CpiFim

2017 CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS ORCO PROPERTY GROUP 2017 CONDENSED CPI FIM SA CONSOLIDATED FINANCIAL STATEMENTS AS AT 31 DECEMBER 2021 AND FOR THE YEAR THEN ENDED CPI FIM SA 2021 CONSOLIDATED FINANCIAL STATEMENTS | 2 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME The accompanying notes form an integral part of these consolidated financial statements. Year-ended Note 31 December 2021 31 December 2020 Gross rental income 5.1 34,880 34,142 Service charges and other income 5.2 32,499 32,469 Cost of service and other charges 5.2 ( 9,719 ) ( 10,803 ) Property operating expenses 5.3 ( 4,048 ) ( 3,413 ) Net service and rental income 53,612 52,395 Hotel revenue 246 - Hotel operating expenses ( 248 ) - Net hotel income ( 2 ) - Total revenues 67,625 66,611 Total direct business operating expenses ( 14,015 ) ( 14,216 ) Net business income 53,610 52,395 Net valuation gain 5.4 263,702 146,433 Net gain/(loss) on the disposal of investment property and subsidiaries 5.5 3,746 ( 602 ) Net gain on the disposal of other investments 5.6 6,175 - Amortization, depreciation and impairments 5.7 3,455 ( 7,400 ) Administrative expenses 5.8 ( 14,022 ) ( 13,252 ) Other operating income 704 406 Other operating expenses ( 827 ) ( 673 ) Operating result 316,543 177,307 Interest income 5.9 211,507 169,821 Interest expense 5.9 ( 161,231 ) ( 141,693 ) Other net financial result 5.10 56,554 ( 9,955 ) Net finance income 106,830 18,173 Share of profit of equity-accounted investees (net of tax) 6. 3 1,146 3,320 Profit before income tax 424,519 198,800 Income tax expense 5.11 ( 57,676 ) ( 53,286 ) Net profit from continuing operations 366,843 145,514 Items that may or are reclassified subsequently to profit or loss Translation difference 30,983 ( 40,417 ) Items that will not be reclassified subsequently to profit or loss Fair value changes of financial assets 13,349 597 Revaluation of property, plant and equipment 1,609 - Income tax on other comprehensive income items ( 386 ) - Other comprehensive income for the period, net of tax 45,555 ( 39,820 ) Total comprehensive income for the year 412,398 105,694 Profit attributable to: Owners of the Company 294,053 112,505 Non-controlling interests 72,790 33,009 Profit for the year 366,843 145,514 Total comprehensive income attributable to: Owners of the Company 339,608 72,685 Non-controlling interests 72,790 33,009 Total comprehensive income for the year 412,398 105,694 Earnings per share Basic earnings in EUR per share 6.10 0.22 0.09 Diluted earnings in EUR per share 6.10 0.22 0.09 CPI FIM SA 2021 CONSOLIDATED FINANCIAL STATEMENTS | 3 CONSOLIDATED STATEMENT OF FINANCIAL POSITION The accompanying notes form an integral part of these consolidated financial statements. Note 31 December 2021 31 December 2020 Non -current assets Intangible assets 610 15 Investment property 6.1 1,514,430 1,367,184 Property, plant and equipment 6.2 22,193 662 Equity accounted investees 6.3 8,190 7,044 Other investments 6.4 52,990 188,884 Loans provided 6.5 4,948,061 4,234,093 Other receivables 74 - Deferred tax asset 5.11 133,921 142,019 6,680,469 5,939,901 Current assets Inventories 355 300 Income tax receivables 116 81 Derivative instruments 2,078 1,694 Trade receivables 6.6 6,929 6,511 Loans provided 6.5 186,859 115,168 Cash and cash equivalents 6.7 210,076 249,190 Other receivables 6.8 236,795 188,232 Other non-financial assets 5,379 3,289 Assets held for sale 6.9 54,586 - 703,173 564,465 Total assets 7,383,642 6,504,366 Equity Equity attributable to owners of the Company 6.10 1,238,649 899,041 Share capital 13,145 13,145 Share premium 784,670 784,670 Other reserves 118,244 72,689 Retained earnings 322,590 28,537 Non-controlling interests 6.10 277,321 204,531 1,515,970 1,103,572 Non-current liabilities Financial debts 6.11 5,400,425 4,855,740 Deferred tax liability 5.11 130,866 78,500 Other financial liabilities 6.12 4,793 8,904 5,536,084 4,943,144 Current liabilities Financial debts 6.11 261,324 376,179 Trade payables 6.13 8,953 8,618 Income tax liabilities 687 20 Other financial liabilities 6.14 59,534 68,677 Other non-financial liabilities 6.15 1,090 4,156 331,588 457,650 Total equity and liabilities 7,383,642 6,504,366 CPI FIM SA 2021 CONSOLIDATED FINANCIAL STATEMENTS | 4 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY The accompanying notes form an integral part of these consolidated financial statements. Note Share capital Share premium Translation reserve Other reserves Retained earnings Equity attributable to owners of the Company Non-controlling interests Total equity As at 1 January 202 1 13,145 784,670 ( 13,987 ) 86,676 28,537 899,041 204,531 1,103,572 Profit for the year - - - - 294,053 294,053 72,790 366,843 Other comprehensive income - - 30,983 14,572 - 45,555 - 45,555 Total comprehensive income for the period - - 30,983 14,572 294,053 339,608 72,790 412,398 Balance as at 31 December 2021 13,145 784,670 16,996 101,248 322,590 1,238,649 277,321 1,515,970 Note Share capital Share premium Translation reserve Other reserves Retained earnings Equity attributable to owners of the Company Non-controlling interests Total equity As at 1 January 2020 13,145 784,670 26,430 86,079 ( 83,968 ) 826,356 171,522 997,878 Profit for the year - - - - 112,505 112,505 33,009 145,514 Other comprehensive income - - ( 40,417 ) 597 - ( 39,820 ) - ( 39,820 ) Total comprehensive income for the period - - ( 40,417 ) 597 112,505 72,685 33,009 105,694 Balance as at 31 December 2020 13,145 784,670 ( 13,987 ) 86,676 28,537 899,041 204,531 1,103,572 CPI FIM SA 2021 CONSOLIDATED FINANCIAL STATEMENTS | 5 CONSOLIDATED STATEMENT OF CASH FLOWS The accompanying notes form an integral part of these consolidated financial statements. Year-ended Note 31 December 2021 31 December 20 20 Profit before income tax 424,519 198,800 Adjusted by: Net valuation gain 5.4, 6.1 ( 263,702 ) ( 146,433 ) Net (gain)/loss on the disposal of investment property 5.5 ( 2,783 ) 602 Depreciation and amortisation 5.7 624 1 Impairment/ (reversal of impairment) 5.7 ( 4,079 ) 7,399 (Gain)/Loss on the disposal of subsidiaries and investees 5.6 ( 7,138 ) - Net interest income ( 50,276 ) ( 28,128 ) Other net finance (income)/costs 5.10 1,390 728 Share of profit of equity accounted investees 6.3 ( 1,146 ) ( 3,320 ) Unrealized exchange rate differences and other non-cash transactions ( 53,054 ) 1,747 Profit before changes in working capital and provisions 44,355 31,396 Decrease/(increase) in inventories ( 55 ) 41 Increase in trade and other receivables ( 51,071 ) ( 168,370 ) Increase/(decrease) in trade and other payables ( 15,986 ) 23,351 Changes in provisions 29 ( 1,532 ) Income tax paid ( 858 ) ( 1,123 ) Net cash from operating activities ( 23,586 ) ( 116,237 ) Acquisition of subsidiaries, net of cash acquired 3.2 ( 2,995 ) - Purchase and expenditures on property, plant and equipment and intangible assets ( 1,585 ) - Purchase and expenditures on investment property 6.1 ( 17,197 ) ( 43,549 ) Acquisition of property, plant and equipment 6.2 ( 18,717 ) - Proceeds from sale of investment property 5.5 44,455 2,294 Proceeds from disposals of subsidiaries, net of cash disposed 5.5 17,238 - Proceeds from disposals of other investment, net of cash disposed 5.6 155,418 - Loans provided ( 993,526 ) ( 948,780 ) Loans repaid 454,815 154,646 Interest received 102,208 108,035 Net cash used in investing activities ( 259,886 ) ( 727,354 ) Drawdowns of loans and borrowings 6.11 553,743 1,083,127 Repayments of loans and borrowings 6.11 ( 203,932 ) ( 24,882 ) Repayments of lease liabilities 6.11 - ( 327 ) Interest paid 6.11 ( 105,453 ) ( 94,584 ) Net cash from financing activities 244,358 963,334 Net increase/(decrease) in cash ( 39,114 ) 119,743 Cash and cash equivalents at the beginning of the year 6.7 249,190 129,447 Cash and cash equivalents at the end of the year 210,076 249,190 CPI FIM SA 2021 CONSOLIDATED FINANCIAL STATEMENTS | 6 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 1 General information CPI FIM SA , société anonyme (the “Company”) and its subsidiaries (together the “Group” or “CPI FIM”), is an owner of income-generating real estate primarily in Poland and in the Czech Republic as well as of land bank and development projects intended for future rent . The Company is a subsidiary of CPI Property Group (also “CPI PG” and together with its subsidiaries as the “CPI PG Group”), which holds 97.31% of the Company shares. The Company is also involved in providing of loans and management services to other entities within the CPI PG Group. The Company is a joint stock company incorporated for an unlimited term and registered in Luxembourg . The address of its registered office is 40, rue de la Vallée, L-2661 Luxembourg , Grand Duchy of Luxembourg. The trade registry number of the Company is B 44 996. The Company´s shares registered under ISIN code LU0122624777 are listed on the regulated markets of the Luxembourg Stock Exchange and the Warsaw Stock Exchange. Description of the ownership structure As at 31 December 2021, CPI PG directly owns 97.31% of the Company shares. CPI PG is a Luxembourg joint stock company ( société anonyme), whose shares registered under ISIN code LU0251710041 are listed on the regulated market of the Frankfurt Stock Exchange in the General Standard segment. As at 31 December 2021, Radovan Vítek, the ultimate beneficial owner of the Group, indirectly owns 88.77% of CPI PG outstanding shares (89.44% voting rights). For the list of shareholders as at 31 December 2021 refer to note 6.10. Board of Directors As at 31 December 2021, the Board of Directors consists of the following directors: Mr. David Greenbaum Mr. Edward Hughes Mrs. Anita Dubost Mr. Scot Wardlaw CPI FIM SA 2021 CONSOLIDATED FINANCIAL STATEMENTS | 7 2 Basis of preparation and significant accounting policies 2.1 Basis of preparation of consolidated financial statements (a) Basis of preparation The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union. All the figures are presented in thousands of Euros, except if explicitly indicated otherwise. The consolidated financial statements have been prepared on a going concern basis. The consolidated financial statements were authorized for issue by the Board of Directors on 30 March 2022. For analysis of the impact of COVID- 19 pandemic on the Group, including its ability to continue as a going concern, refer to note 12. (b) New and amended standards and interpretations For the preparation of these consolidated financial statements, several amendments and interpretations apply for the first time in 2021, but do not have an impact on the consolidated financial statements of the Group. The Group has not early adopted any standards, interpretations or amendments that have been issued but are not yet effective. (c) Basis of measurement The consolidated financial statements have been prepared on a historical cost basis except for the following material items in the consolidated statement of financial position, which are measured as indicated below at each reporting date: • Inventories at lower of cost or net realisable value; • Investment property is measured at fair value; • Derivative instruments are measured at fair value; • Non-derivative financial instruments at fair value through profit or loss are measured at fair value; (d) Functional and presentation currency These consolidated financial statements are presented in Euro (EUR), which is the Company’s functional currency. All financial information presented in EUR has been rounded to the nearest thousand, except when otherwise indicated. The functional currencies of other entities within the Group are listed in note 2.2(b). (e) Use of estimates and judgements The preparation of the consolidated financial statements in conformity with IFRS as adopted by the European Union requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. The estimates and assumptions are based on historical experience, internal calculations and various other factors that the management believes to be reasonable under the circumstances. The actual result might differ from the estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. Information about critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements is included in the following notes: - Note 2.2(c) – Classification of investment property - Note 2.2(l) – Service charges: Gross versus net revenue recognition. Information about assumptions and estimation uncertainties that have a significant risk of a material adjustment within the next financial year are included in the following notes: - Note 2.2(i) - Impairment test; - Note 2.3 – Determination of fair value; - Note 5.11 – Income tax expenses; - Note 7 – Financial risk management. The Group’s assumptions and estimation is based on the evidence available as of the date of these consolidated financial statements. The assumtions and estimates are however sensitive to development of the current COVID-19 world-wide pandemic and its negative impacts on the Company’s real estate portfolio. The uncertainty caused by the COVID-19 pandemic is considered primarily in the below assumtions and estimates: - the fair value measurement of investment property, hotels and biological assets (for more details, refer to note 7.5); - the credit risk and liquidity risk assessment (for more details, refer to note 7.1 and 7.2, respectively); - the assessment of the Group‘s ability to continue as a going concern (for more details, refer to note 12). CPI FIM SA 2021 CONSOLIDATED FINANCIAL STATEMENTS | 8 2.2 Significant accounting policies Except for the changes described above in note 2.1(b). New standards, the accounting policies used in preparing the consolidated financial statements are set out below. These accounting policies have been consistently applied in all material respects to all periods presented. (a) Basis of consolidation (i) Business combinations The Group uses the direct method of consolidation, under which the financial statements are translated directly into the presentation currency of the Group, EUR. Subsidiaries are fully consolidated from the date of the acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date when such control ceases. All intra-group balances, transactions, unrealised gains and losses resulting from intra-group transactions and dividends are eliminated in full on consolidation. Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interests, and any previous interest held, over the net identifiable assets acquired and liabilities assumed. When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss. The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts generally are recognised in profit or loss. Transaction costs, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred. Any contingent consideration payable is measured at fair value at the acquisition date. If the contingent consideration is classified as equity, then it is not re-measured and settlement is accounted for within the equity. Otherwise, subsequent changes in the fair value of the contingent consideration are recognised in profit or loss. The interest of non-controlling shareholders at the date of the business combination is generally recorded at the non-controlling interest’s proportionate share of the acquiree’s identifiable net assets, which are generally at fair value, unless Group management has any other indicators about the non-controlling interest fair value. Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. (ii) Business combinations involving entities under common control Business combinations arising from transfers of interests in entities that are under the control of the shareholder that controls the Group are not in scope of IFRS 3. The assets and liabilities acquired are recognised at the carrying amounts recognised previously in the financial statements of the acquire or at deemed costs if the local standards are different from IFRS adopted by EU. Components of equity of the acquired entities are added to the corresponding equity components of the Group and any gain or loss arising is recognised in equity. (iii) Loss of control On the loss of control, the Group derecognises the assets and liabilities of the subsidiary, any non-controlling interests and the other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is recognised in profit or loss. If the Group retains any interest in the previous subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently it is accounted for as equity accounted investee or as a debt investment at fair value through OCI depending on the level of influence retained. (iv) Equity accounted investees Associates are those entities in which the Group has significant influence, but not control or joint control, over the financial and operating policies. Significant influence is presumed to exist when the Group holds between 20 and 50 percent of the voting power of another entity. Interests in associates and joint ventures are accounted for using the equity method (equity accounted investees) and are recognised initially at cost. The cost of the investment includes transaction costs. The consolidated financial statements include the Group’s share of the profit or loss and other comprehensive income of equity accounted investees, after adjustments to align the accounting policies with those of the Group, from the date that significant influence is obtained until the date that significant influence ceases. When the Group’s share of losses exceeds its interest in an equity accounted investee, the carrying amount of the investment, including any long-term interests that form part thereof, is reduced to zero, and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the investee. Unrealised gains arising from transactions with equity accounted investees are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment. (v) Property asset acquisition Transaction that does not represent a business combination, because the acquired entity does not constitute a business in accordance with the IFRS 3, are accounted for as an asset acquisition. (b) Foreign currency (i) Functional currencies Functional currencies of the companies in the Group are the currencies of the primary economic environment in which the entities operate, and the majority of its transactions are carried out in this currency. CPI FIM SA 2021 CONSOLIDATED FINANCIAL STATEMENTS | 9 The Group’s consolidated financial statements are presented in EUR. The table below presents functional currencies of all Group’s subsidiaries having non EUR functional currency. Each Group’s subsidiary determines its own functional currency, and items included in the financial statements of each entity are measured using that functional currency. For the purposes of inclusion in the consolidated financial statements, the statement of financial position of entities with non-EUR functional currencies are translated to EUR at the exchange rates prevailing at the balance sheet date and the income statements are translated at the average exchange rate for each month of the relevant year. The resulting net translation difference is recorded in OCI. When a foreign operation is disposed of, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as a part of gain or loss on the disposal. Group’s entities in different countries that have non-EUR functional currency: Country Functional currency Czech Republic CZK Poland PLN (ii) Foreign currency transactions Transactions in foreign currencies are translated to the respective functional currencies of the Group’s entities at exchange rates valid at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate at that date. The foreign currency gain or loss on monetary items is the difference between amortised cost in the functional currency at the beginning of the period, adjusted for effective interest and payments during the period, and the amortised cost in foreign currency translated at the exchange rate at the end of the period. