11/2021 are included in this chapter in point «6. Coordinated Articles of Association». Corporate Governance Charter See website of the Company, https://www.carepropertyinvest.be. 1.23 Signicant change in the nancial or commercial position The Company’s nancial or commercial position has not altered signicantly since the end of the previous nancial year for which the audited annual nancial statements or interim nancial statements have been published. Care Property Invest nv / Permanent document 238 239 Permanent document / Care Property Invest nv 2. Information likely to affect any public takeover bid each share affords the right to cast one vote. The following relevant articles of the Articles of Association were included in full in the coordinated Articles of Association (in paragraph ‘6. Coordinated Articles of Association’ on page 248). The coordinated Articles of Association are also available on www.carepropertyinvest. be. Article 6 of the coordinated Articles of Association as at 17/11/2021- CAPITAL Article 7 of the coordinated Articles of Association as at 17/11/2021- AUTHORISED CAPITAL Article 8 of the coordinated Articles of Association as at 17/11/2021- CHANGE IN THE CAPITAL Article 9 of the coordinated Articles of Association as at 17/11/2021- NATURE OF THE SHARES 2.4 Legal or statutory restrictions on the exercise of voting rights On 31 December 2021, Care PropertyInvest held 9,192 treasury shares which were purchased to enable the Company to meet its obligations with respect to management remuneration. On 1 April 2022 the members of the management used part of their variable remuneration to buy these shares. As a result, the balance of treasury shares on the date of publication of this report is reduced to 0. Further information is included in chapter ‘VII. Financial statements’, point ‘T 5.23 Capital’ on page 201. Notices pursuant to Article 34 of the Royal Decree of 14 November 2007 regarding the duties of issuers of nancial instruments admitted to trading on a regulated market (FSMA/2012_01 dated 11 January 2012). Care Property Invest provides a summary and, where appropriate, an explanation below of the following elements, in as far as they are of a nature likely to affect any public takeover bid. The Company has no notices to report for the 2021 nancial year. 2.1 Arrangements whose entry into force at a later date may result in a change of control of the issuing institution. The Company is not aware of any arrangements that could result in a change in control of the Company at a later date. 2.2 Provisions in the Articles of Association which could have the effect of delaying, postponing or preventing a change of control Reference is made to Article 7 of the coordinated Articles of Association as at 17/11/2021 - AUTHORISED CAPITAL. However, the use of the authorised capital is limited in accordance with Article 7:202 BCCA in the event of notication by the FSMA to the Company of a public takeover bid. However, it cannot be excluded that this provision may have a delaying or preventing effect on a possible takeover bid. 2.3 Capital structure The capital structure is included in chapter ‘IV. Care Property Invest on the Stock Market’, paragraph ‘4. Shareholding structure’ on page 116. In accordance with Article 38 of the Articles of Association, 2.5 Legal or statutory restrictions on the transfer of securities The following relevant articles of the Articles of Association were included in full in the coordinated Articles of Association (in paragraph ‘6. Coordinated Articles of Association’ on page 248). The Coordinated Articles of Association are also available on www.carepropertyinvest. be. Article 13 of the coordinated Articles of Association as at 17/11/2021- TRANSFER OF SHARES Article 15 of the coordinated Articles of Association as at 17/11/2021- NOTIFICATION OF SIGNIFICANT PARTICIPATING INTERESTS The legislation applying to public limited liability companies and listed companies whose shares are offered to the public for subscription, and public RRECs in particular, must be respected, including in as far as these entail a restriction of transfers of securities. 2.6 Holders of securities with special control rights attached - description of these rights Not applicable: as at 31 December 2021, there are no special control rights attached to the shares of Care Property Invest. 2.7 The mechanism for the control of any employee share scheme where the control rights are not exercised directly by the employees Not applicable: there are no share schemes. 2.8 Agreements contracted between Care Property Invest and its directors or employees providing for when, in the event of a takeover bid, the directors should resign or are redundant without valid reason or the employees’ employment is terminated Not applicable. 2.9 The rules governing the appointment and replacement of members of the governing body The following relevant articles of the Articles of Association were included in full in the coordinated Articles of Association (in paragraph ‘6. Coordinated Articles of Association’ on page 248). The Coordinated Articles of Association are also available on www.carepropertyinvest. be. Tilburg (NL) I Maria Margarithakerk Care Property Invest nv / Permanent document 240 241 Permanent document / Care Property Invest nv Article 16 of the coordinated Articles of Association as at 17/11/2021- COMPOSITION OF THE BOARD OF DIRECTORS Article 17 of the coordinated Articles of Association as at 17/11/2021- PREMATURE VACANCIES Article 18 of the coordinated Articles of Association as at 17/11/2021- CHAIRMANSHIP Article 25 of the coordinated Articles of Association as at 17/11/2021- COMMITTEES Article 27 of the coordinated Articles of Association as at 17/11/2021- EXECUTIVE COMMITTEE 2.10 The rules for amending the Articles of Association The legislation applying to public limited liability companies and listed companies whose shares are offered to the public for subscription, and public RRECs in particular, must be respected. In the event of an amendment of the Articles of Association or a decision for which the law imposes a similar majority requirement as for an amendment of the Articles of Association, and where the rights and obligations of a certain class of shareholders are affected, the statutory majority requirements must be complied with separately for each class of shareholders. 2.11 The powers of the governing body as regards the power to issue or buy back shares The following relevant articles of the Articles of Association were included in full in the coordinated Articles of Association (in paragraph ‘6. Coordinated Articles of Association’ on page 248). The Coordinated Articles of Association are also available on www. carepropertyinvest.be Article 14 of the coordinated Articles of Association as at 17/11/2021- BUY-BACK OF SHARES Further explanation is given in chapter ‘III. Report of the Board of Directors’, in paragraph ‘11.9 The powers of the administrative body, in particular with regard to the possibility of issuing or repurchasing shares’ on page 98. 2.12 Shareholder agreements known to Care Property Invest, which result in restrictions on the transfer of securities and/or voting rights The following relevant articles of the Articles of Association were included in full in the coordinated Articles of Association (in paragraph ‘6. Coordinated Articles of Association’ on page 248 ). The Coordinated Articles of Association are also available on www. carepropertyinvest.be. Article 13 of the coordinated Articles of Association as at 17/11/2021- TRANSFER OF ORDINARY SHARES No shareholder agreements are known to the Company as at 31 December 2021. 2.13 Signicant agreements to which Care Property Invest is party and which take effect, undergo changes or expire in the event of a change of control over Care Property Invest following a public takeover bid There are no signicant agreements to which the Company is party, and which take effect, undergo changes or expire in the event of a change of control over the Company following a public takeover bid, except the management agreements contracted with the CEO, CFO and COO in relation to their mandate as effective leaders and a number of credits entered into by the Company with credit institutions. Contractual provisions in the management contracts concerning resignation and severance pay are explained in Chapter III. Report of the Board of Directors, ‘11.11 Remuneration report 2021’ on page 100. There are no other agreements contracted between the Company and its directors or employees providing for benets if, in the event of a takeover bid, the directors resign or are made redundant without valid reason or the employees’ employment is terminated. The Belgian labour laws must be respected when workers resign or are dismissed. The loans taken out by the Company, which contain provisions that are subject to a change of control over the Company, have been approved and disclosed by the General Meeting in accordance with article 7:151 BCCA, with the exception of the loan taken out by the Company with ABN AMRO and the sustainability bonds issued. These will be presented at the next General Meeting and disclosed thereafter. Care Property Invest nv / Permanent document 242 243 Permanent document / Care Property Invest nv 3. Declarations (Annex I to Regulation (EU) No. 2019/980) 3.1 Persons responsible for the information provided in the URD The Managing (executive) Directors are responsible for the information provided in this URD, namely: Messrs Peter Van Heukelom, Willy Pintens, Dirk Van den Broeck, Filip Van Zeebroeck and Ms Valérie Jonkers. 3.2 Declaration by the persons responsible for the URD The responsible persons mentioned in point 1.1 above declare that, having taken all reasonable care to ensure that such is the case, and to the best of their knowledge, the information given in the URD is in accordance with the facts and contains no omission likely to affect its import. 3.3 Third party information Care Property Invest declares that the information provided by the experts and the recognised statutory auditor has been faithfully reproduced and is included with their permission. As far as Care Property Invest is aware and has been able to ascertain from information published by the third party concerned, no facts have been omitted that result in any error or misstatement in the information presented. This relates in particular to the information provided by the Company’s statutory auditor, EY Bedrijfsrevisoren (De Kleetlaan 2, 1831 Diegem), the statement ‘1. Status of the property market in which the Company operates’ on page 132, drawn up by and included with the approval of the recognised real estate experts Stadim cvba (Mechelsesteenweg 180, 2018 Antwerp) and Cushman & Wakeeld nv (Kunstlaan 56, 1000 Brussel) in this Annual Financial Report under chapter ‘VI. Real estate report’ and paragraph ‘4. Report of the real estate expert’ on page 149, also in chapter ‘VI. Real estate report’. The Company is not aware of any possible interests that the experts might have in Care Property Invest. 4. Other declarations 4.1 Declaration of the responsible persons in accordance with the Royal Decree of 14 November 2007 Hereby, the responsible persons mentioned under point 3.1 above declare that, to the best of their knowledge, the annual nancial statements which were prepared in accordance with the applicable accounting standards for nancial statements, present a true and fair view of the assets, the nancial position and the results of the Company and that this yearly report includes a fair review of the development, performance and position of the Company and the undertakings included in the consolidation, as well as a description of the principal risks and uncertainties facing the Company and the undertakings included in the consolidation. 4.2 Statements relating to the future This Annual Financial Report contains statements relating to the future. Such statements are based on estimates and forecasts of the Company and naturally contain unknown risks, uncertain elements and other factors that could lead to material differences in the results, the nancial position, the performance and the presentations from those expressed or implied in these forward-looking statements. Given these uncertainties, the statements relating to the future do not entail any guarantees whatsoever. 4.3 Litigation and arbitration proceedings The Care Property Invest Board of Directors declares that no government intervention, litigation or arbitration proceedings are pending that could have a relevant impact on the nancial position or protability of Care Property Invest and that, to the best of its knowledge, there are no facts or circumstances that could give rise to such government intervention, litigation or arbitration proceedings. Vorst (BE) I Les Saules Care Property Invest nv / Permanent document 244 245 Permanent document / Care Property Invest nv 5. History of the Company and its share capital Date Nature of the operation Amount of the share capital (in €) Number of shares (without nominal value) 30 October 1995 Initial capital through cash contributions on incorporation from ASLK Bank, BACOB Bank, Gemeentekrediet, Kredietbank, Petercam and GIMV, (share capital on incorporation through contributions in cash) 1,249,383 210 1,249,383 210 7 February 1996 Capital increase through contribution in cash 59,494,446 10,000 60,743,829 10,210 7 February 1996 IPO on Euronext Brussels 16 May 2001 Reserve incorporation in the capital 566 10,210 60,744,395 10,210 19 February 2004 Conversion of 60 special shares in the name of GIMV into ordinary shares 2012 Investment program 2,000 service ats completed. 2014 Serviceats Invest becomes Care Property Invest and builds its future. Since 25 November 2014, Care Property Invest has the status of a public Regulated Real Estate Company (public RREC) under Belgian law 9 24 March 2014 Division of the number of shares by 1,000 10,210,000 60,744,395 10,210,000 20 June 2014 Capital increase through contribution in kind in relation to stock dividend 889,004 149,425 61,633,399 10,359,425 22 June 2015 Capital increase in cash with irrevocable allocation right 16,809,093 2,825,295 78,442,492 13,184,720 2016 Inclusion of Care Property Invest’s share as BEL Mid Cap in the BEL Mid-Index. 2016 Member of EPRA organisation and inclusion of EPRA performance indicators in its nancial reports. 15 March 2017 Capital increase through contribution in kind 10,971,830 1,844,160 89,414,322 15,028,880 2017 The rst projects in the Walloon and Brussels Capital Regions have been acquired. 27 October 2017 Capital increase in cash with irrevocable allocation right 25,546,945 4,293,965 114,961,266 19,322,845 Date Nature of the operation Amount of the share capital (in €) Number of shares (without nominal value) 2018 Entry onto the Dutch market. 27 June 2018 Deletion of the special shares and conversion to ordinary shares. 114,961,266 19,322,845 114,961,266 19,322,845 2019 Inclusion of Care Property Invest share in Euronext Next 150 index. 3 April 2019 Capital increase through contribution in kind 4,545,602 746,301 119,506,869 20,086,876 26 June 2019 Capital increase by contribution in kind within the framework of optional dividend 1,831,673 307,870 121,338,541 20,394,746 2020 Entry onto the Spanish market 15 January 2020 Capital increase through contribution in kind 7,439,112 1,250,376 128,777,653 21,645,122 19 June 2020 Capital increase through contribution in kind in relation to stock dividend. 