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Non-monetary items in a foreign currency that are measured based on historical cost are translated using the exchange rate at the date of the transaction. Foreign currency differences arising on retranslation are recognised in profit or loss, except for the differences arising on the retranslation of qualifying cash flow hedges to the extent the hedge is effective, which are recognised in OCI. The Group translates the foreign currency operations and transactions using the foreign exchange rates declared by relevant central banks. (c) Investment property and investment property under development Investment property is property held either to earn rental income or for capital appreciation or for both. Investment property is measured at cost on initial recognition and subsequently at fair value with any change therein recognised in profit or loss. Cost of investment property includes expenditure that is directly attributable to the acquisition of the investment property. The cost of self-constructed investment property includes the cost of material and direct labour, any other costs directly attributable to bringing the investment property to a working condition for their intended use and capitalised borrowing costs. External independent valuation companies, having appropriate recognised professional qualifications and recent experience in the location and category of property being valued, valued the portfolio of investment property at the year end of 2021 and 2020 respectively. Any gain or loss on disposal of an investment property (calculated as the difference between the net proceeds from disposal and the carrying amount of the item) is recognised in profit or loss. Property that is being constructed or developed for future use is measured at fair value until construction or development is completed. Any gain or loss arising on the measurement is recognised in profit or loss. The Group capitalises external borrowing costs on qualifying investment properties under development. (d) Leased assets Leases in terms of which the Group assumes substantially all the risks and rewards of ownership are classified as finance leases. On initial recognition, the leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset. Lease payments are accounted for as described in accounting policy 2.2 (m). The Group recognises right-of-use assets at the commencement date of the lease. Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Unless the Group is reasonably certain to obtain ownership of the leased asset at the end of the lease term, the recognised right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term. Right-of-use assets are subject to impairment. Short-term leases and leases of low-value assets: The Group applies the short-term lease recognition exemption to its short-term leases. Short term leases have a lease term of 12 months or less from the commencement date and do not contain a purchase option. It also applies the lease of low-value assets recognition exemption to leases of office equipment that are considered of low value. Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease term. The Group determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised. CPI FIM SA 2021 CONSOLIDATED FINANCIAL STATEMENTS | 10 (e) Property, plant and equipment (i) Recognition and measurement Items of property, plant and equipment are measured at cost less accumulated depreciation (see below) and impairment losses (see accounting policy 2.2 (i). Other items of property, plant and equipment are measured at the lower of cost less accumulated depreciation and impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials, direct labour and any other costs directly attributable to bringing the assets to a working condition for their intended use, capitalised borrowing costs and an appropriate proportion of production overheads. Where components of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. Any gain or loss on disposal of an item of property, plant and equipment (calculated as the difference between the net proceeds from disposal and the carrying amount of the item) is recognised in profit or loss. (ii) Reclassification to investment property When the use of a property changes from owner-occupied to investment property, the property is reclassified to investment property and remeasured to fair value. Any gain arising on remeasurement is recognised in profit or loss to the extent that it reverses the previous impairment loss on the specific property, with any remaining gain recognised in OCI and presented in the revaluation reserve in equity. Any loss is recognised immediately in profit or loss. (iii) Subsequent costs Subsequent expenditure is capitalised only when it is probable that the future economic benefits associated with the expenditure will flow to the Group. Ongoing repairs and maintenance is expensed as incurred. (iv) Depreciation Items of property, plant and equipment are depreciated on a straight-line basis in profit or loss over the estimated useful lives of each component. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term. Land is not depreciated. Items of property, plant and equipment are depreciated from the date that they are ready for use. The estimated useful lives for the current and comparative period are as follows: Assets 2021 2020 Property 50 - 80 years 50 - 80 years Equipment 5 - 10 years 5 - 10 years Fittings 3 - 20 years 3 - 20 years Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate. (f) Intangible assets (i) Other intangible assets Other intangible assets that are acquired by the Group and have finite useful lives, are measured at cost less accumulated amortization (see (iii) below) and accumulated impairment losses (see accounting policy 2.2 (i)). (ii) Subsequent expenditure Subsequent expenditure on intangible assets is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is recognised in profit or loss as incurred. (iii) Amortization Except for goodwill and intangible assets with indefinite useful life, intangible assets are amortised on a straight-line basis in profit or loss over their estimated useful lives, from the date that they are available for use. Amortization methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate. (g) Inventories Inventories represent trading property and are measured at the lower of cost and net realisable value. Cost includes expenditure that is directly attributable to the acquisition of the trading property. The cost of self-constructed trading property includes the cost of material and direct labour, any other costs directly attributable to bringing the trading property to a condition for their intended use and capitalised borrowing costs. Deemed costs of trading property reclassified from existing investment property is the fair value of such property. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and selling expenses. CPI FIM SA 2021 CONSOLIDATED FINANCIAL STATEMENTS | 11 (h) Financial instruments Initial recognition and measurement Financial assets are classified, at initial recognition: as subsequently measured at amortised cost, fair value through other comprehensive income (OCI), and fair value through profit or loss. The Group measures financial assets at amortised cost if both of the following conditions are met: - The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows; and - The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. A debt investment is classified and measured at fair value through OCI if it meets both of the following conditions: - The financial asset is held within a business model with the objective of both holding to collect contractual cash flows and selling; and - The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. All financial assets not classified as measured at amortised cost or fair value through OCI as described above are measured at fair value through profit or loss. On initial recognition, the Group may irrevocably designate a financial asset, that otherwise meets the requirements to be classified and measured at amortised cost or at fair value through OCI, to be classified and measured at fair value through profit or loss if it eliminates or reduces an accounting mismatch that would otherwise arise. Subsequent measurement For purposes of subsequent measurement, financial assets are classified in four categories: - Financial assets at amortised cost (debt instruments) This category is the most relevant to the Group. The Group’s financial assets at amortised cost include trade receivables, and loans provided. Financial assets at amortised cost are subsequently measured using the effective interest (EIR) method and are subject to impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired. - Financial assets at fair value through OCI (debt instruments) For debt instruments at fair value through OCI, interest income, foreign exchange revaluation and impairment losses or reversals are recognised in the statement of profit or loss and computed in the same manner as for financial assets measured at amortised cost. The remaining fair value changes are recognised in OCI. Upon derecognition, the cumulative fair value change recognised in OCI is recycled to profit or loss. - Financial assets designated at fair value through OCI (equity instruments) Gains and losses on these financial assets are never recycled to profit or loss. Dividends are recognised as other income in the statement of profit or loss when the right of payment has been established, except when the Group benefits from such proceeds as a recovery of part of the cost of the financial asset, in which case, such gains are recorded in OCI. Equity instruments designated at fair value through OCI are not subject to impairment assessment. The Group elected to classify irrevocably its non-listed equity investments under this category. Investment in an equity instrument that does not have a quoted market price in an active market and for which other methods of reasonably estimating fair value are inappropriate are carried at cost. - Financial assets at fair value through profit or loss Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. Derivatives, including separated embedded derivatives, are also classified as held for trading unless they are designated as effective hedging instruments. Financial assets with cash flows that are not solely payments of principal and interest are classified and measured at fair value through profit or loss, irrespective of the business model. Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with net changes in fair value recognised in the statement of profit or loss. Derecognition A financial asset is primarily derecognised when the rights to receive cash flows from the asset have expired. A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit or loss. CPI FIM SA 2021 CONSOLIDATED FINANCIAL STATEMENTS | 12 (i) Non-derivative financial assets The Group initially recognises loans and receivables on the date that they are originated. All other financial assets are recognised initially on the trade date, which is the date that the Group becomes a party to the contractual provisions of the instrument. The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in such transferred financial assets that is created or retained by the Group is recognised as a separate asset or liability. Financial assets and liabilities are offset, and the net amount presented in the consolidated statement of financial position when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously. Loans provided Loans are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, provided loans are measured at amortised cost using the effective interest method, less any impairment losses (see accounting policy 2.2(i)). Finance charges, including premiums receivable on settlement or redemption and direct issue costs, are recognised in profit or loss on an accrual basis using the effective interest method and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise. The Group classifies any part of long-term loans, that is due within one year from the reporting date, as current. Trade and other receivables Trade and other receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, receivables are measured at amortised cost using the effective interest method, less any impairment losses (see accounting policy 2.2(i)). Cash and cash equivalents Cash and cash equivalents comprise cash balances and call deposits with maturities of three months or less from the acquisition date that are subject to an insignificant risk of changes in their fair value and are used by the Group in the management of its short-term cash commitments. Bank accounts and call deposits that are repayable on demand and form an integral part of the Group’s cash management are included as a component of cash and cash equivalents for the purpose of the cash-flow statement. The Company treats cash deposited as a security in accordance with bank loan covenants as cash and cash equivalents for cash flow purposes. The cash flow statement of the Group is prepared based on the indirect method from the consolidated statement of financial position and consolidated statement of profit and loss. In 2020, the Company agreed a cash-pool contracts with related subsidiaries of CPI PG Group. The Company clasifies the provided and received cash pool balances including interests as other current receivables and other financial current liabilities, respectively. (ii) Non-derivative financial liabilities Non-derivative financial liabilities comprise loans and borrowings, bonds issued, bank overdrafts, and trade and other payables. The Group initially recognises debt securities issued and subordinated liabilities on the date that they are originated. All other financial liabilities (including financial liabilities designated as at fair value through profit or loss) are recognised initially on the trade date, which is the date that the Group becomes a party to the contractual provisions of the instrument. The Group derecognises a financial liability when its contractual obligations are discharged, cancelled or expire. The Group classifies non-derivative financial liabilities as the other financial liabilities category. Such financial liabilities are recognised initially at fair value less any directly attributable transaction costs. Subsequent to initial recognition, these financial liabilities are measured at amortised cost using the effective interest method. The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the contractual cash flows of the financial liability. Financial debts and bonds are recognised initially at fair value less any directly attributable transaction costs. Subsequent to initial recognition, financial debts and bonds are measured at amortised cost using the effective interest method. Finance charges, including premiums payable on settlement or redemption and direct issue costs, are recognised in profit or loss on an accrual basis using the effective interest method and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which it arises. The Group classifies any part of long-term loans or bonds, that is due within one year from the date of the consolidated statement of financial position, as current liabilities. CPI FIM SA 2021 CONSOLIDATED FINANCIAL STATEMENTS | 13 Bond transaction costs Bonds payable are initially recognized at the amount of the proceeds from issued bonds less any attributable transaction costs. Bond transaction costs include fees and commissions paid to agents, advisers, brokers and dealers, levies by regulatory agencies and securities exchanges. Lease liabilities At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating a lease, if the lease term reflects the Group exercising the option to terminate. In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the in-substance fixed lease payments or a change in the assessment to purchase the underlying asset. (iii) Share capital Ordinary shares Incremental costs directly attributable to the issue of new shares and shares options, other than upon a business combination, are recognised as a deduction from equity, net of any tax effects. (i) Impairment (i) Impairment of non-derivative financial assets The Group recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the discounted cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL). For trade receivables, the Group applies a simplified approach in calculating ECLs. Therefore, the Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Group has established a provision matrix that is based on its historical credit loss experience. The Group considers a non-derivative financial asset in default when contractual payments are 90 days past due. However, in certain cases, the Group may also consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding amounts in full. A non-derivative financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows. Determination of ECLs for loans provided to related parties is based on Group’s risk assessment and estimated rating of the borrower. (ii) Impairment of non-financial assets The carrying amounts of the Group’s non-financial assets, other than investment property (see accounting policy 2.2(c)), property plant and equipment (only partially, see accounting policy 2.2(e)), inventories (see accounting policy 2.2(g)), and deferred tax assets (see accounting policy 2.2(p)), are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. An asset’s recoverable amount is the higher of an asset’s or CGU’s fair value less costs of disposal and its value in use. For the purpose of impairment testing, assets are grouped together into cash generating units (CGU’s) - the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. The Group bases its impairment calculation on detailed budgets and forecast calculations, which are prepared separately for each of the Group’s CGUs to which the individual assets are allocated. Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to CGU (group of CGUs), and then to reduce the carrying amounts of the other assets in the CGU (group of CGUs) on a pro-rata basis. (j) Provisions Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. The unwinding of the discount is recognised as finance cost. CPI FIM SA 2021 CONSOLIDATED FINANCIAL STATEMENTS | 14 (k) Assets held for sale and disposal groups Non-current assets held for sale and disposal groups comprising assets and liabilities, are classified as held-for-sale when it is highly probable that they will be recovered primarily through sale rather than through continuing use. The following criteria must be met for an asset or disposal group to be classified as held for sale: the Group is committed to selling the asset or disposal group, the asset is available for immediate sale, an active plan of sale has commenced, the sale is expected to be completed within 12 months and the asset is being actively marketed for sale at a sales price reasonable in relation to its fair value. Such assets, or disposal groups, are measured at the lower of carrying amount and fair value less costs to sell. (l) Revenue (i) Rental revenue Rental income arising from operating leases on investment property is accounted for on a straight-line basis over the lease terms. Initial direct costs incurred in negotiating and arranging an operating lease are recognised as an expense over the lease term on the same basis as the lease income. Tenant lease incentives are recognised as a reduction of rental revenue on a straight-line basis over the term of the lease. The term of the lease is the non-cancellable period of the lease. Any further term for which the tenant has the option to continue the lease is not considered by the Group. (ii) Services rendered Revenue from services rendered is recognised in profit or loss in proportion to the stage of completion of the transaction at the reporting date. The stage of completion is assessed by reference to surveys of work performed. (iii) Service charges and other income Income arising from expenses recharged to tenants is recognized in the period in which the compensation becomes receivable. Service and management charges and other such receipts are included in net rental income gross of the related costs. T he Group determined that it does control the services before they are transferred to tenants and therefore that the Group acts rather as a principal in these arrangements. (iv) Sale of investment property and trading property, investment in subsidiaries and equity-accounted investees Revenue from the sale of investment and trading property, investments in subsidiaries and equity-accounted investees is recognised in profit or loss by the Group at point of time when the control over the property is transferred to a customer, usually on the date on which the application is submitted to the Land Registry for transfer of legal ownership title. The property must be completed, and the apartments are ready for sale, including the necessary regulatory permissions. The timing of the transfer of risks and rewards varies depending on the individual terms of the sale arrangement. (m) Expenses (i) Service costs and property operating expenses Service costs and property operating expenses are expensed as incurred. Expenditures that relate to multiple accounting periods are deferred and recognised over those accounting periods irrespective of the timing of the consideration given or liability incurred. (n) Interest income, interest expense and other net financial result Interest income comprises interest income on funds invested, such as bank interest, interest on provided loans, interest on bonds purchased and interest on non-current receivables. Interest expense comprises interest expense on loans and borrowings, on leases, on bonds issued and interest charges related to leases. Other net financial result comprises dividend income, gains on disposal of debt investments at fair value through OCI, gains on derivative instruments that are recognised in profit or loss and reclassifications of amounts (losses) previously recognised in OCI, bank charges, losses on disposal of debt investments at fair value through OCI, losses on derivative instruments that are recognised in profit or loss and reclassifications of amounts (gains) previously recognised in OCI and foreign currency gains and losses that are reported on a net basis as either finance income or finance costs depending on whether foreign currency movements result in a net gain or net loss position. Interest income is recognised as it accrues in profit or loss, using the effective interest method. Dividend income is recognised in profit or loss on the date that the Group’s right to receive payment is established. Borrowing costs that are not directly attributable to the acquisition or construction of a qualifying asset are recognised in profit or loss using the effective interest method. (o) Current income tax Current income tax assets and liabilities recognised are the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at the reporting date in the country where the Group operates and generates taxable income. The estimated current income tax expense is calculated using the accounting profit for the period and an estimate of non-deductible expenses of each entity of the Group and the corresponding income tax rate applicable to the given country and accounting period. CPI FIM SA 2021 CONSOLIDATED FINANCIAL STATEMENTS | 15 Current and deferred income tax is recognised in profit or loss except to the extent that it relates to a business combination, or items recognised directly in equity or in OCI. (p) Deferred tax Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for: - temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss (asset acquisition); - temporary differences related to investments in subsidiaries and jointly controlled entities to the extent that the Group is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and - taxable temporary differences arising on the initial recognition of goodwill. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantially enacted at the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously. A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised. (q) Earnings per share The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares. (r) Entity wide disclosures The Group has applied the criteria of IFRS 8, ‘Operating Segments’ to determine the number and type of operating segments. From second half of 2018, the Group reports as a single operating segment entity. Previously, the Group reported the three operating segments: Income generating rental properties, Land bank and Development. The entity wide disclosures are determined based on the nature of the business and how the business is managed by the Board of Directors, the Group’s chief operating decision maker and reflect the internal reporting structure. Reasons supporting the change of operating segments in 2018 are: - The chief operating decision maker no longer focuses on the differentiation based on the asset types but reviews and manages the business as a whole. - Income generating rental properties, land bank and development, previously reported as individual operating segments, became less significant business considering the Group’s financing function. As required by IFRS 8, the Group provides information on the business activities in which, the Group engages including split of revenue and investment property per asset portfolio. (s) Key management personnel The Group discloses the total remuneration of key management personnel as required by IAS 24 – Related party disclosures. The Group includes within key management personnel all individuals (and their family members, if applicable) who have authority and responsibility for planning, directing and controlling the activities of the Group. Key management personnel include all members of the Management Board and the senior executives of the Group. 2.3 Determination of fair value Investment properties are stated at fair value as at 31 December 2021 and 2020 based on external valuations performed by professionally qualified valuers. The Group’s property portfolio in the Czech Republic is valued by Jones Lang LaSalle, CBRE and RSM, in Poland by Knight Frank. The residential portfolio in France is valued by Savills and two Italian properties are valued by Colliers. One asset in Poland was valued internally. Independent valuations are reviewed by the Group’s management and represent a basis for the management’s estimate of the investment properties’ fair value. Those estimates considered the results of current and prior external valuations, information from comparable selling and purchase transactions, the deferred tax impact and current market conditions. Valuations reflect, where appropriate, the type of tenants in occupation or responsible for meeting the lease commitments and the market’s general perception of their creditworthiness; the allocation of maintenance and insurance responsibilities between lessor and lessee; and the remaining economic life of the property. CPI FIM SA 2021 CONSOLIDATED FINANCIAL STATEMENTS | 16 The following valuation methods of investment property were used: The real estate market in Central and Eastern Europe is considered small and transactions with real estate portfolios of the size similar to that of the Group’s portfolio are rare. Global volatility of the financial system is reflected also in local residential and commercial real estate markets. Therefore, in arriving at the estimates of market values of investment property as at 31 December 2021 and 31 December 2020, the reliance placed on comparable historical transactions was limited. Due to the need to use the market knowledge and professional judgements of the valuers to a greater extent, there was higher degree of uncertainty than which would exist in a more developed and active market. (i) Office, Industry and Logistics Office, logistics and industry properties have been valued using predominantly income capitalization and discounted cash flow valuation techniques. Income capitalization method is based on the capitalization of the net annual income the property generates or is potentially able to generate. On lease expiry, future income flows have been capitalized into perpetuity at the estimated rental value, taking into account expiry voids and rent free periods. The net income is the total rental income reduced by the costs the landlord cannot cover from the tenants. The capitalisation yield (equivalent yield) is determined by the market transactions achieved at the sale of the property or similar properties in the market between the willing buyer and the willing seller in the arm´s length transaction. A yield reflects the risks inherent in the net cash flows applicable to the net annual rentals to arrive at the property valuation. The sales comparison valuation technique has been used for smaller special retail assets in Czech Republic. (ii) Land and vacant buildings Land and vacant buildings have been valued using the direct comparison method to arrive at the value of the property in its existing state. Comparison was performed with other similarly located and zoned plots of land/buildings that are currently on the market. This valuation method is most useful when several similar properties have recently been sold or are currently for sale in the subject property market. Using this approach a value indication by comparing the subject property to prices of similar properties is produced. The sale prices of the properties that are judged to be most comparable tend to indicate a range in which the value indication for the subject property will fall. The valuer estimated the degree of similarity or difference between the subject property and the comparable sales by considering various elements of comparison. Percentage adjustments were then applied to the sale prices of the comparables because the prices of these properties are known, while the value of the subject property is not. (iii) Investment property under development / developments The valuer used the Residual Value Approach for the valuation of the investment property under development. In order to assess the market value of the sites, the valuer undertook a development appraisal to assess the potential value (Gross Development Value) of the fully completed and leased development as currently proposed, and deducted hard costs, soft costs, financing costs and a developer’s expected required profit (which reflects the required level of return to a developer and the risk of undertaking the project). In assessing the Gross Development Value, the valuator adopted a market approach by estimating the market rental values for the accommodation being developed, and the appropriate capitalisation rate which a potential investor would require, to arrive at the Market Value of the completed and leased building. For sensitivity analysis on changes in assumptions of Investment property valuation refer to note 7.5. CPI FIM SA 2021 CONSOLIDATED FINANCIAL STATEMENTS | 17 3 The Group structure CPI FIM SA is the Group’s ultimate parent company. As at 31 December 2021, the Group comprises its parent company and 41 subsidiaries (40 subsidiaries as at 31 December 2020) controlled by the parent company and two joint ventures. For list of subsidiaries refer to Appendix I. 3.1 Changes in the Group structure in 2021 In 2021, the Group acquired or founded the following subsidiaries: Entity Change Group’s share Date CPI Italy 130 SPV S.r.l. Founded 100.00% 12 May 2021 CPI ACAYA S.r.l. Acquisition 100.00% 21 May 2021 Brno Property Invest XV., s.r.o. Acquisition 100.00% 1 June 2021 PAC Italy 130 SP V S.r.l. Founded 100.00% 30 June 2021 * Controlled investment vehicle of the Group. In 2021, the Group disposed or liquidated the following subsidiaries: Entity Change Group’s share Date Bubenská 1, a.s. Disposal 100.00% 1 April 2021 HAGIBOR Office Building, a.s. Liquidation 100.00% 29 April 2021 Karviná Property Development, a.s. Liquidation 100.00% 28 December 2021 Development of the office Bubenská 1 office was completed and sold for the value of its net assets of EUR 17.2 million to the related party CPI, a.s. on 1 April 2021. 3.2 Property asset acquisiton in 2021 CPI ACAYA S.r.l. To support operations of newly acquired hotel building in Italy, the Group acquired an Italian based company CPI ACAYA S.r.l. Total consideration of the acquisition was EUR 0.8 million. The acquisition was recognized as a property asset acquisition as the company does not represent a business as defined by IFRS 3. The fair value of the identifiable assets and liabilities at the date of acquisition was as follows: EUR million Intangible assets 0.5 Property, plant and equipment 0.3 Trade receivables 0.1 Identifiable acquired assets 0.9 Trade payables (0.1) Identifiable acquired liabilities (0.1) Net identifiable assets of subsidiary acquired at the date of acquisition amounted to EUR 0.8 million. The net cash outflow connected with the acquisition amounted to EUR 0.8 million. Brno Property Invest XV., s.r.o. On 1 June 2021, the Group acquired A.M.A. Brno spol. s.r.o., an owner of one land plot in Brno, the Czech Republic. The company was subsequently renamed to Brno Property Invest XV., s.r.o. The total consideration paid was EUR 2.2 million. The acquisition was recognized as a property asset acquisition as the company does not represent a business as defined by IFRS 3. The fair value of the identifiable assets and liabilities at the date of acquisition was as follows: EUR million Investment property 2.2 Current assets 0.2 Identifiable acquired assets 2.4 Financial debts and other liabilities (0.2) Identifiable acquired liabilities (0.2) Net identifiable assets of subsidiary acquired at the date of acquisition amounted to EUR 2.2 million. The net cash outflow connected with the acquisition amounted to EUR 2.2 million. 3.3 Changes in the Group structure in 2020 In 2020, the Group disposed or liquidated the following subsidiaries: Entity Change Group’s share Date CEREM S.A. Liquidation 100.00% 3 January 2020 Brillant 1419. GmbH & Co. Verwaltungs KG Liquidation 49.00% 30 June 2020 Endurance Real Estate Management Comapny Liquidation 100.00% 28 December 2020 CPI FIM SA 2021 CONSOLIDATED FINANCIAL STATEMENTS | 18 4 Entity-wide disclosures The management of the Group reviews financial information that is principally the same as that based on the accounting policies described in note 2.2. For all asset types, discrete financial information is provided to the Board of Directors, which is the chief operating decision maker, on an individual entity basis. The group is engaged primarily in financing of CPI PG group; the Group’s other business activities consist of: - rendering of advisory and other services to CPI PG group; - investing in land bank and development portfolio in the Czech Republic; - managing of office portfolio in Poland; - operating of hotel resort in Italy; - managing of residential portfolio in France and Italy. 4.1 Financing Interest income by countries 2021 2020 Amount In % Amount In % Poland 1 - 20 - Luxembourg 210,715 100% 169,801 100% Czech Republic 1 - - - Italy 790 - - - Total 211,507 100% 169,821 100% Loans provided by country of the creditor 31 December 2021 31 December 2020 Amount In % Amount In % Luxembourg 4,948,061 96% 4,234,093 97% Non-current loans provided 4,948,061 96% 4,234,093 97% Luxembourg 186,859 4% 115,168 3% Current loans provided 186,859 4% 115,168 3% Total 5,134,9 2 0 100% 4,349,261 100% 4.2 Other business activities Revenues by countries 2021 2020 Amount In % Amount In % Czech Republic 3,342 5% 3,466 5% - Land bank 1,039 2% 714 1% - Office 2,169 3% 2,449 4% - Industry and logistics 102 - 303 - - Retail 32 - - - Luxembourg 22,853 34% 22,492 34% - Rendering of services 22,789 34% 22,416 34% - Other 64 - 76 - Poland - Office 41,004 61% 40,628 61% France - Residential 115 - 25 - Italy – Hospitality 246 - - - Monaco – Residential 65 - - - Total 67,625 100% 66,611 100% Investment property by countries 31 December 2021 31 December 2020 Amount In % Amount In % Czech Republic 839,426 55% 736,749 54% - Land bank 811,287 53% 604,267 44% - Office 26,522 2% 130,822 10% - Retail 1,617 - - - - Industry and logistics - - 1,660 - Poland 614,304 41% 584,615 43% - Office 613,943 41% 584,251 43% - Land bank 361 - 364 - Other – residential 60,700 4% 45,820 3% Total 1,514,430 100% 1,367,184 100% CPI FIM SA 2021 CONSOLIDATED FINANCIAL STATEMENTS | 19 5 Consolidated statement of comprehensive income 5.1 Gross rental income 2021 2020 Gross rental income 34,880 34,142 5.2 Net service charge and other income 2021 2020 Service revenue 22,791 22,431 Service charge income 9,618 9,968 Revenues from sales of utilities 90 70 Service charges and other income 32,499 32,469 Cost of service charges (9,710) (10,798) Cost of utilities (9) (5) Cost of service and other charges (9,719) (10,803) Total net service charge income 22,780 21,666 In 2021, the service revenue increased due to advisory and management services provided to entities controlled by the majority shareholder of the Group. 5.3 Property operating expenses 2021 2020 Building maintenance (2,204) (1,709) Real estate tax (279) (209) Letting fee, other fees paid to real estate agents (138) (946) Facility management and other property related services (1,427) (549) Total (4,048) (3,413) 5.4 Net valuation gain 2021 2020 Valuation gain 265,502 156,072 Valuation loss (1,800) (9,639) Total 263,702 146,433 In 2021 and 2020, the valuation gain primarily relates to the Group’s portfolio located in the Czech Republic (EUR 226.4 million and EUR 137.9 million, respectively). For the assumptions, the independent valuers used in the property valuations as at 31 December 2021 and 2020, refer to note 7.5. 5.5 Net gain/(loss) on the disposal of investment property and subsidiaries 2021 2020 Proceeds from the disposal of investment property 44,455 2,294 Carrying value of investment property disposed of and related cost (41,672) (2,894) Net gain/(loss) on the disposal of investment property 2,783 (600) Proceeds from the disposal of subsidiaries 17,238 3 Carrying value of subsidiaries disposed of (16,275) (5) Net gain/(loss) on the disposal of subsidiaries 963 (2) Total 3,746 (602) In 2021, the proceeds from disposal of investment property and subsidiaries and the related carrying value was primarily related to one office building in Brno of EUR 39.6 million and subsidiary Bubenská 1 of EUR 17.2 million which was sold to CPI PG Group. In 2020, the proceeds from disposal of investment property and subsidiaries and the related carrying value was primarily related to sale of two Czech land plots and SCP Cayo subsidiary. CPI FIM SA 2021 CONSOLIDATED FINANCIAL STATEMENTS | 20 The following table summarizes disposal effects of subsidiaries sold: 2021 Investment property 71,727 Trade receivables 644 Other non-financial current assets 483 Cash and cash equivalents 3 Total disposed assets 72,857 Non-current financial debts (47,269) Deferred tax liabilities (1,741) Other non-current liabilities (2,334) Current financial debts (2,895) Trade payables (53) Current advance payments (88) Other financial current liabilities (2,202) Total disposed liabilities (56,582) Carrying value of subsidiaries disposed of 16,275 5.6 Net gain on the disposal of the other investments 2021 2020 Proceeds from disposal of CPI PG shares 155,418 - Carrying value of CPI PG shares (149,243) - Total 6,175 - In 2021, the proceeds and carrying value of the disposal of other investments related to the sale of CPI PG shares (for more details refer to note 6.4). 5.7 Amortization, depreciation and impairments 2021 2020 Depreciation and amortization (624) (1) (Impairment)/reversal of impairment of assets 4,079 (7,399) Total 3,455 (7,400) In 2021, the reversal of impairment relates primarily to loans provided to related parties . 5.8 Administrative expenses 2021 2020 Advisory and tax services (9,535) (9,719) Audit services (299) (346) Personnel expenses (1,25 7 ) (1,021) Legal services (1,561) (404) Other administrative expenses (1,370) (1,762) Total (14,022) (13,252) In 2021 and 2020, the advisory expenses primarily include the management services received from related parties in amount of EUR 6.3 million and EUR 4.9 million, respectively. In 2021, the audit, tax and advisory expenses also include the cost of services provided by the Group’s auditor of EUR 0.3 million (0.6 million in 2020), of which EUR 0.3 million (EUR 0.3 million in 2020) related to audit services with remaining amount related primarily to benchmarking for transfer pricing. Personnel administrative expenses As at 31 December 2021 and 2020, the Group had 14 and 12 employees, respectively. 5.9 Interest income and expense Interest income on loans and receivables relates primarily to loans provided to related parties (see note 6.5 and 11). Interest expense relates primarily to loans received from related parties, (see note 6.11 and 11). 2021 2020 Wages and salaries (1,011) (857) Social and health security contributions (239) (157) Other social expenses (7) (7) Total (1,257) (1,021) CPI FIM SA 2021 CONSOLIDATED FINANCIAL STATEMENTS | 21 5.10 Other net financial result 2021 2020 Net foreign exchange gain/(loss) on investment property (6,183) 44,986 Other net foreign exchange gain/(loss) 64,127 (54,213) Other net financial result (956) (506) Bank charges (434) (222) Total 56,554 (9,955) In 2021 and 2020, the other net foreign exchange gains and losses was driven by retranslation of loans provided to related parties in foreign currencies. 5.11 Income tax expense Tax recognized in profit or loss 2021 2020 Current income tax expense (1,377) (1,024) Adjustment for prior year 1,009 439 Income tax expense (368) (585) Temporary differences (50,895) (38,132) Utilization of tax losses carried forward (4,978) (14,260) Other effects (1,435) (309) Deferred income tax expense (57,308) (52,701) Total (57,676) (53,286) In 20 21 and 2020, based on the taxable profit realized in 2021 and 2020 and based on the assessment of its recoverability, the Group partially released deferred tax asset of EUR 5.0 million and 14.3 million, respectively. Reconciliation of effective tax rate 2021 2020 Profit for the period 366,843 145,514 Total income tax recognised in profit or loss 57,676 53,286 Profit before tax 424,519 198,800 Current income tax rate 24.94% 24.94% Income tax expense using the domestic corporate income tax rate (105,875) (49,581) Effect of tax rates in foreign jurisdictions 16,122 6,003 Non-deductible expense (2,851) (5,797) Tax exempt income 5,434 3,693 Change in unrecognized deferred tax asset from tax losses carried forward 29,254 (7,233) Other effects 240 (371) Income tax expense (57,676) (53,286) The main tax rules imposed on the Group companies Luxembourg: The effective tax rate is 24.94% considering the combined corporate income tax rate (corporate income tax rate for companies with taxable income exceeding EUR 30 thousand is 18%), solidarity surtax of 7% on the corporate income tax rate and municipal business tax rate of 6.75%. Tax losses incurred until 2017 may be carried forward indefinitely, while losses incurred as from 2017 should be limited to 17 years. Czech Republic: The corporate income tax rate is 19%. Tax losses can be carried forward for 5 years. Losses may not be carried forward on a substantial (approximately 25%) change in the ownership of a company unless certain conditions are met. Poland: The corporate income tax rate is 19%. Lowered 9% is used for small size taxpayers (sales revenues including VAT below EUR 2 million in previous year). Tax losses 2016-2018 may be carried forward for 5 years but the loss utilization in each year is capped at the 50% of the tax loss. The losses incurred during 2019-2021 can be utilized: a) in the next five consecutive tax years, provided that the amount of the utilization in any of these years may not exceed 50% of the amount of this loss, or b) in one of the next five subsequent tax years by an amount not exceeding PLN 5,000,000, the undetermined amount is subject to settlement in the remaining years of this five-year period, provided that the amount of reduction in any of these years may not exceed 50% of the amount of this loss. Italy: The corporate income tax (“IRES”) rate is 24% plus the regional tax on productive activities (“IRAP”) of 4.82% is applicable in Rome where the business of the Group is situated. (The standard IRAP rate is 3.9% but Italian regions may increase or decrease the standard rate by up to 0.92%.) For IRES purposes, tax losses may be carried forward indefinitely. However, tax losses may be offset only up to 80% of taxable income in each year (the “minimum tax” rule). Tax losses incurred during the first 3 years of new activity may be used to fully offset corporate taxable income. Utilization of the tax losses carried forward is limited upon business reorganizations and a change of control. For IRAP purposes, tax losses may not be carried forward. France: Corporate income tax rate is 26.5% on taxable income up to EUR 250 million and 27.5% on taxable income exceeding EUR 250 million. Small corporations realising a turnover up to EUR 7.63 million (EUR 10 million from 2021) are subject to the reduced CIT rate of 15% that applies on their first EUR 38,120 of taxable profits. Tax losses may be carried forward indefinitely but may be fully utilized against profit up to EUR 1 million and 50% on the excess. Monaco: The corporate income tax rate is 26.5% for companies that generate above 25% of their turnover outside Monaco, otherwise 0%. CPI FIM SA 2021 CONSOLIDATED FINANCIAL STATEMENTS | 22 Recognized deferred tax asset and liability Asset Liability Net 31 December 2021 31 December 2020 31 December 2021 31 December 2020 31 December 2021 31 December 2020 Investment property 2,015 2,235 (135,642) (81,943) (133,627) (79,708) Property, plant and equipment - - (305) - (305) - Tax losses carried-forward 132,157 138,230 - - 132,157 138,230 Other 5,090 5,024 (260) (27) 4,830 4,997 Gross deferred tax asset/(liability) 139,262 145,489 (136,207) (81,970) 3,055 63,519 Deferred tax offset by subsidiaries (5,341) (3,470) 5,341 3,470 - - Net deferred tax asset/(liability) 133,921 142,019 (130,866) (78,500) 3,055 63,519 As at 31 December 2021 and 2020, the Group recognized the deferred tax asset from tax losses carried forward in total amount of EUR 132.2 million and EUR 138.2 million, respectively. As these tax losses relate primarily to the Luxembourg entities (EUR 129.7 million and EUR 134.7 million as at 31 December 2021 and 2020, respectively) and were generated before 2017, they can be carried forward indefinitely. Recognition of the deferred tax asset is based on the future taxable profits that are expected to be generated in next 10 years. The expected profits reflect a strategy of CPI PG in which, the Group renders the financial services to CPI PG’s subsidiaries. Unrecognised deferred tax asset 31 December 2021 31 December 2020 Tax losses carried-forward 13,413 39,124 * Unrecognized deferred tax asset from tax losses carried-forward due to uncertainty of its realization. Expiry of unrecognized tax losses Less than 1 year 1 to 3 years 3 to 5 years More than 5 years Total As at 31 December 2021 5,002 8,685 11,451 44,735 69,873 As at 31 December 2020 9,208 14,155 11,047 145,999 180,409 Movement in deferred tax 2021 2020 As at 1 January 63,519 114,926 Recognized in profit or loss (57,308) (52,701) Recognized in other comprehensive income (386) - Disposal of subsidiaries 1,741 - Translation reserve (4,511) 1,294 As at 31 December 3,055 63,519 CPI FIM SA 2021 CONSOLIDATED FINANCIAL STATEMENTS | 23 6 Consolidated statement of financial position 6.1 Investment property Office Land bank Retail Development Residential Industry and logistics Total As at 1 January 2020 588,824 490,802 - 59,241 50,768 1,800 1,191,435 Development costs and other additions 2,126 3,320 - 37,022 985 96 43,549 Transfers within investment property 96,263 - - (96,263) - - - Transfer from inventory - - - - 1,107 - 1,107 Disposals (43) (1,651) - - - - (1,694) Valuation gain 31,514 122,194 - - (7,040) (235) 146,433 Net foreign exchange loss 39,997 4,932 - - - 57 44,986 Translation differences (43,606) (14,968) - - - (58) (58,632) As at 31 December 2020 715,075 604,629 - - 45,820 1,660 1,367,184 Acquisition of subsididaries - 2,223 - - - - 2,223 Development costs and other additions 9,353 6,735 1,090 - - 19 17,197 Transfers within investment property - (451) 451 - - - - Transfer to asset held for sale - (54,586) - - - - (54,586) Disposals (111,692) (29) - - - (1,678) (113,399) Valuation gain 25,729 223,093 - - 14,880 - 263,702 Net foreign exchange loss 4,672 (10,806) - - - (48) (6,182) Translation differences (2,672) 40,840 76 - - 47 38,291 As at 31 December 2021 640,465 811,648 1,617 - 60,700 - 1,514,430 Acquisition of subsidiaries In 2021, the Group acquired the following investment property (see note 3.1 and 3.2): land bank in Brno, the Czech Republic in total value of EUR 2.2 million. Development costs and other additions In 20 21 , the development costs primarily related to Nová Zbrojovka in Brno, the Czech Republic of EUR 4.8 million and Poland offices Eurocentrum and WFC Investments in total amount of EUR 5.2 million. In 20 20 , the development costs primarily related to development projects Prague’s Bubenská of EUR 25.7 million and Nová Zbrojovka in Brno, Czech Republic of EUR 12.4 million. Transfers to asset held for sale In 2021, the Group transferred into assets held for sale one land bank in Prague of EUR 54.6 million (see note 6.9). Disposals The Group disposed in 2021 primarily two Czech offices Bubenská of EUR 71.7 million (see note 3.1 and 5.5) in Prague and Nová Zbrojovka of EUR 39.6 million in Brno (see note 5.5). Valuation gain In 2021, the valuation gain related primarily to the Group’s Czech office and land bank portfolio in total amount of EUR 226.1 million, primarily related to future development projects Rezidence Pragovka of EUR 58.4 million, Polygon of EUR 53.0 million, STRM Alfa of EUR 34.4 million, Bubny Development of EUR 20.6 million and MQM Czech of EUR 11.0 million. Further, the Group recognized valuation gain from Polish and Italian portfolio of EUR 24.3 million and EUR 12.9 million, respectively. In 2020, the valuation gain related primarily to the Group ’s Czech office and land bank portfolio in total amount of EUR 137.0 million. Translation differences Translation differences related to investment property arise in connection with translation of amounts of subsidiaries with different functional currency than EUR. CPI FIM SA 2021 CONSOLIDATED FINANCIAL STATEMENTS | 24 6.2 Property, plant and equipment 2021 2020 Owner occupied buildings Other Total Owner occupied buildings Other Total Cost As at 1 January - 662 662 - 662 662 Acquisitions through the business combination - 347 347 - - - Hotel acquisition 18,717 - 18,717 - - - Development costs and other additions 447 1,048 1,495 - - - Translation differences - 22 22 - - - Valuation gain/(loss) through OCI 1,609 - 1,609 - - - As at 31 December 20,773 2,079 22,852 - 662 662 Accumulated depreciation and impairment losses As at 1 January - - - - - - Depreciation (623) - (623) - - - Impairment loss/(reversal of impairment loss) - (36) (36) - - - As at 31 December (623) (36) (659) - - - Carrying amounts As at 1 January - 662 662 - 662 662 At 31 December 20,150 2,043 22,193 - 662 662 Hotel acquisition In 2021, the Group acquired a hotel building in Italy with the intention for development for EUR 18.7 million. 6.3 Equity accounted investees As at 31 December 2021, the equity accounted investment in the amount of EUR 8.2 million (EUR 7.0 million as at 31 December 2020) represents investment in Uniborc S.A. Uniborc S.A. is a joint venture constituted in 2013 with Rodamco with aim to develop a shopping center in the Bubny area in Prague, the Czech Republic. The Group’s shareholding is 34%. 2021 2020 As at 1 January 7,044 3,672 Share of profit 1,146 3,320 Other - 52 As at 31 December 8,190 7,044 Condensed statement of comprehensive income of Uniborc S.A. 2021 2020 Net valuation gain on investment property 6,723 14,681 Administrative expenses (89) (78) Operating result 6,634 14,603 Interest expenses (2,112) (2,041) Profit before taxes 4,522 12,562 Income taxes (1,248) (2,922) Profit for the period 3,274 9,640 Condensed statement of financial position of Uniborc S.A. 31 December 2021 31 December 2020 Investment property 74,517 67,439 Cash and cash equivalents 93 89 Total assets 74,610 67,528 Non-current financial liabilities (38,703) (36,582) Deferred tax liabilities (12,200) (10,530) Curent financial liabilities (280) (263) Other current liabilities (28) (28) Total liabilities (51,211) (47,403) Net assets 23,399 20,125 6.4 Other investments As at 31 December 2021 the Group holds 67,000,000 shares in CPI PG, which represents 0.75% of the CPI PG’s shareholding and is valued at EUR 53.0 million (EUR 188.9 million as at 31 December 2020). Through CPI PG share buy back on 26 February 2021, the Company sold 252,302,248 CPI PG shares for total of EUR 155.4 million with profit of EUR 6.2 million (carrying value of respective CPI PG shares was EUR 149.2 million). Sale price per share was EUR 0.616 per share and the Group’s carrying value of each share was EUR 0.59 per share. CPI FIM SA 2021 CONSOLIDATED FINANCIAL STATEMENTS | 25 The valuation of CPI PG shares held by the Group as at 31 December 2021 and 2020 is based on an alternative valuation model because of not an active market. The management determined the use of EPRA NAV per share (net asset value per share determined based on the methodology of European Public Real Estate Association) of CPI PG as the most representative valuation model primarily due to: - EPRA NAV is a globally recognized measure of fair value; - EPRA NAV takes into consideration the fair value of the net assets of a company, applying known aspects of the company’s business model. For the valuation of the CPI PG shares held as at 31 December 2021 and 2020, EPRA NAV per CPI PG share as at 31 December 2021 and 2020 was used. CPI PG’s EPRA NAV per share EUR 0.79 as at 31 December 2021 (EUR 0.59 as at 31 December 2020) differs from the price at the stock- exchange EUR 0.72 as at 31 December 2021 (EUR 0.69 as at 31 December 2020). The change in the value of CPI PG shares is recognized in other comprehensive income by the Group. The detailed calculation of CPI PG’s EPRA NAV per share is presented in the CPI PG’s annual report. The Group adjusted the number of shares used in the calculation for the amount of shares owned by the Group as at 31 December 2021 and 2020. As at 31 December 2021, the EPRA NAV per share of EUR 0.80 (EUR 0.61 as at 31 December 2020) disclosed by CPI PG therefore differs from value used by the Group to value the CPI PG‘s shares owned. 6.5 Loans provided 31 December 2021 31 December 2020 Loans provided - related parties and joint ventures 4,962,740 4,250,722 Impairment to non-current loans provided to related parties (14,679) (16,629) Total non-current loans provided 4,948,061 4,234,093 Loans provided - related parties and joint ventures 186,859 95,165 Loans provided - third parties - 20,003 Total current loans provided 186,859 115,168 Loans provided substantially increased in 2021 due to additional drawings of loans provided to related parties. These loans bear interest rate between 1.47% - 13.18% p.a. (determined based on the Group ’ s risk assessment) and mature in 2021 - 2028. See note 11 for more information. Loans provided to joint venture include loan principal and the interest granted to Uniborc S.A. (see note 6.3) in the amount of EUR 13.6 million and EUR 12.7 million as at 31 December 2021 and 2020. The joint venture is primarily financed through a loan by both partners in the same proportion as their respective shareholdings. The loan is repayable in 2023. 6.6 Trade receivables 31 December 2021 31 December 2020 Trade receivables due from related parties 935 1,644 Trade receivables due from third parties 6,418 5,141 Impairment - trade receivables due from other parties (424) (274) Total 6,929 6,511 6.7 Cash and cash equivalents 31 December 2021 31 December 2020 Bank balances 210,074 249,188 Cash on hand 2 2 Total 210,076 249,190 6.8 Other current receivables 31 December 2021 31 December 2020 Cash pool receivables due from related parties 28,711 29,541 Deposits available upon request due from related parties 89,300 149,521 Other receivables due from related parties 97,626 5,945 Other receivables due from third parties 21,176 3,236 Impairment – other receivables due from other parties (18) (11) Total 236,795 188,232 As at 31 December 2021, the Group had arrangements with selected subsididaries of CPI PG Group allowing the Company to deposit its bank balances on their bank accounts. The deposits of EUR 89.3 million are available to the Group upon request. The Company has agreed a cash-pool contracts with related subsidiaries of CPI PG Group (refer to note 2.2). As at 31 December 2021, other current receivables related to cash pool amounted to EUR 28.7 million (EUR 29.5 million as at 31 December 2020). As at 31 December 2021, the other current receivables increased due to the other receivables of the Group‘s investment vehicle CPI Italy 130 purchased with purpose of future property acquisitions. 6.9 Assets/Liabilities linked to assets held for sale As at 31 December 2021, the one land bank project in Czech Republic was classified as asset held for sale in the amount of EUR 54.6 million. CPI FIM SA 2021 CONSOLIDATED FINANCIAL STATEMENTS | 26 6.10 Equity As of 31 December 2021, the share capital of the Company amounts to EUR 13,145 thousand and is represented by 1,314,507,629 ordinary fully paid shares with a nominal value of EUR 0.01 each. The following table sets out information regarding the ownership of the Company ’ s shares as at 31 December 2021: Shareholder Number of shares Share held Voting rights CPI PROPERTY GROUP S.A. 1,279,198,976 97.31% 97.31% Other 35,308,653 2.69% 2.69% Total 1,314,507,629 100.00% 100.00% Mandatory takeover bid over Company shares On 8 June 2016, CPI Property Group’s fully owned subsidiary Nukasso Holdings Limited directly and indirectly acquired approximately 97.31% of shares in the Company. As a consequence, Nukasso Holdings Limited from the CPI Property Group became obliged to launch a mandatory takeover bid to purchase any and all of the ordinary shares of the Company (the “Mandatory Takeover Offer”). On 22 August 2016, the Czech Office for the Protection of Competition granted the merger clearance for the acquisition of the Company by CPI Property Group, whereas its decision became final and binding on 23 August 2016. On 8 December 2017, the CSSF published press releases in which it stated, inter alia, that it has decided not to approve the offer document in the Mandatory Takeover Offer as a consequence of the existence of an undisclosed concert action with respect to the Company. On 15 March 2018, the CSSF published a press release informing that the decisions detailed in the above-mentioned CSSF press releases of 8 December 2017 have been challenged before the Luxembourg administrative courts. As of the date of this report, the Company has not received any formal decision in relation to the Mandatory Takeover Offer. Earnings per share 31 December 2021 31 December 2020 Weighted average outstanding shares for the purpose of calculating the basic EPS 1,314,507,629 1,314,507,629 Weighted average outstanding shares for the purpose of calculating the diluted EPS 1,314,507,629 1,314,507,629 Net profit attributable to owners of the parent 294,053 112,505 Net profit attributable to owners of the parent after assumed conversions/exercises 294,053 112,505 Total Basic earnings in EUR per share 0.22 0.09 Diluted earnings in EUR per share 0.22 0.09 Basic earnings per share (EPS) are calculated by dividing the profit attributable to the Group by the weighted average number of ordinary shares in issue during the period, excluding ordinary shares purchased by the Group and held as treasury shares. Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. The warrants issued by the Company were not taken into account in the diluted EPS calculation. Non-controlling interests (NCI) After the sale of 80% stake in Czech subsidiaries Bubny Development, STRM Alfa, MQM Czech, Polygon BC (all with registered office at Vladislavova 1390/17, Prague 1, 110 00) and Vysočany Office (registered office at Pohořelec 112/24, Prague 1, 118 00) to related company GSG Europa (in 2019, 2018 and 2017, respectively), the Group continues to manage these entities. The shareholders agreements between the Company and GSG Europa, details the governance, control and cooperation between the shareholders. Considerring IFRS 10, the management concluded that the Group has control over the entities which are therefore consolidated in the Group’s consolidated financial statements as at 31 December 2021 and 2020. As at 31 December 2021 Bubny Development STRM Alfa MQM Czech Polygon BC Vysočany Office Total Land bank Land bank Land bank Land bank Land bank Group’s interest 20% 20% 20% 20% 20% - NCI – at the beginning of the year 138,887 25,760 9,197 28,756 1,931 204,531 NCI – profit for the period 4,900 22,329 7,124 34,283 4,154 72,790 Consensed financial information Non-current assets 250,309 16,390 24,114 94,488 11,462 396,763 Current assets 41 54,623 310 61 0 55,035 Total assets 250,350 71,013 24,424 94,549 11,462 451,798 Equity attributable to owners 179,734 60,111 20,401 78,799 7,606 346,651 Non-current liabilities and other 70,616 10,902 4,023 15,750 3,856 105,147 Total equity and liabilities 250,350 71,013 24,424 94,549 11,462 451,798 Profit for the year 6,125 27,911 8,905 42,854 5,193 90,988 Net increase/(decrease) in cash and cash equivalents (3,600) (3,581) (1) (33) (65) (7,280) CPI FIM SA 2021 CONSOLIDATED FINANCIAL STATEMENTS | 27 As at 31 December 2020 Bubny Development STRM Alfa MQM Czech Polygon BC Vysočany Office Total Land bank Land bank Land bank Land bank Land bank Proportion of ownership interests 20% 20% 20% 20% 20% - NCI – at the beginning of the year 108,931 24,196 9,173 29,161 61 171,522 NCI – profit for the period 29,956 1,564 24 (405) 1,870 33,009 Condensed financial information Non-current assets 227,333 33,317 12,076 37,579 4,552 314,857 Current assets 3,591 3,762 289 202 67 7,911 Total assets 230,924 37,079 12,365 37,781 4,619 322,768 Equity attributable to owners 173,610 32,200 11,496 34,510 3,848 255,664 Non-current liabilities and other 57,314 4,879 869 3,271 771 67,104 Total equity and liabilities 230,924 37,079 12,365 37,781 4,619 322,768 Profit for the year 37,445 1,955 30 (506) 2,337 41,261 Net increase/(decrease) in cash and cash equivalents 3,574 3,588 (16) 25 (12) 7,159 6.11 Financial debts 31 December 2021 31 December 2020 Loans from related parties 5,375,377 4,830,951 Bank loans 20,525 20,525 Lease liabilities 4,523 4,264 Total non-current financial debts 5,400,425 4,855,740 Loans from related parties 261,065 375,925 Bank loans 21 30 Lease liabilities 238 224 Total current financial debts 261,324 376,179 As at 31 December 2021 and 20 20 , the balance of the loans received from the Group ’s parent company CPI PG was EUR 5,075.8 million and EUR 4,594.8 million, respectively. The loans from CPI PG bear interest rates between 0.65% - 5.47% p.a. Maturity of financial debts As at 31 December 2021 Less than one year 1 to 5 years More than 5 years Total Loans from related parties 261,065 2,491,208 2,884,169 5,636,442 Bank loans 21 - 20,525 20,546 Lease liabilities 238 841 3,682 4,761 Total 261,324 2,492,049 2,908,376 5,661,749 As at 31 December 2020 Less than one year 1 to 5 years More than 5 years Total Loans from related parties 375,925 1,991,745 2,839,206 5,206,876 Bank loans 30 - 20,525 20,555 Lease liabilities 224 793 3,471 4,488 Total 376,179 1,992,538 2,863,202 5,231,919 For details on the loans received from related parties, refer to note 11. Reconciliation of movements of liabilities to cash flows arising from financing activities Loans and borrowings Lease liabilities Total As at 1 January 2021 5,227,431 4,488 5,231,919 Interest paid (105,453) - (105,453) Drawings of loans and borrowings 553,743 - 553,743 Repayments of loans and borrowings (203,932) - (203,932) Lease liabilities - - - Total changes from financing cash flows 244,358 - 244,358 Changes arising from obtaining or losing control of subsidiaries - - - The effect of changes in foreign exchange rates 21,680 273 21,953 Interest expense 163,519 - 163,519 As at 31 December 2021 5,656,988 4,761 5,661,749 Loans and borrowings Lease liabilities Total As at 1 January 2020 4,134,515 4,815 4,139,330 Interest paid (94,584) - (94,584) Drawings of loans and borrowings 1,083,127 - 1,083,127 Repayments of loans and borrowings (24,882) - (24,882) Lease liabilities - (327) (327) Total changes from financing cash flows 963,661 (327) 963,334 Changes arising from obtaining or losing control of subsidiaries - - - The effect of changes in foreign exchange rates (15,658) - (15,658) Interest expense 144,913 - 144,913 As at 31 December 2020 5,227,431 4,488 5,231,919 CPI FIM SA 2021 CONSOLIDATED FINANCIAL STATEMENTS | 28 6.12 Other financial non-current liabilities 31 December 2021 31 December 2020 Tenant deposits 3,729 3,725 Payables from retentions 931 3,121 Other payables due to third parties 133 2,058 Total 4,793 8,904 6.13 Trade payables 31 December 2021 31 December 2020 Trade payables due to related parties 1,113 1,444 Trade payables due to third parties 7,840 7,174 Total 8,953 8,618 6.14 Other financial current liabilities 31 December 2021 31 December 2020 Cash pool payables due to related parties 31,915 27,880 Other payables due to related parties 22,382 34,731 Other financial current liabilities due to third parties 5,237 6,066 Total 59,534 68,677 The Company has agreed a cash-pool contracts with selected subsidiaries of CPI PG Group. As at 31 December 2021, the other financial current liabilities related to cash pool amounted to EUR 31.9 million (EUR 27.9 million as at 31 December 2020). 6.15 Other non-financial current liabilities 31 December 2021 31 December 2020 Value added tax payables 95 3,178 Provisions 968 939 Other 27 39 Total 1,090 4,156 6.16 Leases where the Group acts as a lessor The commercial property leases typically have lease terms of between 5 and 10 years and include clauses to enable periodic upward revision of the rental charge according to market conditions. Some contracts contain options to terminate before the end of the lease term. The following table shows the future rental income from lease agreements where the terms are non-cancellable. 31 December 2021 31 December 2020 Less than one year 35,559 40,172 Between one and five years 65,561 86,912 More than five years 6,873 48,724 Total 107,993 175,808 As at 31 December 2021, the future rental income from lease agreements decreased compared to 31 December 2020 primarily due to sale of one office property in Brno, the Czech Republic in 2021. CPI FIM SA 2021 CONSOLIDATED FINANCIAL STATEMENTS | 29 7 Financial risk management Exposure to various risks arises in the normal course of the Group’s business. Financial risk comprises: • credit risk (refer to note 7.1); • liquidity risk (refer to note 7.2); • market risk including currency risk, interest rate risk and price risk (refer to note 7.3). This note presents information about the Group’s exposure to each of the above risks, the Group’s objectives, policies and processes for measuring and managing risk, and the Group’s management of capital. The primary objectives of the financial risk management function are to establish risk limits, and then ensure that exposure to risks stays within these limits. Supervision of the Group’s risk is accomplished through discussions held by executive management in appropriate frameworks together with reporting and discussions with the Board of Directors. 7.1 Credit risk Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Group is exposed to credit risk mainly from its rental activities (primarily for trade receivables) and from its financing activities, including provided loans, purchased bonds, deposits with banks and financial institutions and other financial instruments. The Group evaluates the concentration of risk with respect to loans provided as low, as the debtors are primarily entities controlled by the ultimate shareholder of the Company. Aging structure of financial assets as at 31 December 2021 and 2020 31 December 2021 Total neither past due nor impaired Total past due but not impaired Impaired Total Other investments 52,990 - - 52,990 Loans provided 5,134,920 - (32,763) 5,134,920 - to related parties 5,121,277 - (14,679) 5,121,277 - to third parties - - (18,084) - - to joint venture 13,643 - - 13,643 - bills of Exchange - - - - Trade and other receivables 242,527 1,271 (481) 243,798 Cash and cash equivalents 210,076 - - 210,076 Total 5,640,513 1,271 (33,244) 5,641,784 31 December 2020 Total neither past due nor impaired Total past due but not impaired Impaired Total Other investments 188,884 - - 188,884 Loans provided 4,349,261 - (37,145) 4,349,261 - to related parties 4,316,513 - (16,629) 4,316,513 - to third parties 20,003 - (20,516) 20,003 - to joint venture 12,745 - - 12,745 - bills of Exchange - - - - Trade and other receivables 189,223 5,520 (285) 194,743 Cash and cash equivalents 249,190 - - 249,190 Total 4,976,558 5,520 (37,430) 4,982,078 As at 31 December, the Group recognized an impairment of EUR 14.7 million (EUR 16.6 million as at 31 December 2020) against loans provided to related parties. Breakdown of overdue financial assets which are not impaired: 31 December 2021 Past due 1-30 days Past due 31-90 days Past due 91- 180 days Past due 181-360 days Past due more than 360 days Total Trade and other receivables 794 115 138 35 189 1,271 Total 794 115 138 35 189 1,271 31 December 2020 Past due 1-30 days Past due 31-90 days Past due 91- 180 days Past due 181-360 days Past due more than 360 days Total Trade and other receivables 1,167 689 3,582 53 29 5,520 Total 1,167 689 3,582 53 29 5,520 In respect of the ageing analysis and analysis of rent collections, the Group did not monitor significant increase of the credit risk in connection with COVID-19 pandemic. There has been no significant changes to the provision matrix which is based on the Group‘s historical credit loss experience and which is used for calculation of the expected credit losses. Development of the credit losses is, due to the negative impacts of COVID-19 pandemic, monitored by the Group on a regular basis. CPI FIM SA 2021 CONSOLIDATED FINANCIAL STATEMENTS | 30 The office portfolios were, throughout COVID-19 pandemic, effectively operating normally, with stable occupancy, rents and collection rates close to 100%. The Group was able to invoice and regularly collect rent across its portfolio, even at the peak of the COVID-19 outbreak. Cash and cash equivalents Cash and cash equivalents, neither past due nor impaired (Moody ˈ s ratings of respective counterparties): 31 December 2021 31 December 2020 A1 136,570 45,786 A2 1,777 3,279 Aa2 - 29 Aa3 186 69,723 Baa1 128 - Baa3 - 7 Not rated 71,415 130,366 Total 210,076 249,190 7.2 Liquidity risk The main objective of liquidity risk management is to reduce the risk that the Group does not have available resources to meet its financial obligations, working capital and committed capital expenditure requirements. The Group maintains liquidity management to ensure that funds are available to meet all cash flow needs. Concentration of risk is limited thanks to diversified maturity of the Group’s liabilities and diversified portfolio of the Group’s financing. The Group manages liquidity risk by constantly monitoring forecasts and actual cash flows and by various long-term financing. The Group’s liquidity position is monitored on a weekly basis by division managers and is reviewed quarterly by the Board of Directors. A summary table with maturity of liabilities is used by key management personnel to manage liquidity risks. Liquidity risk analysis The following table summarizes the maturity profile of the Group’s financial liabilities based on contractual undiscounted payments including accrued interest. The table reflects the earliest settlement of Group’s liabilities based on contractual maturity and includes non-derivative as well as derivative financial liabilities. At 31 December 2021 Carrying value < 3 month 3-12 months 1-2 years 2-5 years > 5 year Total Financial debts 5,661,749 256,812 172,018 646,613 2,458,968 3,153,885 6,688,296 - loans from related parties 5,636,442 256,486 171,818 646,120 2,457,553 3,128,077 6,660,054 - bank loans 20,546 88 200 267 800 22,126 23,481 - lease liabilities 4,761 238 - 226 615 3,682 4,761 Other non-current liabilities 4,793 - - 747 2,571 1,475 4,793 Other current liabilities 68,487 44,688 23,799 - - - 68,487 Total 5,735,029 301,500 195,817 647,360 2,461,539 3,155,360 6,761,576 Other current liabilities include current trade payables and other financial current liabilities. At 31 December 2020 Carrying value < 3 month 3-12 months 1-2 years 2-5 years > 5 year Total Financial debts 5,231,919 161,905 370,533 480,819 2,071,569 3,038,508 6,123,334 - loans from related parties 5,206,876 161,595 370,364 480,381 2,070,314 3,013,161 6,095,815 - bank loans 20,555 86 169 225 675 21,876 23,031 - lease liabilities 4,488 224 - 213 580 3,471 4,488 Other non-current liabilities 8,904 - - 1,549 4,555 2,800 8,904 Other current liabilities 77,295 42,930 34,365 - - - 77,295 Total 5,318,118 204,835 404,898 482,368 2,076,124 3,041,308 6,209,533 Other current liabilities include current trade payables and other financial current liabilities. As at 31 December 2021, only financial debts of EUR 1,075.4 million of total EUR 6,688.3 million mature within the next 2 years. The Group maintains strong cash reserves and maintains flexibility with regard to potential uses of liquidity such as capital expenditures and development spending, shareholder distributions etc. As of the date of these financial statements, the Group does not face a significant liquidity risk. 7.3 Market risk Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and prices will affect the Group’s income or the value of its holdings of financial instruments or could cause future cash flows related to financial instruments to fluctuate. The objective of market risk management is to manage and control market risk exposures within acceptable parameters while optimizing the return. The Group’s market risk mainly arises from open positions in a) foreign currencies and b) loans provided and financial debts, to the extent that these are exposed to general and specific market movements. Market risk exposures are measured using sensitivity analysis. Sensitivities to market risks included below are based on a change in one factor while holding all other factors constant. CPI FIM SA 2021 CONSOLIDATED FINANCIAL STATEMENTS | 31 Foreign currency risk Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates (see note 2.2(b)). The Group is exposed to currency risk mainly on sales, purchases and borrowings that are denominated in a currency other than the respective functional currencies of Group entities, primarily the CZK, but also others (see note 2.2(b)). Sensitivity analysis – exposure to currency risk The table below shows the material balances held in foreign currencies that are deemed subject to currency risk and presents sensitivities of profit or loss to reasonably possible changes in foreign currency rates with all other variables held constant. A 10% change in the foreign currency rate of foreign currencies would have the below effect to profit/(loss) or equity of the Group providing all other variables remaining constant: 31 December 2021 Original currency In TEUR Change in TEUR (functional currency depreciated by 10%) Change in TEUR (functional currency appreciated by 10%) Cash and cash equivalents 210,076 TEUR 164,899 - - TCZK 25,037 2,504 (2,504) TUSD 7 1 (1) THUF 3,344 334 (334) TCHF 195 19 (19) TPLN 16,545 1,655 (1,655) TGBP 48 5 (5) THRK 1 - - Loans provided 5,134,920 TEUR 3,116,805 - - TCZK 1,448,292 144,829 (144,829) THUF 342,066 34,207 (34,207) TRON 15,567 1,557 (1,557) TGBP 212,190 21,219 (21,219) Financial debts (5,661,749) TEUR (5,228,346) - - TCZK (123,546) (12,355) 12,355 TCHF (62,034) (6,203) 6,203 TPLN (4,761) (476) 476 TGBP (243,062) (24,306) 24,306 Net exposure to currency risk TCZK 1,349,783 134,978 (134,978) TGBP (30,824) (3,082) 3,082 TPLN 11,784 1,179 (1,179) TRON 15,567 1,557 (1,557) TUSD 7 1 (1) THUF 345,410 34,541 (34,541) THRK 1 - - TCHF (61,839) (6,184) 6,184 31 December 2018 Original currency In TEUR Change in TEUR (functional currency depreciated by 10%) Change in TEUR (functional currency appreciated by 10%) Cash and cash equivalents 129,447 TEUR 108,669 - - TCZK 11,271 1,127 (1,127) CPI FIM SA 2021 CONSOLIDATED FINANCIAL STATEMENTS | 32 31 December 2020 Original currency In TEUR Change in TEUR (functional currency depreciated by 10%) Change in TEUR (functional currency appreciated by 10%) Cash and cash equivalents 249,190 TEUR 154,259 - - TCZK 67,687 6,769 (6,769) TUSD 6 1 (1) THUF 12,509 1,251 (1,251) TPLN 14,728 1,473 (1,473) THRK 1 - - Loans provided 4,349,261 TEUR 2,487,785 - - TCZK 1,367,355 136,736 (136,736) THUF 344,175 34,418 (34,418) TRON 17,393 1,739 (1,739) TGBP 132,553 13,255 (13,255) Financial debts (5,231,919) TEUR (4,897,030) - - TCZK (46,055) (4,606) 4,606 TCHF (59,470) (5,947) 5,947 TPLN (4,488) (449) 449 TGBP (224,876) (22,488) 22,488 Net exposure to currency risk TCZK 1,388,987 138,899 (138,899) TGBP (92,323) (9,233) 9,233 TPLN 10,240 1,024 (1,024) TRON 17,393 1,739 (1,739) TUSD 6 1 (1) THUF 356,684 35,669 (35,669) THRK 1 - - TCHF (59,470) (5,947) 5,947 31 December 2018 Original currency In TEUR Change in TEUR (functional currency depreciated by 10%) Change in TEUR (functional currency appreciated by 10%) Cash and cash equivalents 129,447 TEUR 108,669 - - TCZK 11,271 1,127 (1,127) Interest rate risk At the reporting date the interest rate profile of the Group’s interest-bearing financial instruments are described under notes 6.5 for financial assets and under notes 6.11 financial liabilities respectively. Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group’s interest rate risk is monitored by the Group’s management on a monthly basis. The interest rate risk policy is approved quarterly by the Board of Directors. Management analyses the Group’s interest rate exposure on a dynamic basis. Various scenarios are simulated, taking into consideration refinancing, renewal of existing positions and alternative financing sources. Loans provided by the Group require instalments to be paid by the borrower according to a payment schedule, based on a fixed interest rate. The interest rates charged by the Group are usually based on Group‘s borrowing interest rates. As the loans provided are based on fixed rates, and no financial debt is measured at fair value through profit and loss the Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s long-term debt obligations with floating interest rates. These obligations primarily include bank loans. As at 31 December 2021, there are no bank loans with flexible interest rates. Trade receivables and payables are interest-free and have settlement dates within one year. Price risk The Group is exposed to price risks related to investments in shares of CPI PG, which are classified as other investments. Other components of equity would increase or decrease by EUR 2.6 million as at 31 December 2021 (EUR 9.4 million as at 31 December 2020) as a result of 5% increase or decrease of EPRA NAV per share of CPI PG. Other risks The Group is exposed to price risk other than in respect of financial instruments, such as property price risk including property rental risk. For sensitivity analysis on changes in assumptions of investment property valuation refer to note 7.5. 7.4 Capital management The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders; and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. There is no real seasonality impact on its financial position but rather a volatility of financial markets might positively or negatively influence Group’s consolidated financial position. CPI FIM SA 2021 CONSOLIDATED FINANCIAL STATEMENTS | 33 No changes were made in the objectives, policies or processes during the year ended 31 December 2021. The Group monitors capital on the basis of the gearing ratio. Gearing ratio This ratio is calculated as total debt divided by total equity. Debt is defined as all non-current and current liabilities. Equity includes all capital and reserves as shown in the consolidated statement of financial position. 31 December 2021 31 December 2020 Debt 5,867,672 5,400,794 Equity 1,515,970 1,103,572 Gearing ratio in % 387.06% 489.39% 7.5 Fair value measurement Fair value of financial instruments Fair value measurements of financial instruments reported at fair value are classified by level of the following measurement hierarchy: - Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities. - Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices); - Level 3: Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs). There were no changes in the Group’s valuation processes, valuation techniques, and types of inputs used in the fair value measurements during the period. There were no transfers between Level 1 and Level 2 fair value measurements during the period, and no transfers into or out of Level 3 fair value measurements during the period 2021. The following tables show the carrying amounts at fair value of financial assets and liabilities, including their level in the fair value hierarchy. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value. Accounting classification and fair values The following tables show the carrying amounts and fair value of financial assets and liabilities, including their level in the fair value hierarchy. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value. 31 December 2021 31 December 2020 Financial assets measured at fair value Carrying amount Fair value Carrying amount Fair value CPI Property Group shares 52,981 52,981 188,875 188,875 Other investments 9 9 9 9 Financial assets not measured at fair value Loans provided 5,121,277 5,592,044 4,336,516 4,765,402 Loans provided to joint venture 13,643 1 3,643 12,745 12,745 Financial liabilities not measured at fair value Financial debt – other 5,641,203 5,687,797 5,211,364 5,359,778 Financial debt – bank loans (fixed rate) 20,546 19,632 20,555 19,399 * For the valuation as at 31 December 2021, the shares are valued using EPRA NAV per share of CPI PG as at 31 December 2021 (refer to note 6.4). ** The fair values of the financial assets and financial liabilities included in the level 3 category have been determined in accordance with generally accepted pricing models based on the discounted cash flow analysis, with the most significant inputs being the discount rate that reflects the credit risk of counterparties, with exception of loans provided to/ received from entities controlled by the majority shareholder of the Company, which bear limited credit risk from the Group’s perspective. The Group classifies all its financial assets and liabilities as Level 3 in the fair value hierarchy. Fair value measurement of investment property The Group’s investment properties were valued at 31 December 2021 in accordance with the Group’s accounting policies. The Group utilizes independent professionally qualified valuers, who hold a recognised relevant professional qualification and have recent experience in the locations and segments of the investment properties valued. For all these properties, their current use equates to the highest and best use. The Group’s finance department includes a team that reviews the valuations performed by the independent valuers for financial reporting purposes. COVID-19, a highly infectious virus, was declared a world-wide pandemic by the WHO in March 2020. The measures to slow the spread of COVID-19 have had a significant impact on the global economy, including the real estate sector. However, there was a limited impact of COVID-19 pandemic on the Group’s landbank and office, which largely exhibited normal performance and collection rates, despite office workers spending a significant portion of the year working remotely from home. As at the valuation date, the independent external valuers could attach less weight to the previous market evidence in forming their conclusions. The independent external valuers included a material estimation uncertainty clause in respect of impact COVID-19 pandemic in their valuation reports across all property types as at 31 December 2021. Consequently, a higher degree of caution should be applied in analysing and CPI FIM SA 2021 CONSOLIDATED FINANCIAL STATEMENTS | 34 interpretation of the valuation results then would normally be the case. The inclusion of the material estimation uncertainty clause does not mean that valuations would not be reliable. It should rather highlight the extraordinary circumstances caused by COVID-19 pandemic lockdowns and the fact that less certainty can be attached to the valuations results than it would normally be the case. Given the material uncertainty, the future development and impacts of COVID-19 pandemic on the real estate market should be monitored regularly in the upcoming months. The Group performes regular revaluation of its complete investment property and hotel portfolio on annual basis. If there is indication of a significant change in the fair value, the valuation is performed semi-annually. There were no changes in the valuation methodology used for investment property in respect of Covid-19. Main observable and unobservable inputs The table below presents the valuation method, the key observable and unobservable inputs for each class of property owned by the Group, used by the valuers as at the end of 31 December 2021 and 2020 respectively. The fair value hierarchy of the valuations is Level 3 . Fair value amounts are stated in EUR millions. Investment property Retail Fair Value 2021 Fair Value 2020 Valuation technique Significant unobservable inputs Range (weighted avg) 2021 Range (weighted avg) 2020 Czech Republic 2 - DCF ERV per sqm €175 - NRI per sqm €173 - Discount Rate 5.5% - Exit Yield 5.5% - Vacancy rate 0% - Office Fair Value 2021 Fair Value 2020 Valuation technique Significant unobservable inputs Range (weighted avg) 2021 Range (weighted avg) 2020 Czech Republic *** - 131 DCF ERV per sqm - €111- €168 (€160) NRI per sqm - €38- €76 (€61) Discount Rate - 6.0%-7.3% (6.4%) Exit Yield - 5.0%-6.8 (5.5%) Vacancy rate - 33.2%-61.9% (41.0%) Czech Republic ** 27 - Income ERV per sqm €164 - capitalisation NRI per sqm €131 - Equivalent Yield 4.9% - Vacancy rate 10.4% - Complementary Assets 613 579 Income ERV per sqm €183-€304(€247) €182-€305(€245) capitalisation NRI per sqm €113-€277(€208) €169-€278(€224) Equivalent Yield 4.7%-6.8% (5.2%) 5.0%-6.5% (5.5%) Vacancy rate 0.0%-10.9% (4.3%) 1.0%-4.7% (3.4%) Complementary Assets - 5 DCF ERV per sqm - €232 DCF NRI per sqm - €252 Level 3 DCF Discount Rate - 7.3% Level 3 DCF Exit Yield - 7.0% Industry and Logistics Fair Value 2021 Fair Value 2020 Valuation technique Significant unobservable inputs Range (weighted avg) 2021 Range (weighted avg) 2020 Czech Republic - 2 DCF ERV per sqm - €27 NRI per sqm - €6 Equivalent yield - 11.0% Exit yield - 9.5% Vacancy rate - 100.0% Residential Fair Value 2021 Fair Value 2020 Valuation technique Significant unobservable Inputs Range (weighted avg) 2021 Range (weighted avg) 2020 Complementary Assets 36 34 Comparable Fair value per sqm €17,077- €32,324(€25,120) €16,468- €27,919(€22,819) Italy 25 12 Comparable Fair value per sqm €24,899 €11,840 Landbank Fair Value 2021 Fair Value 2020 Valuation technique Significant unobservable Inputs Range (weighted avg) 2021 Range (weighted avg) 2020 Czech Republic 166 127 Comparable Fair value per sqm €2-€2,353(€10) €2-€2,419(€8) Prague 278 168 Comparable Fair value per sqm €11-€3,702(€300) €8-€3,157(€150) Czech Republic 28 5 Residual Gross development value €2,995-€4,862(€4,262) €2,073 Development margin 15.0%-25.0%(18.2%) 25.0% Landbank - Bubny and Zbrojovka Fair Value 2021 Fair Value 2020 Valuation technique Significant unobservable Inputs Range (weighted avg) 2021 Range (weighted avg) 2020 Bubny 220 200 Comparable Fair value per sqm (€1,094) (€990) Zbrojovka 119 104 Comparable Fair value per sqm (€515) (€449) Total 1,514 1,367 CPI FIM SA 2021 CONSOLIDATED FINANCIAL STATEMENTS | 35 Property, plant and equipment Hotels and Resorts Fair Value 2021 Fair Value 2020 Valuation technique Significant unobservable inputs Range (weighted avg) 2021 Range (weighted avg) 2020 Complementary Assets 20 - DCF Rate per key €103,866 - Exit Yield 6.8% - Discount Rate 9.9% - Total 20 - * 2021 acquisition. ** Valuation method changed from DCF as at 31 December 2020 to Income Capitalization as at 31 December 2021. *** Decreased primarily due to sale of offices in Prague and Brno in 2021. * Increased also due to 2021 acquisition. The tables above are net of properties classified as assets held for sale, recent acquisitions and selected leased properties. The amounts of classes of property as at 31 December 2021 in the table above is not fully comparable to the amounts as at 31 December 2020, primarily due to changes of valuation methods and changes in classification of assets due to their change of use. In 2021, the Group precised calculation of weighted average of fair values per sqm and key. The same approach was applied to comparatives as at 31 December 2020. Appraisal for Bubny as at 31 December 2021 Bubny is a land bank with a size over 201 thousand square meters and is located near the Prague’s city center. The majority of the site is currently not used. As at 31 December 2021 and 2020, a valuation of the land bank was conducted by external valuation expert Jones Lang La Salle (“JLL”) using the comparable method. This method was based on 6 recently executed land site transactions in Prague, included in below table: 2021 Comparative method 1 2 3 4 5 6 Zoning plan Mixed use Mixed use Mixed use Mixed use Industrial -> Residential Mixed use Size (sqm) – approx. 44,000 128,000 10,000 80,000 9,000 20,000 Transacted price per sqm (EUR) 500 400 2,800 400 2,100 2,000 2020 Comparative method 1 2 3 4 5 6 Zoning plan Mixed use Mixed use Mixed use Mixed use Industrial -> Residential Residential Size (sqm) – approx. 44,000 128,000 10,000 80,000 9,000 12,000 Transacted price per sqm (EUR) 500 400 2,700 400 2,000 1,300 The fair value was determined by estimating the fair value per 1 square meter based on comparative land site transaction prices, adjusted for differences between comparative land sites and Bubny site. The adjustments provided for the following characteristics: Adjustment Range used by JLL Average multiple used Description Microlocation Multiple 0.90 – 1.20 1.07 Vicinity to the city center, attractiveness of the area, public amenities. Access Multiple 0.95 - 1.05 1.02 Vehicular and pedestrian access to the property Public transportation Multiple 0.90 - 1.10 1.00 Metro, trams and bus stops in the vicinity Size Multiple 0.8 – 0.95 0.87 Size of land plots Existence of Structures Multiple 1 - 1.05 1.01 Old structures being present on the site, with potential historical protection. Market improvement Multiple 1 - 1.30 1.14 Improvement of the market since the transaction, adjustment used for optimizing dates of transactions to the date of valuation Flooding area Multiple 1 - 1.10 1.02 Risk of floods based on flood map issued by the Association of Insurance Companies Liquidity of apartments Multiple 0.90 - 1.05 1.00 Demand for flats in the location Individual characteristics of the land & Planning procedure Multiple 0.85 – 1.10 0.96 Status of development (construction feasibility, construction ban, zoning / building permits etc.) Sensitivity analysis of Bubny site As the Bubny site was valued by comparable method, the sensitivity analysis was prepared for two key adjustments: micro location and size. For Micro location JLL used the largest range of multiples, indicating high level of judgement included in the adjustment estimate. Size adjustment is selected for sensitivity analysis because of the significance of differences in size between Bubny and comparative land sites. Multiple microlocation MEUR 0.95 1.00 1.05 0.95 199 209 220 1.00 209 220 231 Multiple size 1.05 220 231 241 Triggering and expected events for further development of the Bubny land bank Municipal elections were held in Prague in October 2018. The new Prague leaders were to select land plots for development of apartment buildings as the current supply is lacking. New Prague coalition included Bubny in the statement as it aims to significantly speed up residential development through removing construction bans for these territories. CPI FIM SA 2021 CONSOLIDATED FINANCIAL STATEMENTS | 36 In December 2020, there was a new land study Holesovice-Bubny-Zatory approved. The study represents a basis for a change in the zoning plan which is expected to focus on the future growth of real estate in Prague through development inside the city rather than by growth outside the city’s existing borders. The study divides the Bubny area in several sectors with different use and potential for future development. The land bank owned by the Group was split to several blocks planned for residential and for commercial development, the northern part which is close to the railway line is planned for a public park. Total potential gross floor area attributable to the Group’s land bank in the study is approx. 530,000 sqm. Once the change in the zoning plan becomes legally binding, the construction ban is expected to be removed. These plans contribute to increasing public pressure on the authorities to allow development in Prague, particularly in the brownfield development areas. Appraisal for Zbrojovka as at 31 December 2021 Zbrojovka is a Brown field/land bank with a size over 231 thousand square meters and is located in Brno, the Czech Republic. The majority of the site is currently not used (except for a newly developed office building ZET office). As at 31 December 2021 and 2020, a valuation of the land bank was prepared by JLL using the comparable method. This method was based on 5 recently executed land site transactions in Brno, included in below table: 2021 Comparative method 1 2 3 4 5 Zoning plan Mixed use Mixed use -> Residential Mixed use -> Residential Industrial -> Residential Residential Size (sqm) – approx. 9,000 23,000 5,000 8,000 6,000 Transacted price per sqm (EUR) 300 400 700 700 500 2020 Comparative 1 2 3 4 5 Zoning plan Mixed use Mixed use Mixed use Industrial -> Residential Mixed use Size (sqm) – approx. 9,000 23,000 5,000 8,000 40,000 Transacted price per sqm (EUR) 250 400 650 650 250 The fair value was determined by estimating the fair value per 1 square meter based on comparative land site transaction prices, adjusted for differences between comparative land sites and Zbrojovka site. The adjustments provided for the following characteristics: Adjustment Range used by JLL Average multiple used Description Microlocation Multiple 0.85 - 1.30 1.09 Vicinity to the city center, attractiveness of the area, public amenities. Access Multiple 0.95 - 1.10 1.04 Vehicular and pedestrian access to the property Public transportation Multiple 0.95 - 1.15 1.04 Tram, trolleybus and bus stops in the vicinity Size Multiple 0.85 - 0.90 0.86 Size of land plots Market improvement Multiple 1.00 - 1.10 1.07 Improvement of the market since the transaction, adjustment used for optimizing dates of transactions to the date of valuation Flooding area Multiple 0.95 - 1.00 0.97 Risk of floods based on flood map issued by the Association of Insurance Companies Liquidity of apartments Multiple 0.95 - 1.05 1.01 Demand for flats in the location Individual characteristics of the land & Planning procedure Multiple 0.60 – 1.20 1.01 Status of development (construction feasibility, construction ban, zoning / building permits etc.) Sensitivity analysis of Zbrojovka As the Zbrojovka site was valued by comparable method, the sensitivity analysis was prepared for two key adjustments: planning procedure and size. For planning procedure JLL used the largest range of multiples, indicating high level of judgement included in the adjustment estimate. Size adjustment is selected for sensitivity analysis because of the significance of differences in size between Zbrojovka and comparative land sites. Multiple microlocation MEUR 0.95 1.00 1.05 0.95 108 113 119 1.00 113 119 125 Multiple size 1.05 119 125 131 Triggering and expected events for further development of Zbrojovka land bank Zbrojovka (formerly armory factory) is classified as development for over the last three years. In December 2020, there were final changes to master plan approved. The master plan defines all the main urbanistic, technical and infrastructure links of the area. Development expects residential, office and public amenities with expected gross floor area of approx 510 000 sqm. The budgeted timeline for the development of the whole area is between 10 and 15 years. As of the date, vast of the former structures were removed. The development of the area is divided into 8 phases in separate areas. The first phase should start in 2022 in southern part of the landbank. Other land banks The other land banks which were valued by the comparable method have a total fair value of EUR 444 million and EUR 295 million as at 31 December 2021 and 2020 and a size of 18 million sqm. As these land banks differ significantly in various parameters (such as current zoning, location & micro-location, existence of structures, access etc.) no further disaggregation was performed. CPI FIM SA 2021 CONSOLIDATED FINANCIAL STATEMENTS | 37 Smaller part of landbanks was valued by residual method with total fair value of EUR 28 million as at 31 December 2021 (5 million as at 31 December 2020) and a size of 30 thousands sqm as at 31 December 2021 (15 thousands sqm as at 31 December 2020). The sensitivity analysis for assets where the fair value was determined by comparative method was not prepared, as the potential change in inputs (such as change of multiples etc.) would result in equal or direct change in outputs. Sensitivity analysis on changes in assumptions of property valuations The Group has performed a sensitivity analysis on changes in assumptions of property valuation. The significant unobservable inputs used in fair value measurement categorized within level 3 of the fair value hierarchy of the Group portfolio are: - equivalent yield or discount rate; - estimated rental value (ERV) for rental asset; - development margin/profit for development. Change of the valuation rates would result in the following fair values – analysis of the portfolio of assets valued by discounted cash flow, income capitalization method and development appraisal: As at 31 December 2021 Czech Republic – Retail - DCF Czech Republic – Office - Income Capitalisation MEUR Yield MEUR Yield (0.25%) - 0.25% (0.25%) - 0.25% (5.00%) 1.61 1.54 1.47 (5.00%) 26.80 25.41 24.15 ERV - 1.70 1.62 1.55 ERV - 27.99 26.52 25.20 5.00% 1.78 1.70 1.62 5.00% 29.18 27.64 26.25 Czech Republic Landbank as a development MEUR Developer‘s Profit (5.00%) 31.58 Developer‘s Profit (2.50%) 29.62 Developer‘s Profit - 27.74 Developer‘s Profit 2.50% 25.94 Developer‘s Profit 5.00% 24.21 Poland - Office – Income Capitalization Complementay – Hotels - DCF MEUR Yield MEUR Yield (0.25%) - 0.25% (0.25%) - 0.25% (5.00%) 617.71 585.24 555.84 (5.00%) 19.54 19.14 18.76 ERV - 647.43 613.26 582.32 ERV - 20.57 20.15 19.75 5.00% 677.14 641.27 608.79 5.00% 21.60 21.16 20.74 As at 31 December 2020 Czech Republic – Industrial - DCF Czech Republic – Office - DCF MEUR Yield MEUR Yield (0.25%) - 0.25% (0.25%) - 0.25% (5.00%) 1.60 1.58 1.55 (5.00%) 129.15 124.31 119.82 ERV - 1.69 1.66 1.63 ERV - 135.94 130.85 126.12 5.00% 1.77 1.74 1.71 5.00% 142.74 137.39 132.43 Czech Republic Landbank as a development MEUR Developer‘s Profit (5.00%) 5.89 Developer‘s Profit (2.50%) 5.49 Developer‘s Profit - 5.09 Developer‘s Profit 2.50% 4.72 Developer‘s Profit 5.00% 4.35 Poland - Office – Income Capitalization Poland - Office – DCF MEUR Yield MEUR Yield (0.25%) - 0.25% (0.25%) - 0.25% (5.00%) 582.51 553.67 527.43 (5.00%) 4.63 4.47 4.31 ERV - 609.80 579.44 551.82 ERV - 4.87 4.70 4.54 5.00% 637.00 605.15 576.16 5.00% 5.12 4.94 4.77 CPI FIM SA 2021 CONSOLIDATED FINANCIAL STATEMENTS | 38 8 Contingencies In June 2007 the Company issued a guarantee up to a maximum amount of EUR 5 million to secure all payment claims of IBB Holding and BTGI against inter alia Gewerbesiedlungs-Gesellsschaft (Berlin), Orco Russian Retail, and MSREF V/MSREF Turtle B.V under an option agreement dated 22/23 May 2006 as amended on 24/25 April 2007 concerning the acquisition of all shares in Gewerbesiedlungs-Gesellsschaft. According to the framework agreement dated 18 August 2011 between the Company and MSREF V Turtle, the Company assumed the obligation to release the Morgan Stanley companies (MSREF V and MSREF V Turtle) from all claims under the Morgan Stanley guarantee by issuing a respective back to back guarantee of EUR 10 million. IBB Holding and BTGI agreed to accept a top up of OPG guarantee and the release of Morgan Stanley companies from their engagement as per the option agreement. In June 2015 the Company issued the EUR 5 million top up guarantee in favor IBB Holding and BTGI and obtained a release from Morgan Stanley back to back guarantee. The aggregate guarantee of the Company to the benefit of IBB Holding and BTGI amounts to EUR 10 million. 