1,624,755 273,091 130,402,408 21,918,213 25 June 2020 Capital increase in cash (accelerated book building with orderbook composition) 13,040,239 2,191,821 143,442,647 24,110,034 20 January 2021 Capital increase through contribution in kind 10,091,030 1,696,114 153,533,677 25,806,148 17 November 2021 Capital increase through contribution in kind 6,692,997 1,124,968 160,226,675 26,931,116 2022 Entry onto the Irish market Care Property Invest nv / Permanent document 246 247 Permanent document / Care Property Invest nv 6. Coordinated Articles of Association COMPANY HISTORY The company was incorporated by deed executed before the notary public Jan Boeykens on 30 October 1995, published in the Annexes to the Belgian Ofcial Gazette of 21 November thereafter under number 19951121/176. The articles of association were amended by deeds executed before the aforementioned notary public Jan Boeykens on: • 30 October 1995, published in the Annexes to the Belgian Ofcial Gazette of 24 November thereafter under number 19951124/208. • 7 February 1996, published in the Annexes to the Belgian Ofcial Gazette of 19 March there- after under number 19960319/128. • 9 June 1999, published in the Annexes to the Belgian Ofcial Gazette of 16 July thereafter under number 19990716/228. The capital was adjusted and converted into Euros by a resolution of the General Meeting dated 16 May 2001, published in the Annexes to the Belgian Of- cial Gazette of 17 August thereafter under number 20010817/309. The articles of association were subsequently amended by deeds executed before the aforemen- tioned notary public on: • 28 January 2004, published in the Annexes to the Belgian Ofcial Gazette of 16 February thereafter under number 20040216/0025164. • 7 November 2007, published in the Annexes to the Belgian Ofcial Gazette of 7 December thereafter under number 20071207/0176419. • 27 June 2012, published in the Annexes to the Belgian Ofcial Gazette of 17 July thereafter under number 20120717/0125724. • 26 June 2013, published in the Annexes to the Belgian Ofcial Gazette of 19 July thereafter under number 20130719/0112410. • 19 March 2014, published in the Annexes to the Belgian Ofcial Gazette of 16 April thereafter under number 20140416/0082192 The articles of association were subsequently amended by deed executed before notary public Alvin Wittens in Wijnegem on: • 20 June 2014, published in the Annexes to the Belgian Ofcial Gazette of 15 July thereafter under number 20140715/0136439. • 25 November 2014, published in the Annexes to the Belgian Ofcial Gazette of 16 December thereafter under number 20141216/ 0233120. • 22 June 2015, published in the Annexes to the Belgian Ofcial Gazette of 17 July thereafter under number 20150717/0103638. • 22 June 2016, published in the Annexes to the Belgian Ofcial Gazette of 14 July thereafter under number 20160714/0098793. • 15 March 2017, published in the Annexes to the Belgian Ofcial Gazette of 11 April thereafter under number 20170411/0051595. • 27 October 2017, published in the Annexes to the Belgian Ofcial Gazette of 27 November thereafter under number 20171127/0165423. • 16 May 2018, published in the Annexes to the Belgian Ofcial Gazette of 12 June thereafter, under number 20180612/0090633. • 3 April 2019, published in the Annexes to the Belgian Ofcial Gazette of 30 April thereafter, under number 20190430/0059222. • 26 June 2019, published in the Annexes to the Belgian Ofcial Gazette of 12 July thereafter, under number 20190712/0094013. • 18 December 2019, published in the Annexes to the Belgian Ofcial Gazette of 24 January thereafter, under number 20200124/001490. • 15 January 2020, published in the Annexes to the Belgian Ofcial Gazette of 12 February thereafter, under number 20200212/20024540. • 15 June 2020, published in the Annexes to the Belgian Ofcial Gazette of 9 September there- after, under number 20200909/0104355. • 19 June 2020, published in the Annexes to the Belgian Ofcial Gazette of 9 September there- after, under number 20200909/0104355. • 23 June 2020, published in the Annexes to the Belgian Ofcial Gazette of 22 July 2020 there- after, under number 20200722/0083098. • 25 June 2020, published in the Annexes to the Belgian Ofcial Gazette on 18 February 2021 thereafter, under number 20200805/0090304. • 20 January 2021, published in the Annexes to the Belgian Ofcial Gazette of 22 July 2020 thereafter, under number 20210218/0022138.17 November 2021, to be published in the Belgian Ofcial Gazette. COORDINATED TEXT OF THE ARTICLES OF ASSOCIATION AS AT 17 NOVEMBER 2021 Where these articles of association refer to ‘the regulations applicable to the regulated real estate company’ this shall mean ‘the regulations applicable to the regulated real estate company at any time’. TITLE I – LEGAL FORM - NAME - REGISTERED OFFICE - PURPOSE - INVESTMENT POLICY - DU- RATION ARTICLE 1 – LEGAL FORM AND NAME The company has the legal form of a public limited liability company (société anonyme/naamloze vennootschap). It is subject to the statutory regime for public regu- lated real estate companies, which is called "public RREC" or “PRREC”. It bears the name "CARE PROPER- TY INVEST", abbreviated as "CP Invest". The company’s name and all of the documents that it produces (including all deeds and invoices) contain the words “Openbare gereglementeerde vastgoedvennootschap naar Belgisch recht (“Public regulated real estate company under Belgian law") or “OGVV naar Belgisch recht” ("PRREC under Belgian law") or are immediately followed by these words. The company’s name must always be preceded or followed by the words “naamloze vennootschap” (“public limited liability company"/”société anon- yme”) or the abbreviation “NV"/”SA”. The company is subject to regulations applicable to regulated real estate companies at any time and in particular to the provisions of the Act of 12 May 2014 concerning regulated real estate companies (the “RREC Act") and the Royal Decree of 13 July 2014 with respect to regulated real estate companies (the “RREC Decree") as amended from time to time. The company is also subject to the Decree of the Flemish government of 3 May 1995 governing the exemption from inheritance rights attached to the corporate rights in companies established within the framework of the realisation and/or nancing of investment programs of service ats, as amended from time to time and with effect from 1 January 2015 inserted in Article 2.7.6.0.1. of the Decree of 13 December 2013 containing the Flemish Tax Code (the " Flemish Tax Code of 13 December 2013"). ARTICLE 2 - REGISTERED OFFICE The registered ofce of the company is located in the Flemish Region. It may be transferred to any other place in Belgium by decision of the Board of Directors, subject to compliance with language legislation. The company may, by decision of the Board of Directors, establish administrative seats, ofces, branches, agencies and establishments at any other place in Belgi um or abroad. For the application of Article 2:31 of the Code of Companies and Associations, the company's web- site is www.carepropertyinvest.be. The company's e-mail address is [email protected]. ARTICLE 3 - OBJECT The company’s sole object is, (a) making real estate available to users directly or via a company in which it has a shareholding, in compliance with the provisions of the RREC Act and decrees and regulations issued for the implementa- tion of the RREC Act; (b) property ownership within the limits of the RREC Act, as referred to in Article 2, 5°, vi to xi of the RREC Act; (c) concluding or joining one or more of the follow- ing long-term contracts with a public client, directly or via a company in which it has a shareholding in compliance with the provisions of the RREC Act and the decrees and regulations issued for its implemen- tation, possibly in collaboration with third parties: (i) Design, Build, Finance (DBF) contracts, except where these can be qualied solely as a promotional order for works, within the meaning of Article 115, 4° of the Royal Decree of 15 July 2011 on the award of public procurement contracts in the classical sectors; (ii) Design, Build, (Finance) and Maintain (DB(F)M) contracts; (iii) Design, Build, Finance, (Maintain) and Operate (DBF(M)O) contracts; and/or (iv) contracts for concessions for public work relat- ing to buildings and/or other infrastructure of an immovable nature and services relating to this, on the basis of which: (i) it guarantees the provision, maintenance and/ or operation for a public entity and/or citizens as end-users, in order to meet a social need and/or to facilitate the provision of a public service; and (ii) for which it is able to bear the associated nanc- ing, availability, demand and/or operating risks, partially or in full, in addition to any construction risk, without necessarily holding rights in rem in that regard. (d) developing, providing for the development, estab- lishing, providing for the establishment, managing, providing for the management, operating, provid- ing for the operation of or making available one or more of the following in the long term, directly or via a company in which it has a shareholding in compliance with the provisions of the RREC Act and the decisions and regulations imposed for its implementation, possibly in collaboration with third parties: (i) utilities and storage locations for transportation, distribution or storage of electricity, gas, fossil or non-fossil fuels and energy in general and the related goods; (ii) utilities for transportation, distribution, storage or treatment of water and the related goods; (iii) installations for the generation, storage and transportation of energy, green or otherwise, and the related goods; or (iv) waste and incineration installations and related goods. The activity, as described in the preceding para- graphs, must relate to the nancing and realisa- tion of (i) with regard to the Flemish Region, only projects primarily concerning (a) the realisation of service ats as referred to in Article 88, §5, of the Residential Care Decree of 13 March 2009 (as amended from time to time) or (b) real estate for facilities in relation to the Residential Care Decree of 13 March 2009, or (c) real estate for persons with disabilities, (ii) with regard to the European Economic Area, with the exception of the Flemish Region, projects equivalent to the projects referred to in (i), or (iii) real estate located in a Member State of the European Economic Area and used or intended solely or primarily for residential units adapted for residential care or health care, or (iv) other projects which are approved from time to time under the applicable legislation on exemption from inher- itance tax, without withdrawal of recognition under that legislation (hereinafter jointly referred to as ”Projects"). In the context of the provision of real estate, the company may, in accordance with regulations applicable to RRECs and within the aforementioned limits, perform all activities related to the estab- lishment, construction (without prejudice to the prohibition to act as a property developer, within the meaning of the RREC Act, except in the case of occasional transactions), refurbishment, renovation, furnishing and tting, development, acquisition, disposition, lease, sublease, exchange, contribution, transfer, parcelling, placement under a system of co-ownership or joint ownership of real estate as described above, the provision or acquisition of right Care Property Invest nv / Permanent document 248 249 Permanent document / Care Property Invest nv of supercie, usufruct, leasehold or other real or personal rights to real estate as described above, the management and operation of real estate. The com- pany may, in accordance with regulations applicable to regulated real estate companies and within the aforementioned limits: • act as the lessee of real estate, with or without a purchase option; • - act as the lessor of real estate, as the main activity or as an additional activity, with or without a purchase option (with the proviso that the leasing of real estate with a purchase option may only be the main activity, as dened in and subject to compliance with the conditions of Article 17(3) of the RREC Royal Decree); • -develop activities within the framework of public-private partnerships, whether or not incorporated in an institutional regulated real estate company; • initially hold a share of less than 25% in the capital of a company which performs the ac- tivities referred to in sub-paragraph (c) of this Article, in as far as the said participating in- terest is converted into a participating interest through a share transfer, in accordance with the provisions of the RREC Act and the deci- sions and regulations for its implementation, within two years of the end of the construction phase of the public-private partnership (PPP) or after every longer term required in that regard by the public entity with which the contract is concluded; • in a secondary or temporary capacity, invest in securities which are not property securities within the meaning of the regulations applica- ble to RRECS. These investments will be car- ried out in accordance with the risk manage- ment policy adopted by the company and will be diversied so that they ensure adequate risk diversication. The company may also own unallocated cash and cash equivalents. The cash and cash equivalents may be held in any currency in the form of deposits on demand, or term deposits or any monetary instrument, which are readily available for mobilisation; • provide mortgages or other securities, or issue guarantees in the context of the activities of the company or its group, within the limits of the regulations applicable to RRECs; • grant loans within the limits of the legislation applicable to RRECs, and • carry out transactions concerning author- ised hedging instruments (as dened in the regulations applicable to regulated real estate companies), where these operations are part of a policy adopted by the company to cover - nancial risks, with the exception of speculative transactions. • The company shall, in compliance with the regula- tions applicable to regulated real estate companies, within the above limits, carry out all immovable, movable, nancial, commercial and industrial actions which are directly or indirectly related to its objectives or of a basic nature to pursue their realization or to facilitate this, both domestically and abroad. In compliance with the regulations applicable to regulated real estate companies, and within the above limits, the company may acquire, by means of contribution in cash or in kind, merger, de-merger or other corporate law restructuring, subscription, participation, nancial intervention or otherwise, a share in any existing or future companies or businesses in Belgium or abroad, whose objectives are identical, similar or related to its own, or of a nature as to pursue or promote the objectives of the company. ARTICLE 4 - PROHIBITORY PROVISION The company may not act as a real estate promoter within the meaning of the legislation applicable to regulated real estate companies, unless these are occasional activities. The company is not permitted to: 1° participate in a permanent takeover or guarantee syndicate; 2° lend nancial instruments, with the exception of loans which are granted in accordance