9 Litigations Kingstown dispute in Luxembourg In January 2015 the Company was served with summons by Kingstown Partners Master Ltd. of the Cayman Islands, Kingstown Partners II LP of Delaware, Ktown LP of Delaware (collectively referred to as “Kingstown”), claiming to be former shareholders of the Company. The action was filed with the “Tribunal d´Arrondissement de et a Luxembourg“ (the “Court”) and seeks condemnation of the Company, CPI PG and certain members of the Company´s board of directors as jointly and severally liable to pay damages in the amount of EUR 14.5 million and compensation for moral damage in the amount of EUR 5 million. According to Kingstown’s allegation the damage claimed arose inter alia from the alleged violation of the Company’s minority shareholders rights. The management of the Company has been taking all available legal actions to oppose these allegations in order to protect the corporate interest as well as the interest of its shareholders. Accordingly, the parties sued by Kingstown raised the exceptio judicatum solvi plea, which consists in requiring the entity who initiated the proceedings and who does not reside in the EU or in a State which is not a Member State of the Council of Europe to pay a legal deposit to cover the legal costs and compensation procedure. The Court rendered a judgement on 19 February 2016, whereby each claimant has to pay a legal deposit in the total amount of EUR 90 thousand to the “Caisse de Consignation” in Luxembourg. Kingstown paid the deposit in January 2017 and the litigation, currently being in a procedural stage, is pending. In October 2018, Kingstown's legal advisors filed additional submission to increase the amount of alleged damages claimed to EUR 157.0 million. The Company continues to believe the claim is without merit and intends to vigorously contest it. In June 2019, the Court issued a first instance judgement, dismissing the claim against CPI PG because the claim was not clearly pleaded (“libellé obscur”) in relation to CPI PG. In December 2020, the Luxembourg Court declared that the inadmissibility of the claim against CPI PG and certain other defendants has not resulted in the inadmissibility of the litigation against the Company and the remaining defendants. Some defendants have decided to appeal against this judgment which declared the claim admissible against the Company. A judgment on the appeal is not expected to occur before 2H 2022. Disputes related to warrants issued by the Company The Company was sued by holders of the warrants holders of the 2014 Warrants registered under ISIN code XS0290764728. The first group of the holders of the 2014 Warrants sued the Company for approximately EUR 1.2 million in relation to the Change of Control Notice published by the Company, notifying the holders of the 2014 Warrants that the Change of Control, as defined in the Securities Note and the Summary for the 2014 Warrants, occurred on 8 June 2016. The second holder of the 2014 Warrants sued the Company for approximately EUR 1 million in relation to the alleged change of control which allegedly occurred in 2013. These litigations are pending. The Company will defend itself against these lawsuits and reminds that in accordance with the judgement of the Paris Commercial Court pronounced on 26 October 2015 concerning the termination of the Company’s Safeguard Plan, liabilities that were admitted to the Safeguard, but are conditional or uncalled (such as uncalled bank guarantees, conditional claims of the holders of 2014 Warrants registered under ISIN code XS0290764728, provided that they were admitted to the Safeguard plan), will be paid according to their contractual terms. Pre-Safeguard liabilities that were not admitted to the Company’s Safeguard will be unenforceable. As such, only claims of holders of the 2014 Warrants, whose potential claims were admitted to the Company’s Safeguard Plan, could be considered in respect of the present Change of Control. Claims of holders of the 2014 Warrants that were not admitted to the Company’s Safeguard will be unenforceable against the Company. To the best of Company’s knowledge, none of the holders of the 2014 Warrants who sued the Company filed their claims 2014 Warrants-related claims in the Company’s Safeguard Plan. 10 Capital and other commitments The Group has capital commitments of EUR 2.0 million and EUR 1.0 million in respect of capital expenditures contracted as at 31 December 2021 and 2020, respectively. CPI FIM SA 2021 CONSOLIDATED FINANCIAL STATEMENTS | 39 11 Related party transactions Transactions with key management personnel Total compensation given as short-term employee benefits to the top managers was EUR 0.6 million and EUR 0. 6 million in 2021 and 2020, respectively. The Board and Committees attendance compensation was EUR 36 thousand and EUR 36 thousand in 2021 and 2020. The remuneration of the key management personnel and members of Board of Directors 31 December 2021 31 December 2020 Remuneration paid to the key management personnel and members of Board of Directors 567 627 Breakdown of balances and transactions with related of the Group Majority shareholder of the Group 31 December 2021 31 December 2020 Trade receivables 644 456 Management 31 December 2021 31 December 2020 Other current payables 12 - Transactions Other operating expenses (27 ) (25) Entities over which the majority shareholder has control 31 December 2021 31 December 2020 Loans provided current (refer below for the detail) - 35,109 Trade receivables 14 8 Transactions Rental income 20 28 Other operating income 30 - Advisory services - 42 Interest income (refer below for the detail) 261 2,655 Entities controlled by members of Board of Directors 31 December 2021 31 December 2020 Trade receivables 1 - Trade payables 58 - Loans received current (refer below for the detail) - 120 Transactions Interest expense (refer below for the detail) (1) (2) CPI PG Group 31 December 2021 31 December 2020 Loans provided non-current (refer below for the detail) 4,949,247 4,238,117 Loans provided current (refer below for the detail) 186,709 59,917 Trade receivables 276 1,180 Other current receivables 215,637 185,007 Loans received non-current (refer below for the detail) 5,375,377 4,830,950 Loans received current (refer below for the detail) 261,065 375,805 Trade payables 1,055 1,444 Other current liabilities 54,297 62,611 Transactions Service revenue 23,008 22,465 Advisory services (9,095) (9,785) Interest income (refer below for the detail) 209,143 165,916 Interest expense (refer below for the detail) (163,149) (144,482) Joint venture 31 December 2021 31 December 2020 Loans provided non-current (refer below for the detail) 13,493 12,605 Loans provided current (refer below for the detail) 150 139 Transactions Interest income (refer below for the detail) 857 821 CPI FIM SA 2021 CONSOLIDATED FINANCIAL STATEMENTS | 40 Non -current loans provided to related parties CPI PG Group 31 December 2021 31 December 2020 1 Bishops Avenue Limited 143,284 126,938 Airport City Kft. 14,750 15,656 Airport City Phase B Kft. 1,914 1,754 ALIZÉ PROPERTY a.s. 82 - Andrássy Hotel Zrt. 3,884 4,683 Andrássy Real Kft. 11,986 10,778 Arena Corner Kft. 35,317 35,530 Balvinder, a.s. 3,817 4,434 BARON PUGLIA S.a.r.l. - 16,085 Baudry Beta, a.s. 10,526 10,372 BAYTON Alfa, a.s. 12,087 11,655 BC 91 Real Estate Kft. - 1,210 BC 99 Office Park Kft. 33,987 34,851 Beroun Property Development, a.s. 9,750 8,792 Best Properties South, a.s. 67,249 56,178 Brandýs Logistic, a.s. 25,509 23,797 Brno Development Services, s.r.o. 1,415 255 Březiněves, a.s. 1,984 5,277 Buy-Way Dunakeszi Kft. 4,673 5,791 Buy-Way Soroksár Kft. 3,366 3,783 CAMPONA Shopping Center Kft. 68,566 67,881 Carpenter Invest, a.s. 2,272 2,050 CB Property Development, a.s. 2,458 935 Conradian, a.s. 4,612 5,375 CPI – Bor, a.s. 12,942 10,869 CPI - Horoměřice, a.s. 44 - CPI - Orlová, a.s. 1,167 1,189 CPI - Real Estate, a.s. 2,436 2,115 CPI Beet, a.s. 173 52 CPI BYTY, a.s. 92,207 93,658 CPI Delta, a.s. 1,743 1,651 CPI East, s.r.o. 81,281 81,471 CPI Facility Slovakia, a.s. 6,042 - CPI Hotels, a.s. 24,744 35,169 CPI Hotels Europeum Kft. - 527 CPI Hotels Properties, a.s. 16,187 12,592 CPI IMMO, S.a.r.l. 3,797 3,797 CPI Jihlava Shopping, a.s. - 15,433 CPI Kappa, s.r.o. 778 650 CPI Office Business Center, s.r.o. (formerly CPI Meteor Centre, s.r.o.) 89,775 15,353 CPI Palmovka Office, s.r.o. - 1,280 CPI PROPERTY GROUP S.A. 2,488,310 1,634,505 CPI Reality, a.s. 49,863 48,628 CPI Retail One Kft. 6,398 10,349 CPI Retail Portfolio Holding Kft. 26,915 20,931 CPI Retail Portfolio I, a.s. 6,437 2,009 CPI Retail Portfolio II, a.s. 3,748 - CPI Retail Portfolio IV, s.r.o. 1,386 1,287 CPI Retail Portfolio V, s.r.o. 3,632 4,094 CPI Retail Portfolio VI, s.r.o. 1,478 1,326 CPI Retail Portfolio VIII s.r.o. 4,011 4,048 CPI Retails ONE, a.s. 8,574 8,916 CPI Retails ROSA s.r.o. 3,878 4,485 CPI Retails THREE, a.s. 27,222 31,637 CPI Retails TWO, a.s. 7,380 7,260 CPI Sekunda, s.r.o. 825 - CPI Shopping MB, a.s. 35,011 34,887 CPI Shopping Teplice, a.s. 48,557 50,269 CPI Vestec, s.r.o. 5,060 5,360 CPIPG Management S.à r.l. 46,352 - Czech Property Investments, a.s. 428,571 773,988 Čadca Property Development, s.r.o. 3,188 934 Čáslav Investments, a.s. 2,038 2,178 Duca Puglia S.r.l. - 6,600 EMH South, s.r.o. 7,265 7,429 ENDURANCE HOSPITALITY FINANCE S.á.r.l. 8,043 8,043 Europeum Kft. 23,394 24,246 Farhan, a.s. 53,830 52,198 FL Property Development, a.s. 184 192 CPI FIM SA 2021 CONSOLIDATED FINANCIAL STATEMENTS | 41 CPI PG Group 31 December 2021 31 December 2020 Futurum HK Shopping, s.r.o. 88,816 86,060 Gateway Office Park Kft. 9,271 12,450 HD Investment s.r.o. 75 66 Hightech Park Kft. 3,638 3,633 Hraničář, a.s. 13,301 12,276 IGY2 CB, a.s. 1,972 2,424 IS Nyír Ingatlanhasznosítóés Vagyonkezelo Kft. 2,627 1,350 IS Zala Ingatlanhasznosítóés Vagyonkezelo Kft. 7,987 8,431 Janáčkovo nábřeží 15, s.r.o. 7,782 6,892 Jeseník Investments, a.s. 2,361 1,895 Kerina, a.s. 6,517 5,755 KOENIG Shopping, s.r.o. 47,566 46,899 Komárno Property Development, a.s. 1,546 2,009 Kosmonosy Property Development, s.r.o. - 8,037 Kunratická farma, s.r.o. 2,695 - LD Praha, a.s. 4,679 4,571 Levice Property Development, a.s. 3,376 3,898 Lockhart, a.s. 25,367 28,905 Lucemburská 46, a.s. 5,236 4,805 Marissa Gama, a.s. - 38,933 Marissa Omikrón, a.s. 14,604 15,181 Marissa Tau, a.s. 16,309 5,028 Marissa Théta, a.s. 630 1,060 Marissa West, a.s. 81,279 37,495 Marissa Yellow, a.s. - 7,250 Marissa Ypsilon, a.s. 36,445 37,008 MARRETIM s.r.o. 946 - MB Property Development, a.s. - 208 Michalovce Property Development, a.s. 3,307 3,729 MUXUM, a.s. 6,351 3,627 Na Poříčí, a.s. 28,882 29,364 New Age Kft. 786 832 Nymburk Property Development, a.s. 1,899 - OC Nová Zdaboř a.s. 9,354 8,811 OC Spektrum, s.r.o. 14,621 10,100 OFFICE CENTER HRADČANSKÁ, a.s. - 11,692 Olomouc Building, a.s. 19,626 14,111 Orchard Hotel a.s. 5,498 9,802 Outlet Arena Moravia, s.r.o. - 17 Ozrics Kft. 2,632 3,014 Pelhřimov Property Development, a.s. 2,496 2,493 Platnéřská 10 s.r.o. 61 528 Pólus Shopping Center Zrt. 63,618 66,589 Považská Bystrica Property Development, a.s. 818 1,130 Prievidza Property Development, a.s. 2,366 2,673 Projekt Nisa, s.r.o. 78,183 77,912 Projekt Zlatý Anděl, s.r.o. 75,261 76,654 Prostějov Investments, a.s. 990 645 Příbor Property Development, s.r.o. 525 401 Real Estate Energy Kft. 98 85 Residence Belgická, s.r.o. 1,715 1,521 Residence Izabella, Zrt. 3,385 4,084 Rezidence Jančova, s.r.o. 1,150 1,212 Rezidence Malkovského, s.r.o. - 400 Savile Row 1 Limited 68,000 5,615 Statek Kravaře, a.s. - 4,573 Statenice Property Development, a.s. 2,250 2,265 Svitavy Property Alfa, a.s. 8,391 9,015 Tepelné hospodářství Litvínov, s.r.o. 511 680 Trebišov Property Development, s.r.o. 3,368 - Třinec Investments, s.r.o. 2,157 2,346 Třinec Property Development, a.s. 2,824 3,224 Tyršova 6, a.s. 3,607 1,845 U svatého Michala, a.s. 3,305 3,192 Uchaux Limited 905 - V Team Prague, s.r.o. 4,683 5,603 Vigano, a.s. 10,723 9,490 ZET.office, a.s. 30,931 - Ždírec Property Development, a.s. 591 659 Total loans provided non-current - related parties 4,949,247 4,238,117 Joint venture CPI FIM SA 2021 CONSOLIDATED FINANCIAL STATEMENTS | 42 CPI PG Group 31 December 2021 31 December 2020 Uniborc S.A. 13,493 12,605 Total 4,962,740 4,250,722 Current loans provided to related parties CPI PG Group 31 December 2021 31 December 2020 Airport City Kft. 215 - Airport City Phase B Kft. 26 - ALIZÉ PROPERTY a.s. 1 - Andrássy Hotel Zrt. 158 - Andrássy Real Kft. 229 - Arena Corner Kft. 622 - Balvinder, a.s. 44 51 BARON PUGLIA S.a.r.l. - 549 Baudry Beta, a.s. 1,183 - BAYTON Alfa, a.s. 178 172 BC 99 Office Park Kft. 560 - Beroun Property Development, a.s. 752 - Best Properties South, a.s. 3,911 - Brandýs Logistic, a.s. 2,043 - Brno Development Services, s.r.o. 42 18 Březiněves, a.s. 241 - Buy-Way Dunakeszi Kft. 85 - Buy-Way Soroksár Kft. 68 - CAMPONA Shopping Center Kft. 5,560 5,651 Carpenter Invest, a.s. 36 38 CB Property Development, a.s. 116 19 Conradian, a.s. 74 200 CPI – Bor, a.s. 1,058 - CPI - Orlová, a.s. 171 - CPI – Real Estate, a.s. 29 25 CPI Beet, a.s. 3 2 CPI BYTY, a.s. 922 941 CPI Delta, a.s. 135 - CPI East, s.r.o. 2,2 73 - CPI Facility Slovakia, a.s. 127 - CPI Hotels, a.s. 2,474 529 CPI Hotels Properties, a.s. 471 133 CPI IMMO, S.a.r.l. 238 182 CPI Kappa, s.r.o. 12 13 CPI Office Business Center, s.r.o. (formerly CPI Meteor Centre, s.r.o.) 1,597 - CPI PROPERTY GROUP S.A. 91,130 34,450 CPI Reality, a.s. 4,702 - CPI Retail One Kft. 87 168 CPI Retail Portfolio I, a.s. 435 - CPI Retail Portfolio II, a.s. 46 - CPI Retail Portfolio IV, s.r.o. 110 - CPI Retail Portfolio V, s.r.o. 311 - CPI Retail Portfolio VI, s.r.o. 105 - CPI Retail Portfolio VIII s.r.o. 428 - CPI RETAIL PORTFOLIO HOLDING Kft. 665 512 CPI Retails ONE, a.s. 897 - CPI Retails Rosa s.r.o. 358 - CPI Retails THREE, a.s. 2,486 - CPI Retails TWO, a.s. 636 - CPI Sekunda, s.r.o. 12 - CPI Shopping MB, a.s. 2,612 125 CPI Shopping Teplice, a.s. 1,699 - CPI Vestec, s.r.o. 467 - Czech Property Investments, a.s. 13,128 11,247 Čadca Property Development, s.r.o. 251 - Čáslav Investments, a.s. 194 - Duca Puglia S.r.l. - 307 EMH South, s.r.o. 520 - Europeum Kft. 1,654 - Farhan, a.s. 3,859 - FL Property Development, a.s. 21 - Futurum HK Shopping, s.r.o. 3,103 - Gateway Office Park Kft. 149 - Hightech Park Kft. 62 - Hospitality Invest S.a r.l. 51 - Hraničář, a.s. 185 170 CPI FIM SA 2021 CONSOLIDATED FINANCIAL STATEMENTS | 43 CPI PG Group 31 December 2021 31 December 2020 IGY2 CB, a.s. 105 96 IS Nyír Kft. 42 - IS Zala Kft. 178 - Janáčkovo nábřeží 15, s.r.o. 104 91 Jeseník Investments, a.s. 213 - Kerina, a.s. 72 64 KOENIG Shopping s.r.o. 2,364 - Komárno Property Development, a.s. 117 - Kunratická farma, s.r.o. 11 - LD Praha, a.s. 44 43 Levice Property Development, a.s. 311 - Lockhart, a.s. 354 398 Lucemburská 46, a.s. 37 34 Marissa Omikrón, a.s. 1,423 - Marissa Tau, a.s. 268 - Marissa Théta, a.s. 5 9 Marissa West, a.s. 2,911 - Marissa Ypsilon, a.s. 3,186 - MARRETIM s.r.o. 15 - Michalovce Property Development, a.s. 335 - MUXUM, a.s. 74 32 Na Poříčí, a.s. 2,109 - New Age Kft. 39 - Nymburk Property Development, a.s. 36 - OC Nová Zdaboř a.s. 739 - OC Spektrum, s.r.o. 805 - Olomouc Building, a.s. 364 160 Orchard Hotel a.s. 98 170 Ozrics, Kft. 99 - Pelhřimov Property Development, a.s. 280 - Platnéřská 10 s.r.o. 1 7 Pólus Shopping Center Zrt. 2,400 - Považská Bystrica Property Development, a.s. 77 - Prievidza Property Development, a.s. 176 - Projekt Nisa, s.r.o. 2,753 - Projekt Zlatý Anděl, s.r.o. 5,601 - Prostějov Investments, a.s. 17 21 Příbor Property Development, s.r.o. 41 - Real Estate Energy Kft. 2 2 Residence Belgická, s.r.o. 20 18 Residence Izabella, Zrt. 74 - Rezidence Jančova, s.r.o. 36 39 Rezidence Malkovského, s.r.o. - 18 Statek Kravaře, a.s. 295 2,610 Statenice Property Development, a.s. 286 - Svitavy Property Alfa, a.s. 781 - Tepelné hospodářství Litvínov, s.r.o. 5 7 Trebišov Property Development, s. r. o. 43 - Třinec Investments, s.r.o. 187 - Třinec Property Development, a.s. 51 164 Tyršova 6, a.s. 26 13 U svatého Michala, a.s. 227 - V Team Prague, s.r.o. 73 82 Vigano, a.s. 166 337 ZET.office, a.s. 538 - Ždírec Property Development, a.s. 78 - Total loans provided current - related parties 186,709 59,917 Entities over which the majority shareholder has control GAMALA LIMITED - 35,109 Joint venture Uniborc S.A. 150 139 Total 186,859 95,165 Other current receivables (Deposits) CPI PG Group 31 December 2021 31 December 2020 BAYTON Gama, a.s. - 3,811 BPT Development, a.s. - 3,810 Byty Lehovec, s.r.o. - 3,600 CPI – Horom ěřice, a.s. - 3,600 CPI – Orlov á, a.s. - 3,600 CPI Flats, a.s. - 3,600 CPI FIM SA 2021 CONSOLIDATED FINANCIAL STATEMENTS | 44 CPI PG Group 31 December 2021 31 December 2020 CPI Green, a.s. - 3,600 CPI Kvarta, s.r.o. - 3,600 CPI Kvinta, s.r.o. - 3,600 CPI Omikr ón, a.s. - 3,600 CPI Reality, a.s. 9,500 6,200 CPI Retail Portfolio I, a.s. 10,000 3,600 CPI Retails ONE, a.s. 9,800 9,100 CPI Retails TWO, a.s. 10,300 3,600 CPI Shopping MB, a.s. 9,800 7,400 CPI Shopping Teplice, a.s. 9,700 3,600 CPI Sekunda, s.r.o. - 3,600 CPI Tercie, s.r.o. - 3,600 CPI Thé ta, a.s. - 3,600 Czech Property Ivestments, a.s. 10,000 9,200 HD Invenstment s.r.o. - 3,600 Jet řichovice Property, a.s. - 3,600 Kosmonosy Investments, s.r.o. - 3,600 Marissa Gama, a.s. - 9,400 Na Poříčí, a.s. 10,500 9,400 Outlet Arena Moravia, s.r.o. - 3,600 PROJECT FIRST a.s. - 3,600 Projekt Nisa, s.r.o. 9,700 3,600 Rezidence Jančova, s.r.o. - 3,600 Rezidence Malkovsk ého , s.r.o. - 3,600 Statenice Property Development, a.s. - 3,600 Tachov Investments, s.r.o. - 3,600 Te lč Property Development, a.s. - 3,600 ZET.office, a.s. - 1,200 Total 89,300 149,521 Other current receivables (Cash pool) CPI PG Group 31 December 2021 31 December 2020 Balvinder, a.s. 555 237 Baudry Beta, a.s. 192 235 BAYTON Alfa, a.s. 739 507 Beroun Property Development, a.s. 78 204 Best Properties South, a.s. 2,471 1,261 Brandýs Logistic, a.s. 4,410 716 Brno Development Services, s.r.o. 599 34 BRNO INN, a.s. 83 91 Březiněves, a.s. 148 - CPI - Bor, a.s. 726 13 CPI - Real Estate, a.s. 454 180 CPI - Zbraslav, a.s. 151 23 CPI Beet, a.s. 18 83 CPI BYTY, a.s. 20 41 CPI Delta, a.s. 11 26 CPI East, s.r.o. 298 1,091 CPI Energo, a.s. 3 - CPI Finance CEE, a.s. 1 1 CPI Hotels Properties, a.s. 312 227 CPI Jihlava Shopping, a.s. - 402 CPI Kappa, s.r.o. - 13 CPI Management, s.r.o. 1,192 366 CPI Office Business Center, s.r.o. (formerly CPI Meteor Centre, s.r.o.) 621 179 CPI Národní, s.r.o. - 1,129 CPI Office Prague, s.r.o. 1,670 1,610 CPI Palmovka Office, s.r.o. - 12 CPI PROPERTY GROUP S.A. 614 3,179 CPI Reality, a.s. - 1,060 CPI Retail MB s.r.o. - 34 CPI Retail Portfolio I, a.s. 385 625 CPI Retail Portfolio II, a.s. 63 163 CPI Retail Portfolio VI, a.s. 10 57 CPI Retail Portfolio VIII, a.s. 22 195 CPI Retails ONE, a.s. 60 151 CPI Retails TWO, a.s. 54 98 CPI Services, a.s. 720 - CPI Shopping MB, a.s. 131 856 CPI Shopping Teplice, a.s. 153 815 CPI Vestec, s.r.o. 102 101 CPI FIM SA 2021 CONSOLIDATED FINANCIAL STATEMENTS | 45 CPI PG Group 31 December 2021 31 December 2020 CPIPG Management S.à r.l. 230 169 Czech Property Investments, a.s. 584 - Čadca Property Development, s.r.o. - 215 Čáslav Investments, a.s. 12 25 EMH South, s.r.o. 45 113 ENDURANCE HOSPITALITY ASSET S.à r.l. 3 - ENDURANCE HOSPITALITY FINANCE S.à r.l. 3 - Farhan, a.s. 606 1,434 FL Property Development, a.s. - 1 Futurum HK Shopping, s.r.o. 165 1,379 Hospitality invest S.à r.l. 3 6 HOTEL U PARKU, s.r.o. 108 46 Hraničář, a.s. 377 331 Janáčkovo nábřeží 15, s.r.o. 731 270 Jeseník Investments, a.s. 4 19 Kerina, a.s. 320 228 KOENIG Shopping, s.r.o. 133 481 Kosmonosy Property Development, s.r.o. - 189 LD Praha, a.s. 118 135 Lockhart, a.s. 749 639 Lucemburská 46, a.s. 630 227 Marissa Gama, a.s. - 213 Marissa Omikrón, a.s. 20 190 Marissa Théta, a.s. 107 77 Marissa West, a.s. 27 761 Marissa Ypsilon, a.s. 97 202 MB Property Development, a.s. - 178 MMR RUSSIA S.à r.l. 6 - MUXUM, a.s. 571 219 Na Poříčí, a.s. - 54 Nymburk Property Development, a.s. 111 - OC Nová Zdaboř a.s. 74 239 OC Spektrum, s.r.o. 1,069 1,194 OFFICE CENTER HRADČANSKÁ, a.s. - 17 Olomouc Building, a.s. 784 538 Orchard Hotel a.s. 248 215 Pelhřimov Property Development, a.s. 11 31 Platnéřská 10 s.r.o. 3 1 Považská Bystrica Property Development, a.s. - 12 Projekt Nisa, s.r.o. 426 1,678 Projekt Zlatý Anděl, s.r.o. 414 719 Příbor Property Development, s. r.o. 37 12 Residence Belgická, s.r.o. 170 60 Svitavy Property Alfa, a.s. 58 67 Tepelné hospodářství Litvínov s.r.o. 12 - Třinec Investments, s.r.o. 15 45 Třinec Property Development, a.s. 248 - Tyršova 6, a.s. 2 177 U svatého Michala, a.s. - 34 V Team Prague, s.r.o. 1,829 677 ZET.office, a.s. 482 - Ždírec Property Development, a.s. 3 9 Total 28,711 29,541 Non-current financial debts received from related parties CPI PG Group 31 December 2021 31 December 2020 CPI PROPERTY GROUP S.A. 5,075,824 4,532,880 GSG Asset GmbH & Co. Verwaltungs KG 4,013 4,000 GSG Gewerbehöfe Berlin 1. GmbH & Co. KG 13,141 13,100 GSG Gewerbehöfe Berlin 2. GmbH & Co. KG 19,963 19,900 GSG Gewerbehöfe Berlin 3. GmbH & Co. KG 30,095 30,000 GSG Gewerbehöfe Berlin 4. GmbH & Co. KG 19,662 19,600 GSG Gewerbehöfe Berlin 5. GmbH & Co. KG 34,709 34,600 ST Project Limited 177,970 176,870 Total financial debts non-current - related parties 5,375,377 4,830,950 Entities over which the majority shareholder has control Turf Praha a.s. - - Total 5,375,377 4,830,950 CPI FIM SA 2021 CONSOLIDATED FINANCIAL STATEMENTS | 46 Current financial debts received from related parties CPI PG Group 31 December 2021 31 December 2020 BAYTON Gama, a.s. 8 1,732 BPT Development, a.s. 87 1,617 BRNO INN, a.s. 3,168 3,098 Brno Property Development, a.s. 25,119 21,809 Byty Lehovec, s.r.o. 5,053 3,753 CPI – Horoměřice, a.s. - 80 CPI - Zbraslav, a.s. 524 2,590 CPI Energo, a.s. - 326 CPI Finance CEE, a.s. 73 71 CPI Flats, a.s. 686 4,073 CPI Green, a.s. 82 77 CPI Hungary Investments Kft. 3,044 998 CPI Hungary Kft. 963 809 CPI Kvarta, s.r.o. 1 2 CPI Kvinta, s.r.o. 2 2 CPI Národní, s.r.o. 33,508 33,934 CPI Office Prague, s.r.o. 256 620 CPI Omikrón, a.s. - 77 CPI PROPERTY GROUP S.A. 97,924 146,945 CPI Retail MB, s.r.o. - 39 CPI Retail Portfolio II, a.s. - 714 CPI Sekunda, s.r.o. 2 2 CPI Tercie, s.r.o. 1 2 CPI Th éta, a.s. 82 76 Czech Property Investments, a.s. 82,214 135,863 GSG Asset GmbH & Co. Verwaltungs KG 60 13 GSG Gewerbehöfe Berlin 1. GmbH & Co. KG 197 41 GSG Gewerbehöfe Berlin 2. GmbH & Co. KG 299 63 GSG Gewerbehöfe Berlin 3. GmbH & Co. KG 451 95 GSG Gewerbehöfe Berlin 4. GmbH & Co. KG 295 62 GSG Gewerbehöfe Berlin 5. GmbH & Co. KG 521 109 HOTEL U PARKU, s.r.o. 637 651 Jetřichovice Property, a.s. 257 247 Nymburk Property Development, a.s. - 3,622 PROJECT FIRST, a.s. 4,941 4,720 Rezidence Malkovského, s.r.o. 518 - ST Project Limited - 6,679 Tachov Investments, s.r.o. 57 53 Telč Property Development, a.s. 35 48 Trebišov Property Development, s. r. o. - 17 ZET.office, a.s. (formerly CPI Orange, a.s.) - 76 Total financial debts current - related parties 261,065 375,805 Entities over which the majority shareholder has control Turf Praha a.s. - - Entities controlled by members of Board of Directors CPI Yellow, a.s. - 72 Turf Praha a.s. - 48 Total 261,065 375,925 Other current liabilities (Cash pool) CPI PG Group 31 December 2021 31 December 2020 Balvinder, a.s. 2 - Baudry Beta, a.s. 389 376 Beroun Property Development, a.s. 114 337 Best Properties South, a.s. 24 - Brandýs Logistic, a.s. 859 652 BRNO INN, a.s. 8 - Březiněves, a.s. - 1,411 CB Property Development, a.s. - 1,275 Central Tower 81 sp. z o.o. 1 - City Gardens Sp. z o.o. 66 - CPI - Bor, a.s. 75 135 CPI - Real Estate, a.s. 17 - CPI - Zbraslav, a.s. - 33 CPI BYTY, a.s. 3,723 3,111 CPI Delta, a.s. 53 55 CPI East, s.r.o. 2,010 1,152 CPI Energo, a.s. 219 424 CPI Hotels Properties, a.s. 19 - CPI FIM SA 2021 CONSOLIDATED FINANCIAL STATEMENTS | 47 CPI PG Group 31 December 2021 31 December 2020 CPI Jihlava Shopping, a.s. - 1,024 CPI Management, s.r.o. 318 590 CPI Národní, s.r.o. 3,500 1,356 CPI Office Business Center, s.r.o. (formerly CPI Meteor Centre, s.r.o.) 462 401 CPI Office Prague, s.r.o. 1,478 - CPI Palmovka Office, s.r.o. - 50 CPI Property a Facility, s.r.o. - 276 CPI Reality, a.s. 562 1,086 CPI Retail Portfolio II, a.s. 42 199 CPI Retail Portfolio IV, a.s. 82 25 CPI Retail Portfolio V, a.s. 443 328 CPI Retail Portfolio VI, a.s. 77 78 CPI Retail Portfolio VIII s.r.o. 105 - CPI Retails ONE, a.s. 189 232 CPI Retails Rosa s.r.o. 76 56 CPI Retails THREE, a.s. 735 500 CPI Retails TWO, a.s. 214 312 CPI Services, a.s. 3,645 2,555 CPI Shopping MB, a.s. 708 493 CPI Shopping Teplice, a.s. 560 - CPI Vestec, s.r.o. 24 129 Czech Property Investments, a.s. 1 231 Čadca Property Development, s.r.o. 99 - Čáslav Investments, a.s. 44 48 EMH South, s.r.o. 162 145 Farhan, a.s. 813 1,629 FL Property Development, a.s. 2 2 Futurum HK Shopping, s.r.o. 1,523 - HOTEL U PARKU, s.r.o. 7 - IGY2 CB, a.s. - 730 Janáčkovo nábřeží 15, s.r.o. 15 - Jeseník Investments, a.s. 64 64 KOENIG Shopping, s.r.o. 1,233 - Komárno Property Development, a.s. 73 36 Kosmonosy Property Development, s.r.o. - 191 LD Praha, a.s. 3 - Levice Property Development, a.s. 103 63 Lockhart, a.s. 25 - Lucemburská 46, a.s. 23 - Marissa Gama, a.s. - 697 Marissa Omikrón, a.s. 148 351 Marissa Théta, a.s. 2 - Marissa West, a.s. 570 1,069 Marissa Ypsilon, a.s. 261 78 Michalovce Property Development, a.s. 62 81 MMR RUSSIA S.à r.l. - 10 MUXUM, a.s. 21 - Na Poříčí, a.s. 413 250 Nymburk Property Development, a.s. 440 - OC Nová Zdaboř a.s. 320 516 OC Spektrum, s.r.o. 228 1 OFFICE CENTER HRADČANSKÁ, a.s. - 215 Orchard Hotel a.s. 4 - Pelhřimov Property Development, a.s. 36 53 Považská Bystrica Property Development, a.s. 74 - Prievidza Property Development, a.s. 31 32 Projekt Nisa, s.r.o. 1,326 - Projekt Zlatý Anděl, s.r.o. 1,675 1,848 Příbor Property Development, s. r.o. - 3 Residence Belgická, s.r.o. 9 - Svitavy Property Alfa, a.s. 204 373 Tepelné hospodářství Litvínov s.r.o. 1 107 Trebišov Property Development, s. r. o. 146 - Třinec Investments, s.r.o. 81 57 Třinec Property Development, a.s. - 335 Tyršova 6, a.s. 98 - U svatého Michala, a.s. 19 - V Team Prague, s.r.o. 381 - ZET.office, a.s. 357 - Ždírec Property Development, a.s. 19 14 Total 31,915 27,880 CPI FIM SA 2021 CONSOLIDATED FINANCIAL STATEMENTS | 48 Interest income from related parties CPI PG Group 2021 2020 1 Bishops Avenue Limited 5,295 3,423 AIRPORT CITY Kft. 888 705 Airport City Phase B Kft. 93 76 ALIZÉ PROPERTY a.s. 2 - Andrássy Hotel Zrt. 332 212 Andrássy Real Kft. 843 504 Arena Corner Kft. 2,475 1,582 Balvinder, a.s. 185 209 BARON PUGLIA S.a.r.l. 150 529 Baudry Beta, a.s. 737 482 BAYTON Alfa, a.s. 711 692 BC 30 Property Kft. - - BC 91 Real Estate Kft. 64 68 BC 99 Office Park Kft. 2,212 1,561 Beroun Property Development, a.s. 595 467 Best Properties South, a.s. 3,836 2,413 BPT Development, a.s. - - Brandýs Logistic, a.s. 1,468 952 Brno Development Services, s.r.o. 25 18 BRNO INN, a.s. 1 - Brno Property Development, a.s. - - Březiněves, a.s. 154 373 Bubenská 1, a.s. merged with CPI Office Business Center, s.r.o. 1,733 - Buy-Way Dunakeszi Kft. 372 297 Buy-Way Soroksár Kft. 280 206 Byty Lehovec, s.r.o. - 742 CAMPONA Shopping Center Kft. 7,262 5,290 Carpenter Invest, a.s. 134 143 CB Property Development, a.s. 170 71 Conradian, a.s. 322 369 CPI – Bor, a.s. 736 530 CPI - Orlová, a.s. 79 67 CPI - Real Estate, a.s. 112 95 CPI - Zbraslav, a.s. 1 - CPI Beet, a.s. 18 14 CPI BYTY, a.s. 3,718 3,827 CPI Delta, a.s. 105 83 CPI East, s.r.o. 4,461 4,118 CPI Facility Slovakia, a.s. 127 - CPI Flats, a.s. - 4 CPI Hotels, a.s. 1,864 526 CPI Hotels Europeum Kft. 34 32 CPI Hotels Properties, a.s. 758 512 CPI IMMO, S.a.r.l. 57 57 CPI Jihlava Shopping, a.s. 948 1,006 CPI Kappa, s.r.o. 46 57 CPI Management, s.r.o. 9 1 CPI Národní, s.r.o. 9 1 CPI Office Business Center, s.r.o. (formerly CPI Meteor Centre, s.r.o.) 2,324 606 CPI Office Prague, s.r.o. 10 956 CPI Palmovka Office, s.r.o. merged with CPI Office Business Center, s.r.o. 65 148 CPI Property a Facility, s.r.o. - 5 CPI PROPERTY GROUP S.A. 56,700 35,957 CPI Reality, a.s. 3,684 2,504 CPI Retail MB s.r.o. (merged with Nymburk Property Development, a.s.) 24 - CPI Retail One Kft. 575 813 CPI Retail Portfolio Holding Kft. 841 850 CPI Retail Portfolio I, a.s. 365 99 CPI Retail Portfolio II, a.s. 66 - CPI Retail Portfolio IV, s.r.o. 90 48 CPI Retail Portfolio V, s.r.o. 238 190 CPI Retail Portfolio VI, s.r.o. 82 64 CPI Retail Portfolio VIII s.r.o. 294 215 CPI Retails ONE, a.s. 616 478 CPI Retails ROSA s.r.o. 259 159 CPI Retails THREE, a.s. 1,801 1,160 CPI Retails TWO, a.s. 496 356 CPI Sekunda, s.r.o. 24 - CPI Services, a.s. 29 85 CPI FIM SA 2021 CONSOLIDATED FINANCIAL STATEMENTS | 49 CPI PG Group 2021 2020 CPI Shopping MB, a.s. 2,174 1,709 CPI Shopping Teplice, a.s. 3,479 2,967 CPI Tercie, s.r.o. 1 - CPI Vestec, s.r.o. 359 288 CPIPG Management S.à r.l. 2 - Czech Property Investments, a.s. 28,234 36,835 Čadca Property Development, s.r.o. 228 41 Čáslav Investments, a.s. 150 131 Duca Puglia S.r.l. 127 307 EMH South, s.r.o. 507 408 ENDURANCE HOSPITALITY FINANCE S. a r.l. - 96 Europeum Kft. 1,867 1,241 Farhan, a.s. 3,778 2,809 FL Property Development, a.s. 11 10 Futurum HK Shopping, s.r.o. 6,044 4,332 Gateway Office Park Kft. 674 563 Gewerbesiedlungs-Gessellschaft mbH - 52 HD Investment s.r.o. 4 4 Hightech Park Kft. 246 210 Hospitality Invest S. a r.l. - - Hraničář, a.s. 717 675 IGY2 CB, a.s. 159 196 IS Nyír Ingatlanhasznosítóés Vagyonkezelo Kft. 133 79 IS Zala Ingatlanhasznosítóés Vagyonkezelo Kft. 724 599 Janáčkovo nábřeží 15, s.r.o. 402 351 Jeseník Investments, a.s. 160 109 Kerina, a.s. 276 262 KOENIG Shopping, s.r.o. 3,392 2,724 Komárno Property Development, a.s. 82 63 Kosmonosy Property Development, s.r.o. 251 384 Kravařská zemědělská, a.s. - 159 Kunratická farma, s.r.o. 11 - LD Praha, a.s. 174 175 Levice Property Development, a.s. 220 157 Liptovský Mikuláš Property Development, a.s. - 286 Lockhart, a.s. 1,473 1,529 Lucemburská 46, a.s. 147 146 Marissa Gama, a.s. 2,507 1,887 Marissa Omikrón, a.s. 940 838 Marissa Tau, a.s. 893 396 Marissa Théta, a.s. 30 38 Marissa West, a.s. 2,843 2,615 Marissa Yellow, a.s. 536 524 Marissa Ypsilon, a.s. 2,485 1,949 MARRETIM s.r.o. 37 - MB Property Development, a.s. (merged with Nymburk Property Development, a.s.) 3 70 Michalovce Property Development, a.s. 203 177 MUXUM, a.s. 280 141 Na Poříčí, a.s. 2,056 1,744 New Age Kft. 54 40 Nymburk Property Development, a.s. 107 - OC Nová Zdaboř a.s. 583 432 OC Spektrum, s.r.o. 1,046 558 OFFICE CENTER HRADČANSKÁ, a.s. merged with CPI Office Business Center, s.r.o. 647 639 Office Center Poštová, s.r.o. - 122 Olomouc Building, a.s. 1,371 651 Orchard Hotel a.s. 397 662 Outlet Arena Moravia, s.r.o. 1 15 Ozrics, Kft. 198 147 Pelhřimov Property Development, a.s. 180 140 Platnéřská 10 s.r.o. 8 7 Pólus Shopping Center Zrt. 5,633 4,399 Považská Bystrica Property Development, a.s. 48 37 Prievidza Property Development, a.s. 126 95 Projekt Nisa, s.r.o. 5,427 4,705 Projekt Zlatý Anděl, s.r.o. 4,339 3,229 Prostějov Investments, a.s. 53 42 Příbor Property Development, s.r.o. 34 19 Real Estate Energy Kft. 5 9 Residence Belgická, s.r.o. 78 72 Residence Izabella, Zrt. 334 222 CPI FIM SA 2021 CONSOLIDATED FINANCIAL STATEMENTS | 50 CPI PG Group 2021 2020 Rezidence Jančova, s.r.o. 132 49 Rezidence Malkovského, s.r.o. 37 33 Savile Row 1 Limited 2,915 9 Spišská Nová Ves Property Development, a.s. - - Statek Kravaře, a.s. 140 237 Statenice Property Development, a.s. 129 115 Svitavy Property Alfa, a.s. 602 469 Telč Property Development, a.s. - 1 Tepelné hospodářství Litvínov, s.r.o. 19 35 Trebišov Property Development, s.r.o. 123 1 Třebíč Investments, s.r.o. - - Třinec Investments, s.r.o. 146 111 Třinec Property Development, a.s. 214 214 Tyršova 6, a.s. 98 57 U svatého Michala, a.s. 180 133 Uchaux Limited 31 - V Team Prague, s.r.o. 352 252 Vigano, a.s. 632 641 ZET.office, a.s. 1,658 - Ždírec Property Development, a.s. 43 34 Total interest income - related parties 209,143 165,916 Entities over which the majority shareholder has control GAMALA LIMITED 261 2,655 Joint venture Uniborc S.A. 857 821 Total 210,261 169,392 Interest expense from related parties CPI PG Group 2021 2020 Baudry Beta, a.s. 4 1 BAYTON Gama, a.s. 55 37 Beroun Property Development, a.s. 3 2 Best Properties South, a.s. - 1 BPT Development, a.s. 10 65 Brandýs Logistic, a.s. 10 9 Brno Development Services, s.r.o. 4 - BRNO INN, a.s. 93 78 Brno Property Development, a.s. 672 637 Březiněves, a.s. 12 11 Bubenská 1, a.s. merged with CPI Office Business Center, s.r.o. 1 - Byty Lehovec, s.r.o. 130 4 CB Property Development, a.s. 10 3 CPI - Bor, a.s. 1 - CPI – Horoměřice, a.s. 2 7 CPI - Zbraslav, a.s. 65 76 CPI BYTY, a.s. 127 24 CPI Delta, a.s. 1 - CPI East,s.r.o. 27 5 CPI Energo, a.s. 10 11 CPI Finance CEE, a.s. 3 2 CPI Flats, a.s. 110 84 CPI Green, a.s. 2 2 CPI Hungary Kft. 26 24 CPI Hungary Investments Kft. 27 13 CPI Jihlava Shopping, a.s. 17 1 CPI Management, s.r.o. 5 1 CPI Národní, s.r.o. 1,042 892 CPI Office Business Center, s.r.o. (formerly CPI Meteor Centre, s.r.o.) 11 1 CPI Office Prague, s.r.o. 29 41 CPI Omikrón, a.s. 2 2 CPI Palmovka Office, s.r.o. merged with CPI Office Business Center, s.r.o. 1 - CPI Property a Facility, s.r.o. (merged with CPI Services, a.s.) 2 1 CPI PROPERTY GROUP S.A. 157,429 139,864 CPI Reality, a.s. 16 4 CPI Retail MB s.r.o. (merged with Nymburk Property Development, a.s.) - 38 CPI Retail Portfolio I, a.s. 1 - CPI Retail Portfolio II, a.s. 5 102 CPI Retail Portfolio IV, a.s. 1 - CPI Retail Portfolio V, a.s. 3 1 CPI Retail Portfolio VI, a.s. 1 - CPI Retail Portfolio VIII, a.s. 2 - CPI FIM SA 2021 CONSOLIDATED FINANCIAL STATEMENTS | 51 CPI PG Group 2021 2020 CPI Retails ONE, a.s. 3 1 CPI Retails Rosa s.r.o. 2 - CPI Retails TWO, a.s. 3 1 CPI Retails THREE, a.s. 13 1 CPI Services, a.s. 37 9 CPI Shopping MB, a.s. 9 2 CPI Shopping Teplice, a.s. 8 - CPI Théta, a.s. 2 2 CPI Vestec, s.r.o. 2 - Czech Property Investments, a.s. 808 1,665 Čadca Property Development, s.r.o. 2 - Čáslav Investments, a.s. 1 - EMH South, s.r.o. 6 1 Farhan, a.s. 10 3 Futurum HK Shopping, s.r.o. 23 - GSG Asset GmbH & Co. Verwaltungs KG 60 13 GSG Gewerbehöfe Berlin 1. GmbH & Co. KG 197 41 GSG Gewerbehöfe Berlin 2. GmbH & Co. KG 299 63 GSG Gewerbehöfe Berlin 3. GmbH & Co. KG 451 95 GSG Gewerbehöfe Berlin 4. GmbH & Co. KG 295 62 GSG Gewerbehöfe Berlin 5. GmbH & Co. KG 521 110 HOTEL U PARKU, s.r.o. 19 16 Hraničář, a.s. 1 - IGY2 CB, a.s. 4 2 Jeseník Investments, a.s. 1 - Jetřichovice Property, a.s. 7 7 KOENIG Shopping, s.r.o. 16 - Komárno Property Development, a.s. 2 - Kosmonosy Property Development, s.r.o. 3 1 Levice Property Development, a.s. 1 - Marissa Gama, a.s. 13 2 Marissa Omikrón, a.s. 3 1 Marissa West, a.s. 22 4 Marissa Ypsilon, a.s. 10 - MB Property Development, a.s. (merged with Nymburk Property Development, a.s.) 4 - Michalovce Property Development, a.s. 1 1 Na Poříčí, a.s. 11 2 Nymburk Property Development, a.s. 101 177 OC Nová Zdaboř a.s. 3 1 OC Spektrum, s.r.o. 2 1 OFFICE CENTER HRADČANSKÁ, a.s. merged with CPI Office Business Center, s.r.o. 3 1 Olomouc Building, a.s. 1 - Pelhřimov Property Development, a.s. 1 1 Považská Bystrica Property Development, a.s. 1 - Prievidza Property Development, a.s. 1 - PROJECT FIRST a.s. 144 139 Projekt Nisa, s.r.o. 10 - Projekt Zlatý Anděl, s.r.o. 14 4 Rezidence Malkovského, s.r.o. 3 - Svitavy Property Alfa, a.s. 4 1 Tachov Investments, s.r.o. 1 2 Telč Property Development, a.s. 1 2 Tepelné hospodářství Litvínov s.r.o. 4 1 Trebišov Property Development, s. r. o. 1 - Třinec Investments, s.r.o. 1 - Třinec Property Development, a.s. 2 1 Tyršova 6, a.s. 1 - V Team Prague, s.r.o. 1 - ZET.office, a.s. (formerly CPI Orange, a.s.) 7 2 Total interest expense - related parties 163,149 144,482 Entities over which the majority shareholder has control Turf Praha a.s. - - Entities controlled by members of Board of Directors CPI Yellow, a.s. 1 2 Total 163,150 144,484 CPI FIM SA 2021 CONSOLIDATED FINANCIAL STATEMENTS | 52 Sale of investment property In 2021, the Group sold office building in Brno, Czech Republic to its related party ZET.office, a.s. for EUR 39.3 million . Sale of subsidiaries On 1 April 2021, the Group sold subsidiary Bubenská 1, a.s. to its related party CPI, a.s. for EUR 17.2 million. Resale of Globalworth Real Estate Investments Limited shares On 6 March 2020, the Group purchased 1,500 thousand shares of Globalworth Real Estate Investments Limited for EUR 14.8 milllion from CPI PG. On 10 and 17 March 2020, the shares were sold for the same amount to the related party Zakiono Enterprises Limited. The related party transactions were priced on arm's length basis. 12 Events after the reporting period Sanctions against certain Russian entities In February 2022, EU and other countries imposed sanctions against certain entities and individuals in Russia as a reaction of military operations initiated by Russia against the Ukraine. Due to the growing geopolitical tensions, there has been a significant increase in volatility on the securities and currency markets. It is expected that these events may affect the activities of Russian enterprises in various sectors of the economy. The Group does not hold any properties directly in the region. The Group regards these events as non-adjusting events after the reporting period. Impact of COVID -19 pandemic on the Group COVID-19, an infectious disease caused by a new virus, was declared a world-wide pandemic in March 2020. The outbreak of the pandemic heavily impacted global financial markets, economies including the real estate sector. The Group was however able to invoice and regularly collect rent across its portfolio, even at the peak of the COVID-19 outbreak. The Group’s main shareholder CPI PG Group currently has EUR 1.2 billion of liquidity including EUR 700 million of undrawn revolving credit facility due in 2026. Overall, Covid-19 pandemic lockdowns had no significant impact on the CPI PG Group’s business and therefore, the Group does not expect the COVID-19 pandemic to have impact on its ability to continue as a going concern. CPI FIM SA 2021 CONSOLIDATED FINANCIAL STATEMENTS | 53 Appendix I – List of group entities Entities fully consolidated Company Country 31 December 2021 31 December 2020 Brno Property Invest XV., s.r.o. Czech Republic 100.00% - Bubenská 1, a.s. Czech Republic - 100.00% Bubny Development, s.r.o. Czech Republic 20.00% 20.00% BYTY PODKOVA, a.s. Czech Republic 100.00% 100.00% Camuzzi, a.s. Czech Republic 100.00% 100.00% Castor Investments sp. z o.o. Poland 100.00% 100.00% Castor Investments sp. z o.o. S.K.A. Poland 100.00% 100.00% CD Property s.r.o. Czech Republic 100.00% 100.00% CPI - Krásné Březno, a.s. Czech Republic 100.00% 100.00% CPI - Land Development, a.s. Czech Republic 100.00% 100.00% CPI ACAYA S.r.l. Italy 100.00% - CPI Italy 130 SPV S.r.l. Italy 100.00% - CPI Park Žďárek, a.s. Czech Republic 99.98% 99.98% CPI Pigna S.r.l. Italy 100.00% 100.00% CPI REV Italy II S.r.l. Italy 100.00% 100.00% CPI South, s.r.o. Czech Republic 90.00% 90.00% Darilia, a.s. Czech Republic 20.00% 20.00% Development Doupovská, s.r.o. Czech Republic 75.00% 75.00% Diana Property Sp. z o.o. Poland 100.00% 100.00% Equator IV Offices sp. z o.o. Poland 100.00% 100.00% Estate Grand, s.r.o. Czech Republic 100.00% 100.00% Eurocentrum Offices sp. z o.o. Poland 100.00% 100.00% HAGIBOR OFFICE BUILDING, a.s. Czech Republic - 100.00% Industrial Park Stříbro, s.r.o. Czech Republic 100.00% 100.00% JIHOVÝCHODNÍ MĚSTO, a.s. Czech Republic 100.00% 100.00% Karviná Property Development, a.s. Czech Republic - 100.00% Land Properties, a.s. Czech Republic 100.00% 100.00% LES MAS DU FIGUER France 100.00% 100.00% Marki Real Estate Sp. z o.o. Poland 100.00% 100.00% MQM Czech, a.s. Czech Republic 20.00% 20.00% NOVÁ ZBROJOVKA, s.r.o. Czech Republic 100.00% 100.00% Nupaky a.s. Czech Republic 100.00% 100.00% PAC Italy 130 SPV S.r.l. Italy 100.00% - Pietroni, s.r.o. Czech Republic 100.00% 100.00% Polygon BC, a.s. Czech Republic 20.00% 20.00% Rezidence Pragovka, s.r.o. Czech Republic 100.00% 100.00% SCP Reflets Monaco 100.00% 100.00% Strakonice Property Development, a.s. Czech Republic 100.00% 100.00% STRM Alfa, a.s. Czech Republic 20.00% 20.00% STRM Beta, a.s. Czech Republic 100.00% 100.00% STRM Gama, a.s. Czech Republic 100.00% 100.00% Svitavy Property Development, a.s. Czech Republic 100.00% 100.00% Vysočany Office, a.s. Czech Republic 20.00% 20.00% WFC Investments sp. z o.o. Poland 100.00% 100.00% Equity method investments Company Country 31 December 2021 31 December 2020 Beta Development, s.r.o. Czech Republic 35.00% 35.00% Uniborc S.A. 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