with the provisions and under the conditions of the Royal Decree of 7 March 2006; 3° acquire nancial instruments issued by a compa- ny or a private association which has been declared bankrupt, entered into an amicable settlement with its creditors, been the subject of a judicial reorgan- isation, been granted a suspension of payments or which has been the subject of similar measures in another country; and 4° conclude contractual agreements or provide for provisions of the articles of association relating to afliated companies that could adversely affect the voting power that is granted to them in accordance with applicable law following a participation of a participation of 25% plus one share. ARTICLE 5 - DURATION The company is established for an indenite period and commenced operations on the date of its formation. It can be dissolved by a decision of the General Meeting, deliberating in accordance with the condi- tions and forms required for an amendment of the articles of association. TITLE II - CAPITAL - SHARES - OTHER SECURITIES ARTICLE 6 - CAPITAL The capital amounts to one hundred and sixty million two hundred and twenty-six thousand six hundred and seventy-four euro and seventy-two eurocents (€160,226,674.72). The capital is represented by twenty-six million nine hundred and thirty-one thousand one hundred and sixteen (26,931,116) shares without par value. All shares must be fully paid up from the subscrip- tion date. ARTICLE 7 - AUTHORISED CAPITAL The Board of Directors is authorised, on dates and at conditions at its discretion, in one or more tranches, to increase the share capital by a maximum amount of one hundred and fourteen million, nine hundred and sixty-one thousand two hundred and sixty-six euros and thirty-six eurocents (€114,961,266.36). This authorisation is valid for a period of ve years from the announcement of the decision of the EGM of 16 May 2018 in the Annexes to the Belgian Ofcial Gazette. It is renewable. This/these capital increase(s) may be carried out in any manner permitted under the applicable regulations, including by contributions in cash, by contributions in kind or as a mixed contribution, or by the conversion of reserves, including retained earnings and share premiums as well as all private assets under the statutory IFRS nanci al statements of the company (prepared under the regulations applicable to regulated real estate companies) that are amenable to conversion into capital, and with or without the creation of new se- curities, in accordance with the rules prescribed by the Belgian Code for Companies and Associations, the regulations applicable to regulated real estate companies and to these articles of association. The Board of Directors may issue new shares with the same rights as the existing shares for that purpose. As the case may be, the share premiums, less any deduction of an amount no more than that equal to the costs of the capital increase within the meaning of the applicable IFRS rules, in the event of a capital increase decided by the Board of Directors, must be placed by the Board of Directors in a blocked reserve account that shall constitute the surety for third parties on the same basis as the capital and which in no case may be reduced or eliminated other than by a decision of the General Meeting deciding as for an amendment of the articles of association, except for the conversion into capital as provided above. Under the conditions and within the limits provided in this article, the Board of Directors may also issue subscription rights (whether or not attached to another security) and convertible bonds or bonds redeemable in shares, which may give rise to the creation of the same securities as referred to in the fourth paragraph, and always in compliance with the applicable regulations and these articles of association. Without prejudice to the application of the mandato- ry provisions contained in the applicable regula- tions, the Board of Directors may restrict or cancel the preferential right in the cases and subject to compliance with the conditions stipulated in the ap- plicable regulations, even if this is done in favour of one or more specic persons other than employees of the company or its subsidiaries. If applicable, the irrevocable allocation right must at least comply with the modalities shown in the applicable regulations on regulated real estate companies and article 8.1 of these articles of asso- ciation. Without prejudice to the application of the mandatory provisions contained in the applicable regulations, the aforementioned restrictions in con- nection with the cancellation or restriction of the preferential right are not applicable in the case of a cash contribution with restriction or cancellation of the preferential right, which is made to supplement a contribution in kind for the purpose of distributing an optional dividend, provided this is made payable to all shareholders. Upon the issue of securities for contributions in kind, the conditions set out in the applicable regulations on regulated real estate companies and article 8.2 of the articles of association must be complied with (including the ability to deduct an amount equal to the portion of the undistributed gross dividend). However, the special rules set out under article 8.2 regarding the capital increase in kind shall not apply to the contribution of the right to dividend for the purposes of the payment of an optional dividend, provided this is made payable to all shareholders. ARTICLE 8 - CHANGE IN THE CAPITAL Notwithstanding the option of using the authorised capital by means of a resolution of the Board of Directors, and with due regard to the legislation ap- plicable to regulated real estate companies, a capital increase or capital reduction may only be decided by an extraordinary General Meeting in the presence of a notary public and in accordance with the Belgian Code for Companies and Associations and the RREC legislation. The company is prohibited from directly or indirect- ly subscribing to its own capital increase. On the occasion of each capital increase, the Board of Directors shall determine the price, the issue premium, if any, and the terms and conditions of the issue of new shares, unless the General Meeting decides otherwise itself. If the General Meeting decides to request an issue premium, this must be placed in a non-available reserve account that shall constitute the guarantee of third parties in the same way as the capital and which may not be reduced or eliminated in any case other than by a decision of the General Meeting deciding as for an amendment of the articles of association, except for the conversion into capital as provided above. In the event of a reduction in the issued capital, shareholders must be treated equally in equivalent circumstances, and the other rules contained in the mandatory provisions of the applicable regulations must be complied with. Care Property Invest nv / Permanent document 250 251 Permanent document / Care Property Invest nv 8.1 Capital increase in cash In the case of a capital increase by contribution in cash and without prejudice to the application of the mandatory provisions contained in the applicable regulations, the preferential right may be restricted or cancelled in the cases and subject to compliance with the conditions stipulated in the applicable regulations. If applicable, the irrevocable allocation right must at least meet the following conditions: 1. it must relate to all newly issued securities; 2. it must be granted to the 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 an- nounced no later than the eve of the opening of the public subscription period; and 4. the public subscription period must in such case be at least three trading days. However, according to the RREC legislation, this should in any event not be granted in the case of a capital increase by contribution in cash carried out under the following conditions: 1. the capital increase shall take place using the authorised capital; 2. the cumulative amount of capital increases carried out in accordance with this paragraph over a period of twelve (12) months shall not exceed 10% of the amount of the capital at the time of the decision to increase the capital. Without prejudice to the application of the mandato- ry provisions contained in the applicable regula- tions, the aforementioned restrictions in connection with the capital increase in cash shall also not apply in the case of a cash contribution with restriction or cancellation of the preferential right, which is made to supplement a contribution in kind for the purpose of distributing an optional dividend, provided this is made payable to all shareholders. 8.2 Capital increase in kind The following conditions must be fullled upon the issue of securities against contribution in kind, without prejudice to articles 7:196 and 7:197 of the Belgian Code for Companies and Associations: 1. the identity of the contributor must be stated in the report of the Board of Directors referred to in article 7:197 of the Belgian Code for Companies and Associations and, where appropriate, in the notice convening the General Meeting for the purpose of the capital increase; 2. the issue price shall not be less than the lower of (a) a net value per share, which dates back more than four months before the date of the contribution agreement or, at the option of the company, prior to the date of the deed of capital increase, and (b) the average closing price of the thirty calendar days prior to that date; 3. unless the issue price or, in the case referred to in article 8.3, the exchange ratio, and the relevant conditions are determined no later than the working day following the conclusion of the contribution agreement and communicated to the public, spec- ifying the period within which the capital increase will be effectively implemented, the deed of capital increase will be executed within a maximum period of four months; and 4. the report envisaged in point 1 above must also explain the impact o f the proposed contribution on the situation of former shareholders, in particular as regards their share in the prots, the net value per share and in the capital, as well as the impact in terms of voting rights. For the purposes of point 2 above, it is permitted to deduct from the amount referred to in paragraph (b) of point 2, an amount equal to the portion of the un- distributed gross dividend to which the new shares would eventually not give any rights. In such case, the Board of Directors shall specically account for the deducted dividend amount in its special report and explain the nancial conditions of the transac- tion in its annual nancial report. The special rules set out under this article 8.2 re- garding the capital increase in kind shall not apply to the contribution of the right to dividend for the purposes of the payment of an optional dividend, provided this is made payable to all shareholders. 8.3 Mergers, demergers and similar transactions The special rules concerning the capital increase in kind as set out under article 8.2, shall apply mu- tatis mutandis to mergers, demergers and similar transactions as referred to in the Belgian Code for Companies and Associations. In such case, the "date of the contribution agree- ment" refers to the date on which the merger or demerger proposal is deposited. ARTICLE 9 - NATURE OF THE SHARES The shares are without nominal value. The shares may be registered or dematerialised, at the option of the shareholder and in accordance with the restrictions imposed by law. Shareholders may at any time and free of charge re- quest in writing the conversion of registered shares into dematerialised shares or vice versa. Dematerialised securities are represented by an en- try in an account with an approved account holder or a settlement institution, in the name of the owner or holder, and shall be transferred by transfer from account to account. The number of dematerialised shares in circulation at any time will be registered in the register of registered shares in the name of the settlement institution. A register is maintained for registered shares at the registered ofce of the company. This register of the registered shares may be kept in electronic form. Each holder of securities may inspect the register with respect to his or her securities. ARTICLE 10 - SECURITIES The company may, with the exception of prot-shar- ing certicates and similar securities and provided it is in compliance with the regulations applicable to regulated real estate companies, issue any securities that are not prohibited by or by virtue of the law, in accordance with the rules as prescribed therein and the legislation applicable to regulated real estate companies and the articles of association. These securities are registered or dematerialised. ARTICLE 11 - EXERCISE OF RIGHTS ATTACHED TO THE SHARES The shares are indivisible with respect to the company. If a share belongs to several people or the rights attached to a share are divided among several people, the Board of Directors may suspend the exer- cise of the rights attached thereto until one person has been designated as a shareholder vis-à-vis the company. If a share is encumbered with usufruct, then the voting rights connected to that share shall be exerci- sed by the usufructuary, unless otherwise agreed with the bare owner. ARTICLE 12 - (BLANCO) ARTICLE 13 - TRANSFER OF SHARES The shares are freely transferable. ARTICLE 14 - ACQUISITION OF OWN SHARES The company may buy back its own shares or accept them in pledge, in compliance with the conditions provided for in the Belgian Code for Companies and Associations. Pursuant to the decision of the extraordinary Gen- eral Meeting of 15 June 2020, the Board of Directors is authorised to acquire its own shares, or to take them into pledge, with a maximum of ten percent (10%) of the total number of shares issued, for a unit price that may not be less than ninety per cent (90%) of the average price of shares listed on the regulated market of Euronext Brussels in the past thirty (30) days, nor higher than one hundred and ten per cent (110%) of the average price of shares listed on the regulated market of Euronext Brussels in the past thirty (30) days, or a maximum increase or fall of ten per cent (10%) in relation to the aforementioned average price. This authorisation is granted for a renewable period of ve (5) years from the date of the publication in the Annexes to the Belgian Ofcial Gazette of the decision of the extraordinary General Meeting of 15 June 2020. The company may dispose of its own shares on the stock exchange or privately, subject to the condi- tions set by the Board of Directors, without the prior consent of the General Meeting, provided that the applicable market regulations are respected. The Board of Directors is permitted to dispose of its own listed shares, in accordance with article 7:218, §1, paragraph 1, 2° of the Belgian Code for Companies and Associations. The above authorisation also applies for the acqui- sition and disposal of shares in the company held by one or more direct subsidiaries of the company, within the meaning of the legal provisions concern- ing the acquisition of shares of the parent company by its subsidiaries. ARTICLE 15 - DISCLOSURE OF SIGNIFICANT par- ticipations In accordance with the conditions, terms and provisions stipulated in articles 6 to 13 of the Act of the second of May two thousand and seven and the Royal decree of the fourteenth of February two thou- sand and eight concerning the disclosure of major shareholdings, as amended from time to time (the "Transparency Law"), any natural or legal person must inform the company and the Financial Ser- vices and Markets Authority (FSMA) of the number and the percentage of voting rights that he or she holds directly or indirectly, whenever the number of voting rights reaches, exceeds or falls below 5%, 10%, 15%, 20% etc., in each case in blocks of 5 percent, of the total of the existing voting rights, under the con- ditions stipulated by the Transparency Act. Pursuant to article 18 of the Act of the second of May two thousand and seven, this requirement also applies when the voting rights attached to the securities with voting rights that are held directly or indirectly reach, exceed or fall below the threshold of three percent (3%) of the total existing voting rights. TITLE III - MANAGEMENT AND AUDIT ARTICLE 16 - COMPOSITION OF THE BOARD OF DIRECTORS The Board of Directors has a variable number of members. The minimum number of directors is ve. The directors do not need to be shareholders. The Board of Directors shall be composed of at least three independent members within the meaning of article 7:87, §1 of the Belgian Code for Companies and Associations. The directors are exclusively natural persons; they must meet the requirements of reliability and expertise as laid down in the RREC legislation and may not fall within the scope of the prohibitions laid down in the RREC legislation. The duration of the mandate of a director shall not exceed four years. Outgoing directors are eligible for re-appointment. Care Property Invest nv / Permanent document 252 253 Permanent document / Care Property Invest nv The members of the Board of Directors are appoint- ed by the General Meeting, which also determines their remuneration. Their remuneration, if any, may not be determined in relation to the operations and transactions carried out by the company. Unless the appointment decision of the General Meeting provides otherwise, the mandate of outgo- ing and non-elected directors shall end immediately after the rst General Meeting following after the expiry of the term of the respective mandate, which has provided for new appointments in so far as this is necessary in the light of the legal and statutory number of directors. If a director’s mandate becomes vacant for any reason, a new director shall be elect- ed notwithstanding the provisions of article 17. The effective management of the company must be entrusted to at least two persons who, like the mem- bers of the managing body, must have the necessary professional reliability and appropriate expertise as required for the performance of their mandate and must comply with the regulations applicable to regulated real estate companies. The appointment of directors and effective manage- ment is submitted to the FSMA for approval. ARTICLE 17 - PREMATURE VACANCY If any managing director’s mandate becomes vacant for any reason whatsoever, the remaining managing directors shall convene a board meeting to provide for temporary replacements for such vacancies until the next General Meeting, which will make provi- sion for the nal appointment. On this occasion the directors must ensure that sufcient independent directors remain in relation to the above article 16 and the applicable regulations. The directors must possess the professional reli- ability and appropriate expertise required for the performance of their mandate. Every appointment of a director by the General Meeting pursuant to the above terminates the man- date of the director that he or she replaces. ARTICLE 18 - CHAIRMANSHIP The Board of Directors shall elect a chairman among its directors. The chairman chairs the Board of Directors. ARTICLE 19 - MEETINGS OF THE BOARD OF DIREC- TORS The Board of Directors shall be convened by the chairman or by two directors whenever the interests of the company so require. The convening notices state the place, date, time and agenda of the meeting and are sent at least two full days before the meeting by letter, e-mail or by any other written means. If the chairman is unable to attend, the Board of Di- rectors is chaired by the most senior non-executive director.Each director who attends a meeting of the Board of Directors or is represented at such meeting is considered to be regularly convoked. ARTICLE 20 - deliberation The Board of Directors can only validly deliberate and decide if at least a majority of the directors are present or represented. If this quorum is not reached, a new Board of Direc- tors may be convened with the same agenda, which will validly deliberate and decide if at least two directors are present or represented. With respect to items not included on the agenda, it may only deliberate with the consent of the entire Board of Directors and provided that all directors are present or represented. Convening notices shall be sent by electronic mail or, in the absence of an e-mail address communicat- ed to the company, by ordinary letter or by any other means of communication, in accordance with the applicable legal provisions. Any director may grant a proxy by letter, e-mail or any other written form to another member of the Board of Directors to represent him or her at a meet- ing of the Board of Directors and to validly vote in his or her place. The Board of Directors may meet by conference call, video conference or similar commu- nications equipment, by means of which all persons participating in the meeting can hear each other. Any director may also provide his or her advice to the chairman by letter, e-mail or other written form. A decision may be adopted by unanimous written consent of all directors. If a director has a direct or indirect interest of a nancial nature that conicts with a decision or transaction that falls within the competence of the Board of Directors, he or she must act in accordance with article 7:96 of the Belgian Code for Companies and Associations. The members of the Board of Directors shall also comply with articles 37 and 38 of the RREC Act. Subject to the provisions hereafter, decisions of the Board of Directors are adopted by a majority of votes cast. Blank or invalid votes shall not be counted as votes cast. In the event of a tie of votes within the Board of Directors, the director chairing the meeting will cast the deciding vote. ARTICLE 21 - MINUTES The deliberation of the Board of Directors shall be re- corded in minutes signed by the members present. These minutes shall be included in a special register kept at the registered ofce of the company. The proxies shall be attached to the minutes. The copies or extracts, required to be presented by law or otherwise, shall be signed by two directors or by a person charged with the daily management. This authority may be delegated to a proxyholder. ARTICLE 22 - POWERS OF THE BOARD OF DIREC- TORS The Board of Directors has the broadest powers to perform all acts that are necessary or useful for the realisation of the object of the company. It is authorised to perform all acts that are not expressly reserved for the General Meeting by law or by the articles of association. The Board of Directors draws up the half-yearly reports as well as the annual report. The Board of Directors appoints one or more inde- pendent valuation expert(s) in accordance with the RREC legislation and, if necessary, proposes any modication to the list of experts included in the dossier attached to the application for recognition as RREC. ARTICLE 23 - SPECIAL POWERS The Board of Directors may mandate a proxyholder for special and specic matters, even if he or she is not a shareholder or director, within the limits set by the applicable legal provisions. The proxyholders legally bind the company within the limits of the powers granted, without prejudice to the responsibility of the Board of Directors in the event of excessive power. ARTICLE 24 - REMUNERATION The mandate of directors is remunerated. The General Meeting determines the remuneration of the directors. The members of the Board of Directors are entitled to a refund of the costs directly related to their mandate. ARTICLE 25 – COMMITTEES 25.1 Advisory committees The Board of Directors sets up an audit committee and a remuneration committee in accordance with article 7:99 and article 7:100 of the Belgian Code for Companies and Associations. 25.2 Other committees Without prejudice to article 25.1, the Board of Directors may establish one or more other advisory committees from its members and under its respon- sibility, in accordance with article 7:98 of the Belgian Code for Companies and Associations. The Board of Directors determines the composition, mandate and powers of these committees, in com- pliance with the applicable regulations. ARTICLE 26 - EXTERNAL REPRESENTATION POWERS The company is legally represented in all its ac- tions, including those to which a public ofcial or a ministerial ofcer cooperates, as well as in legal proceedings, either by two directors acting jointly or, within the limits of day-to-day management, by two members of the executive committee acting jointly. The company is also validly represented by special proxyholders within the limits of the mandate entrusted to them for this purpose by the competent body. ARTICLE 27 - DAILY MANAGEMENT The Board of Directors entrusts the daily manage- ment as well as the representation concerning the daily management of the company to an executive committee consisting of at least three members. A director who is also a member of the executive com- mittee shall be referred to as a “managing director”. ARTICLE 28 - (BLANCO) ARTICLE 29 - AUDITS The audit of the nancial situation, the nancial statements and the regularity of the company’s operations in terms of the Belgian Code for Compa- nies and Associations, the RREC legislation and the articles of association, shall be entrusted to one or more statutory auditors appointed from the auditors or rms of auditors approved by the FSMA. The General Meeting shall determine the number of statutory auditors and their remuneration by simple majority. The statutory auditors are appointed for a renewable term of three years. Under penalty of damages, they may be dismissed by the General Meeting only for legitimate reasons during their mandate, subject to compliance with the procedure described in article 3:67 of the Belgian Code for Companies and Associations. ARTICLE 30 - RESPONSIBILITIES OF THE STATU- TORY AUDITORS The statutory auditors have an unrestricted right of audit over all operations of the company, either jointly or separately. They may inspect the books, correspondence, minutes and in general all docu- ments of the company on site. Every six months, the Board of Directors shall hand them a statement summarizing the assets and liabilities of the company. The statutory auditors may be assisted by employ- ees or other persons for whom they are responsi- ble in the exercise of their mandate, at their own expense. TITLE IV - GENERAL MEETING ARTICLE 31 - THE GENERAL MEETING - COMPOSI- TION AND POWERS The regularly constituted General Meeting repre- sents the totality of the shareholders. The resoluti- ons of the General Meeting are binding on all share- holders, even on those absent from the meeting or those who voted against them. ARTICLE 32 - MEETINGS OF THE GENERAL MEET- ING The General Meeting shall be held on the last Wednesday of the month of May at 11 a.m. An extraordinary General Meeting may be convened whenever the interests of the company require it and must always be convened whenever sharehold- ers representing one tenth of the subscribed capital so request. Such request shall be sent by registered letter to the ofce of the company and shall precisely describe the subjects to be deliberated and decided by the General Meeting. Care Property Invest nv / Permanent document 254 255 Permanent document / Care Property Invest nv The request should be addressed to the Board of Directors and the statutory auditor, who must jointly convene a meeting within three weeks of receipt of the request. In the convening notice other agenda items may be added next to items requested by the shareholders. One or more shareholders who together hold at least three percent (3%) of the capital of the company may, in accordance with the provisions of the Bel- gian Code for Companies and Associations, request the inclusion of items to be discussed on the agenda of any shareholders' meeting and may submit proposals for resolutions with respect to items to be discussed that have been or will be included on the agenda. Unless otherwise stated in the convening notice, the General Meeting will be held at the registered ofce of the company. ARTICLE 33 – CONVOCATION The Board of Directors or the statutory auditor(s) convenes the General Meeting. The notices convening meetings state the venue, date, time and agenda of the General Meeting as well as the proposed resolutions and are issued in the form and within the periods required by the Belgian Code for Companies and Associations. Each year, a General Meeting will be held whose agenda includes at least the following points: the discussion of the annual report and the report of the statutory auditor(s), the discussion and approval of the nancial statements and the appropriation of net prot, discharge of the directors and the statuto- ry auditor(s) and, where applicable, the appointment of directors and the statutory auditor(s). The regularity of the convocation of meetings cannot be disputed if all shareholders are present or duly represented. ARTICLE 34 - ELIGIBILITY A shareholder may only participate in the General Meeting and exercise voting rights, subject to com- pliance with the following requirements: A shareholder may only participate in the General Meeting and exercise voting rights on the basis of the administrative registration of the shares of the shareholder on the registration date, either by registration in the register of registered shares of the company, or by their registration in the accounts of a recognised account holder or a clearing institu- tion, irrespective of the number of shares held by the shareholder at the General Meeting. The fourteenth day before the General Meeting, at midnight (Belgian time), counts as the registration date. Holders of dematerialised shares who wish to attend the meeting must submit a certicate issued by a recognised account holder or the clearing insti- tution and conrming, as appropriate, how many dematerialised shares are registered in the name of the shareholder on the record date and for which the shareholder has indicated that he or she intends to participate in the General Meeting. Such submission shall be made no later than the sixth day preceding the date of the General Meeting, via the e-mail address of the company or via the e-mail address specically mentioned in the convo- cation notice, at the registered ofce or by post. The owners of registered shares who wish to partic- ipate in the meeting, must inform the company no later than six days before the date of the meeting of their intention to participate in the meeting, via the e-mail address of the company or via the e-mail address specically mentioned in the convocation notice, by post or, as the case may be, by sending a proxy. The Board of Directors shall keep a register of each shareholder who has indicated he or she wishes to participate in the General Meeting, which will list his or her name and address or registered ofce, the number of shares in his or her possession on the registration date and with which he or she indicated they will participate in the General Meeting, and a description of the documents showing that he or she held the relevant shares on the registration date. ARTICLE 35 – PROXY VOTING Each shareholder may appoint a proxy to represent him or her at the General Meeting in accordance with the relevant provisions of the Belgian Code for Companies and Associations. The proxy does not have to be a shareholder. A shareholder of the company may appoint only one person as a proxy at each General Meeting. Any de- viation from this rule is only possible in accordance with the relevant provisions of the Belgian Code for Companies and Associations. A person who acts as a proxy holder may hold a proxy of more than one shareholder. Where a proxy holder holds proxies of several shareholders, he or she may vote differently for one shareholder than for another shareholder. The appointment of a proxy holder by a shareholder takes place in writing or through an electronic form and must be signed by the shareholder, in such case by an advanced electronic signature within the meaning of article 4, §4 of the Act of 9 July 2001 concerning the establishment of rules relating to the legal framework for electronic signatures and certication services, or by an electronic signature which meets the requirements of article 1322 of the Belgian Civil Code. The notication of the proxy to the company must be made via the company's e-mail address or via the e-mail address specically mentioned in the convo- cation notice, at the registered ofce or by post. The company must receive the proxies by the sixth day before the date of the General Meeting at the latest. Notwithstanding the possibility to deviate from the instructions in certain circumstances in accordance with article 7:145, second paragraph of the Belgian Code for Companies and Associations, the proxy holder shall cast votes in accordance with any instructions of the shareholder who appointed him or her. The proxy holder shall keep a record of the voting instructions for at least one year and conrm that he or she has complied with the voting instruc- tions at the request of the shareholder. In the case of a potential conict of interest, as de- ned in article 7:143, §4 of the Belgian Code for Com- panies and Associations, between the shareholder and the proxy holder he or she has designated, the proxy holder must disclose the specic facts that are relevant for the shareholders in order to assess whether there is any risk that the proxy holder might pursue another interest than the interest of the shareholder. In addition, the proxy holder may only vote on behalf of the shareholder, provided that he or she has received specic voting instructions for each item on the agenda. If several persons hold rights in rem in respect of the same share, the company may suspend the exercise of the voting rights attached to that share until one person has been designated as the holder of the voting rights. ARTICLE 36 - BUREAU Every General Meeting is chaired by the chairman of the Board of Directors or, in his or her absence, by the oldest director present. The chairman appoints a secretary and two scru- tineers, who need not be shareholders. One person may be both secretary and scrutineer. The chairman, the secretary and the scrutineers together form the bureau, which is completed by the other members of the Board of Directors. ARTICLE 37 - POSTPONEMENT The Board of Directors may, at any General Meeting, during the session, postpone the decision regarding the approval of the nancial statements for ve weeks. This postponement does not affect the other deci- sions taken, unless otherwise decided by the Gener- al Meeting in this regard. The next meeting has the right to determine the nal nancial statements. The Board of Directors also has the right to postpone any other General Meeting or any other item on the agenda of the annual meeting during the session by ve weeks, unless the meeting was convened at the request of one or more shareholders representing at least one fth of the capital or by the statutory auditor(s). ARTICLE 38 - NUMBER OF VOTES – EXERCISE OF VOTING RIGHTS Every share confers the right to one vote, subject to the cases of suspension of voting rights provided for in the Belgian Code for Companies and Associations or any other applicable law. ARTICLE 39 - PROCEEDINGS OF THE GENERAL MEETING - deliberation An attendance list which displays the name of the shareholders and the number of shares they repre- sent at the meeting, shall be signed by each of the shareholders or by their proxy before the meeting is opened. The General Meeting may not deliberate or decide on items not listed on the agenda unless all share- holders are present or represented at the meeting and they unanimously decide to extend the agenda. The required approval is certain if no opposition is noted in the minutes of the meeting. The aforementioned shall not affect the possibility of one or more shareholders jointly holding at least 3% of the share capital, and provided that the rele- vant provisions of the Belgian Code for Companies and Associations are met, to have items placed on the agenda to be discussed at the General Meeting and to submit proposals for resolutions relevant to the agenda or to include items to be discussed, until at the latest the twenty-second day before the date of the General Meeting. This does not apply if a General Meeting is con- vened by a new convocation notice because the required quorum was not reached with the rst convocation, provided that the rst convocation was in compliance with the legal requirements, the date of the second meeting was mentioned in the rst convocation notice and no new items are put on the agenda. The company must receive these requests by the twenty-second day before the date of the General Meeting at the latest. The subjects to be covered and the related proposals for resolutions that would be added to the agenda in such case, shall be published in accordance with the provisions of the Belgian Code for Companies and Associations. If a proxy was already notied to the company before the publication of this revised agenda, the proxy holder must comply with the relevant provisions of the Belgian Code for Companies and Associations. The items to be discussed and the proposed resolu- tions that have been placed on the agenda pursuant to the preceding paragraph, may be discussed only if all relevant provisions of the Belgian Code for Companies and Associations have been met. The Board of Directors shall answer the questions raised, during the meeting or in writing, regarding their report or regarding the agenda items, to the extent that sharing the details or facts is not of a na- ture to be potentially detrimental to the company’s business interests or to the condentiality to which the company or its directors have committed to. The statutory auditors shall answer the questions raised, during the meeting or in writing, regarding their report, to the extent sharing the details or facts is not of a nature to be potentially detrimental to the company’s business interests or to the condential- Care Property Invest nv / Permanent document 256 257 Permanent document / Care Property Invest nv ity to which the company, its directors or the statu- tory auditors have committed to. They are entitled to address the General Meeting regarding fullment of their task. If there are various questions regarding the same subject, the Board of Directors and the statutory auditors may answer these in a single response. Once the convocation notice is published, the share- holders may ask the above questions in writing, in accordance with the relevant provisions of the Belgian Code for Companies and Associations. The General Meeting may validly deliberate and vote, regardless of the part of the capital that is present or represented, except in cases where the Belgian Code for Companies and Associations im- poses an attendance quorum. Except for mandatory legal provisions or provisions in the articles of association that stipulate other- wise, decisions shall be taken by simple majority of the votes cast. Blank and invalid votes are not counted as votes cast. In the case of a tie vote the proposal will be rejected. Voting takes place by show of hands or by roll call, unless the General Meeting decides otherwise by a simple majority of the votes cast. The extraordinary General Meeting must be held in the presence of a notary public who will prepare an authentic ofcial record. The General Meeting may only validly deliberate and decide on an amendment of the articles of association if those attending the meeting represent at least half of the share capital. If a quorum is not reached, then a new convocation is required; the second meeting shall deliberate and decide validly, irrespective of the present or repre- sented portion of the capital. Moreover, an amendment of the articles of associa- tion is only adopted if it was previously approved by the FSMA and if three quarters of the votes attached to the present or represented shares are acquired (or any other special majority stipulated in the Belgian Code for Companies and Associations), with abstentions not being taken into account either in the numerator or in the denominator. ARTICLE 40 - MINUTES Minutes shall be drawn up of every General Meeting. The minutes of the General Meeting are signed by the members of the bureau and by shareholders who request so. The copies required to be presented by law or otherwise, shall be signed by two directors or by a managing director. For each decision, the number of shares for which valid votes have been cast, the percentage in the share capital represented by these shares, the total number of validly cast votes, the total number of votes cast in favour of or against each decision, and the number of abstained votes, if any, will be reported in the minutes of the General Meeting. This information will be published on the company web- site within fteen days of the General Meeting. TITLE V - FINANCIAL STATEMENTS - PROFIT APPROPRIATION ARTICLE 41 - FINANCIAL YEAR - FINANCIAL STATEMENTS - ANNUAL REPORT The nancial year commences on the rst of Janu- ary and ends on the thirty-rst of December of each year. At the end of each nancial year, the Board of Directors prepares an inventory and the nancial statements. The directors also prepare a report in which they render account of their policy, i.e., the annual report. This report contains a commentary on the nancial statements, which includes a fair overview of the state of affairs and the position of the company. This report also contains the infor- mation required by the Belgian Code for Companies and Associations, including a corporate governance declaration, which forms a specic part thereof. This corporate governance declaration also contains the remuneration report, which forms a specic part thereof. In view of the Annual General Meeting, the statutory auditor prepares a written and detailed report, i.e., the audit report. As soon as the notice of the meeting has been pub- lished, the shareholders may take note of the nan- cial statements and other documents referred to in the Belgian Code for Companies and Associations. ARTICLE 42 - APPROVAL OF THE FINANCIAL STATEMENTS The General Meeting shall be presented with the an- nual report and the report of the statutory auditor(s) and decide by a simple majority on the approval of the nancial statements. After approval of the nancial statements, the Gen- eral Meeting shall decide by a simple majority, by separate voting, regarding the discharge granted to the directors and the statutory auditor(s). This discharge is only valid if the balance sheet does not contain omissions or false statements conceal- ing the true state of the company and, in respect of acts contrary to the articles of association, only if these were specically indicated in the convocation notice. The Board of Directors shall ensure that the statu- tory and consolidated nancial statements are led with the National Bank of Belgium within thirty days of the approval of the nancial statements, in accordance with the relevant legal provisions. The annual and half-yearly nancial reports, the annual and half-yearly nancial statements and the statutory auditor's report and the articles of association of the company, will be made available to the shareholders for consultation, in accordance with the provisions applicable to issuers of nancial instruments admitted to trading on a regulated market and with the RREC legislation. The annual and half-yearly reports can be consulted, for infor- mation purposes, on the website of the company. Shareholders can obtain a free copy of the annual and half-yearly reports at the registered ofce of the company. ARTICLE 43 - APPROPRIATION OF PROFIT At the proposal of the Board of Directors, the General Meeting shall vote by a simple majority on the appropriation of net prot. The company must distribute to its shareholders, within the limits permitted by the Belgian Code for Companies and Associations and the RREC legislation, a dividend, the minimum amount of which is prescribed by the RREC legislation. ARTICLE 44 - PAYMENT OF DIVIDENDS The payment of dividends shall take place at the time and place determined by the Board of Directors. The Board of Directors may pay interim dividends, within the limits specied in article 7:213 of the Belgian Code for Companies and Associations. ARTICLE 45 - (BLANCO) TITLE VI - DISSOLUTION - LIQUIDATION ARTICLE 46 - LIQUIDATION In the event of the dissolution of the company, for any reason or at any time, the liquidation will be performed by liquidators appointed by the General Meeting. If the statement of assets and liabilities drawn up in accordance with the Belgian Code for Companies and Associations shows that not all creditors can be repaid in full, the appointment of the liquidators in the articles of association or by the General Meeting must be submitted to the President of the Court for conrmation. However, this conr- mation is not required if that statement of assets and liabilities shows that the company only has debts towards its shareholders and all shareholders who are creditors of the company conrm in writing that they agree to the appointment. In the absence of such appointment, the liquidation will be performed by the Board of Directors acting in the capacity of liquidation committee. With regard to third parties, they shall be considered as liqui- dators by operation of law, but without the powers conferred by law and the articles of association on the liquidator appointed in the articles of associa- tion, by the General Meeting or by the court. The liquidators shall take up their mandate only af- ter the competent commercial court has conrmed their appointment following the decision of the General Meeting. Unless decided otherwise, the liquidators shall act jointly. To this end, the liquidators shall have the broadest powers in accordance with articles 2:87 et seq. of the Belgian Code for Companies and Associa- tions, subject to limitations imposed by the General Meeting. The General Meeting determines the remuneration of the liquidators.The liquidation of the compa- ny shall be completed in accordance with the provisions of the Belgian Code for Companies and Associations. ARTICLE 47 - DISTRIBUTION After the settlement of all debts, charges and ex- penses of the liquidation, the net assets must rst be used to repay, in cash or in kind, the amount paid up on the shares. Any surplus shall be distributed to the shareholders in proportion to their rights. TITLE VII - GENERAL PROVISIONS ARTICLE 48 - ELECTED DOMICILE Every director, manager and liquidator who resides abroad shall be deemed to have chosen domicile in Belgium for the term of its mandate. If this was not the case, they shall be deemed to have his domicile at the registered ofce of the company, where writs and notices concerning the affairs of the company and the responsibility for its governance may be validly served, with the exception of notices that are sent in accordance with these articles of associa- tion. The holders of registered shares are required to notify the company of any change of address. In the absence of notication, they shall be deemed to have elected domicile at their last known address. ARTICLE 49 - JURISDICTION Except when explicitly waived by the company, any disputes between the company, its directors, its stockholders and liquidators concerning the affairs of the company and the implementation of these articles of association shall be settled exclusively by the commercial courts where the company has its registered ofce. ARTICLE 50 – General provisions of law The parties declare that they will fully comply with the Belgian Code for Companies and Associations, as well as the regulations applicable to regulated real estate companies (as amended from time to time). Accordingly, any provisions of these articles of association which unlawfully deviate from the provisions of the aforementioned laws, shall be deemed not to be included in the current deed, and the clauses which are contrary to the provisions of these laws shall be deemed not written. The nullity of one article or part of an article of these articles of association will not affect the validity of the other (parts of) clauses in these articles of association. On behalf of the company The notary public Care Property Invest nv / Permanent document 258 259 Permanent document / Care Property Invest nv 7. The public regulated real estate company (RREC) 7.1 Denition The public regulated real estate company (RREC) was established on 12 May 2014 by the RREC Law of 12 May 2014 as last amended by the Law of 28 April 2020. The RREC Law denes the RREC as a company that (i) is established for an indenite period, (ii) performs the activity referred to in Article 4 or Article 76/5 of the RREC Law (see below) and (iii) is licensed as such by the Belgian Financial Services and Markets Authority (FSMA). The public RREC is an RREC, the shares of which are admitted for trading on a regulated market and which raises its nancial resources in Belgium or elsewhere through a public offering of shares. A public RREC is therefore a listed company, subject to the requirement that at least 30% of its marketable shares should be issued to the public (free oat). According to the RREC Law, a public RREC carries on a business consisting of: (a) making real estate available to users directly or via a company in which it holds a participation, in compliance with the provisions of the Law and decrees and regulations issued for the implementation of the Law; and (b) property ownership, within the limits of Article 7, 1, b of the RREC Law, as referred to in Article 2(5°) (vi) to (xi) of the RREC Law; (c) concluding or joining one or more of the following long-term contracts with a public client, directly or via a company in which it has a shareholding in compliance with the provisions of the legislation on the public regulated real estate company (public RREC) (SIR/GVV), possibly in collaboration with third parties: (i) Design, Build, Finance (DBF) contracts; (ii) Design, Build, (Finance) and Maintain (DB(F)M) contracts; (iii) Design, Build, Finance, (Maintain) and Operate (DBF(M)O) contracts; and/or (iv) contracts for concessions for public work relating to buildings and/or other infrastructure of an immovable nature and services relating to this, on the basis of which: (i) it guarantees the provision, maintenance and/or operation for a public entity and/or citizens as end-users, in order to meet a social need and/or to facilitate the provision of a public service; and (ii) for which it is able to bear the associated nancing, availability, demand and/or operating risk, partially or in full, in addition to any construction risk, without necessarily holding rights in rem in that regard. (d) developing, providing for the development, establishing, providing for the establishment, managing, providing for the management, operating, providing for the operation of or making available one or more of the following in the long term, directly or via a company in which it has a shareholding in compliance with the provisions of the legislation on the public RREC (SIR/GVV), possibly in collaboration with third parties: (i) utilities and storage locations for transportation, distribution or storage of electricity, gas, fossil or non- fossil fuels and green energy in general and the related goods; (ii) utilities for transportation, distribution, storage or treatment of water and the related goods; (iii) installations for the generation storage and transportation of energy, renewable and/or green or otherwise, and the related goods; or (iv) waste and incineration installations and the related goods. Real estate refers to ‘real estate’ within the meaning of the RREC legislation. In the context of the provision of real estate, the Company may perform all activities relating to the construction, refurbishment, renovation, development (for its own portfolio), acquisition, disposal, management and operation of real estate. RRECs are subject to the supervision of the FSMA and must comply with extremely strict rules regarding conicts of interest. From its formation until 25 November 2014, Care Property Invest held the status of a property investment fund with xed capital (BEVAK/sica). On 25 November 2014, the Company acquired the status of a public RREC. 7.2 Main features 7.2.1 ACTIVITIES The public RREC must carry on the activities mentioned above. In the context of the provision of real estate, a public RREC may perform all activities relating to the construction, refurbishment, renovation, development (for its own portfolio), acquisition, disposal, management and operation of real estate (Article 4, §1 of the RREC Law). A public RREC pursues a strategy that serves to maintain long-term ownership of its real estate and, in the performance of its activities, focuses on active management, which implies in particular that it takes responsibility itself for the development and day-to-day management of the real estate, and that all other activities that it performs have added value for that real estate or its users, such as the provision of services that are complementary to the provision of the relevant properties. To this end: (i) the public RREC performs its activities itself, without delegating such performance to a third party, other than to an afliated company, (ii) it maintains direct relationships with its clients and suppliers, and (iii) it has operational teams at its disposal which constitute a signicant part of its workforce. In other words, a public RREC is an operational and commercial real estate company. Care Property Invest nv / Permanent document 260 261 Permanent document / Care Property Invest nv It may own the following types of real estate (as dened by the RREC Law): Ordinary real estate: 1. real estate as dened in Article 517 and thereafter of the Civil Code and rights in rem to real estate, excluding property of a forestry, agricultural or mining character; 2. shares with voting rights issued by real estate companies, of which the Company holds directly or indirectly more than 25% of the capital; 3. option rights on real estate; 4. shares of public or institutional RRECs, provided that, in the latter case, the Company holds directly or indirectly more than 25% of the capital; 5. rights arising from contracts leasing one or more properties to the RREC or granting other similar rights of use. Other real estate (within certain limits): 1. shares of public and institutional property investment funds (BEVAK/ sica); 2. participating rights in foreign collective property investment institutions registered in the list referred to in Article 260 of the AICB Law; 3. participating rights in collective real estate investment institutions established in another Member State of the European Economic Area (EEA) and not registered in the list referred to in Article 260 of the AICB Law, in as far as they are subject to equivalent supervision to the public property investment funds (BEVAK/sica); 4. shares or participating rights issued by companies (i) having legal personality; (ii) governed by the law of another EEA Member State; (iii) the shares of which are admitted for trading on a regulated market and/ or which are subject to a prudential supervision regime; (iv) the principal activity of which is the acquisition or construction of real estate with a view to making it available to users, or the direct or indirect ownership of participating interests in companies with similar activities; and (v) which are exempt from tax on income from the prots generated by the activities referred to in (iv) above, subject to compliance with certain legal obligations, and which are at least required to distribute part of their income to their shareholders (also known as the ‘Real Estate Investment Trusts’ (abbreviated REITs)); 5. real estate securities, as referred to in Article 5, §4 of the Law of 16 June 2006; 6. participating rights in a Specialised Real Estate Investment Fund.The real estate referred to in (vi), (vii), (viii), (ix) and (xi) that concerns participation rights in an alternative investment institution as referred to in Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers and amending Directives 2003/41/EC and 2009/65/EC and Regulations (EC) No. 1060/2009 of the European Parliament and of the Council of 16 September 2009 on credit rating agencies and (EU) No. 1095/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Securities and Markets Authority), amending Decision No. 716/2009/EC and repealing Commission Decision 2009/77/EC, cannot qualify as shares with voting rights issued by real estate companies, regardless of the amount of the shareholding held directly or indirectly by the public RREC (SIR/ GVV). A public RREC may not invest more than 20% of its consolidated assets in real estate which constitutes a single property (same rule as that applying to property investment funds (BEVAK/sica) and may not hold ‘other property’ (as referred to in paragraphs vi to xi) or option rights for such assets, other than in as far as the fair value of these does not exceed 20% of its consolidated assets. The Company’s business consists of the provision of real estate to users (in particular all forms of housing covered by the Residential Care Decree plus accommodation for the disabled) and the active development and management of its real estate. The added value that Care Property Invest provides here consists in offering customised real estate solutions, in which the properties are adapted to the specic needs of users. Care Property Invest develops, renovates or extends real estate for this purpose. Care Property Invest wishes to continue deploying its expertise and know-how accumulated in the realisation of 2,000 (subsidised) service ats in order to realise projects provided for in the Residential Care Decree in the future. This includes nursing homes, short-stay centres, day care centres, service centres, groups of assisted living residences, as well as all residential facilities for people with disabilities. 7.2.2 OBLIGATIONS In order to acquire and maintain the status of a public RREC and the scal transparency regime provided for this Company (see below), the Company is subject to, inter alia, the following obligations; Dividend pay-out ratio: the public RREC must (if it makes a prot) pay out at least the positive difference between the following amounts as return on capital: 1°) 80% of the amount equal to the sum of the adjusted result and the net gain on disposal of property that is not exempt from mandatory payouts 2°) the net reduction of the debt during the nancial year. Limit on the debt ratio: the consolidated debt ratio of the public RREC and its subsidiaries and the corporate debt ratio of the public RREC must not exceed 65% of the consolidated or corporate assets, as the case may be, less the permitted hedging instruments unless this is because of a change in the fair value of the assets; if the consolidated debt ratio of the public RREC and its subsidiaries exceeds 50% of the consolidated assets less the permitted hedging instruments, the public RREC should draw up a nancial plan together with an implementation timetable, with a description of the measures that will be taken to prevent the consolidated Care Property Invest nv / Permanent document 262 263 Permanent document / Care Property Invest nv debt ratio from exceeding 65% of the consolidated assets. Diversication of real estate: the assets of the public RREC must be diversied in such a way as to ensure an appropriate spread of the risks in terms of real estate, by geographical region and by category of user or lessee; no operation performed by the public RREC may result in more than 20% of its consolidated assets being invested in real estate that constitutes a ‘single real estate entity’ (subject to the exceptions permitted by the FSMA and to the extent that the consolidated debt ratio of the public RREC and its subsidiaries does not exceed 33% of the consolidated assets less the permitted hedging instruments). Risk management: the Company must, as a public RREC, have an appropriate risk management function and appropriate risk management policy. It may only subscribe to hedging instruments (excepting any transactions of a speculative nature) if the Articles of Association allow for this and if these form part of a policy intended to cover nancial risks. This policy must be published in the annual and half-yearly reports. Management structure and organisation: the Company must, as a public RREC, have its own management structure and suitable administrative, accounting, nancial and technical organisation, enabling it to carry out its activities in accordance with the RREC regulations, an appropriate internal control system, an appropriate independent internal audit function, an appropriate independent compliance function and an appropriate integrity policy. 7.2.3 TAX CONSEQUENCES Tax regime for the RREC The taxable basis of the RREC is limited to non-deductible professional expenses, unusual or gratuitous advantages and a special assessment on ‘secret commissions’ on expenses that are not properly accounted for. The RREC may not apply the venture capital deduction or the reduced corporation tax rates. If an RREC participates in a merger, demerger or a similar transaction, that transaction will not qualify for the scal neutrality regime but will give rise to the application of the exit tax, as is the case for property investment funds (BEVAK/sica). As announced by the Belgian federal government in its budgetary agreement of 26 July 2017, the rate of the exit tax has been reduced to 12.75% (including crisis contribution) as a result of the reduction of the standard rate of the corporate tax. On 10 December 2018, an amendment was published in the Belgian Ofcial Gazette concerning the entry into force of the reduction of the exit tax. As a result of this legislative amendment, the rate of the exit tax is no longer determined by the assessment year, linked to the taxable period in which the merger takes place, but as a new rule applies that the rate is determined by the date of the merger. For the assessment years 2019 and 2020, the percentage decreases from 16.995% to 12.75% as a result of this change in the law and will then increase again to 15%. The RREC is subject to the ‘subscription fee’ in Articles 161 and 162 of the Inheritance Tax Code. The tax regime for the shareholders of the RREC The following paragraphs summarise certain effects of the ownership and transfer of shares in an RREC under Belgian tax law. This summary is based on the tax laws, regulations and administrative commentaries applicable in Belgium on the date of preparation of this document, and is included subject to changes in Belgian law, including changes with retroactive effect. This summary does not consider or treat the tax laws of countries other than Belgium and does not take into account special circumstances peculiar to each shareholder. The shareholders are invited to consult their own advisers. Natural persons domiciled in Belgium The dividends paid out by a RREC to a natural person domiciled in Belgium were formerly subject to withholding tax at a reduced rate of 15%. Pursuant to the Law of 18 December 2016 regulating the recognition and denition of crowd funding and containing various provisions concerning nancing, published in the Belgian Ofcial Gazette on 20 December 2016, shareholders of Care Property Invest can again enjoy a reduced rate of withholding tax, of 15% as from 1 January 2017. The Company satises the requirement of investing at least 60% of its property being located in the EEA and which is used or intended solely or primarily for residential care or residential units adapted for residential care or healthcare. After all, the portfolio of Care Property Invest consists solely of such real estate and, in accordance with its statutory purpose can only consist of such real estate. The tax that is withheld by the RREC discharges Belgian shareholders-natural persons from their obligations. Capital gains realised by Belgian natural persons who have not acquired the shares in the RREC in the context of the exercise of a professional activity are not taxable if they are part of the normal management of private assets. Capital losses are not deductible. Care Property Invest declares that the information provided by the experts and the authorised auditor were faithfully reproduced and were included with their consent. Care Property Invest nv / Permanent document 264 265 Permanent document / Care Property Invest nv Belgian domestic companies Pursuant to the Law of 18 December 2016 regulating the recognition and denition of crowd funding and containing various provisions concerning nancing, published in the Belgian Ofcial Gazette on 20 December 2016, shareholders of Care Property Invest can again enjoy a reduced rate of withholding tax, of 15% as from 1 January 2017. These dividends in principle do not entitle the holder to a deduction by way of denitively taxed income for the Belgian shareholder company, as is the case for dividends from property investment funds (BEVAK/sica). As is the case for capital gains on the shares of property investment funds (BEVAK/sica), the capital gains on the shares of RRECs are not exempt from corporation tax. As a rule, the withholding tax on dividends paid by the RREC can be offset against corporation tax, and any overpayment is refundable, in as far as the shareholder corporation had full ownership of the shares at the time when the dividend was awarded or became payable and in as far as this award or provision for payment does not entail any impairment of or capital loss on these shares. Non-resident shareholders RREC dividends paid to non-resident shareholders normally give rise to the collection of withholding tax at the rate of 30% or 15% (RREC investing 60% or more in healthcare property, such as the Company). The reduced rate of 15% was repealed by the Law of 26 December 2015 containing measures to promote job creation and purchasing power (Belgian Ofcial Gazette, 30 December 2015) and increased to 27% from 1 January 2016. Pursuant to the Law of 18 December 2016 regulating the recognition and denition of crowd funding and containing various provisions concerning nancing, published in the Belgian Ofcial Gazette on 20 December 2016, shareholders of Care Property Invest can again enjoy a reduced rate of withholding tax, of 15% as from 1 January 2017. The Company satises the legal requirement of investing at least 60% of its property being located in the EEA and which is used or intended solely or primarily for residential care or residential units adapted for residential care or healthcare. Certain non-citizens domiciled in countries with which Belgium has concluded tax treaties may, under certain conditions and subject to certain formalities, enjoy a reduction or an exemption from withholding tax. Tax on stock exchange transactions As a rule, the purchase, sale and any other acquisition and transfer for consideration in Belgium of existing shares in an RREC (secondary market) arranged through a ‘professional intermediary’, as is the case for property investment funds (BEVAK/ sica), is usually subject to the tax on stock exchange transactions, currently at a rate of 0.09% with a maximum of €650 per transaction and per party. Inheritance tax Subject to the conditions referred to in Article 2.7.6.0.1 of the Flemish Tax Code (VCF), the shares of Care Property Invest can be exempted from inheritance tax, as the Company has accreditation within the meaning of this Article. The change of status from BEVAK to RREC does not, therefore, affect this exemption in any way. Care Property Invest nv / Permanent document 266 267 Permanent document / Care Property Invest nv Lanaken (BE) I 3 Eiken IX. Glossary XI. GLOSSARY 1. Denitions 1.1 Acquisition cost Intangible xed assets: the acquisition value includes the capitalised costs exclu- ding VAT. Tangible xed assets: the acquisition value includes the capitalised costs excluding VAT. Finance lease receivables: the acquisition value includes the entire investment cost including VAT. Investment properties: the acquisition value incorporates the conventional value that is included in the calculation of the price. For projects acquired through a con- tribution in kind, the price is determined on the basis of a contribution agreement. For development projects, the acquisition cost includes the price paid for the land plus the construction costs already incur- red. 1.2 Privileged information or inside knowledge Privileged information about the Company is any information that has not been dis- closed and that is accurate, referring to an existing situation or a situation that can reasonably be expected to arise or an event that has occurred or that can reasonably be expected to occur, and that is sufciently precise to enable conclusions to be drawn on the potential impact of that situation or event for the price of the nancial in- struments or nancial derivatives of Care Property Invest, that relates directly or in- directly to Care Property Invest, and that, if it were disclosed, could inuence the price of Care Property Invest’s nancial instru- ments or nancial derivatives, including information regarded as price-sensitive for the nancial instruments or nancial de- rivatives if an investor, acting reasonably, is likely to use this information as a partial basis for his/her investment decisions. 1.3 Occupancy rate The occupancy rate is the result of the total number of effectively occupied residenti- al units in relation to the total number of residential units (both occupied and unoc- cupied). With regard to the initial portfolio, the leasehold fee agreed in the relevant agreements contracts is payable, regar- dless of occupancy. Also for acquisitions under the new real estate programme, the vacancy risk is transferred to the operator, with the exception of the ‘Tilia’ project in Gullegem. 1.4 Bullet loan A loan which is repaid as a lump sum at the end of the term and for which only the interest charges are payable during the term of the loan. 1.5 Compliance ofcer The Compliance Ofcer shall ensure com- pliance with the laws, regulations and rules of conduct applicable to the Compa- ny, and more specically with the rules relating to the integrity of the Company's business and shall manage the Company's compliance risk. 1.6 Corporate Governance Sound management of the Company. These principles, such as transparency, integrity and balance of responsibilities, are based on the recommendations of the Belgian Corporate Governance Code 2020 (‘Code 2020’), as available on the website at www.corporategovernancecommittee.be. 1.7 Dividend yield Gross - or net dividend divided by the clo- sing price of Care Property Invest shares during the relevant nancial year or at a specic time or divided by the subscription price at the IPO (excluding costs). Zeist (NL) I Villa Pavia 1.8 Double net See denition in paragraph 1.32 ‘Triple net’ later in this chapter, less owner mainte- nance (= major maintenance and repairs). There is only one project in the portfolio that was concluded with a long-term lease- hold agreement of the ‘double net’ type, being the project ‘Les Terrasses du Bois’ in Watermaal-Bosvoorde. Care Property Invest nv / Glossary 270 271 Glossary / Care Property Invest nv 1.9 EPRA European Public Real Estate Association is an association founded in 1999 for the promotion, development and grouping of European listed real estate companies. EPRA establishes best practices re- garding accounting, reporting and corporate governance and har- monises these rules in various countries, in order to provide high quality and comparable information to the investors. EPRA organi- ses also discussion forums concerning the issues that determine the future of the sector. Finally, EPRA has created indexes that serve as benchmark for the real estate sector. All this information is available on the website www.epra.com. Zutphen (NL) I De Gouden Leeuw Zutphen EPRA Key Performance Indicators Denition Objective EPRA Earnings Result from operational activities A key measure of a company’s underlying operating results and an indication of the extent to which current dividend pay- ments are supported by earnings. Adjusted EPRA Earnings Result from operational activities ad- justed by company-specic non-cash items (being nance leases - prot or loss margin attributable to the period, depreciation, provisions and other portfolio result). An important measure of a company’s underlying operating results and an indi- cation of the extent to which its current dividend payments are supported by its results, taking into account company-spe- cic non-cash elements. EPRA NAV Net Asset Value (NAV) adjusted to include the investment properties at their fair value and to exclude certain items not expected to crystallise in a long-term investment property busi- ness model. Net Asset Value (NAV) adjusted to include the investment properties at their fair value and to exclude certain items not ex- pected to crystallise in a long-term invest- ment property business model. EPRA NNNAV EPRA NAV adjusted to include the fair value of (i) nancial instruments, (ii) debt and (iii) deferred taxes. Makes adjustments to EPRA NAV to pro- vide stakeholders with the most relevant information on the current fair value of all the assets and liabilities within a real esta- te company. EPRA NRV EPRA Net Reinstatement Value assu- mes that the Company will never sell its assets and gives an estimate of the amount needed to re-establish the company. Makes amendments to the IFRS NAV to provide interested parties with the most relevant information regarding the fair value of the assets and liabilities within a real estate investment company with a long-term investment strategy. EPRA NTA EPRA Net Tangible Assets, assumes that the Company acquires and sells assets, which would result in the reali- sation of certain unavoidable deferred taxes. Makes amendments to the IFRS NAV to provide interested parties with the most relevant information regarding the fair value of the assets and liabilities within a real estate investment company with a long-term investment strategy. Care Property Invest nv / Glossary 272 273 Glossary / Care Property Invest nv EPRA Key Performance Indicators Denition Objective EPRA NDV EPRA Net Disposal Value, represents the value payable to the share share- holders of the Company in the event of a sale of its assets, which would result in the settlement of deferred taxes, the liquidation of the nancial instruments and the taking into account of other liabilities at their maximum amount, less taxes. Makes amendments to the IFRS NAV to provide interested parties with the most relevant information regarding the fair value of the assets and liabilities within a real estate investment company with a long-term investment strategy. EPRA Net Initial Yield (NIY) Annualised gross rental income based on the passing rents at the closing date, excluding property charges, divided by the market value of the portfolio, incre- ased with estimated transaction costs resulting from the hypothetical dispo- sal of investment properties. A comparable measure for portfolio valua- tions. This measure should make it easier for investors to judge themselves, how the valuation of portfolio X compares with portfolio Y. EPRA ‘topped-up’ NIY This measure incorporates an adjust- ment to the EPRA NIY in respect of the expiration of rent-free periods and other incentives. This measure should make it easier for investors to judge themselves, how the valuation of portfolio X compares with portfolio Y. EPRA Vacancy Rate Estimated Rental Value (ERV) of vacant space divided by the ERV of the total portfolio. A ‘pure’ (%) measure of investment proper- ty space that is vacant, based on ERV. EPRA Cost Ratios (including costs of di- rect vacancy) Administrative/operational expenses, including the direct costs of vacant buildings, divided by the gross rental income. A key measure to enable meaningful measurement of the changes in a compa- ny’s operating costs. EPRA Cost Ratios (excluding costs of direct vacancy) Administrative/operational expen- ses, less the direct costs of vacant buildings, divided by the gross rental income. A key measure to enable meaningful measurement of the changes in a compa- ny’s operating costs. 1.10 Leasehold agreement Contract with a term of at least 27 years and no more than 99 years, which grants a tem- porary right in rem to the leaseholder, consisting of the full enjoyment of the property du- ring that period. In return, the leaseholder pays an annual fee, known as the ‘ground rent’. 1.11 Exit tax Companies that apply for recognition as a regulated real estate company or specialised real estate investment fund, or that merge with a regulated real estate company, are sub- ject to a specic tax or exit tax. This tax is comparable to a liquidation tax on deferred net capital gains and tax-exempt reserves. The current exit tax rate is 15%. 1.12 Free oat The free oat is the number of shares circulating freely on the stock exchange and, therefore, in the hands of the pu- blic. 1.13 FSMA The Financial Services and Markets Authority, as referred to in the Law of 2 August 2002 on the supervision of the nancial sector and nancial services. 1.14 Closed period Period during which persons in a management position and their closely related persons, as well as all persons in- cluded in the list of insiders pursuant to the Law of 2 August 2002 regarding the supervision of the nancial sector and nancial services (the so-called 'insiders’ list') of Care Property Invest, may not carry out transactions involving nancial instruments or nancial derivatives of Care Property Invest. The closed periods are set out in the Dealing Code of Care Property Invest, which is part of the Corporate Governance Charter that is available on the website www.carepropertyinvest.be. 1.15 RREC Decree The Royal Decree dated 13 July 2014 regarding regulated real estate companies (SIR/GVV), as published in the Belgi- an Ofcial Gazette of 16 July 2014 and subsequently amended, last on 23 April 2018. 1.16 RREC Law The Law of 12 May 2014 concerning regulated real estate companies (SIR/GVV), as published in the Annexes to the Belgian Ofcial Gazette of 30 June 2014 and last altered by the Law of 22 October 2017, as published in the Belgian Ofcial Gazette of 9 November 2017. Care Property Invest nv / Glossary 274 275 Glossary / Care Property Invest nv 1.17 IAS/IFRS standards The IAS/IFRS were issued by the IASB, which develops the international stan- dards for the preparation of nancial statements. European listed companies must apply these rules in their consolida- ted accounts for nancial years beginning on or after 1 January 2005. In accordance with the Royal Decree of 13 July 2014, Care Property Invest has applied these rules to its statutory nancial statements since the nancial year commencing on 1 January 2007. 1.18 Interest rate swap Financial instrument with which parties contractually agree to swap interest pay- ments over a certain period. This allows parties to swap xed interest rates for oating interest rates and vice versa. The Company only possesses interest rate swaps that allow her to swap oating inte- rest rates for xed interest rates. 1.19 Investment value The investment value is the value as de- termined by an independent real estate expert and of which the necessary additi- onal mutation costs are included (formerly known as ‘deed-in-hand value’). 1.20 Duration Weighted average duration of the lease contracts, where the weight is equal to the ratio of the rental income to the total rental income of the portfolio. 1.21 Liquidity provider A liquidity provider is a nancial institu- tion (in the case of Care Property Invest: Bank Degroof Petercam and KBC Securi- ties) which, under the supervision of Eu- ronext and the FSMA, carries out a market animation assignment with respect to the Company’s shares. The purpose of the mar- ket animation mandate is to promote the liquidity of transactions in the Company’s shares and, more specically, to facilitate an appropriate interaction between supply and demand, thereby facilitating the free market and thus reducing price uctuati- ons in the share. 1.22 Market capitalisation Share price multiplied by the total number of listed shares. 1.23 Transfer tax The transfer of ownership of real estate is in principle subject to collection by the State of transfer tax, which constitutes most of the transaction costs. The amount of this tax depends on the transfer method, the capacity of the buyer and the geo- graphical location of the property. The rst two conditions, and thus the amount paya- ble for the rights, are only known after the conclusion of the transfer of ownership. In Belgium, the main possible methods of transfer of real estate and the associated registration fees are as follows: • contracts of sale relating to real estate: 12.5% for real estate in the Brussels- Capital Region and the Walloon Region, and 10% for real estate in the Flemish Region; • sales of real estate under the regime of a real estate agent: 5% to 8%, depending on the region; • establishment of building rights and leasehold rights (up to 50 years for the right to build and to 99 years for leasehold: 2% or 0.5% if the tenant is a non-prot organisation); • contracts of sale relating to real estate where the buyer is a public body (e.g., an entity of the European Union, the federal government, a regional government or a foreign government.): tax exempt; • contribution of real estate in kind, for the issuance of new shares to the benet of the contributor: tax exempt; • contracts of sale of the shares in a real estate company: tax exempt; • mergers, splits and other corporate restructuring: tax exempt; • etc. The effective rate of the transfer tax the- refore varies between 0 and 12.5% without it being possible to give the percentage applying to a specic property before the transfer is executed. N.B.: It should be noted that, as a result of the interpretation of the IAS/IFRS stan- dards calculated by the Belgian Associati- on of Asset Managers (BEAMA), the book value of buildings for the IAS/IFRS balance sheet is determined by deducting a xed sum for transfer tax from the investment value, which is currently set by the real estate experts at 2.5%. However, for proper- ties with a value of less than €2.5 million, the registration fees that apply according to the location of the property are deduc- ted. For the Dutch and Spanish real estate investments there is no special agreement and the statutory transfer tax rates apply. 1.24 Net value per share The value obtained by dividing the consoli- dated net assets of the RREC, net of mino- rity interests, or, if no consolidation takes place, the net assets at statutory level, by the number of shares issued by the RREC, not including any treasury shares that may be held at the consolidated level. ‘Inventory value of the shares’ is a sy- nonym for net value of share. 1.25 Net Rental Income Rental income - reversals of transferred and discounted rent - expenses relating to rentals 1.26 Turnover rate Total volume of shares traded during the year, divided by the total number of sha- res, as dened by Euronext (a synonym is ‘velocity’). 1.27 Building rights A building right is a right in rem to have buildings, works or plantations partially or fully on, above or below another party’s land (see Article 1 of the Law of 10 January 1824 concerning building rights). Care Property Invest nv / Glossary 276 277 Glossary / Care Property Invest nv 1.28 Pay-out ratio Gross dividend per share divided by the appropriated earnings per share, with the gross dividend being calculated on the ba- sis of the adjusted EPRA Earnings. 1.29 Fair value The fair value of the investment properties in Belgium is calculated as follows: Buildings with an investment value exceeding €2.5 million: The fair value = investment value/(1 + average determined as the lower of the investment unit value/(1 + percentage of the transfer costs, depending on the region in which the building is located) and the investment value as a whole/(1 + average percentage of the transaction costs as de- termined by BEAMA); Properties with an investment value of less than €2.5 million: 1. if the real estate expert nds that the building can be sold per apartment, the fair value is determined as the lower of the investment unit value/ (1 + percentage of the transfer costs, depending on the region where the building is located), and the investment value as a whole/ (1 + average percentage of the transaction costs as determined by BEAMA); 2. if the real estate expert nds that the building cannot be sold per apartment, the fair value is equal to the investment value as a whole/(1 + percentage of the transfer rights, depending on the region in which the building is located). The average percentage of the transaction costs, as determined by BEAMA, is revie- wed annually and adjusted if necessary, per threshold of 0.5%. The real estate ex- perts conrm this deduction percentage in their regular reports to shareholders. The rate now stands at 2.5%. 1.30 Financial debt ratio Numerator: ‘Total liabilities’ on the balance sheet • I. Non-current liabilities - A. Provisions • I. Non-current liabilities - C. Other non- current nancial liabilities - Hedging instruments • I. Non-current liabilities - F. Deferred tax liabilities • II. Current liabilities - A. Provisions • II. Current liabilities - C. Other current nancial liabilities - Hedging instruments • II. Current liabilities - F. Deferrals and accruals as provided in the schedules in the Appendix to the Royal Decree of 13 July 2014 concern- ing regulated real estate companies. The amounts still payable by the RREC for the acqui- sition of real estate, which will be settled within a customary period, may be deducted in the calculation of the debt level. Denominator: ‘Total assets’ after deduction of authorized hedging instruments. Result: ≤ 65%. 1.31 Transparency legislation The Law of 2 May 2007 concerning the disclosure of signicant participating interests in issuers, the shares of which are admitted for trading on a regulated market and laying down various provisions, and the Royal Decree of 14 February 2008 concerning the dis- closure of signicant participating interests. 1.32 Triple net The operating costs, maintenance costs and loss of rent associated with the vacancy are borne by the operator. 1.33 Distributable result or adjusted EPRA Earnings (per share) As a return on capital, the Company must pay a sum equal to at least the positive differen- ce between the following amounts: • 80% of an amount equal to the sum of the net result (IFRS) (A) and the net gain on dispo- sal of real estate assets that are not exempt from distribution (B). (A) and (B) are calculated according to the following schedule: Hof Driane (BE) I Herenthout Care Property Invest nv / Glossary 278 279 Glossary / Care Property Invest nv Net result + depreciation and amortisation + impairments - reversals of impairments - reversals transferred and discounted rent +/- other non-monetary items +/- result of sales of property +/- changes in fair value of real estate, changes in fair value of nancial assets/liabili- ties = adjusted EPRA Earnings (A) +/- gains and losses on real estate (gains and losses relative to the cost plus activated investment costs) realised during the nancial year - gains on real estate realised during the nancial year that are exempt from mandato- ry distribution subject to their reinvestment within a period of four years (gains in relation to the cost plus activated investment costs). + realised gains on real estate that were previously exempt from mandatory distribu- tion and were not reinvested within a period of four years (gains in relation to the acquisition value plus activated investment costs). = Net gain on disposal of real estate that is not exempt from mandatory distribution (B) and • the net diminution in the debt of the public RREC in the course of the nancial year, as provided for in Article 13 of the Royal Decree of 13 July 2014 (see the above denition of debt ratio). 1.34 Universal registration document Institutions whose securities are admitted to a regulated market may draw up a regis- tration document on a yearly basis in the form of a Universal Registration Document describing the organisation, business, nancial position, prots, prospects and governance and shareholder structure of the institution. The Universal Registration Document may be used for an offer of se- curities to the public or the admission of securities to trading on a regulated market provided that it has been approved by the FSMA, together with any amendments and a securities note and summary approved in accordance with Regulation (EU) 2017/1129. 1.35 Company Care Property Invest NV 1.36 Prohibited period The period that is communicated as such by the Compliance Ofcer on the instruc- tions of the Executive Committee or the Board of Directors and commencing on the date on which inside knowledge becomes known to the Board of Directors, the Execu- tive Committee and lasting until immedi- ately after the disclosure of the said inside knowledge or to the date on which the inside knowledge loses its price-sensitive character. 1.37 Regulation (EU) 2017/1129 Regulation (EU) 2017/1129 of the European Parliament and Council of 14 June 2017 on the prospectus to be published when secu- rities are offered to the public or admitted to trading on a regulated market and repe- aling Directive 2003/71/EC. 1.38 Code for Companies and Associations (CCA) The Code of Companies and Associations of 23 March 2019, as published in the Belgi- an Ofcial Gazette of 4 April 2019. The Companies Code entered into force on 1 May 2019 and replaces the former Com- panies Code of 7 May 1999. 1.39 Residential Care Decree The Residential Care Decree of 13 March 2009, as published in the Belgian Ofcial Gazette on 14 May 2009, which entered into force on 1 January 2010, together with its implementing decrees, as amended from time to time. Care Property Invest nv / Glossary 280 281 Glossary / Care Property Invest nv 2. Abbreviations ABB Accelerated Book Building AICB Alternative Institution Collective Investment APM Alternative Performance Measure BEAMA Belgian Asset Managers Association BE-REIT Belgian Real Estate Investment Trust BEVAK Investment company with xed capital BCCA (WVV) Belgian Code of Companies and Associations BPR Best Practices Recommendations CEO Chief Executive Ofcer CFO Chief Financial Ofcer COO Chief Operating Ofcer CODM Chief Operating Decision Maker C VA Credit Valuation Adjustment DBF Design, Build & Finance DBFM Design, Build, Finance & Maintain DPS Dividend per share DVA Debt Valuation Adjustment EBITDAR Earnings Before Interest, Taxes, Depreciation, Amortisation & Rent costs EEA European Economic Area EPRA European Public Real Estate Association EPS Earnings per share ESMA European Securities and Markets Authority FSMA Financial Services and Markets Authority FTE Full Time Equivalent ERV Estimated rental value GVBF/ FIIS Specialised Real Estate Investment fund RREC Regulated Real Estate Company IAS International Accounting Standards ICMA International Capital Market Association IFRS International Financial Reporting Standards IRS Interest Rate Swap LTIP Long Term Incentive Plan MTN Medium Term Notes OCMW/PCSW Public Centre for Social Welfare UCI Undertaking for Collective Investment IFRS International Financial Reporting Standards IRS Interest Rate Swap NAV Net Asset Value NV Public limited company (Naamloze Vennootschap) SME Small & Medium sized Enterprise URD Universal Registration Document VCF Flemish Codex Taxation VZW Non-prot organisation Care Property Invest nv / Glossary 282 283 Glossary / Care Property Invest nv Care Property Invest nv Horstebaan 3 2900 Schoten T +32 3 222 94 94 F +32 3 222 94 95 E [email protected] Belus BE27 0910 0962 6873 GKCC BE BB BE 0456 378 070 LPR Antwerp Public RREC under Belgian Law www.carepropertyinvest.be 284 / Care Property Invest nv 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